StanChart's cost-cutting to weigh on 2025 profits but wealth segment strong

The bank should be able to manage real estate challenges in Hong Kong, China, SoKor, says S&P.

Standard Chartered Group’s profitability is expected to moderately decline in 2025 amidst restructuring-related expenses, said S&P Global Ratings.

“We expect Standard Chartered group's profitability to moderately decline in 2025. This will be mainly because the bulk of restructuring expenses related to the group's cost-saving initiative called "fit for growth" will be realized during the year,” the ratings agency said.

S&P estimates that Standard Chartered’s return on average assets (ROAA) will be about 0.45% in 2025, lower than 0.5% in 2024 but higher than the 0.42% in 2023. ROAA will be buoyed by momentum in the bank’s wealth management segment, particularly in Hong Kong and Singapore.

The bank should also be able to manage real estate challenges in Hong Kong, mainland China, and South Korea, according to S&P Global Ratings.

The group’s mainland China commercial real estate sector (CRE) exposure remains low for China (0.7% of gross customer loans) and Hong Kong (0.9%).