Standard Chartered revealed a $1 billion share buyback program on Friday, concurrently expressing CEO Bill Winters’ belief that the current share price undervalues the bank’s intrinsic worth.
The UK-based financial institution reported statutory pre-tax profits of $1.1 billion for Q4 2023, aligning with analysts’ expectations, and a full-year figure surging by 19% to $5.1 billion.
Winters emphasized the commitment to shareholders, outlining a plan to distribute at least $5 billion to them within the next three years. As part of the strategy to enhance returns consistently, the bank declared a dividend of 21 cents per share, aiming to reflect optimism about prospects.
Despite trading below its net asset value, StanChart has faced pressure to boost its share price performance. Shares have fallen 32% since Winters assumed leadership in June 2015. To address concerns, Winters announced a cost-saving plan expected to save $1.5 billion in expenses over the next three years.
StanChart reported confidence in the outlook for Asia, with profits in its biggest market rising 18% YoY in Q4 to $928 million. Winters acknowledged risks, citing a sluggish housing market in China. The bank also reported impairments related to Chinese commercial real estate.
Winters’ total pay package for the year rose to £7.8 million, up 22% from last year. The bank’s Ventures unit, launched in 2018 to invest in fintech businesses, reported a loss of $133 million in Q4.
The bank’s return on tangible equity for 2023 was 10.1%, exceeding analysts’ expectations, with a target of 12% by 2026. The wealth management unit recorded revenue growth to $412 million in Q4, reflecting the bank’s focus on growth plans, while net interest income rose 6% to $2.4 billion. The bank expects this figure to rise further in 2024, benefiting from higher interest rates.
