26th Apr 2016 08:33
LONDON (Alliance News) - Standard Chartered, listed in London and lending in Asia, Africa and the Middle East, on Tuesday said it expects its performance to remain "subdued" throughout 2016, after a drop in first-quarter operating income hit profit.
Pretax profit fell to USD589 million in the three months ended March 31, from USD1.44 billion in the corresponding quarter a year earlier, the bank said in a statement.
Operating income fell by 24% to USD3.35 billion and operating expenses fell by 10% to USD2.25 billion, while impairment losses on bad loans improved slightly to USD471 million from USD476 million. Impairment charges for bad loans fell from USD1.13 billion in the final quarter of 2015.
On an underlying basis, which strips out own credit adjustments, restructuring costs and the effects of buying back debt, pretax profit fell to USD539 million in the first quarter, from USD1.49 billion the corresponding three months a year earlier.
"Although trading conditions in the first quarter remained challenging, we continue to make good progress on our strategic objectives. The management team is in place, we are taking action to improve recent income trends, managing costs tightly, progressing on key investments, making early progress on the exit of the liquidation portfolio, and maintaining strong levels of capital and liquidity," Chief Executive Bill Winters said in a statement.
Winters, who's been trying to make Standard Chartered "lean and focused" since replacing Peter Sands in June 2015, has already raised USD5.1 billion in a rights issue, identified 15,000 job cuts, and reduced commodities exposure as part of his plan to restore the bank to health.
Standard Chartered swung to a USD1.52 billion pretax loss in 2015, its first since 1989, with emerging markets seeing weaker growth that year amid volatile Chinese equity markets and depressed commodity markets.
Shares in Standard Chartered were up 6.1% at 552.10 pence on Tuesday morning.
By Samuel Agini; [email protected]; @samuelagini
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