Standard Chartered, one of Hong Kong's three note-issuing banks, will invest US$1.5 billion in its wealth-management business over the next five years as robust growth in serving affluent clients drove the lender's profit 19 per cent higher in 2024.
Hong Kong would be one of the focus areas for the investment, CEO Bill Winters said on Friday.
"The wealth business has been growing very nicely, and Hong Kong is absolutely a centre of that," Winters said, adding that Singapore, Dubai and Jersey in the UK were also important.
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"Hong Kong has obviously had a little bit of a tough time over the past few years, but we feel that is stabilising and actually improving. We are investing in that market as much as we ever have."
Clients from China and India were becoming extremely active in wealth management, Winters said, prompting Standard Chartered to solidify its position as a leading wealth manager in Asia. It was also focusing on Africa and the Middle East, he added.
The lender had set an ambitious goal of gathering US$200 billion of net new money from 2025 to 2029, he said.
"This will be enabled by investing US$1.5 billion over five years in our wealth and digital platforms, client centres, people, brand and marketing, to accelerate income growth and returns," Winter said.
"This investment will be funded by reshaping our mass retail business to focus on developing a strong pipeline of future affluent and international clients."
Standard Chartered's net profit in 2024 rose to US$4.28 billion, or US$1.41 per share from US$3.58 billion in 2023, the bank said in a Hong Kong stock exchange filing on Friday, topping the US$4.23 billion consensus forecast among analysts tracked by Bloomberg.
It proposed a 28 US cents final dividend, bringing the total for 2024 to 37 US cents. The bank said it would set aside US$1.5 billion to buy back its own shares in the coming year, after a total of US$2.5 billion buy-back last year.
The bank's shares jumped 4.4 per cent to HK$116 on Friday in Hong Kong after the report card. The Hang Seng Index surged 4 per cent.
Standard Chartered CEO Bill Winters pictured in November 2022. Photo: Edmond So alt=Standard Chartered CEO Bill Winters pictured in November 2022. Photo: Edmond So>
The London-based bank, which generates much of its revenue from Asia, reported an 19 per cent increase in underlying pre-tax profit to US$6.8 billion for 2024.
Underlying pre-tax profit in Hong Kong jumped by 25 per cent to US$2.3 billion, representing 34 per cent of total, the biggest among all of the bank's markets.
"Our strategy of combining differentiated cross-border capabilities for corporate and institutional clients with leading wealth-management expertise for affluent clients is firing on all cylinders," Winters said.
The wealth-management business expanded 29 per cent, which helped deliver a record income of US$19.7 billion, he said. The bank also recorded double-digit growth in global markets and global banking, with strong growth momentum continuing into this year, he noted.
Standard Chartered said it added 265,000 new affluent clients in 2024, boosting its priority and private bank net new money by 61 per cent from a year earlier to US$43.6 billion.
The bank's net interest margin in 2024, an important measure of profitability, widened to 1.94 per cent from 1.67 per cent a year earlier.
Net interest income rose 10 per cent to US$10.4 billion in 2024 from US$9.6 billion a year earlier. Operating income, which is equivalent to revenue in US accounting terms, rose 14 per cent to US$19.7 billion from US$17.4 billion a year earlier with a constant currency exchange rate.
The bank said it had a 5 per cent increase in its bad debt charge to US$557 million. That included a US$58 million exposure to Hong Kong commercial real estate, a US$70 million exposure to China commercial real estate, as well as default payments of credit card and personal loans.
"Our exposure to commercial real estate in Hong Kong is relatively limited, and it is very concentrated in a handful of relationship with the very largest developers," Diego De Giorgi, the bank's chief financial officer, said in the briefing.
"You can clearly see in our numbers that that part of the market has not affected us."
Its digital banking business continued to report losses. SC Ventures' underlying pre-tax loss stood at US$390 million in 2024, narrower than a year-earlier loss of US$408 million. The segment included its majority owned virtual banks: Mox in Hong Kong and Trust in Singapore.
For the fourth quarter, Standard Chartered's underlying pre-tax profit stood at US$1 billion, which was similar the year-earlier period.
