Standard Chartered: Hong Kong Investor Day - What are we looking for?

Research evidence excerpt

Standard Chartered: Hong Kong Investor Day - What are we looking for?

2 1.1 1.0

6% and 2026e guidance of 5-7% (MSe 6.4%). We expect 6% cost jaws in 2026 ROE (%) 10.9 11.4 12.4 14.0

(company guidance is for flat costs as they benefit from US$400m of FFG savings) Div yld (%) 2.5 2.7 3.1 3.8

Core tier 1 capital ratio, 14.1 13.5 13.4 13.4

and 3ppts jaws thereafter. Our cost estimates are in-line with consensus in 2028e. Basel 3 (%)

We see US$14.3bn capital returns 2026e-2028e (US$3bn share buy back and 30% Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

dividend payout) helping drive RoTE to 15.9% in 2028e (consensus 15.1%). Our RoTE ** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

walk suggests pressure on NII from lower rates is more than offset by non NII e = Morgan Stanley Research estimates

growth and cost control.

What will we be watching for? A stronger revenue outlook, likely driven by better

wealth and corporate banking. Currently we expect wealth invested AUM 2025-

2028e CAGR of 15% and net new money of US$170bn 2026-2028e (2025-2029

targets US$200bn of NNM). We see stable investment products income as a % of

invested AUM. Our Asian macro team have recently highlighted that Asia is headed

towards an industrial super-cycle and we expect this will support Standard

Chartered's corporate and FI businesses. We currently forecast 4.2% 2026-2028e

revenue CAGR at CCIB, driven by 7% CAGR in markets revenues and 8% CAGR in

Morgan Stanley does and seeks to do business with

markets flow business. Key will be the extent this can be delivered in a tight cost companies covered in Morgan Stanley Research. As a result,

environment. We forecast 3% jaws in 2027/8e.