Standard Chartered on Thursday has pushed back its target return on tangible equity, despite posting a commendable increase in annual profits. The revenue growth came from its main markets.
The lender posted a pretax profit of $3.71 billion for 2019, up from $2.55 billion in 2018, according to its results statement. The 45.5 percent increase in profits defied the headwinds of global trade tensions and protests in Hong Kong.
However, this is slightly below the $3.94 billion average of analysts’ forecasts compiled by the bank.
The bank highlighted that its target of a 10 percent return on tangible equity, previously set for 2021, would be pushed back. In October, the global lender said that the goal had become more difficult amid worsening global economic conditions.
These headwinds are expected to be transitory, but we now believe it will take longer to achieve our RoTE target of 10 percent than we previously envisaged,” it said in an earnings statement to the stock exchange.
Stanchart’s results announcement comes after rival HSBC Holdings warned it could suffer loan losses of up to $600 million if the virus outbreak continues into the second half of the year.
The bank added it has approved the buyback of up to $500 million worth of shares, which will commence shortly. It is in the midst of reviewing whether to do further capital return upon completing the sale of its stake in Indonesian lender Permata.
