Proactive Investors - FTSE 100 banking big cap Standard Chartered PLC (LON:STAN) cheered a strong set of results today, but there’s one bugbear remaining on chief executive Bill Winters’ mind.
"The share price is crap. I know that's going to be a quote," Winters said in response to a question on the bank’s valuation. Right he was.
“We will be completely focused on addressing shareholders' concerns because we are completely optimistic about our delivery," he added.
Winters replaced Peter Sands as boss of Standard Chartered in February 2015. His previous accolades include being co-head of JPMorgan’s investment bank before founding hedge fund Renshaw Bay in 2011.
Since taking the helm at Standard Chartered, shares are down around 28%, and down around 13% year on year.
But they bounced a meaty 9.5% today in response to solid annual financials, with total operating income up 10% yearly and net interest income (NII) adding 23%.
Bumper share buybacks and a tidy 50% increase in dividends aided the rally.
Forward guidance has NII between $10 billion and $10.25 billion for 2024, with RoTE holding steady at 10%.
If Standard Chartered manages to keep stakeholders on-side, this “crap” share price could look less crap down the line.
However, exposure to China’s real estate market is a “thorn in the side of the business”, said AJ Bell’s investment director Russ Mould, while an $850 million write-down on its investment in Chinese bank Bohai added a bit of a sting to the earnings.
Yet “medium-term returns targets are ahead of where the consensus is sitting so if these can be delivered they could help lift the company’s valuation”.
Emerging-market exposure, however, will remain a source of unpredictability “which may get in the way of these aspirations”.
Winters’ pay springs higher
Not so crap is Winters’ £7.8 million remuneration package for 2023, which was more than 40% higher year on year.
Around 40% of this handsome amount was in the form of long-term incentives payable in the following two years, with base salary, pensions and benefits comprising another 40% and annual incentives making up the remainder.
This puts Winters in the upper echelons of chief executive salaries, though still behind HSBC’s chief executive Noel Quinn.
Despite HSBC’s annual results released earlier this week underwhelming City analysts, Quinn saw his total fixed and variable pay package nearly double in 2023, taking home over £10.6 million.