The UK bank’s wealth management business has seen steady growth in 2023, driven by treasury products and bancassurance.
Standard Chartered finished the last quarter of 2023 on a high, with underlying pre-tax profit jumping 62% to US$1.06 billion compared with the prior year quarter, according to its latest earnings report. Operating income rose seven percent year-on-year (YoY) to US$4 billion in Q4 23.
Performance was broad-based as three of our five largest Wealth markets, Hong Kong, China and Taiwan, all grew income at double-digit rates - Diego De Giorgi
The UK bank’s wealth management (WM) business which is housed under the consumer, private and business banking division saw a 15% YoY gain at all fronts to US$412m in operating income in the last quarter ended in December, particularly supported by bancassurance.
With the latest quarterly figure, the bank’s WM segment wrapped up the full year 2023 with an eight percent YoY to US$1.9 billion in operating income. Income from treasury products and bancassurance was up 16% YoY and 17% YoY, respectively, while managing investments and secured wealth lending were the laggards, impacted by client deleveraging and margin compression, according to Diego De Giorgi (pictured), the banking group’s chief financial officer.
‘Performance was broad-based as three of our five largest Wealth markets, Hong Kong, China and Taiwan, all grew income at double-digit rates,’ said Giorgi, who was named CFO just last month, succeeding Andy Halford who had been in this role since 2014.
The higher income in WM also translated into a soaring in affluent net new money, which attracted 50% YoY to US$29 billion in 2023.
The UK bank highlighted that more than a quarter of a million new-to-bank affluent clients were onboarded in 2023, or 10% of its overall affluent client base. Geographically, Hong Kong SAR and South Korea saw the number of new affluent clients double, while China and Singapore grew 40% and 30% YoY, respectively.
Structured products
Standard Chartered’s structured products business had a strong presence in Switzerland as the bank distributed 695 products in 2023, according to SRP data.
Some 451 marketed by the UK bank are structured notes, most of them linked to a basket of equities. Popular underlings are centered in the technology, retail, software and services sectors, including Nvidia, Amazon, and Tesla.
The remaining products distributed in the Swiss market were investment certificates – 134 of which were autocallables.
In Taiwan’s private banking space, Standard Chartered doubled its distribution of structured notes to a total of 249 in 2023. In comparison, 2022 saw 109 products distributed by the UK bank. Out of 249 structured notes marketed in Taiwan, 96 structured notes came from issuing bank BNP Paribas, followed by Société Générale (80), UBS (71), and HSBC Bank (two).
About 188 had a tenor of less than a year, followed by 50 that had one to three-year tenors and 11 had three to six-year investment terms. The majority of the products were linked to baskets of shares comprising unspecified underlyings.
In Malaysia, Standard Chartered Bank issued 26 structured deposits for retail investors and 13 equity-linked investments (ELI) for private banking clients in 2023, SRP data shows.
At the beginning of 2023, the UK bank also unveiled a new module enabling end-to-end automation for its structured notes offering targeting Hong Kong SAR’s professional investors. The bank aims to transact 90% of its trading volume through the digital platform following the launch.
Other business lines
By products, transaction banking’s operating income recorded a 51% YoY rise to US$5.8 billion in 2023, with cash management income soaring 79% YoY to US$4.5 billion.
The financial markets segment’s operating income dropped. Macro trading was down five percent YoY to US$2.8 billion. Credit markets gathered US$1.8 billion, up two percent compared to the prior year.
Looking at the full 2023, Standard Chartered’s reported profit before tax rose by 19% YoY to US$5.09 billion. By region, Asia recorded over US$3.8 billion in reported profit before tax in full 2023, up 15% YoY, accounting for nearly 75% of the bank’s overall pre-tax fit
Africa and Middle East region collected a reported pre-tax profit of US$1.3 billion, while Europe and Americas and Central and other regions lost US$28m and US$8m, respectively.
Click the link to read Standard Chartered’s Q4 23 and full 2023 earnings release, presentation, and data pack.
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