StanChart unveils fresh US$1 billion buyback as Q2 earnings beat estimates
The lender posts a pre-tax profit of US$2.33 billion for the three months through June
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[LONDON] Standard Chartered (StanChart) unveiled a fresh US$1 billion share buyback as second-quarter earnings beat expectations, while it booked more charges tied to the conflict in the Middle East.
The London-based lender posted a pre-tax profit of US$2.33 billion for the three months through June, exceeding a Bloomberg-compiled estimate of US$2.08 billion.
The better-than-expected performance was bolstered by the strength of its wealth business – which performed well despite its key market of China introducing new restrictions on cross-border accounts – and global banking.
“We delivered a record first-half performance in 2026, with double-digit growth in wealth solutions and global banking,” chief executive officer Bill Winters said.
The bank took a US$150 million credit impairment in the quarter, including US$44 million relating to the Middle East conflict and potential “second-order effects”. These included increased overlays for the petrochemical sector and potential sovereign downgrades.
Shares of StanChart and other financial institutions with exposure to Hong Kong and mainland China have been hit in recent months after Chinese authorities moved to crack down on its citizens moving wealth offshore.
The clampdown raised fears in particular about the growth of wealth management businesses, with Bloomberg Intelligence analysts estimating that banks could face a 30 per cent drop in new money flows in a worst-case scenario.
The stock has subsequently recovered, reaching fresh all-time highs in recent weeks, and is currently up about 15 per cent this year in London trading. The bank completed its latest share buyback programme in late June, having repurchased stock worth US$1.5 billion.
The impairment for the Middle East comes top of the previous quarter’s US$190 million in “precautionary management overlays” tied to the Iran war. The Middle East represents about 6 per cent of StanChart’s exposure, with the bulk of it in the United Arab Emirates followed by Saudi Arabia.
The UK bank raised its guidance for operating income growth for 2026 to be around the middle of the 5-7 per cent range, compared to around the bottom of the range previously. It expects expenses to be around US$13.3 billion, up 2 per cent from the previous year.
Speaking at a Goldman Sachs Group conference last month, chief financial officer Manus Costello said that the bank was seeing “good levels of client activity” within its wealth unit. BLOOMBERG
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