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Highlights
- Standard Chartered has lifted its core profitability targets and has vowed to provide its shareholders with bonus payouts despite generating lower than expected profits.
- The bank depends on interest rate hikes to boost its lending and strives to reach double-digit returns by 2024.
UK-based globally operating banking and financial services firm Standard Chartered plc (LON: STAN) has grabbed the attention of investors as it lifted its core profitability targets and vowed to provide its shareholders with bonus payouts.
Let’s take a look at the bank’s latest results and its share price performance.
Bonus pot for 2021
On 17 February 2022, Standard Chartered has released its full-year and Q4 2021 results, reporting a profit of US$3.3 billion in 2021, falling short of the expected US$3.8 billion. Despite the profits being less than anticipated amid the already ongoing fixed cost cutting, the London-headquartered bank increased its bonus pot by 38% for 2021, touching US$1.37 billion. It expects to grow further on the back of rising interest rates, which would potentially give a boost to lending activity.
This move represents that the UK banks are bouncing back on the path of normalcy after the turmoil caused by the pandemic. The bank has reported that by 2024, it strives to reach double digit returns and is planning to cut back on its yearly expenses by US$1.5 billion. As real incomes are falling globally due to rising inflation, Standard Chartered is planning for a 4.8% hike in salaries across the bank this year.
Standard Chartered aims to start off with its US$750 million share buyback very soon, and it has planned to offer a final dividend for 2021 of 9c per share, amounting to US$277 million. Owing to these significant shareholder distributions, the bank is all set to provide its shareholders with total returns of over US$5 billion in the next three years.
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Share price performance
The British banking group, Standard Chartered plc, is listed on the main market of the London Stock Exchange since February 1970. The bank is a constituent of the FTSE 100 index and has LSE’s green economy mark, making it a part of the sustainable finance ecosystem.
The current market cap of the bank stands at £16,892.05 million. Standard Chartered plc’s dividend yield for a year stands at 1.6%, and its 5-year dividend yield is 1.4%. Standard Chartered plc’s shares were trading at GBX 534.20, down by 2.63%, at 12:57 PM (GMT) on 17 February 2022.
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Note: The above content constitutes a very preliminary observation or view based on industry trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
