In key news on UK stocks, Standard Chartered PLC (GB:STAN) (HK:2888) reported a 6% year-on-year increase in Q1 pre-tax profit to $1.9 billion, beating analysts’ forecasts of $1.4 billion. The growth was driven by an interest rate boost and the performance of its wealth and banking businesses. Following the announcement, STAN shares rallied by 6% as of writing. The Hong Kong-listed shares gained almost 6% in today’s trading session.
Standard Chartered is a leading international banking group, operating in 53 markets.
Insights from Standard Chartered’s Q1 Results
In the first quarter results, Standard Chartered’s operating income grew by 17% to $5.2 billion on a constant currency basis. Among its segments, operating income for its Wealth Solutions increased by 23% at constant currency, driven by widespread growth across products. The operating income for both the Banking and Markets segments grew by 17%.
The bank’s net interest income (NII) increased by 5% to $2.4 billion in constant currency, with a net interest margin of 1.76%, up 6 basis points quarter-on-quarter. For the full year 2024, the bank is targeting to achieve a net interest income in the range of $10 billion to $10.25 billion.
The bank’s underlying profit before tax increased by 27% at constant currency to $2.13 billion. Profit from the Investment Banking business jumped 13% in the first quarter.
On the flip side, Standard Chartered’s credit impairments deteriorated in 2024, to a $165 million write-down, compared to $20 million in the last year. The majority of this was attributed to the bank’s wealth and retail banking division, amid mortgage pressures in Hong Kong and South Korea.
Moving ahead, Standard Chartered expects its operating income to rise to the upper end of the 5-7% range in 2024, excluding the two notable items in Q1 2024 related to gains on the revaluation of forex positions in Egypt and a hyperinflationary accounting adjustment in Ghana.
Are Standard Chartered Shares a Good Buy?
Post-results, Morgan Stanley analyst Nick Lord reiterated his Buy rating on Standard Chartered stock, predicting a 30% upside.
On TipRanks, STAN stock has a Moderate Buy rating, backed by seven Buy and three Hold recommendations. The Standard Chartered share price forecast is 911.68p, which is 24.3% higher than the current trading level.
