Standard Chartered’s top brass has once again bemoaned its weak share price but ruled out ditching its primary listing in London as it committed to press on with a renewed effort to slash costs and raise investor returns.
Speaking at the FTSE 100 bank’s annual meeting in London on Friday, chair José Viñals said the board was “acutely aware that the share price is not where we want it to be, and we continue to work hard to deliver greater value for shareholders”.
Standard Chartered’s share price has struggled in recent years, with long-serving chief executive Bill Winters calling it “crap” in February as the bank unveiled a $1.5bn (£1.2bn) cost-cutting plan aiming to simplify its structure and automate more of its processes.
It is aiming to increase its return on tangible equity, a key measure of profitability for banks, from 10 per cent to 12 per cent by 2026.
“When I speak to colleagues in many different markets about how we can perform better as a bank, I often hear the same things. We are too complex, too fragmented, too siloed,” Viñals said on Friday.
Commenting on the new three-year plan, Winters added: “We’re off to a great start, but we’ve got much, much, much, much more that we can do.”
Standard Chartered’s share slump has left the emerging markets-focused bank vulnerable to a potential takeover, with First Abu Dhabi Bank looking at making an offer last year before deciding against it.
This year has seen Standard Chatered’s share price gain 17 per cent in London as it stood out from most other major lenders with an uptick in profit.
Last week, the bank reported a massive earnings beat for the first three months of 2024, driven by its trading and wealth division, as well as higher net interest income despite looming base rate cuts from major central banks.
Although the stock is currently trading at its highest level since last March, it is still down 24 per cent since Winters became CEO in June 2015. Winters’ tenure has seen the bank cut thousands of jobs in an effort to boost investor returns.
Some analysts have suggested that Standard Chartered may be tempted to move its primary listing from London to Hong Kong, where it currently has a secondary listing, in search of better returns.
When asked whether the bank was considering this, Viñals said on Friday that it had “no current plans to list anywhere else”.
He added that London was “a very liquid market” that is “very easily accessible for European and American investors”.
Despite being based in London, Standard Chartered makes nearly all of its revenue in Asia, the Middle East and Africa, with hubs in Hong Kong and Singapore.
Last year, the bank was hit by losses tied to China’s commercial real estate crisis and exited markets in sub-Saharan Africa and Jordan as part of efforts to streamline its global operations.
Standard Chartered has taken $850m (£679m) in writedowns on its stake in China’s Bohai Bank, which, like its peers, has suffered from the country’s slowing economy. Fellow UK-based lender HSBC was hit by $3bn (£2.4bn) in charges from its stake in a Chinese bank at the end of last year.
“Despite rising geopolitical tension and continuing economic uncertainties across the world, I am cautiously optimistic about growth in 2024,” Viñals said on Friday.
“We expect to see a soft landing for the global economy this year. Activity remains resilient, with Asia continuing to take the lead on growth.”
Friday’s AGM comes after reports surfaced last night that Standard Chartered, HSBC and other major Asia-focused UK firms were lobbying Rishi Sunak’s government to tone down proposed clampdowns on doing business in China.
The firms declined to comment. Executives are said to be calling for China not to be included in the strictest risk category within new national security legislation, arguing it could impede business and stoke negative publicity.
