Profits Rise at Standard Chartered’s Wealth Arm

Standard Chartered's wealth division reports an 11% profit increase in Q3, fueled by a $1.5 billion investment to enhance services and capabilities.

Profits Rise at Standard Chartered's Wealth Arm

In a recent announcement, the UK-listed banking institution, Standard Chartered, has unveiled an ambitious plan to allocate approximately $1.5 billion over the next five years. This substantial investment aims to enhance its cadre of investment advisors and relationship managers, bolster wealth solutions, and expand various other capabilities. The wealth and retail banking division of Standard Chartered reported a commendable profit increase in the third quarter, reaching $742 million—an 11 percent rise compared to the same period last year. Over the nine months concluding in September, profits rose by 5 percent, totaling $2.149 billion.

At the group level, pre-tax profits experienced a remarkable surge of over one-third. The wealth solutions sector benefited from increased earnings derived from various products, although this was somewhat tempered by a decline in income from deposits. Operating expenses rose by 4 percent, while credit impairments in the third quarter escalated to $62 million.

In terms of net new sales within the wealth management sector, the bank reported an impressive $5 billion for the quarter, marking a 13 percent year-on-year increase. Notably, Standard Chartered, which derives the majority of its revenues from international markets rather than the UK, reiterated its commitment to invest around $1.5 billion over the next five years. This investment will focus on relationship managers, investment advisors, wealth solutions, and the enhancement of advisory, cross-border, and digital capabilities. This commitment represents a doubling of their previous investment plans, as stated by the bank.

The incremental investment is expected to be financed through a strategic reshaping of the mass retail business, aimed at cultivating a robust pipeline of future affluent and international banking clients.

Looking ahead, Standard Chartered anticipates an operating income growth rate of 5 to 7 percent on a compound annual basis from 2023 to 2026, although growth in 2025 is projected to fall below this range. On a reported basis, pre-tax profit soared by 37 percent year-on-year, reaching $1.807 billion, while attributable profit surged by 56 percent to $1.005 billion. As of the end of September, the Common Equity Tier 1 ratio stood at a robust 14.2 percent, reflecting a 30 basis point increase from the previous year.