Standard Chartered PLC (LSE:STAN) hiked its dividend 50% and promised to “imminently” launch a US$1bn share buyback after making higher profits in the second quarter than expected.
A record second quarter from its investment banking arm and a return to growth for wealth management, despite faltering growth in its key market of China, saw group pre-tax profit rise 27% to US$1.6bn in the three months to end-June. Analysts had forecast US$1.4bn, on average.
This meant underlying profits of US$3.3bn for the first half of the year reached their highest level since 2015.
Chief executive Bill Winters also upgraded 2023 guidance for income to grow 12-14% from the previous 10%, returns on tangible equity to 10% (previously "approaching 10%"), and the 'jaws' ratio of income to costs, which is now expected to be 4% on the positive side.
Income in the past quarter was up 20% to US$4.6bn, just ahead of the consensus estimate of US$4.4bn.
Net interest margin (NIM) improved to 1.71% from 1.63% at the end of March, of which six basis points were said to be from rising interest rates.
Bad debt impairments of US$146mln were made in the quarter, up US$80mln on a year ago and including US$84mln related to China.
As well as the share buyback, the interim dividend was hiked 50% to US$0.06 per share.
The shares rose 5.7% to 749.8p in early trading on Friday.