StanChart increases 2023 profit by 18%, announces $1 billion share buyback and dividend hike.

• According to the bank, its statutory pretax profit for 2023 was $5.09 billion, which is in line with the $5.1 billion forecasted by 15 analysts.
• The bank recorded a $850 million impairment, primarily due to its investment in Bohai Bank, which has been hit by rising bad loans.
• The bank aims to repay at least $5 billion within the next three years, as stated by CEO Bill Winters in a statement.

On Friday, the company reported a 18% increase in pre-tax profit, in line with forecasts, and rewarded shareholders with a $1 billion share buyback and a jump in dividend.

The company, which generates most of its revenue in Asia, reported statutory pretax profit of $5.09 billion for 2023, matching the $5.1 billion forecasted by 15 analysts.

The bank recorded a $850 million impairment, primarily due to its investment in Bohai Bank, which has been hit by rising bad loans as China's economic growth slowed.

The significant loss in China, a key market for StanChart's growth strategy, highlights the difficulties the bank faces in expanding in the country as officials grapple with a worsening property market and declining consumer confidence.

The value of its stake in Bohai Bank dropped from $1.5 billion to $700 million after a $700 million writedown, resulting in a fresh $150 million loss.

The decline in the value of StanChart's stake was due to the challenges in the banking industry and the uncertainty surrounding the property market.

The London-based lender declared a final dividend of $560 million or 21 cents per share, increasing the full year dividend payout by 50% to 27 cents, which is higher than the consensus view of 23.7 cents.

The bank aims to repay at least $5 billion within the next three years, as stated by CEO Bill Winters in a statement.

The bank issued tempered guidance on its future performance, predicting income growth of 5-7% from 2024 to 2026, lower than the anticipated 10% growth in 2023.

The lender aims to increase the return on tangible equity, a crucial profitability measure, from the current 10% to 12% by 2026.

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