Standard Chartered net profit declines 17pc
Standard Chartered, the British bank which is heavily exposed in emerging markets, posted its first decline in earnings in a decade due to volatile financial markets and tough conditions in South Korea, with analysts warning the bank still faces challenges in 2014.
Standard Chartered, the British bank which is heavily exposed in emerging markets, posted its first decline in earnings in a decade due to volatile financial markets and tough conditions in South Korea, with analysts warning the bank still faces challenges in 2014.
Standard Chartered's profit before taxation dropped 7 per cent to US$6.96 billion last year. The statutory net profit for ordinary shareholders sank 17 per cent to US$3.99 billion. The bonus pool was cut 15 per cent to US$1.3 billion, with chief executive Peter Sands' bonus down 21 per cent.
The decline came after 10 consecutive years of growth in revenue and profit, with 90 per cent of its profit earned from Asia, the Middle East and Africa.
"Standard Chartered has experienced the worst scenario in its operating markets," said Maybank Kim Eng analyst Steven Chan, referring to asset quality deterioration in India and South Korea. "Whether it can rebound in this year hinges on the volume growth in trade, wealth management and small and medium-sized enterprise businesses."
Sands said 2013 was "not a great year" for Standard Chartered and warned that "performance in the first half of 2014 will remain challenged both at an income and profit level".
Non-core businesses were put up for sale, including the consumer finance business and Savings Bank in South Korea, the Swiss private bank business and the consumer banking business in Lebanon. It reported US$1 billion of impairment charges from the Korean business last year.
