Standard Chartered Soars to Q1 2025 Earnings Victory with EPS Growth Surpassing Expectations

Standard Chartered’s first-quarter 2025 results marked a resounding success, with earnings per share (EPS) surging 22% year-on-year to 56.6 cents, comfortably beating both prior-year levels and analyst expectations. The bank’s strategic focus on high-growth businesses—particularly Wealth Solutions and cross-border services—drove robust income expansion, while cost discipline and a share buyback program amplified returns for investors.

EPS Beats: The Numbers That Matter

The reported EPS of 56.6 cents for Q1 2025 reflects a 10.1-cent jump from the 46.5 cents recorded in Q1 2024. Even more impressive, the underlying EPS (excluding one-time costs) rose 19% to 62.7 cents, underscoring operational strength. This outperformance was fueled by:
- Profit before tax hitting $2.103 billion, a 15% year-on-year increase and $200 million above consensus estimates.
- Revenue growth of 12% to $5.4 billion (excluding notable items), with non-interest income up 18% in the same adjusted terms.

Growth Drivers: Where the Money Is

The bank’s Wealth Solutions division was the star performer, with income jumping 28% year-on-year. This was driven by strong demand for structured products and affluent client activity, including $13 billion in net new money and 72,000 new clients.

The Global Markets division also shone, with income rising 14% as volatile markets spurred client activity in foreign exchange and derivatives. Meanwhile, Global Banking saw income grow 17%, fueled by bond issuances and corporate dealmaking.

Costs and Capital: A Tightrope Walked Well

While operating expenses rose 5% year-on-year due to inflation and tech investments, the bank’s Fit for Growth cost-saving program delivered $400 million in annualized savings. Restructuring charges of $73 million were incurred, but the Common Equity Tier 1 (CET1) ratio improved to 13.8%, a 21-basis-point quarterly increase.

The $1.5 billion share buyback program, now 43% completed, has reduced shares outstanding by 9%, directly boosting EPS.

Risks and Challenges: The Clouds on the Horizon

• Trade Tariffs: Up to $900 million of network income could be at risk due to U.S. tariffs, though management emphasized diversification efforts to mitigate impacts.
• Credit Impairments: A $219 million charge in Wealth and Retail Banking reflects heightened caution amid macroeconomic uncertainty.
• Net Interest Income (NII) Pressures: NII fell 5% quarterly due to lower deposit pass-through rates, though it remained stable year-on-year when excluding one-time items.

Stock Performance and Valuation

Shares rose 2.57% post-earnings, with the stock up 49.24% year-to-date to $14.72. At a P/E ratio of 10.5, Standard Chartered appears undervalued compared to its peers. The 2.51% dividend yield offers steady income, but investors must weigh risks like geopolitical volatility and NII headwinds.

Conclusion: A Resilient Play for Global Growth

Standard Chartered’s Q1 results highlight its ability to navigate macroeconomic headwinds while capitalizing on structural trends like wealth management growth and cross-border trade. With 5–7% annual revenue growth guidance intact, a robust CET1 ratio, and a share buyback program nearing completion, the bank is positioned to deliver sustained returns.

However, investors should remain cautious about near-term risks: tariffs, credit quality, and NII pressures could test resilience. That said, the 19% EPS growth and $7.3 billion in cross-border network income since 2019 signal a long-term growth story.

For investors seeking exposure to Asia-Africa-Middle East markets and global banking services, Standard Chartered’s 10.5 P/E ratio and dividend yield make it an attractive, if occasionally volatile, play. The bank’s results are a clear win—but the broader macroeconomic backdrop will determine whether this outperformance continues.

Final Takeaway: Buy with a long-term horizon, but stay alert to geopolitical and interest-rate risks.