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Now, Standard Chartered is set to return another one point five billion dollars to shareholders this as the London based lender reports fourth quarter earnings that beat estimates. Let's cross over to London right now where Bloombos Ana Edwards is standing by, ready to speak to the CFO.
Of that bank. Anna, Thanks very much, tom Y.
I'm really pleased to say I'm joined by Diego di Georgi, who is the CFO of Standard Chartered and joins me here on set in London. Diego, nice to have you with us this Friday morning.
Thank you for coming in. So the numbers themselves coming in better.
Than estimates, returning one and a half billion dollars to shareholders. You've given some guidance this morning. I wonder whether the guidance looks a bit conservative. That's one of the conclusions coming out of one of the analysts this morning. How do you how do you rationalize the guidance you're giving.
Well, look, we upgraded our guidance at Q three and in the meantime we have delivered another strong repeat performance by our engines of growth, financial markets, banking and in particular our wealth management business, and it's really been consistent delivery quarter after quarter, and that has allowed us to reach eleven point seven percent return on tangible equity, which is at one hundred and sixty business points increase on
last year. When you think of it, we're really delivering top line growth fourteen percent, and we are marrying with a returning capital to our shareholders. And we've announced, as Tom just said, another one and a half a billion dollar buy back, which, when you think about it, really means that we are delivering what we have promised to our shareholders, which is sustainably higher returns from our high growth business in our high growth market.
Okay, and a lot of banks have had the experience of being assisted in this activity by higher interest rates and ness interest margin benefits from those higher interest rates.
What are you assuming for this.
Year and therefore, you know, could you be could your numbers do better if rates are not cost as much as maybe we were expecting recently.
So the environment might be a little bit more conducive than we were expecting up until a few months ago. But first of all, let's remember that in terms of contribution to the top line, our net interestingcom contributes about fifty percent, and our non net interesting income contributes about another fifty percent. Non net interesting income has very strong engines of growth, up twenty percent last year, as we
have just discussed. And in terms of net interest income, we have been building up our heades the risking the delivery of net interest income, and I think that positions as well for this slightly more uncertain world.
Okay, so let's turn to the other paths of the income stream and a wave nets interest margin in the other areas. One of the areas want to ask you about it is global markets and what you managed to achieve them. The global markets business getting a boost from some of the flacility in markets. It seems traders doing well on that, and that's been a story across Wall Street, across lots in the banking sector. The thing is, is
that sustainable in any way? Do you have any visibility on whether that kind of performance is sustainable?
So I think it's sustainable for us.
And the reason is that our markets business, as we often like to point out, is a peculiar type of market business because we are a giant connector bank. Really seventy five percent of what we do in markets is helping our clients manage their exposures to foreign currency, interest rates and other risks.
That is very.
Recurrent activity when volatility then spikes, so we add to it performance in helping them take advantage of those market these locations. But the delivery of our financial markets numbers is highly de risked once again by this attractive, by this attractive complexion of the business. And it's business that,
by the way, grows well. We pointed out at Q three at our last set, at our last set of results, that this part of the business grows at almost ten percent perannum and it's been doing so for five years.
Yeah, okay, so.
You're confident in the sustainability of the performance there in terms of the wealth management side of the business, managing money for increasingly wealthy people. That's not a revenue stream that you have. What do those conversations look like at the moment? Are global investors are they talking about, well, there's still no alternatives being invested in the United States tech story or is it a much more global narrative?
How is it shifting?
So for us for standard charter, it's a very global narrative in particular because of the nature of the wealth management activities that we do. While we are present across the continuum of wealth management all the way up to the private bank, the core of what we do is really with the affluent customers. These are customers that have with US five hundred thousand dollars one million, two million dollars.
These people really save and invest with us. So that kind of debate, although the type of products that they use might be shifting over time, is really focused really on the long term.
From that point of view.
Of course, we are assisted by the incredible secular trends that we have in our markets.
Our markets are the.
Fastest growing ones in the world, and the places where most of the weld two thirds of the wealth of the middle class over the course of the next five years is really going to be creating in Asia, Middle East and Africa.
Yeah, and that's where the business is focused.
Let me ask you about the Shepherd's performance because bel WinCE's the CEO, quite famously recently described a year or so again, describe the performance of the shares as crap.
I wonder if you have a different word.
That you'd like to use now, because now the stock is caught up with the rest of the.
European banking sector. So three words, more to do.
I think we've done well, I think, and by the way, we don't manage to the stock res I mean we manage the bank. We try to deliver sustainably higher returns. We try to return excess capital after we have invested heavily in our business so that we can deliver those sustainably higher returns. But it's true that we've had a good performance, but you know, we keep our eye on the ball. We continue executing and we hope that the
market will continue to reward us. But there is more to do, no doubt there.
Is most okay, we take that message in terms of the way that you reward staff. We're sitting here in the UK, diego and here in the UK you've got more flexibility to pay stuff with bigger bonuses since in recent regulatory changes. How important is that in the global competition for banking talent?
Very much so, in the sense that it's truly a global competition.
And look at a few things here.
We've always been a signed with the industry and we intend to be aligned with the industry going forward. And this shift towards more performance related pay I think is ideal. It aligns the interests of our colleagues with the interests of our shareholders, and it enables us to attract talented people, which is what we need in order to serve our clients in these uncertain and more fragmented times.
Yesertain, more fragmented.
And you've mentioned how some of that volacility helps on the global markets business, for example, and there's a lot of need to perhaps hold investors' hands through a lot of this velocility. I wonder if that drives opportunity. Actually, when you're managing money for wealthy global investors, if there's a lot of velacility and a lot of uncertainty, does that mean they require more or different things from you?
Very much so.
And by the way, allow me to take one step back for a second. There is a lot of discussions about theglobalization, lack of growth, et cetera. First of all, the world is growing strongly and it will continue to do so. Deglobalization is just globalization shifting towards new corridors.
And these new.
Corridors of growth that globalization is shifting towards are the intra Asian Asia to the Middle East, Asian Middle East, and Africa corridors the standard chart that really sits astride, but there's.
Less over between those corridors. In a declobalized well.
There might be, but the diversification effect of all of that will lead to a continued set of flows which are going to be more fragmented. And that fragmentation, that complexity of navigating this environment is what our clients look to us for help.
Thank you so much for joining us. Very nice to speak to you this morning.
Diego di Geogi at the CFO of Standard Charts