StanChart clocks 22% jump in 2023 profit, announces $1 bln buyback

investing.com:

Investing.com-- Asia-focused lender Standard Chartered PLC (HK:2888) (LON:STAN) clocked a stronger profit for 2023 as it benefited from higher interest rates, with the bank also announcing a $1 billion buyback.

Still, the bank downgraded its income outlook for 2024 and forecast mild increases in its net interest income, citing some economic risks from sticky inflation and potential geopolitical instability. 

StanChart’s underlying profit before tax for the year to December 31 rose 22% to $5.68 billion, the bank said in a statement to the Hong Kong Stock Exchange. The bank’s underlying net interest income rose 20% to $9.56 billion for the year. 

The strong performance, which was largely driven by an improved net interest margin for the year, at 1.67%, saw the bank announce a buyback of $1 billion, starting immediately. 

Still, the bank forecast minimal increases in its operating income over the coming years, which is expected to rise between 5% and 7% for 2024 to 2026. 

Net interest income for 2024 is expected at $10 billion to $10.25 billion for the current year, the bank said.

The softer outlook mirrors similar warnings offered by StanChart’s global peers, as credit activity slows under pressure from higher-for-longer interest rates. 

China- which is among the bank’s biggest markets, is also grappling with a pronounced slowdown in economic growth, which has also weighed heavily on consumer credit in the country. 

StanChart's shares rose 0.4% in Hong Kong trade.