Standard Chartered’s 2025: profit up, dividend up 65%, and another $1.5bn buyback
Standard Chartered has delivered a strong set of full-year numbers and is sharing the spoils. Underlying return on tangible equity (RoTE – a profitability measure on shareholders’ tangible capital) hit 14.7%, beating its three-year target a year early. The Board lifted the full-year dividend to 61 cents per share, up 65%, and announced a new $1.5 billion share buyback to kick off imminently.
Under the bonnet, the growth engine wasn’t higher interest rates; it was fees and trading. Non-interest income surged, led by Wealth Solutions and a livelier year in Global Banking and Global Markets. Capital and liquidity remain robust, with a Common Equity Tier 1 (CET1) ratio of 14.1% and a chunky 155% liquidity coverage ratio (LCR).
Headline numbers retail investors should know
| Metric | FY’25 | Change vs FY’24 |
|---|---|---|
| Underlying operating income | $20.9bn | +6% (c.+8% ex notable items) |
| Underlying profit before tax | $7.9bn | +18% |
| Reported profit before tax | $7.0bn | +16% |
| Underlying RoTE | 14.7% | +300bps |
| Underlying EPS | 229.7 cents | +37% |
| Dividend per share (full year) | 61 cents | +65% |
| New share buyback | $1.5bn | Announced |
| CET1 capital ratio | 14.1% | (12)bps YoY |
| Net interest margin | 2.03% | (3)bps |
| Credit impairment | $676m | +21% |
| Customer deposits | $530.2bn | +14% |
Notes: “Notable items” relate mainly to Ghana hyperinflation and FX revaluation in Egypt. RoTE is return on tangible equity. CET1 is the core equity capital ratio. NIM (net interest margin) is the spread earned on interest-earning assets. LCR measures liquidity versus stressed outflows.
Where the growth came from: fees, trading and wealth
Net interest income (NII) was broadly flat at $11.2 billion as lower rates compressed margins, but the real kicker was outside interest. Non-interest income rose 13% to $9.7 billion, driven by:
- Wealth Solutions up 24% (Investment Products +28%, Bancassurance +12%) on strong client onboarding and $52 billion net new money.
- Global Banking up 15% on higher origination, distribution, and capital markets activity.
- Global Markets up 12% as client “flow” income rose 15%.
That’s exactly what you want in a falling-rate world: more fee and markets income to balance the pressure on NIM (down 3bps to 2.03%). On the flip side, Transaction Services dipped 7% as Payments & Liquidity and Trade & Working Capital faced margin compression from lower rates.
Costs, efficiency and credit: disciplined, with a few moving parts
Operating expenses rose 4% to $12.3 billion, reflecting investment in front-line bankers and performance pay, partly offset by Fit for Growth efficiencies. The cost-to-income ratio improved to 59.1% (from 59.9%), giving positive “jaws” (income growth faster than cost growth).
Credit impairment was $676 million, equating to a loan loss rate of 19bps, flat year-on-year. Wealth & Retail Banking’s charge fell $28 million to $595 million after unsecured portfolio optimisation. Corporate & Investment Banking saw a small $4 million net charge, largely due to the non-repeat of prior-year releases. Stage 3 (impaired) loans edged down to 2.1% of gross loans, and investment-grade corporate exposure held steady at 74%.
Capital, liquidity and shareholder returns: still generous
CET1 sits at 14.1% (down 12bps year-on-year), after $2.8 billion of buybacks during 2025 and higher RWAs. The new $1.5 billion buyback is expected to shave roughly 58bps off CET1 in Q1’26. Liquidity remains ample with an LCR of 155% and advances-to-deposits at 51.4%.
The Board proposed a final dividend of 49 cents, taking the full-year pay-out to 61 cents per share (+65%). Underlying EPS rose 37% to 229.7 cents, helped by higher profits and a lower share count. Since the FY’23 results, total shareholder distributions announced have reached $9.1 billion.
Q4 in brief: steady end to a strong year
Q4 operating income of $4.8 billion was broadly flat year-on-year, up 3% excluding notable items and a deposit insurance reclassification. Expenses grew 4% to $3.4 billion. Credit impairment was $145 million. Underlying profit before tax rose 19% to $1.2 billion. Within that, NII was down 1% to about $3.0 billion, while non-interest income ticked up 1% to $1.9 billion. A softer quarter in “episodic” Markets income was offset by ongoing strength in Wealth and Global Banking.
What the 2026 guidance says
- Reported operating income growth around the bottom end of 5-7% at constant currency.
- NII expected to be broadly flat year-on-year at constant currency.
- Reported costs broadly flat at constant currency (including the final year of Fit for Growth charges).
- Statutory RoTE greater than 12%.
Translation: expect another year of fee-led growth to do the heavy lifting while rates drift, with costs held in check and double-digit returns maintained.
Why this matters for investors
Positives I like
- RoTE of 14.7% is a proper step-change and shows the model works in a lower-rate backdrop.
- Wealth Solutions (+24%) and Global Banking (+15%) demonstrate demand where Standard Chartered is strongest – cross-border, affluent, and institutional corridors across Asia, Africa and the Middle East.
- Capital return remains front and centre: 65% dividend uplift plus a fresh $1.5 billion buyback, with liquidity still very strong.
- Credit quality looks resilient: 19bps loss rate, Stage 3 down to 2.1%, overlays maintained on China/Hong Kong CRE.
Watch-outs to keep in mind
- NIM slipped 3bps and 2026 guidance has NII broadly flat – this puts more pressure on non-interest income to keep delivering.
- RWAs rose to $258 billion, including a $5.7 billion rise in operational risk RWAs due to timing changes. That’s capital consumptive and worth tracking.
- Transaction Services (-7%) shows how rate compression can bite; further rate moves could keep the margin pressure on.
- Restructuring and other charges totalled $937 million in 2025, including $531 million for Fit for Growth. Final year of those is included in 2026 costs.
Segment lens: who’s pulling their weight?
- Corporate & Investment Banking: Underlying profit before tax up 9% at constant currency, with record Global Markets flow and strong Global Banking.
- Wealth & Retail Banking: Underlying profit before tax up 14% at constant currency; 275,000 new affluent clients and $52 billion net new money underpin the 24% Wealth Solutions income growth.
- Ventures: Loss narrowed to $167 million as income more than doubled to $415 million (helped by a $238 million gain from the Solv India transaction), with improving delinquency trends at Mox.
My take
This is a confident performance with the right kind of growth. While the rate tailwind fades, the bank’s fee and markets engines are firing, Wealth is compounding nicely, and credit quality is behaving. The capital return story remains compelling, even after a big year of distribution.
The main debate for 2026 is whether non-interest income can keep offsetting a flat NII outlook and whether RWAs can be managed tightly enough to protect CET1 after buybacks. For now, Standard Chartered looks set to stay in double-digit return territory while continuing to hand back cash – a combination the market tends to reward.
