Morgan Stanley has released a research report indicating that Standard Chartered Group (02888) has made an encouraging start to 2026, with first-quarter business trends continuing the strong momentum from the previous year. The wealth management business has demonstrated robust performance year-to-date, with net new money inflows remaining healthy. Boosted by market volatility, non-recurring income has rebounded from a weak fourth quarter last year, though it faces a high year-on-year comparison base against a strong first quarter in 2025. The bank has set a London price target of 1,865 pence for Standard Chartered (STAN.L) with an "Overweight" rating.
The report cited Standard Chartered's management reaffirming guidance for 2026 fiscal year net interest income and costs to remain broadly flat year-on-year. Looking beyond 2026, even in a more volatile environment, management expressed comfort with maintaining credit costs for the full cycle within a range of 30 to 35 basis points. In corporate, financial institution, and commercial banking, Standard Chartered's strategy remains focused on distribution-led business and large international corporations. Within corporate and investment banking, the focus continues shifting toward affluent and wealth management clients while reducing exposure to unsecured consumer lending. These factors support confidence in long-term credit quality.
Additionally, Standard Chartered's management views recent geopolitical events as having no direct impact on staff or operations. From a credit perspective, focus remains on core corporate and investment banking markets in the UAE, Qatar, and Saudi Arabia, where 80% of exposure is investment-grade and directed toward large multinational corporations, financial institutions, and government-related entities. These portfolios are considered low-risk. In wealth management and retail banking, credit exposure is primarily composed of mortgages in the UAE with low loan-to-value ratios; the bank exited small and medium enterprise business in the Middle East several years ago. Management maintains a cautious yet comfortable stance regarding first-stage impacts, while potential second-stage effects depend on the duration of geopolitical uncertainties, though current guidance remains unchanged.
Comments