Standard Chartered unveils share buy-back and ramps up bonuses as profits rebound
International banking group Standard Chartered reported a rebound in profits to $3.9bn today and announced a $750m share buy-back as it begins to recover from a pandemic slump.
Bosses said that profits had grown 61 per cent on 2020 levels but warned that the pandemic’s “considerable challenges” were dragging on performance and making a turnaround “longer than expected”.
Alongside the share buy-back of $750m, shareholders are in line for a jump in payouts as the firm announced a 33 per cent rise in the full year dividend pay out to 12 cents per share.
Bankers at the firm are in line for bumper payouts, with the firm set to dish out a $1.37bn bonus pot, up 38 per cent, which the firm said represented a normalisation of bonuses after pandemic cut backs.
Standard Chartered’ boss Bill Winters said the group was now looking to drill down into costs as he unveiled a plan to cut expenditure and put returns back in the hands of shareholders.
“We have committed today to a set of far-reaching actions, to deliver a return on tangible equity of 10 per cent by 2024.,” he said.
“Our refreshed strategy has proved resilient and delivered our return to growth in the second half of 2021. We remain fully focused on driving continued business momentum in 2022, together with substantial shareholder returns”
Winters said the firm would target $1.3 billion of cost efficiencies to help offset the challenges of inflation and create room for continued investment, as well as driving down the firm’s cost-to-income ratio to around 60 per cent, down from 76 per cent in 2021.
This would be delivered by growing income and executing a $500m “business expense reduction programme”, he said.
Winters also unveiled a A $300m investment into the firm’s China-related businesses to “capture the opportunity from China’s continued opening”.
“Our positioning in China has never been better and the opportunities for us never more attractive” he added.
Winters said the outlook for the group remains strong as it exits 2021.
“We have the right strategy, business model and ambition to deliver on this potential. We have shown a resilient financial performance in 2021 and have set out clear actions to achieve a RoTE of 10 per cent by 2024,” he said.