Core Viewpoint - CICC has upgraded Standard Chartered Group's (02888) net profit forecasts for 2025E and 2026E by 30.6% and 21.2% to $5.01 billion and $4.80 billion respectively, due to strong non-interest income performance and better-than-expected asset quality [1] Group 1: Financial Performance - In Q2 2025, Standard Chartered reported adjusted operating income of $5.5 billion, a year-on-year increase of 14.6%, and adjusted net profit of $1.8 billion, up 53.7%, exceeding both CICC's and market expectations primarily due to better-than-expected non-interest income [2] - Non-interest income grew by 33% to $2.8 billion, with a contribution of $240 million from the sale of equity in Solv India, while excluding this, non-interest income still showed a 22% year-on-year growth [3] - The bank's financial market services income in Q2 2025 increased by 47.2%, driven by demand for interest rate and currency hedging amid market volatility [3] Group 2: Guidance and Projections - The strong performance in non-interest income has led the company to raise its revenue growth guidance for 2025 from "below 5%" to a lower limit of "5%-7%" [3] - Net interest income was in line with expectations, remaining flat year-on-year but decreasing by 3% quarter-on-quarter, primarily due to the decline in Hibor [3] - The company expects net interest income to decline in single digits year-on-year for 2025, based on the anticipated recovery of Hibor [3] Group 3: Operating Expenses and Asset Quality - Operating expenses in Q2 2025 continued to grow at a rate lower than income growth, with guidance to keep 2026 operating expenses below $12.3 billion [4] - Credit costs were annualized at 16 basis points, slightly increasing year-on-year but still at a low level, with guidance indicating a gradual return to a normalized range of 30-35 basis points [4] - The company expressed confidence in the quality of its asset exposure in Hong Kong's commercial real estate, with only about $2 billion in local real estate exposure, representing less than 50 basis points of overall risk exposure [4] Group 4: Shareholder Returns - The company has nearly completed the $1.5 billion share buyback announced in the 2024 annual report and has declared a new $1.3 billion buyback, maintaining guidance for a total of at least $8 billion in buybacks from 2024 to 2026 [5] - The company aims to gradually increase its annual dividend per share and maintain a return on tangible equity (ROTE) close to 13% by the end of 2026, with plans for further increases thereafter [5]
中金：升渣打集团目标价至158.8港元 维持“跑赢大市”评级