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Standard Chartered (LSE:STAN) shares are up 69% over the past 12 months. That means £20,000 invested one year ago is now worth £33,800.
Clearly, that’s a very strong return over a short period of time. And investors will have received dividends during that period.
However, it’s worth noting that while I’ve generally been rather bullish on the bank, there was one point when I was a little nervous.
With Donald Trump back in the White House, his renewed push for tariffs — particularly around the so-called Liberation Day — made me uneasy about Standard Chartered’s heavy exposure to developing markets.
The bank’s growth depends on trade flows across Asia, Africa, and the Middle East, and any escalation in protectionism threatens to slow those economies.
Among other things, I was worried that these tariffs could disrupt supply chains, weaken export revenues, and dampen credit demand in key regions. And it did seem for a while that some of Standard Chartered’s key markets were the focus of Trump’s ire.
Despite these concerns, the bank’s share price has gone from strength to strength. Worries about bad credit exposure and falling demand appear to have been misplaced.
That doesn’t mean it won’t be an issue in the future — the full impact of Trump’s trade policies may not be perfectly understood for some time.
What does the valuation tell us?
Standard Chartered’s valuation looks reasonable given its earnings trajectory, though it’s not especially cheap compared to peers.
Based on current estimates, the bank trades on a forward price-to-earnings (P/E) ratio of around 10.2 times for 2025. This falls to 9.3 times for 2026, and 7.5 times for 2027. That implies analysts expect strong earnings growth. Earnings per share are forecast to rise from $1.87 in 2025 to $2.54 by 2027.
The dividend yield is expected to remain moderate, at 2.3% in 2025, 2.6% in 2026, and 2.9% in 2027.
While the payout ratio stays below 25%, the prospective yield is lower than that of Lloyds, which offers a more generous return to shareholders.
Still, the valuation multiples reflect Standard Chartered’s emerging markets bias — higher growth potential but also higher perceived risk.
The shares trade below book value for much of the forecast horizon, suggesting lingering investor caution.
Although the earnings outlook is encouraging, with forecast profit growth outpacing many UK-listed peers, the income case is less compelling. Overall, the stock appears attractively valued for growth-oriented investors, but less so for those prioritising income in the near term.
The bottom line
It’s certainly worth considering, and it’s also worthwhile given that Standard Chartered could outperform UK-focused banks like Lloyds beyond the forecast period.
Personally, my favourite in the sector to add to a watchlist is currently Arbuthnot. It’s hard to compare as Arbuthnot is much smaller.
However, the value proposition of Arbuthnot is stronger than its FTSE 100 peers. Size accounts for some of that, but not all.
Arbuthnot’s edge lies in its ability to grow lending prudently and its high-wealth clientele — typically more resilient in economic downturns.
While its smaller size is a risk, its private and commercial banking focus captures clients often under-served by larger peers, while its low loan-to-deposit ratio supports stability.
That combination could drive outperformance relative to its current valuation.
