London-headquartered Standard Chartered posted a profit increase in 2022, fuelled by higher income from rising interest rates.
Standard Chartered posted a pre-tax profit of $4.3 billion in 2022, according to its annual report, marking a 28 percent year-on-year increase from $3.3 billion in 2021.
This underperformed the $4.7 billion average forecast by analysts compiled by the bank.
Standard Chartered also proposed a final dividend of 14 cents per share, up 50 percent, and announced that a new $1 billion round of share buyback would start imminently.
Interest Income
Operating income increased 10 percent to $16.3 billion with half of this performance attributable to «strong, sustained business momentum», including growth in its balance sheet, fee and trading income, and the other half attributable to the higher interest rate environment.
Net interest income climbed 12 percent to $7.6 billion while other income also increased 9 percent to $8.7 billion.
China Property Hit
Standard Chartered saw credit impairments increase by $575 million to $838 million in 2022. This includes $582 million related to China’s commercial real estate sector as well as $283 million related to sovereign downgrades, though this was partly offset by Covid-linked releases.
Operating expenses also grew 4 percent to $10.7 billion.
Upgraded Forecast
Overall, the bank is optimistic about the outlook and upgraded its performance forecast. It now expects to achieve a return on tangible equity of 10 percent in 2023 and upped its 2024 target from 10 percent to 11 percent.
«The revenue outlook into 2023 is positive, with our core business momentum supported by the tailwind of rising interest rates. We are optimistic for the markets in our footprint as they finally emerge from the challenges brought by the pandemic and as economic activity rebounds,» said Standard Chartered group CEO Bill Winters.
