Goldman Sachs: Standard Chartered Underlying Numbers Better Than Expected

Goldman Sachs analysts said in a note this week that Standard Chartered’s (LON: STAN) underlying Q4 2024 performance exceeded expectations, despite headline financials being impacted by several large items.

“Underlying numbers [were] better than expected,” Goldman Sachs stated, with a 12% beat on net interest income (NII), though this was adjusted to 6% after factoring in a $147 million reclassification of deposit insurance payments. 

The bank’s stronger-than-expected fees in Global Banking, Global Markets, and Wealth Solutions were also highlighted, with a solid start to 2025 flagged in these areas.

However, headline profit fell 19% below consensus, primarily due to a $342 million software impairment charge, which had no impact on capital. Standard Chartered’s core capital ratio (CET1) remained stable at 14.2%.

The bank announced a $1.5 billion share buyback, $400 million larger than expected, and a final dividend per share (DPS) of 28 cents, 18% above expectations.

Despite the strong underlying performance, Goldman Sachs maintained its Neutral rating on the stock, citing concerns over non-interest income growth sustainability and cost pressures. The price target was raised by 3% to 1,097p.

Looking ahead, Goldman sees potential upside if Standard Chartered delivers stronger balance sheet growth, builds hedges against rate cuts, and benefits from elevated FX volatility. 

However, they note that downside risks include weaker emerging market credit and tighter capital controls in China.