Standard Chartered CEO Addresses Share Price Concerns Amid Dividend Boost and Buyback

Bill Winters, Chief Executive Officer of Standard Chartered PLC, acknowledged the bank’s disappointing share price performance and pledged to address it as the lender unveiled increased dividends, a new $1 billion buyback, and an 18% rise in annual profit.

Winters candidly remarked on the bank’s share price during a conference call with reporters, acknowledging its lackluster performance, which had declined by 4% year-to-date and 16% over the last 12 months. He attributed this to various factors, asserting that the bank’s market valuation does not align with its historical sector returns.

Despite the share price challenges, Standard Chartered’s shares surged 5% in London and had risen 2% in Hong Kong early on. The bank reported a 2023 statutory pre-tax profit of $5.09 billion, meeting expectations, and announced an increase in dividends alongside the buyback. However, it provided conservative guidance for 2024, expecting income growth at the higher end of 5-7%, lower than the previous estimate of 8-10%.

Additionally, Standard Chartered aims to steadily increase returns on tangible equity from the current 10% to 12% by 2026, abandoning its previous forecast to reach 11% this year. The bank faced an $850 million impairment, mainly from its stake in Chinese lender Bohai Bank, reflecting challenges in China’s property market and increasing bad loans.

Despite these challenges, Standard Chartered announced a final dividend resulting in a 50% increase in its full-year dividend payout, reflecting a trend among European peers to prioritize shareholder rewards amid a challenging operating environment.

Winters stated the bank’s goal to return at least $5 billion to shareholders over the next three years. His total pay package rose to $9.88 million, while the group bonus pool for staff decreased slightly to $1.6 billion.

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