Comments
Standard Chartered, the emerging markets-focused bank, has insisted that it continued to offer “huge growth opportunities,” and reassured investors on its capital position as it reported the first drop in profits in ten years.
The bank admitted 2013 “was a challenging year,” as it reported an 11.4 per cent drop in pre-tax profits to $6.06 billion, after it was hit by an-already announced $1 billion impairment charge at its South Korean operations, turbulent financial markets, falling margins, and a slowdown in growth in Asia.
‘Modest growth’ ahead Chief Executive Peter Sands said that conditions, though improved from the second half of 2013, remained tough in early 2014, and that the bank expected “modest growth” for the year. “Market and trading conditions are more volatile and difficult than a year ago…performance in the first half will remain challenging at both an income and profit level.”
However, the bank provided assurance on its capital position, which had been the cause of some concern ahead of the results, with some even raising the possibility of a rights issue. The bank’s Basel III Common Equity Tier 1 ratio of 11 per cent, a key measure of financial strength, came in at 11.2 per cent, ahead of many analyst forecasts.
“While we expect risk weighted assets to grow in 2014, we intend to maintain healthy capital ratios through a range of measures, including driving profitable capital accretive growth and divesting certain non-core assets,” said Sands on Wednesday. Shares of Standard Chartered have fallen nearly 30 per cent over the past year amid concerns over a slowdown in Asia, which constitutes the bulk of its business.
In November last year it said it was abandoning its target of double-digit growth, while in January it announced an overhaul of its business, including plans to merge its consumer and corporate banking divisions.
Unlike other UK banks that have garnered criticism over the level of 2013 bonuses, Standard Chartered announced that the bonus pool for 2013 had fallen to 15 per cent, while dividends rose by 10 per cent to 84 pence.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.