Standard Chartered PLC (LSE:STAN) unveiled over US$1bn of shareholder returns alongside its fourth-quarter results, which the emerging markets-focused bank said was the first of new set of “far-reaching” strategic actions.
A US$750mln share buyback will begin imminently, it said, with a final dividend of US$0.09 per share proposed, equating to US$277m, and resulting in a full-year dividend per share of US$0.12, up 33% on last time.
A total of at least US$5bn of shareholder returns is promised over the next three years.
A statutory loss of US$208mln was reported for the fourth quarter, while adjusted pre-tax profits of US$139mln were much less than expected.
Improvements in income in the third and fourth quarters almost compensated for the weak first half, though the fourth quarter was slower than the third and mean for the year income was down 1% to US$14.7bn on a constant currency basis.
Conditions remain challenging but after a return to income growth the FTSE 100 lender said “we believe [this] signals the start of a sustainable recovery”, with the year finishing with good momentum in financial markets, trade and wealth management.
“Confidence in our overall asset quality and earnings trajectory allows us to return significant capital to shareholders,” said chief executive Bill Winters.
On the new targets, he said: “We have committed today to a set of far-reaching actions, to deliver a return on tangible equity of 10% by 2024. 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.”
The strategy update includes an overall target deliver return on tangible equity of 10% by 2024, by growing income 8-10%, focusing more on the high-returns from affluent customers while increasing “scale profitably” in mass retail through productivity improvement and cost efficiencies, as part of a US$1.3bn gross “structural” reduction of costs.
To “seize” the “China opportunity”, Winters will invest US$300mln with the aim of doubling China onshore and offshore pre-tax profit.