Standard Chartered PLC (LSE:STAN) has raised its full-year 2026 income growth forecast after reporting a 27% increase in third-quarter pretax profit to $2.25 billion, exceeding analysts’ expectations of $2.09 billion.
The Asia-focused banking group reported a 14% increase in operating income on a constant-currency basis, excluding notable items, supported by growth in wealth management, financial markets activity and net interest income.
Standard Chartered now expects full-year income growth to exceed its previous guidance range of 5% to 7%. The bank also increased its return on tangible equity target to approximately 14%, compared with its earlier expectation of more than 12%.
The revised outlook follows growth across several business divisions, including a third consecutive quarterly record for Wealth Solutions income.
Third-Quarter Profit Exceeds Market Expectations
Standard Chartered reported pretax profit of $2.25 billion for the third quarter, representing a 27% increase compared with the corresponding period in 2025.
The result exceeded the Bloomberg-compiled analyst consensus of $2.09 billion by approximately $160 million.
Profit for the period increased 36% to $1.76 billion.
Operating income rose 14% in constant currency when excluding notable items, reflecting higher contributions from wealth management, trading and lending activities.
The bank’s net interest income increased 9% to $3 billion during the quarter.
The results prompted management to revise several financial targets for the remainder of 2026.
Full-Year Income Growth Guidance Raised
Standard Chartered now expects income growth for 2026 to exceed its previous forecast range of 5% to 7%.
The bank did not provide a specific replacement percentage, indicating instead that growth is expected to finish above the upper end of the earlier range.
Management also increased its return on tangible equity target to approximately 14%, compared with its previous objective of more than 12%.
Return on tangible equity measures profitability relative to shareholders’ tangible equity and is used by banks to assess financial performance.
The revised targets reflect the bank’s third-quarter earnings performance and its expectations for the remainder of the financial year.
Net Interest Income Forecast Increased
Standard Chartered raised its full-year net interest income growth guidance to approximately 4%, replacing its previous expectation of low-single-digit growth.
The revision follows a 9% increase in third-quarter net interest income to $3 billion.
Net interest income represents the difference between interest earned on assets, including loans, and interest paid on liabilities such as customer deposits.
The bank also changed the way it presents its operating cost target.
Instead of targeting approximately $13.3 billion in absolute expenses, Standard Chartered now expects a cost-to-income ratio of around 60%.
The revised measure relates operating expenses to income and therefore takes account of changes in revenue when assessing cost efficiency.
Wealth Solutions Income Rises 26%
Standard Chartered’s Wealth Solutions division reported a 26% increase in income, marking its third consecutive quarterly record.
The growth was supported by investment products and bancassurance, which involves distributing insurance products through banking channels.
The bank has continued to expand its wealth management activities, particularly across Asian markets.
Goldman Sachs analysts highlighted net new money inflows of $20 billion during the period.
The analysts said the inflows “reinforces the structural narrative behind Wealth.”
The result indicates continued customer investment activity within the bank’s wealth management operations.
Wealth Solutions has become an increasingly important contributor to Standard Chartered’s non-interest income.
Global Markets Income Increases 21%
Standard Chartered reported a 21% increase in Global Markets income during the third quarter.
The division benefited from trading activity, contributing to the group’s overall increase in operating income.
Global Markets provides financial market products and services to institutional and corporate customers, including foreign exchange, interest rate and other trading solutions.
The division’s performance, together with Wealth Solutions growth, contributed to the increase in non-interest income.
Goldman Sachs analysts described the quarterly results as a “beat and raise,” referring to earnings exceeding expectations alongside the upward revision to financial guidance.
The investment bank identified non-interest income as a principal contributor to the quarterly performance.
Loan Impairment Charge Totals $90 Million
Standard Chartered recorded a loan impairment charge of $90 million for the quarter.
The figure was below analysts’ expectations, according to Goldman Sachs.
The investment bank attributed the lower charge partly to impairment releases within Standard Chartered’s Corporate and Investment Banking division.
Loan impairment charges reflect provisions recognised for expected credit losses associated with lending activities.
Lower charges can contribute to profitability, although future provisions depend on credit conditions and the performance of borrowers.
Goldman Sachs expects credit charges to move towards more typical levels during the fourth quarter.
The analysts also anticipate some seasonal moderation in non-interest income and an increase in operating costs towards the end of the year.
Capital Ratio Declines to 13.8%
Standard Chartered reported a common equity tier 1 (CET1) capital ratio of 13.8%, compared with 14.2% a year earlier.
The CET1 ratio measures a bank’s highest-quality regulatory capital relative to its risk-weighted assets.
The bank also reported a liquidity coverage ratio of 154%.
The liquidity coverage ratio measures the availability of high-quality liquid assets relative to expected net cash outflows over a 30-day stress period.
Both ratios provide information about the bank’s capital and liquidity positions.
Goldman Sachs also commented on the potential impact of Basel 3.1 regulatory changes on Standard Chartered’s risk-weighted assets.
The analysts said the anticipated capital impact from the revised risk-weighted asset requirements would be largely offset by a 30-basis-point reduction in the bank’s Pillar 2A capital requirement.
Chief Executive Comments on Revised Outlook
Standard Chartered Chief Executive Bill Winters attributed the quarterly performance to contributions across the group’s operations and the implementation of its strategy.
Winters said the breadth and consistency of the results reflected the bank’s franchise and its disciplined execution.
He indicated that the performance had increased management’s confidence in the revised financial outlook.
The bank’s updated guidance incorporates expectations for income growth, net interest income, profitability and operating efficiency.
Fourth-Quarter Expectations
Following the third-quarter results, Standard Chartered enters the final three months of 2026 with higher income and profitability targets.
The bank expects annual income growth to exceed 7%, net interest income growth of approximately 4%, a return on tangible equity of around 14% and a cost-to-income ratio of approximately 60%.
Goldman Sachs analysts expect some moderation in fourth-quarter trading and other non-interest income, alongside higher costs and more typical loan impairment charges.
The bank’s full-year results will determine whether the revised targets are achieved.
Wealth management activity, financial markets income, net interest margins and credit costs remain relevant factors for the final quarter.
More About Standard Chartered
Standard Chartered PLC is an international banking group headquartered in London, with operations across Asia, Africa, the Middle East and other international markets.
The bank provides corporate and investment banking, wealth management, retail banking and financial markets services.
Its activities include lending, deposits, transaction banking, investment products and capital markets services for individual, corporate and institutional customers.
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