StanChart restores payouts but income drop signals challenges ahead

Standard Chartered PLC (STAN.L) reported a higher than expected 57% jump in first-half profit and $350 million worth of shareholder payouts, but a fall in revenue showed the longer-term struggle ahead for the bank.

StanChart announced a $250 million share buyback and resumption of interim dividend payments worth 3 cents per share, or $94 million in total.

However, income fell 5% thanks to low interest rates, which the bank said it hopes are bottoming out, and declining revenue in its cash cow transaction banking business.

Having spent the early years since his appointment in 2015 fixing StanChart’s battered balance sheet and slashing costs, Chief Executive Bill Winters in recent years has tried to restore its growth momentum. The results of those efforts have been mixed, as affirmed by the bank’s latest report.

The Asia, Africa and the Middle East-focused bank is looking to capitalise on rising trade between those regions, as well as grow fee-based businesses such as wealth management to compensate for rock-bottom policy rates worldwide.

The bank’s net interest income fell 4% as low rates squeezed its margins.

Statutory pretax profit for StanChart rose to $2.55 billion in January-June from $1.63 billion in the same period last year, the London-headquartered bank said.

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