Strong earnings propel Standard Chartered new growth strategy

Standard Chartered has unveiled higher long-term profitability targets and plans to reduce corporate roles as it builds on strong earnings growth driven by its wealth and capital markets businesses.

Standard Chartered has announced ambitious new profitability targets alongside plans to streamline its operations, as the lender seeks to build on recent strong financial performance.

In a strategy update the bank said it is aiming to achieve a return on tangible equity (ROTE) of more than 15% by 2028, rising further to around 18% by 2030. The revised target marks a significant increase from its earlier goal of above 12% by 2026.

The bank said the next phase of growth would be driven by a more integrated operating model and greater efficiency across the organisation. As part of this effort, Standard Chartered plans to reduce corporate function roles, including back-office positions, by around 15% by the end of the decade. According to its latest annual report, the bank employed more than 81,800 full-time staff as of Dec 31.

Chief executive Bill Winters said the lender had already achieved its medium-term financial objectives ahead of schedule, giving it confidence to pursue more aggressive targets.

“We achieved our 2026 medium-term financial targets a year earlier than planned,” Winters said. “We now have a more focused, streamlined and efficient organisation.”

The bank intends to continue prioritising higher-margin segments, particularly affluent retail banking customers and financial institutions within its corporate and investment banking business.

Latest financial results

The updated strategy follows a strong first-quarter performance announced in April. Standard Chartered reported a 17% rise in pre-tax profit to USD 2.45 billion for the January-to-March period, surpassing analysts’ expectations of USD 2.14 billion. The figure compared with USD 2.10 billion recorded a year earlier.

Growth was fuelled by strong performances in its wealth management and capital markets divisions. Income from the bank’s wealth business surged 32% as customers increased demand for investment products, while revenue from global banking rose 19%, supported by heightened capital markets activity and stronger bond issuance by corporate clients.

Despite the positive results, the bank also disclosed a USD 190 million charge linked to expected losses arising from the Iran conflict. Even so, the results suggested that major European lenders have so far remained relatively resilient in the face of broader geopolitical uncertainty.

Winters said the bank’s international footprint and cautious approach to risk management positioned it well to navigate ongoing economic and geopolitical challenges.

“Despite ongoing geopolitical tensions and global economic uncertainty, our advantaged market presence and disciplined risk management give us confidence in our ability to perform,” he said.