£20,000 invested in Standard Chartered shares 1 year ago is now worth…
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, thatâs a very strong return over a short period of time. And investors will have received dividends during that period.
However, itâs worth noting that while Iâve 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 â particularly around the so-called Liberation Day â made me uneasy about Standard Charteredâs heavy exposure to developing markets.
The bankâs 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 Charteredâs key markets were the focus of Trumpâs ire.
Despite these concerns, the bankâs share price has gone from strength to strength. Worries about bad credit exposure and falling demand appear to have been misplaced.
That doesnât mean it wonât be an issue in the future â the full impact of Trumpâs trade policies may not be perfectly understood for some time.
What does the valuation tell us?
Standard Charteredâs 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 Charteredâs emerging markets bias â 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
Itâs certainly worth considering, and itâs 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. Itâs 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.
Arbuthnotâs edge lies in its ability to grow lending prudently and its high-wealth clientele â 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.
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James Fox has positions in Arbuthnot Banking Group Plc. The Motley Fool UK has recommended Standard Chartered Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
