Standard Chartered (LON:STAB) reported a record first-half performance and raised its 2026 income outlook, citing momentum in wealth management, corporate and investment banking and cross-border client activity.
The bank said earnings per share rose 17% year over year in the first half. It now expects 2026 income growth to be around the midpoint of its previously stated 5% to 7% range at constant currency. The company also announced a 1 billion share buyback and an interim dividend of 0.204 per share.
Second-Quarter Results
Chief Financial Officer Manus Costello said second-quarter operating income totaled $5.7 billion, up 3% year over year at constant currency. Excluding a gain tied to the Solv transaction in the prior-year period, income increased 8%.
Profit before tax was $2.3 billion, while ROTE reached 17.9%. Net tangible asset value per share rose 4% year over year to $17.55.
Net interest income increased 1% from the first quarter, helped by loan volumes and a lower proportion of treasury assets. Costello said those gains were partly offset by rate and margin headwinds, as well as previously announced portfolio actions in the wealth and retail banking business.
The bank upgraded its 2026 net interest income outlook and now expects low-single-digit percentage growth at constant currency. It expects continued business volume growth and balance-sheet mix benefits in the second half, though these are expected to be offset by a shift toward term deposits, portfolio actions and related business exits.
Non-interest income was resilient against a comparison that included a $238 million Solv India transaction gain a year earlier. Excluding that gain, non-interest income rose 9% year over year.
- Second-quarter expenses were broadly flat year over year.
- Excluding a $74 million Korea equity-linked securities provision release classified as a notable item, expenses rose 3%.
- Standard Chartered expects 2026 expenses, excluding notable items, of about $13.3 billion at constant currency.
- The bank booked $128 million of costs to achieve under its Fit for Growth program during the quarter, taking year-to-date spending to about $250 million.
Credit Quality and Capital
Credit impairment charges were $150 million in the second quarter, including $44 million of additional management overlays related to the Middle East conflict. The latest charge brought total Middle East-related overlays to $234 million. Costello said the additional overlays were mainly related to the petrochemical sector and the potential for sovereign downgrades.
The quarterly loan loss rate was 20 basis points, while the annualized rate for the first half was 26 basis points. The bank maintained its through-the-cycle loan loss rate expectation of 30 to 35 basis points.
Early-alert exposures increased by about $800 million in the quarter, largely due to sovereign-related names affected by the Middle East conflict. However, credit grade 12 and net Stage 3 assets remained broadly stable. Costello said the increase in Stage 2 assets reflected the precautionary overlays rather than a significant deterioration in underlying credit risk.
Customer loans and advances grew 2% on an underlying basis in the quarter and 5.7% year to date, driven primarily by global banking, secured wealth lending and mortgages. Customer deposits also rose 2% during the quarter.
The common equity tier 1 ratio was 14.2%. Risk-weighted assets fell $4.7 billion, or 2%, from the prior quarter, though management said much of that reduction should reverse in the second half as banking deal timing, deposit flows, business growth and operational-risk changes affect the balance sheet.
Costello said the bank continues to expect the day-one impact of Basel 3.1 to be broadly neutral after management actions. Those actions could include changes to unsecured credit lines, unused lending commitments and possible securitizations, he said.
Wealth and Corporate Banking Momentum
Wealth and retail banking income rose 18% to $2.5 billion in the second quarter. Wealth solutions income reached a record $1.1 billion, up 43% year over year, supported by broad-based growth across markets and products.
The bank added $15 billion in net new money during the quarter, including $9 billion in wealth. It onboarded 76,000 new-to-bank affluent clients. Management said first-half wealth solutions income benefited from buoyant equity markets and cautioned against annualizing the pace of growth seen during the first half.
Corporate and investment banking income rose 2% to $3.3 billion. Transaction services income increased 5%, global banking income rose 18%, and global markets flow income increased 16%, helped by technology and electronic-platform investments that improved foreign-exchange performance.
Management said first-half global banking income increased 19%, while origination volumes rose 37% and distribution volumes rose 15%. The bank highlighted its financial institutions business, network income and originate-to-distribute model as areas that are increasing the proportion of income from higher-returning activities.
Digital Assets and Outlook
Standard Chartered said it is investing in digital financial infrastructure across blockchain-based issuance, settlement and payments; banking services for digital-asset companies; and regulated access to digital assets as an asset class.
The company cited the completion of its first digitally traded intraday foreign-exchange swap during the first half. It also reported around GBP 11 billion in monthly tokenized-deposit run rate, primarily from e-CNY cross-border settlements on mBridge and multicurrency client work.
Management maintained its 2025-to-2028 targets, including 5% to 7% income compound annual growth, a cost-income ratio of around 57% in 2028, a CET1 range of 13% to 14%, a high-teens earnings-per-share compound annual growth rate and a dividend payout ratio of at least 30%.
Bill said the bank remained alert to geopolitical fragmentation, shifts in client activity and technological change, but said its network, wealth platform and cross-border capabilities position it to support clients through a more complex global environment.
About Standard Chartered (LON:STAB)
Standard Chartered PLC is an international banking company. The Banks’s segments include Corporate & Institutional Banking, Retail Banking, Commercial Banking and Private Banking. Its Corporate & Institutional Banking segment allows companies and financial institutions to operate and trade globally, and its Private Banking segment supports high net worth individuals with their banking needs across borders and offers access to global investment opportunities. Its Retail Banking segment offers clients, as well as small businesses a range of banking support solutions, and its Commercial Banking segment provides mid-sized companies with financial solutions and services.
