The UK bank’s wealth management income saw a slow recovery, driven by a rebound in key markets such as Hong Kong and China.

Standard Chartered Bank (SCB) has reported US$1 billion in wealth management (WM) income during the first half of 2023, a two percent increase compared with the prior-year period, with a large gain in affluent net new money, according to the bank’s half-year earnings report.

We couldn’t be better positioned to generate good, strong growth in our wealth management business, and we're just getting started - Bill Winters

Asia-focused SCB highlighted that income year-on-year (YoY) rose in four out of the top five wealth management income markets – this growth was supported by the rebound in Hong Kong and the China reopening. As a result, the number of new-to-bank clients tripled in Hong Kong and doubled in both China and Singapore in the first six months ended on 30 June.

In the structured products space, the UK bank doubled its distribution of capital-at-risk structured notes to a total of 159 in Taiwan year-to-date compared with last year’s same period (78 products), according to SRP data - some 150 equity names were featured across unspecified share baskets.

Thirty-five of the products marketed by SCB had a tenor of one to three years while the remaining were less than one year with issuing banks including Société Générale (68), UBS (64) and BNP Paribas (27).

SCB also has eight live tranche products across other markets including the UK (four products), Malaysia (three) and Singapore (one).

Earlier this year, the bank promoted Olivier Pierlot (right) to global head of structured products & fixed income product management within the capital market products & solutions division, with the aim of pushing product development globally for retail and private banking segments,  as well as broadening the structured product and fixed income franchise to the high-growth markets for SCB.

Wealth management

The rise in WM income was also reflected in a soaring affluent net new money, which collected US$12.9 billion in H1 23, doubling from US$5.3 billion in H1 22. New-to-bank clients represented 80% of this figure during the period.

Within WM, treasury and bancassurance income products rose by 18% and nine percent in H1 23, respectively, on the back of ‘strong customer onboarding, while wealth secured lending income decreased by a third on the back of ‘customer deleveraging and higher cost of funding,’ stated the bank.

‘The real engagement with markets is just beginning,’ said Bill Winters (pictured), group chief executive, during the results call. ‘The fact that we’ve got a number one net promoter score in nine of our top nine markets...It's certainly unprecedented for us. We couldn’t be better positioned to generate good, strong growth in our wealth management business, and we're just getting started.’

Despite a ‘strong double-digit growth in foreign exchange (FX), fixed income and structured products,’ reported by the bank, the figure was partly offset by lower managed investment income as ‘transactional volumes were impacted by subdued equity markets across the footprint,’ stated SCB.

Business lines

Other businesses at SCB also saw robust growth in H1 23. Transaction banking’s operating income recorded an 84% YoY rise to US$2.86 billion with cash management income soaring 155% YoY to US$2.2 billion. In the financial markets segment, macro trading and credit markets collected US$1.66 billion and US$922m, up 3% and 6% YoY, respectively.

Groupwide, SCB posted an underlying profit of US$3.3 billion during H1 23, soaring 25% YoY as Winters described in a statement as its ‘highest first half profit since 2015.’ Operating income, which reached US$8.95 billion during the six months ended 30 June, jumped 14% YoY.

By region, Asia recorded over US$2.7 billion in pre-tax profit in H1 23, accounting for the bank’s 83% profit share. Africa and Middle East region collected a pre-tax profit of US$653m, while Europe and Americas and Central and other regions lost US$11m and US$85m, respectively.

Click the link to view Standard Chartered Bank’s half year 2023 interim report, earnings presentation and data pack.