StanChart; Credit Quality Good, Some Buyback Offset.

Standard Chartered (STAN LN) 4Q23 results which missed on revenues but included better credit metrics and above-consensus revenue outlook but with some offset from (another) buyback. Perhaps a small credit positive here.

• Key credit metrics: credit losses were a tiny 8bp (from 41bp in 3Q23) and non-performers ticked down to 2.47% (from 2.62% at Sep-23). CET1 ratio is 14.1% (20bp higher than Sep-23). So, a minor credit positive.
• Revenues missed consensus by 1% (but were +7% y/y), costs were 2% lower than expected and credit losses, in common with HSBC, undershot meaningfully. This drove a 7% pre-tax profit beat but an uptick in the tax rate meant net profit was only inline with expectations.
• Other areas: there is a USD1bn buyback (4.9% of market cap) and aspiration to return USD5bn of 3yrs (this includes dividends and is less than the USD5.5bn returned in the last 25 months). The outlook statement indicates 5-7% revenue growth FY24-26 (consensus has 4.5%) with <2% cost growth and loan losses in the 30-35bp range. This appears a small revenue upgrade.

Conf call is 0800 (London time) at https://edge.media-server.com/mmc/p/uj4fioqt/