Wealth management aids Standard Chartered in surpassing projected outcomes
Here's the Rewritten Article:
Standard Chartered Smashes Profit Expectations in Q1 2025, Thanks to Booming Wealth Division
Standard Chartered left analysts stunned as it surpassed profit expectations in the first quarter of 2025. The Asia-focused lender reported a whopping 12% increase in pre-tax profits to a staggering $2.1 billion (£1.5 billion) during the three-month period ending March. This outpaced average forecasts of $1.9 billion.
Operating income rose by 5% on an underlying basis to a impressive $5.4 billion, with short-term hedging boosting net interest income. Banks often employ structural hedging to protect profits from erratic interest rate fluctuations.
The wealth management division was the star performer, with income skyrocketing by 28% to a hefty $777 million due to high demand for investment products and bancassurance. In keeping with its strategic focus on wealth management, StanChart announced plans to invest $1.5 billion in this area over the subsequent five years last October.
However, the FTSE 100 company sounded a cautionary note on Friday, citing recent tariff measures as sources of uncertainty. Since President Donald Trump's return to office in mid-January, he has shaken up the global trading system with broad tariffs on US imports. These include a 10% baseline tariff on most goods, 25% levies on foreign steel and aluminum products, and a jaw-dropping 145% tariff on Chinese-made goods.
China has retaliated with 125% tariffs on American products, while Canada has countered with measures worth £32 billion on some goods. Bill Winters, StanChart's CEO, acknowledged the complexity these tariffs have added to the global economic and political landscape. Despite this, he expressed confidence in the bank's ability to help clients manage their businesses and wealth during periods of volatility.
Winters saw a significant 46% increase in his compensation to a record-breaking £10.7 million last year, with £7.6 million coming from bonuses and share awards. Although his annual basic pay has been trimmed by 40%, he could earn as much as £13.1 million this year if the bank meets certain performance targets.
Standard Chartered shares dipped by 0.3% to 1,089p on Friday morning, yet they have climbed by a substantial 44% over the past year. Fellow banking giant NatWest reported a 33.3% surge in operating pre-tax profits to a massive £1.8 billion in the first quarter.
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Enrichment Data:
Overall:Standard Chartered's wealth management division demonstrated remarkable growth in Q1 2025, with Wealth Solutions income increasing by 28% year-over-year and three key drivers:- 33% growth in investment products- Expansion of the affluent client base- Focus on supply chain diversification across Asia, Africa, and the Middle East
This performance aligns with the bank's strategic focus on wealth management to offset lower interest rates and rising credit impairments.
Tariffs impact: While the bank has limited exposure to potential US tariffs, with US-related corporate income representing only 7% of its Corporate & Institutional Banking income, it has opened six international wealth centers across five markets since 2024 and onboarded ten regional treasury centers to offset geopolitical risks.
Investment plans: Standard Chartered has maintained its 2023–2026 targets, including:- 5–7% annual operating income growth (CAGR)- $8 billion shareholder returns (2024–2026)- 13–14% CET1 capital ratio- 13% return on tangible equity by 2026
The Global Markets and Wealth divisions are expected to remain key growth drivers, with management highlighting a positive start to Q2 2025 in these segments.
- While Standard Chartered's wealth management division witnessed a significant 28% increase in income from investment products and bancassurance, it remains cautious about recent tariff measures.
- Standard Chartered plans to invest $1.5 billion in its wealth management division over the next five years, reflecting its strategic focus on this area.
- Bill Winters, the CEO of Standard Chartered, acknowledged the complexity that tariffs have added to the global economic and political landscape, yet expressed confidence in the bank's ability to help clients manage their businesses and wealth during volatile times.
- In addition to tariffs, Standard Chartered has opened six international wealth centers across five markets and onboarded ten regional treasury centers to offset geopolitical risks.
- In Q1 2025, Standard Chartered's wealth management division reported a hefty $777 million in income, thanks to high demand for investment products and bancassurance.
- Investors exploring low-cost online investing platforms can consider offerings from several providers, including AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212, in addition to the traditional banking landscape.
