Goldman Sachs: Raising the target price of Standard Chartered Group (02888) to HK$276. Second quarter results beat expectations and raised full-year guidance

The Zhitong Finance App learned that Goldman Sachs released a research report stating that it reaffirmed Standard Chartered Group's (02888) “buy” rating, and that the target price for 12 months was raised from HK$267 to HK$276, reflecting the stronger revenue momentum of the company's Wealth Solutions business. Earnings per share forecast for the 2026 fiscal year were raised by 4%, and the forecast for the 2027-2028 fiscal year remained largely unchanged.

The bank pointed out that Standard Chartered announced second-quarter results. Profits for the period were 17% and 11% higher than the market and the bank's expectations, respectively, mainly driven by strong non-net interest income, reduced provisions, slightly better net interest income than expected, and more favorable tax rates. Management also raised its FY2026 guidance, including raising the operating income growth guide from the bottom of the 5% to 7% range to the middle, and raising the net interest income guideline from broadly flat to low unit growth.

Goldman Sachs pointed out that non-interest revenue for the second quarter was US$2.83 billion, 5% higher than market expectations. It was mainly driven by continued strong wealth solutions business and better-than-expected global banking business performance, which offset the negative effects of intermittent market weakness and debtor evaluation adjustments (DVA). Net interest income was US$2.87 billion, 1% higher than market expectations, and increased 1% quarter-on-quarter. The number of beneficiary days, loans and deposits continued to grow, and the combined effect. Overall operating revenue was 3% higher than market expectations.

The company's second-quarter credit impairment was US$150 million, 37% lower than market expectations. The annualized loan loss rate fell to 20 pips, and asset quality was still good. In terms of cost, operating expenses for the period were slightly lower than expected, but excluding the release of Korea's ELS provision, “Fit for Growth” savings continued to offset the impact of business growth and inflation. After adjustment, the annual cost guidance is approximately US$13.3 billion, which is about 1% lower than market expectations.