Standard Chartered (LSE: STAN) shares might have escaped some investors’ notice. The bank isn’t a high street name, doesn’t serve UK domestic customers, and a lot of people simply haven’t heard of it. But investors who took the plunge five years ago have enjoyed the biggest gains out of all the FTSE 100 banks.
A five-year rise of 258% eclipses even NatWest‘s storming 205% over the same period. Standard’s focus is on wealth management in Asia, Africa and the Middle East. And there’s surely great promise there.
While those areas do bring geopolitical risk, wealth in the regions is rising strongly. And it helped boost underlying profit before tax by 18% in 2025 — as reported Tuesday (24 February). The final quarter did fall a little short of analyst expectations. And Standard Chartered shares lost around 1% in early trading.
New share buyback
The standout is a new share buyback, of $1.5bn — adding to $2.8bn already announced during 2025. It seems Standard Chartered is throwing off a lot of cash — and there’s enough to lift the full-year dividend by 65% too. At 61 cents (around 45.3p) per share, it means a yield of 2.5% on the previous day’s close.
That’s well below the best the FTSE 100 banks have to offer. Again, NatWest comes out on top, with a 5.3% yield on the cards. Still, there are different ways to return cash to shareholders.
Standard’s buyback approach should increase future per-share measures, like earnings. And that, in turn, can boost share prices further. Whether it’s by share price growth or by dividend income, total returns are what matter.
A cracking year
In the words of CEO Bill Winters: “2025 was another year of strong momentum. We achieved an underlying return on tangible equity of 14.7%, exceeding our three-year plan a full year early.“
The bank saw net interest income rise 1% to $11.2bn. That might not look like a big increase. But in these days of global inflation generally falling, I’d say it’s a positive sign of reliable profitability.
Over the year, Standard Chartered saw 24% growth in operating income from its Wealth Solutions division. Global Banking brought in a 15% rise over 2024 too. The focus appears to be paying off.
At the bottom line, underlying earnings per share (EPS) climbed 37% to 170p. That puts Standard Chartered shares on a trailing price-to-earnings (P/E) ratio of 10.7. Is that, perhaps, fully valued? Or is there room for more?
Next few years
The big jump in earnings per share puts that valuation below analyst expectations — they had it up around 12. What’s more, they forecast a further 15% EPS rise between now and 2027. That could drop the P/E to only a bit over nine by then, which I find attractive.
I still expect some volatility. It’s an unavoidable risk with any investment based on emerging markets.
But with the developing world hopefully pulling further away from the post-Covid economic slump, I rate Standard Chartered as one to consider for the long term.
