Standard Chartered PLC (LSE:STAN) shares notched a 12-year high but investors were not entirely blown away after the Asia-focused lender delivered second-quarter results that beat expectations and tweaked its 2025 guidance.
Underlying profit before tax for the second quarter came in at $2.4 billion, up 31% year on year, around 23% above the City consensus, though the figure included a gain on disposal of Solv India, which not all analysts had modelled.
Analysts said consensus was beaten primarily due to much better-than-expected non-interest income as well as a lower-than-expected credit impairment charge, more than offsetting slightly weaker performance on net interest income and costs.
An interim dividend of $0.123, up 37%, beat consensus by 7%, while a further share buyback of $1.3 billion was proposed, slightly better than expected.
Capital also came in stronger than forecast, with a CET1 ratio of 14.3%, including the buyback, and implying a pro-forma CET1 ratio of 13.8%.
The FTSE 100 group's 2025 guidance is now for income growth excluding notable items to be at the bottom of the 5-7% mid-term range, versus prior expectations below that level. Net interest income is now forecast to decline at a low single-digit rate in 2025.
The bank reiterated its 2026 cost target of under $12.3 billion, and expects returns on tangible equity to approach 13%, with total shareholder payouts of at least $8 billion between 2024 and 2026.
Shore Capital analyst Gary Greenwood said it was a "decent" headline profit beat, in part driven by gain on disposal of Solv India that had not been fully included in consensus.
Excluding this, underlying PBT was 17% ahead and reported pre-tax 26% ahead of consensus largely due to stronger than expected non-interest income performance, which helped offset a smaller miss on net interest income.
It was "clearly a positive update but the shares have run up strongly in recent weeks in anticipation of a strong update which may therefore limit the extent of any positive share price reaction", he said.
Indeed, the shares were down almost 1% to 1,357p in the afternoon after touching a long-term high in earlier trading.