London-based Standard Chartered saw profits rise in 2023 on the back up higher interest rates and partial recovery from its wealth business.

Standard Chartered's pre-tax profit for 2023 rose 19 percent year-on-year to $5.1 billion, according to the bank’s annual report. 

Operating income increased 10 percent to $17.4 billion as the bank benefited from the positive impact of rising interest rates and a «partial recovery» in its wealth management business which saw a «steady flow» of fresh clients and net new money. Operating expenses grew 7 percent to $11.1 billion.

Impairments

Credit impairments fell $308 million to $528 million, representing an annualized loan loss rate of 17 basis points. This includes $282 million related to China's commercial real estate sector, $354 million from the consumer, private and business banking portfolio and $85 million from ventures. This was partly offset by a $45 million net release from sovereign-related exposures and other corporate exposures.

Goodwill and other impairments totaled $850 million, primarily reflecting a reduction in the carrying value of the British lender's investment in China-based Bohai Bank.

Asia Performance

Within Asia, pre-tax profit rose 15 percent to $3.8 billion. Operating income was up 14 percent to $12.4 billion while operating expenses increased 6 percent to $7.1 billion. Performance was also affected by the aforementioned Bohai charge.

Highlights in the region include record income from its onshore China business as well as strong income growth in Hong Kong via wealth management with affluent clients, financial markets activity with corporate and institutional clients as well as material improvement in net interest margin.

Dividend, Buyback

The bank proposed a final dividend of $560 million which will result in a full-year dividend of $728 million or 27 cents per share, up 50 percent. It has announced a share buyback for up to a maximum consideration of $1 billion.

«We produced strong results in 2023, continuing to demonstrate the value of our franchise and delivering our financial objective of a 10 percent [return on tangible equity] (RoTE) for the year,» said group CEO Bill Winters. «We will now build on this success, taking action to deliver sustainably higher returns with a focus on driving income growth and improving operational leverage and targeting 12 percent RoTE in 2026.»