23rd Feb 2016 08:30
LONDON (Alliance News) - Standard Chartered PLC on Tuesday reported that it swung to an annual loss in 2015, with the bank hit by restructuring costs and falling commodity prices, and said it expects a "subdued" financial performance in the current year.
Shares in Standard Chartered were down 8.3% at 400.00 pence on Tuesday morning, the worst performer in the FTSE 100 in early trade.
The bank, which is known for lending to Asia and emerging markets, swung to a USD1.52 billion pretax loss in 2015, versus a pretax profit of USD4.24 billion the prior year, as operating income fell by 15% to USD15.44 billion and operating expenses fell by 2.5% to USD10.48 billion. Restructuring costs amounted to USD1.85 billion.
Impairment charges on bad loans almost doubled, rising to USD4.01 billion from USD2.14 billion, due to exposures beyond the bank's recently tightened risk tolerance, falling commodity prices and deterioration in financial markets in India.
Chief Executive Bill Winters, the former JPMorgan Chase & Co banker, has set about a heavy restructuring of Standard Chartered since he took the helm in June 2015. He intends to remove inefficiencies and improve returns.
Under his leadership, the bank has raised USD5.1 billion in a rights issue and axed its final dividend payment, set out plans to cut 15,000 jobs on the way to saving USD2.9 billion from 2015 to 2018, and identified about one third of group risk-weighted assets for restructuring.
"While 2015 performance was poor, the actions we took on capital throughout last year and in particular in December have positioned us strongly for the current macro environment. We have a balance sheet that is resilient and we are in the right markets," Winters said.
"We have identified our risk issues, and we are dealing with them assertively. We are making good progress on executing our strategy, creating a bank that will generate improved financial performance over time following from our improved cost efficiency, tightened risk controls, and focus on our many core advantages," he added.
By Samuel Agini; [email protected]; @samuelagini
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