5th Mar 2014 09:35
LONDON (Alliance News) - Standard Chartered PLC Wednesday reported its first annual decline in pretax profit after a decade of growth, as it was hit by emerging market fears and a writedown in its Korean business.
But the FTSE 100 bank reiterated that it is well capitalised, indicating that it will not go to the market to raise equity.
Standard Chartered shares were Wednesday quoted at 1,299.00 pence, up 24.50 pence or 1.9%.
The emerging markets bank reported a USD6.06 billion pretax profit for 2013, compared with USD6.85 billion in 2012, as operating income was slightly lower at USD18.78 billion. Operating expenses fell to USD10.19 billion from USD10.72 billion.
But Standard Chartered was hit by rising impairment losses on loans and advances and other credit risk provisions, which increased to USD1.62 billion from USD1.20 billion in 2012, while also suffering a previously announced USD1.00 billion goodwill writedown in Korea.
Without those impairments, Standard Chartered's operating profit rose to USD8.58 billion from USD8.06 billion.
Its Core Tier 1 capital ratio was 11.8%, higher than the 11.7% reported for 2012.
Chief Executive Peter Sands said 2013 was not a great year for Standard Chartered, adding that 2014 would have its own challenges.
"Our outlook for 2014 is one of modest growth. Market and trading conditions are more volatile and difficult than a year ago. While current performance momentum is ahead of the second half of last year, performance in the first half of 2014 will remain challenged both at an income and profit level," Sands said.
Setting out Standard Chartered's priorities for 2014, Sands said he wants to deliver profitable and capital accretive growth, to optimise the way capital is deployed, and to digitise and simplify in order to improve productivity and effectiveness.
As previously announced Standard Chartered is reorganising its business as part of its plans, with Finance Director Richard Meddings set to depart and Mike Rees to become Deputy Group Chief Executive, with its wholesale and consumer banking divisions merging, as the bank tries to build its relationships with its smaller corporate, private banking and retail clients. The changes will be reflected when the bank reports its 2014 interim results.
In response the lower profit, Standard Chartered decreased its bonus pool by 15% but raised its dividend 2.4% to 86.0 pence from 84.0 pence.
By Samuel Agini; [email protected]; @samuelagini
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