Standard Chartered Q1 2025 slides: Income up 12%, network strategy delivers

Introduction & Market Context

Standard Chartered (LON:STAN) PLC (OTC:SCBFF) (LSE:STAN) presented its first quarter 2025 results on May 2, showing strong performance across key metrics despite ongoing global economic uncertainty. The international banking group leveraged its diversified network to deliver solid growth, with particular strength in its Global Markets and Wealth Solutions businesses.

The bank’s cross-border strategy continues to be a key differentiator, with management highlighting limited exposure to potential US tariffs while capitalizing on supply chain diversification trends across its core markets in Asia, Africa, and the Middle East.

Quarterly Performance Highlights

Standard Chartered reported operating income of $5,390 million for Q1 2025, representing a 7% year-over-year increase at constant currency. When excluding notable items of $234 million in Q1 2024, income growth reached 12%.

Profit before tax rose 12% year-over-year to $2,277 million, while underlying earnings per share increased 19% to 62.7 cents. The bank’s underlying return on tangible equity (ROTE) improved by 120 basis points to 16.4%.

As shown in the following comprehensive financial summary:

Net interest income grew 7% year-over-year to $2,796 million, while non-interest income also increased 7% to $2,594 million. Operating expenses were well-controlled at $2,915 million, down 5% year-over-year, contributing to a 9% increase in pre-provision operating profit to $2,475 million.

Detailed Financial Analysis

The bank’s net interest income showed resilience despite some quarterly fluctuations, while non-interest income demonstrated strong growth, particularly when excluding notable items. The waterfall charts below illustrate the key drivers:

Expense management remained disciplined, with the bank maintaining positive income-to-cost jaws while continuing to invest in strategic initiatives. Standard Chartered confirmed its 2026 expense target remains under $12.3 billion.

Credit quality continued to improve, with credit impairment charges down 24% year-over-year to $219 million. The bank’s high-risk assets decreased by approximately $0.5 billion quarter-on-quarter, reflecting prudent risk management.

Balance sheet growth was robust, with loans and advances increasing by approximately $7 billion (3%) since December 31, 2024, while customer deposits grew by $25 billion (5%) over the same period.

The bank maintained a strong capital position with a CET1 ratio of 13.8%, down 39 basis points quarter-on-quarter primarily due to the ongoing share buyback program. Approximately 43% of the $1.5 billion share buyback announced in February 2025 has been completed.

Strategic Initiatives

Standard Chartered emphasized its network advantage as a key differentiator in the current uncertain global environment. The bank’s diversified, resilient, and agile network generated $7.3 billion in cross-border income for the full year 2024, with seven market corridors each generating over $100 million in annual income.

The following diagram illustrates the bank’s extensive cross-border network income flows:

The bank highlighted its limited exposure to potential US tariffs, with US-related corporate income representing approximately $0.9 billion, or just 7% of Corporate & Institutional Banking (CIB) total income for the full year 2024.

By business segment, CIB income increased 4% year-over-year, driven by strong performances in Global Markets (up 14%) and Global Banking (up 17%), partially offset by a 4% decline in Transaction (JO:NTUJ) Services.

The Wealth and Retail Banking (WRB) segment showed strong momentum with income up 12% year-over-year, led by double-digit growth in Wealth Solutions. Investment Products grew by an impressive 33% as the bank continued to expand its affluent client base.

Forward-Looking Statements

Standard Chartered maintained its previous guidance, targeting operating income growth of 5-7% CAGR from 2023 to 2026, with operating expenses to remain under $12.3 billion in 2026. The bank expects to maintain positive jaws each year and aims for a return on tangible equity approaching 13% by 2026.

The capital strategy includes maintaining a CET1 ratio of 13-14% and returning at least $8 billion to shareholders between 2024 and 2026.

Management expressed confidence in the bank’s long-term prospects while acknowledging the need to remain watchful of macroeconomic volatility. The bank reported a positive start to Q2 2025, particularly in Global Markets.

Standard Chartered’s focus on capturing opportunities from supply chain diversification, international capital markets, and its global affluent client proposition appears to be yielding results, as evidenced by the onboarding of 10 regional treasury centers and the opening of six international wealth centers across five markets since the beginning of 2024.

Full presentation:

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