StanChart bets on rate hikes to hit lofty goals

Standard Chartered has raised its core profitability goals and promised shareholders extra payouts, despite full year profit undershooting expectations, as it banks on inflation-battling rate hikes worldwide to boost lending.

CEO Bill Winters, who repaired StanChart's balance sheet and cut thousands of jobs after he took charge in 2015, is under pressure to boost growth and lift the bank's flagging share price. Its London-listed stock is around 45 per cent below the level when Winters became CEO.

StanChart's shares fell 4 per cent on Thursday, the second worst performers in the benchmark London FTSE index as the bank's 2021 profits missed expectations and investors digested a growth strategy reliant on rate hikes and cost cuts.

The results on Thursday from the emerging-markets focused lender, the first major British bank to report annual earnings, gave an early indication of how rising central bank interest rates will help banks to improve performance.

StanChart, which earns most of its revenue in Asia, said its statutory pre-tax profit doubled to $3.3 billion in calendar 2021 from $1.6 billion in 2020, but missed the $3.8 billion average estimate of 16 analysts, as compiled by the bank.