"Forecast" Brokers expect Standard Chartered's third-quarter reported pre-tax profit to fall by more than 8%, focusing on operational and shareholder return guidance

AASTOCKS
2025.10.24 02:46

Citi and Morgan Stanley expect Standard Chartered (02888.HK) to announce its third-quarter results for the period ending September 30 next Thursday (30th). Due to the decline in Hong Kong interbank offered rates during the quarter, net interest income is expected to decrease year-on-year, and provisioning expenses are anticipated to increase, offsetting the strong performance of the wealth management business. According to a comprehensive forecast from four brokerages, Standard Chartered's reported benchmark pre-tax profit for the third quarter is expected to be between USD 1.37 billion and USD 1.699 billion, compared to USD 1.722 billion in the same period last year, representing a year-on-year decline of 1.3% to 20.4%, with a median of USD 1.574 billion, down 8.6% year-on-year.

According to the forecasts from four brokerages, Standard Chartered's basic performance pre-tax profit is expected to be between USD 1.62 billion and USD 1.909 billion for the third quarter, compared to USD 1.807 billion in the same period last year, reflecting a year-on-year decline of 10.3% to an increase of 5.6%, with a median of USD 1.793 billion, down 0.8% year-on-year. A comprehensive forecast from three brokerages indicates that Standard Chartered's basic performance revenue for the third quarter is expected to be between USD 4.877 billion and USD 5.058 billion, compared to USD 4.904 billion in the same period last year, reflecting a year-on-year decline of 0.6% to an increase of 3.1%. Investors will focus on the management's latest operational and shareholder return guidance.

Additionally, according to Standard Chartered's information, the forecast for the reported benchmark pre-tax profit for the third quarter, based on 14 analysts, is USD 1.521 billion, with the basic performance pre-tax profit expected to be USD 1.742 billion, and the basic performance revenue for the third quarter is estimated at USD 4.981 billion. It is estimated that the transaction services revenue will be USD 1.461 billion, global banking revenue will be USD 534 million, global markets revenue will be USD 929 million, and wealth solutions revenue will be USD 764 million (including investment product revenue of USD 557 million and bank insurance revenue of USD 203 million), while venture capital revenue is expected to be USD 59 million (including digital banking revenue of USD 51 million and venture capital revenue of USD 9 million). Analysts have not made predictions regarding the share buyback plan.

【Global Markets Business Expected to Support Revenue Growth】

Goldman Sachs predicts that Standard Chartered's basic performance pre-tax profit for the third quarter will increase by 5.6% year-on-year to USD 1.909 billion, benefiting from growth in non-interest income and a decrease in costs. The reported benchmark pre-tax profit is expected to decline by 1.3% year-on-year to USD 1.699 billion, while basic operating revenue is expected to increase by 2.8% year-on-year to USD 5.041 billion. The bank noted that the global markets business is a major revenue driver for Standard Chartered, accounting for about 60% of revenue growth in the first half of the year, while revenue growth excluding this segment was only about 2%. Incremental growth in global banking and wealth solutions business is partially offset by interest-sensitive sectors such as transaction services, deposits, mortgages, and unsecured loan income. The bank also indicated that management has maintained guidance for a low single-digit decline in annual net interest income amid recent increases in Hong Kong interbank offered rates, suggesting a low likelihood of exceeding expectations for net interest income in the third quarter.

Morgan Stanley expects Standard Chartered's reported benchmark pre-tax profit for the third quarter to be USD 1.37 billion, a year-on-year decline of 20.4% (down 40% quarter-on-quarter), estimating the basic performance pre-tax profit for the third quarter to be USD 1.62 billion, down 10.3% year-on-year, and basic performance operating revenue to be USD 4.877 billion, down 0.6% year-on-year Net interest income is expected to be USD 2.684 billion, down 3% year-on-year (down 1% quarter-on-quarter), while non-interest income is expected to be USD 2.193 billion, up 3% year-on-year (down 22% quarter-on-quarter). Provision expenses are estimated to increase to USD 231 million (the market peers expect provision expenses of USD 266 million), and Standard Chartered's Common Equity Tier 1 (CET1) capital ratio for the third quarter is expected to be 14.1% (down 7 basis points quarter-on-quarter).

Citigroup predicts that Standard Chartered's pre-tax underlying profit for the third quarter will increase by 0.5% year-on-year to USD 1.816 billion, down 16% quarter-on-quarter, affected by a decline in market revenue quarter-on-quarter. Pre-tax reported benchmark profit is expected to decrease by 5.4% year-on-year to USD 1.628 billion, while underlying operating income is expected to increase by 3.1% year-on-year to USD 5.058 billion, driven by strong growth in wealth management revenue boosting non-interest income. The bank predicts that Standard Chartered's net interest income will decrease by 2% quarter-on-quarter to USD 2.6 billion, with net interest margin narrowing by 9 basis points to 1.89%, mainly affected by a 21 basis point decline in the one-month Hong Kong interbank offered rate quarter-on-quarter. Non-interest income is expected to decrease by 6% quarter-on-quarter to USD 2.4 billion, with global markets revenue expected to decrease by 19% quarter-on-quarter, but still up 13% year-on-year. Wealth management business revenue is expected to perform strongly. The bank expects Standard Chartered's Common Equity Tier 1 (CET1) capital ratio for the third quarter to be 14.1% (down 20 basis points quarter-on-quarter). Citigroup does not expect Standard Chartered to announce a new round of share buyback plans when it announces its third-quarter results, until the full-year results are announced in March next year.

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According to a comprehensive forecast from four brokerages, Standard Chartered's pre-tax reported benchmark profit for the third quarter of this year is expected to be between USD 1.37 billion and USD 1.699 billion, compared to USD 1.722 billion in the same period last year, a year-on-year decline of 1.3% to 20.4%, with a median of USD 1.574 billion, down 8.6% year-on-year.

Brokerage│Pre-tax reported benchmark profit for the third quarter│Year-on-year change

Goldman Sachs│USD 1.699 billion│-1.3%

Citigroup│USD 1.628 billion│-5.5%

JP Morgan│USD 1.52 billion│-11.7%

Morgan Stanley│USD 1.37 billion│-20.4%

Based on Standard Chartered's pre-tax reported benchmark profit of USD 1.722 billion for the third quarter of 2024.

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According to a comprehensive forecast from four brokerages, Standard Chartered's underlying pre-tax profit for the third quarter of this year is expected to be between USD 1.62 billion and USD 1.909 billion, compared to USD 1.807 billion in the same period last year, a year-on-year decline of 10.3% to an increase of 5.6%, with a median of USD 1.793 billion, down 0.8% year-on-year.

Brokerage│Underlying pre-tax profit for the third quarter│Year-on-year change Goldman Sachs | USD 1.909 billion | +5.6%

Citigroup | USD 1.816 billion | +0.5%

JP Morgan | USD 1.77 billion | -2%

Morgan Stanley | USD 1.62 billion | -10.3%

Based on Standard Chartered's pre-tax underlying profit of USD 1.807 billion for Q3 2024.

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According to a comprehensive forecast from three brokerages, Standard Chartered's underlying performance revenue for Q3 this year is expected to be between USD 4.877 billion and USD 5.058 billion, compared to USD 4.904 billion in the same period last year, representing a year-on-year decline of 0.6% to an increase of 3.1%.

Brokerage | Q3 Underlying Performance Operating Revenue | Year-on-Year Change

Citigroup | USD 5.058 billion | +3.1%

Goldman Sachs | USD 5.041 billion | +2.8%

Morgan Stanley | USD 4.877 billion | -0.6%

Based on Standard Chartered's Q3 2024 operating revenue of USD 4.904 billion

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