Standard Chartered PLC: history, ownership, mission, how it works & makes money

A Brief History of Standard Chartered PLC

Standard Chartered PLC, founded in 1969, is a British multinational banking and financial services company. It has its roots in two banks: Standard Bank of British South Africa, established in 1862, and Chartered Bank of India, Australia and China, founded in 1853.

In 1987, the bank listed on the London Stock Exchange and became a publicly traded company. By 1999, Standard Chartered acquired Grindlays Bank, significantly expanding its global footprint.

As of 2023, Standard Chartered operates in over 60 markets, with a strong presence in Asia, Africa, and the Middle East. Its strategic focus has been on the emerging markets of Asia and Africa, which provide lucrative growth opportunities.

Financial performance has been robust over the years. For the fiscal year ending December 31, 2022, Standard Chartered reported:

The bank has maintained a solid capital base, with a Common Equity Tier 1 (CET1) ratio of 13.9% as of December 31, 2022, slightly up from 13.6% in 2021. This indicates a strong buffer against potential financial difficulties.

Standard Chartered's strategic initiatives include an emphasis on digital transformation and sustainability. In 2022, the bank invested USD 3.5 billion in technology and innovation to enhance customer experience and operational efficiency.

The bank's international presence is noteworthy, with significant operations in key markets such as:

In terms of stock performance, Standard Chartered’s shares have demonstrated resilience. The stock price as of September 30, 2023, was approximately USD 7.50, reflecting a year-to-date increase of around 20%.

Overall, Standard Chartered PLC has positioned itself as a leading player in international banking, leveraging its strengths in emerging markets while addressing the evolving needs of its global customer base.

A Who Owns Standard Chartered PLC

Standard Chartered PLC, a prominent international banking group, operates in various markets across Asia, Africa, and the Middle East. The ownership structure of the bank is diverse, comprising institutional investors, individual shareholders, and various organizations. As of the latest data from 2023, the shareholding percentage distribution among the largest shareholders is as follows:

Institutional investors hold a significant majority of the shares, with approximately 69.70% held by various institutional entities. This reflects the confidence of major investment firms in the bank’s global operations and financial health. Retail investors account for a smaller fraction, comprising about 1.39% of total shares. These ownership patterns indicate a strong institutional backing, presenting stability and strategic influence over the bank's decisions.

In terms of governance, Standard Chartered's board of directors includes representatives from major shareholders, ensuring that investor interests are represented. The company's operational transparency and performance metrics are closely monitored by these key stakeholders, fostering a proactive approach to corporate governance.

As of June 30, 2023, Standard Chartered's market capitalization stood at approximately $25 billion, reflecting fluctuations in share prices over time. The bank’s share price has exhibited resilience, with a year-to-date increase of approximately 12%, compared to the previous year. This performance is essential for long-term investors looking for growth within the banking sector.

Moreover, the bank’s financial health is highlighted by recent earnings reports. In the first half of 2023, Standard Chartered reported a net profit of $2.2 billion, up from $1.8 billion in the same period of 2022. This growth translates to a year-on-year increase of approximately 22%, indicating strong operational performance and effective risk management strategies.

The global economic environment poses both opportunities and challenges for Standard Chartered. Its strategic focus on digital banking services and sustainable finance is expected to attract further investment and enhance its competitive edge in emerging markets. With sound financial performance and a diversified ownership structure, Standard Chartered is well-positioned to navigate the complexities of the global banking landscape.

Standard Chartered PLC Mission Statement

Standard Chartered PLC operates under a mission statement that emphasizes its commitment to driving commerce and prosperity through its unique presence in Asia, Africa, and the Middle East. The company's guiding principle can be succinctly captured in its dedication to being a trusted partner for clients while ensuring sustainable growth for the communities in which it operates.

The company's mission statement emphasizes the importance of supporting economic development in emerging markets. As of their latest financial report for the year 2022, Standard Chartered reported a profit before tax of $3.8 billion, representing an increase of 14% year-on-year. This growth underscores its focus on meeting the banking needs of individuals and corporates in high-growth markets.

Standard Chartered has outlined its commitment to responsible banking practices. Their sustainability framework includes a target to provide $40 billion in sustainable financing by 2025, which aligns with global efforts to combat climate change and promote social equity.

The bank’s purpose is reflected in its strategy, which is to deliver leading financial services while addressing critical social issues. For instance, in 2022, the bank reported a total income of $18.8 billion, up from $17.9 billion in 2021, indicating a robust demand for its services in the regions it operates.

With a workforce spanning over 60,000 employees across more than 50 markets, Standard Chartered pursues a mission that encompasses diversity and inclusion within its corporate culture. The bank has been recognized for its efforts, receiving a score of 80% on the Human Rights Campaign's Corporate Equality Index in 2022.

Furthermore, Standard Chartered’s approach to digital banking aligns with its mission. In 2022, the bank reported that over 50% of its transactions were completed via digital channels, highlighting its commitment to enhancing customer experience and operational efficiency.

In terms of customer segments, Standard Chartered serves over 7 million customers, ranging from personal banking clients to large corporations. Their focus on innovation and technology is reflected in a significant increase in their investment in fintech partnerships, reaching $500 million in 2022.

The mission statement of Standard Chartered PLC is not just a statement of intent; it actively guides their operations and strategic decisions, positioning them as a leader in providing value-driven banking solutions in emerging markets.

How Standard Chartered PLC Works

Standard Chartered PLC operates as an international banking group, providing a broad range of financial services in key markets across Asia, Africa, and the Middle East. As of the latest financial reports, the company has established a solid presence in over 60 markets, employing approximately 85,000 people globally.

The core business segments of Standard Chartered include Retail Banking, Commercial Banking, Private Banking, and Wholesale Banking. Each segment caters to different client needs, from individual customers to large corporations.

Financial Performance

For the year ended December 31, 2022, Standard Chartered reported:

• Total income of $18.6 billion
• Operating profit of $5.5 billion
• Profit before tax of $4.9 billion
• Net profit attributable to shareholders of $3.7 billion

The bank's earnings per share (EPS) for the same period were $1.24, reflecting a solid performance compared to prior years.

Recent Stock Performance

As of the end of September 2023, Standard Chartered's stock is listed under the ticker STAN on the London Stock Exchange. The share price was approximately £6.20, with a year-to-date increase of 15%.

Business Strategy

Standard Chartered emphasizes sustainable growth through digital transformation and environmental stewardship. The bank has committed to investing $500 million in technology and innovation over the next three years. This initiative aims to enhance customer experience and operational efficiency.

The company also focuses on reducing its carbon footprint and has set a target to reduce financed emissions from its portfolio by 50% by 2030.

Risk Management

Standard Chartered employs a robust risk management framework to identify and mitigate various risks, including credit, market, operational, and liquidity risks. The Common Equity Tier 1 (CET1) capital ratio stood at 14.5% as of June 2023, indicating a strong capital position relative to regulatory requirements.

In terms of credit quality, the bank reported a non-performing loan (NPL) ratio of 1.4% in its latest financial disclosures, showing effective management of credit risks.

Regional Operations

Standard Chartered operates in significant markets with varying contributions to income:

Overall, Standard Chartered continues to adapt and thrive in a dynamic global banking environment, reflecting both its resilience and strategic focus in its operations.

How Standard Chartered PLC Makes Money

Standard Chartered PLC generates revenue through various financial services, including retail banking, wealth management, corporate banking, and investment banking. As of the latest reports, the company reported a revenue of $18.86 billion for the year 2022.

The breakdown of the revenue sources is as follows:

In retail banking, Standard Chartered offers a range of personal banking services including savings and current accounts, mortgage loans, and personal loans. The bank's digital strategy has been instrumental, with an increase in online banking customers, surpassing 12 million in 2022.

Wealth management contributes significantly through advisory services, mutual funds, and insurance products. The assets under management (AUM) in wealth management reached $100 billion as of December 2022, demonstrating robust growth driven by a rising affluent class in Asia and Africa.

Corporate banking services include trade finance, cash management, and lending for small and medium-sized enterprises (SMEs). The corporate banking segment earned $4.61 billion in revenue in 2022, benefiting from increased trade flows and economic recovery post-pandemic.

Investment banking activities, including capital markets and advisory services, also play a crucial role. The company facilitated equity and debt capital raisings of over $20 billion in 2022, reinforcing its positioning in the market.

Standard Chartered operates in several key geographical regions. In 2022, the revenue distribution by region was:

By focusing on emerging markets, especially in Asia and Africa, Standard Chartered has capitalized on the growing demand for banking services. The bank's total assets stood at approximately $750 billion as of the end of 2022, reflecting a steady increase driven by customer deposits and loan growth.

The cost-to-income ratio improved to 55% in 2022, demonstrating effective cost management and operational efficiency. Standard Chartered invested heavily in technology, with an emphasis on enhancing mobile and digital banking experiences, which aided in reducing costs and improving customer satisfaction.

Furthermore, Standard Chartered's strategic partnerships and collaborations, especially in fintech, have been crucial in expanding its customer base and revenue streams, positioning them well for future growth in an increasingly competitive landscape.