Standard Chartered PLC; (Holding Co.); Standard Chartered Bank (Lead Bank)

The stable outlook on Standard Chartered PLC (SC PLC, the holding company of the Standard Chartered group) mainly reflects our view that the group will maintain its adequate risk management in the coming two years. The group has made steady progress in cleaning up its balance sheet and strengthening its risk management in the past few years. Its performance has shown resilience despite the difficult operating conditions amid COVID-19 and very low interest rates. We expect the group to maintain asset quality and credit losses that are broadly comparable to its global systemically important bank (G-SIB) peers'. In our view, the group's profitability will gradually improve, backed by good growth in its major markets, continued strengthening of its wealth management

...Standard Chartered group's profit should recover supported by rising interest rates in key markets and cost discipline. The group is targeting a 10% annual return on tangible equity (RoTE) by 2024, from about 6% in 2021. While operating conditions remain tough, the Standard Chartered group had an annualized RoTE of about 10% for the first half of 2022 backed by strong performance of financial markets and a double-digit growth in net interest income. The group's adequate risk management will cushion credit risks. The Standard Chartered group's multiyear efforts to strengthen risk management should contain credit costs this year despite recent COVID-19-related lockdowns in China, strains in the country's property market, and global macroeconomic uncertainties from the Russia-Ukraine war. We anticipate the group's credit costs in the next 12-18 months will gradually move toward its normalized guidance of 30-35 bps of gross customer loans, compared to about 9 bps in 2021....

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