Standard Chartered highlights growth in Asian economies as profits surge

And it reported statutory pre-tax profits of 123m dollars (£102m) in the final three months of the year, a big improvement after making a loss of 208 million dollars (£173m) in the same period in 2021.

It also saw its net interest margin – the difference between what a bank charges for loans and pays for savings – increase by 0.2 percentage points as it benefited from a higher interest rate environment.

Meanwhile, the banking giant announced the “imminent” launch of a new one billion dollar (£830m) share buy-back programme and a final dividend payout worth 405m dollars (£336m).

It takes its total shareholder distributions announced since the start of 2022 to 2.8bn dollars (£2.3bn), it said.

Standard Chartered upgraded its expectations for the next two years, saying it expects its income to grow by up to a tenth as it continues to benefit from rising interest rates.

The Asia-focused bank, which has 83,000 staff around the world, added that economic growth in the Asian economies it operates in will be “pivotal” to global recovery.

Furthermore, China’s path out of its “zero-Covid” policy gives it “plenty of reasons for optimism”, group chairman Dr Jose Vinals said.

Dr Vinals said: “We are well positioned to take advantage of considerable growth opportunities in our footprint as we navigate an uncertain external environment in 2023.

“Global growth, while slower, should remain resilient.

“But, with central banks focusing on controlling inflation against a backdrop of trade and geopolitical tensions, significant uncertainties remain.

“Our markets are some of the world’s most dynamic places, with a growth potential that significantly outstrips more established economies.

“Asia is likely to be the fastest-growing region in the world, and the significant reopening of the Chinese economy from Covid-19 restrictions is likely to materially boost demand and growth.”

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said:

“Standard Chartered’s profits disappointed in the final quarter. Impairments came in worse than expected, with credit charges stemming from the group’s large exposure to the shifting Chinese real estate sector. Downgrades in the quality of government debt in other areas, including Pakistan and Sri Lanka have also taken their toll.

"More disappointing is the misstep in the group’s wealth management business, where growth has been a priority. Customers are wary in the current economic environment, which acts as a headwind for this area. This also raises questions for Asian banking giant HSBC, which is hoping to unlock hundreds of millions in business from a renewed push into wealth services, boosted by the reopening of Hong Kong’s borders.”