Standard Chartered (LON:STAB) reported a “strong start to the year” in its first-quarter 2026 results, driven by record income and continued momentum in Wealth Solutions, Global Banking, and Global Markets flow income, according to Global Head of Investor Relations Manus Costello.
Costello said first-quarter income totaled $5.9 billion, up 9% year-on-year at constant currency, while profit before tax was $2.5 billion. The bank reported a return on tangible equity (ROTE) of 17.4% and a 31% increase in earnings per share. Management said 2026 guidance remains unchanged, including an expectation of ROTE above 12% for the year.
Income growth led by non-interest revenues
Net interest income (NII) declined 3% quarter-on-quarter. Costello attributed the move to lower rates during the quarter—“especially HIBOR”—offsetting volume growth and mix benefits. He added that improved liability mix, particularly in Transaction Banking and Wealth and Retail Banking (WRB) current account and savings account (CASA) balances, helped support NII.
Despite volatility in rate expectations, Costello said the bank’s weighted average rate outlook was “largely unchanged,” implying a 42-basis-point reduction in 2026. He reiterated that WRB portfolio actions are expected to reduce NII by around 2% in 2026, with headwinds expected to be mitigated by volume growth, leading the bank to expect NII to be “broadly flat in 2026.”
Asked about the unchanged NII guidance and pass-through rates, Costello said the pressure is “focused on CIB at the moment rather than WRB,” noting that pass-through rates in Corporate and Investment Banking (CIB) remain elevated and can have a lagged effect in a falling-rate environment. He reiterated the bank’s sensitivity disclosure that “every point of PTRs is about GBP 30 million of NII pressure.”
Costs and Fit for Growth savings
Operating expenses rose 1% year-on-year, with Costello saying business growth and inflation were “largely offset” by Fit for Growth (FFG) efficiency initiatives. The bank incurred $119 million of FFG cost-to-achieve in the quarter and has reached an exit run-rate savings level of around $900 million so far, Costello said. Management continues to expect expenses to remain broadly flat in 2026 at constant currency, excluding material notable items.
In the Q&A, Interim Group CFO Pete Burrill discussed an “other” movement in the capital bridge, citing items including employee share awards (which tend to be a first-quarter impact), as well as valuation adjustments such as debit valuation adjustment (DVA) and prudential valuation adjustments (PVA), which can be influenced by market volatility.
Credit overlays tied to Middle East conflict
Management repeatedly referenced the evolving conflict in the Middle East, emphasizing that the priority remains staff safety and supporting clients. Costello said there had been “no material impact” on the bank’s portfolios, but Standard Chartered took “precautionary” expected credit loss (ECL) overlays.
Credit impairment charges were $296 million, including $190 million of “precautionary overlays” and post-model adjustments related to the conflict. Costello said the overlays include a new downside scenario that considers a prolonged geopolitical crisis leading to sustained energy supply disruptions and elevated global commodity prices. He added that the bank also took overlays for the petrochemical sector and for potential sovereign downgrades tied to sustained conflict.
Costello said CIB credit impairment was $111 million, reflecting a portion of the overlays, offset by net recoveries elsewhere in the portfolio. He said WRB remained resilient, with impairment “broadly flat despite the overlays,” supported by portfolio optimization actions.
The quarter’s annualized loan loss rate—including overlays—was 32 basis points, within the bank’s 30 to 35 basis-point through-the-cycle guidance. Costello also said high-risk assets rose about $700 million due to more early alerts stemming from the conflict, while credit grade 12 and net stage 3 assets were “broadly stable.” He noted that the Middle East represents about 6% of group exposures, with more than 90% in CIB and weighted toward sovereigns and financial institutions; WRB exposures are “mostly secured.”
On scenario weightings, Burrill said the bank had 70% weighting on two downside scenarios: 45% on the Sustained Middle East Conflict scenario and 25% on the more severe Bank Capital Stress Test (BCST) scenario. He said the base case reflected a “pre-war” outlook and that weightings could be revisited as the outlook changes. Burrill added that it was “too early” to discuss write-backs or reversals of overlays.
Responding to questions on sovereign downgrade sensitivity, Burrill said the overlays relate to countries more sensitive to higher oil prices—particularly oil importers with less fiscal headroom—and that potential RWA impacts are “manageable, not material, and well within our guidance.”
Balance sheet growth and capital position
Costello said underlying loans and advances to customers increased 3%, or $10 billion, in the quarter, primarily from Global Banking and secured wealth lending. Underlying customer deposits were up 3%, with “strong growth in CASA across WRB and CIB.”
Risk-weighted assets rose 3%, driven by asset growth and mix, plus a $3 billion increase in market risk RWA as the bank supported client activity. Standard Chartered’s CET1 ratio was 13.4%, which Costello said reflected capital generation offset by distributions and business growth.
In the Q&A, CEO Bill Winters said the bank has “said consistently” it will operate within a 13% to 14% CET1 range and described the first-quarter RWA increase as tied both to volume opportunities and higher volatility. Burrill added that market risk RWA typically rises in the first quarter after a seasonally lower fourth quarter and suggested RWA growth should be “more flattish” through the remainder of the year.
Segment performance: CIB and WRB
In CIB, income was $3.6 billion, up 6%, with Costello citing “continued momentum” in Global Banking, where income rose 19% on increased origination volumes. Global Markets delivered record flow income, up 17%, driven by increased client activity across rates and FX, and supported by investments in electronic platforms and talent, Costello said. Episodic income was lower versus a strong comparator in the first quarter of 2025, with 12-month rolling episodic income around $800 million.
WRB income rose 13% to $2.5 billion. Costello said the quarter included records for affluent net new money and Wealth Solutions income. Wealth Solutions income rose 32%, driven by client activity across multiple asset classes in investment products; bancassurance income increased 20%.
Affluent net new money inflows were $18 billion, equivalent to 16% annualized growth in affluent assets under management, which Costello said was driven primarily by wealth products and reflected fast execution on the bank’s open architecture platform during volatile markets.
Costello also noted that digital banks are now reported within WRB. He said Mox was profitable in the first quarter, and Trust “turned profitable in March.”
In response to questions about the sustainability of strong wealth performance, Winters said the bank focuses on leading indicators such as new clients and the migration from deposits into wealth products. While he cautioned that the bank cannot “extrapolate 30%+ growth ad infinitum,” he described structural drivers as “very clear” and “very consistent,” supported by ongoing investments and a brand perceived as “a good and safe place to go in good times and bad.” Costello added that quarter-on-quarter AUM movement also reflected FX effects, given a stronger dollar during the quarter.
On trends into the second quarter, Winters said first-quarter momentum has carried into early Q2, while cautioning that a prolonged Middle East conflict could affect both returns and lending opportunities. Costello also reminded analysts that the bank is cycling certain second-quarter 2025 items, including a ventures gain and a strong episodic quarter, which could make year-on-year comparisons more challenging.
Looking ahead, Costello said the bank will provide a medium-term financial framework at an investor event in May, reiterating that 2026 guidance remains unchanged and that management remains “watchful of the external environment.”
About Standard Chartered (LON:STAB)
Standard Chartered PLC is an international banking company. The Banks’s segments include Corporate & Institutional Banking, Retail Banking, Commercial Banking and Private Banking. Its Corporate & Institutional Banking segment allows companies and financial institutions to operate and trade globally, and its Private Banking segment supports high net worth individuals with their banking needs across borders and offers access to global investment opportunities. Its Retail Banking segment offers clients, as well as small businesses a range of banking support solutions, and its Commercial Banking segment provides mid-sized companies with financial solutions and services.
