Standard Chartered's H1 2026 pretax profit up 9pc, announces US$1 bln share buyback

Standard Chartered (2888) announced on Wednesday that pretax profit for the first six months of 2026 grew 9 percent year on year to US$4.78 billion (HK$37.28 billion), driven by surging wealth and global banking revenue that offset ongoing credit charges tied to the Iran war.

StanChart's Hong Kong-traded shares rose more than 6 percent after the earnings release to hit an almost 19-year high on a fresh US$1 billion share buyback and a 20.4 cents-per-share interim dividend.

The London-headquartered lender, which earns most of its revenue in Asia and Africa, said pretax profit for the first six months is well above analysts' forecast of US$4.52 billion.

It raised its guidance for the year, saying it would see income growth around the middle of a 5-7 percent range instead of previous guidance for it to be closer to the bottom.

"Clients continue to turn to us to facilitate trade, investment and wealth flows across the world's most dynamic markets," Group Chief Executive Bill Winters said in a statement.

The strong set of results showed StanChart making continued progress on Winters' strategy to grow fee income, earning more from wealth products and cross-border banking despite concerns that geopolitical and regulatory uncertainty would dampen investments and dealmaking.

Winters also noted that the bank is investing in data, digital platforms, and artificial intelligence to improve client experience as technology is reshaping financial services. However, he mentioned that AI presents a source of risk for the bank at the same time, such as AI-enabled cyber threats and evolving security vulnerabilities, and operational, technology, and cyber risks remained a key area of focus.

COSTS UNDER CONTROL, WEALTH INCOME SOARS

"Shareholders benefited from the revenue beat with a 2 percent surprise on costs," analysts from Jefferies said in a research note, adding that wealth growth from higher-fee investment products rather than deposits bodes well for earnings quality.

Costs in the first half rose 2 percent to US$6.3 billion, less than the 6.4 percent rise forecast by analysts.

Wealth management income soared 38 percent, driven by double-digit growth in investment products as inflows and the number of new accounts increased amid strong demand for wealth advice during a period of market volatility.

The wealth boom comes despite Beijing's crackdown on cross-border investments, which is expected to weigh on the lucrative wealth businesses of banks such as StanChart and HSBC that serve mainland Chinese clients via Hong Kong.

StanChart's cross-border and corporate banking revenue rose 19 percent in the first six months, as large corporate clients turned to the bank to borrow money, issue debt and strike deals.

StanChart said its Middle East portfolio, which represents 6 percent of overall exposures, had remained broadly stable.

The lender took an additional impairment charge of US$44 million in the second quarter, which it said partly reflected clients in the petrochemical sector showing early signs of distress.

It set aside US$190 million as precautionary management overlays in April against expected future losses.

Reuters and staff reporter

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