5th Aug 2015 09:25
LONDON (Alliance News) - Standard Chartered PLC on Wednesday slashed its interim dividend and said it is yet to decide whether ask shareholders for new capital, as the emerging markets bank reported a drop in first-half pretax profit and a jump in impairment charges for bad loans.
Standard Chartered, which makes the bulk of its money in Asia, the Middle East and Africa, said its pretax profit amounted to USD2.10 billion in the six months to the end of June, compared with USD3.25 billion in the corresponding half of the prior year.
Operating income increased to USD8.77 billion from USD9.25 billion, and operating expenses fell to USD5.04 billion from USD5.08 billion.
Impairment losses on bad loans and advances, together with other credit risk provisions, increased to USD1.65 billion from USD846 million.
The emerging markets focused bank halved its interim dividend to 14.4 cents per share, and said it expects to make a similar percentage adjustment to the final dividend. Standard Chartered's common equity tier one ratio, a key measure of financial strength increased to 11.5% from 10.7% at the end of 2014, putting it within its targeted capital range of 11% and 12%.
"If we decide we need capital for the long-term benefit of the group, we will raise capital. If we decide we don't need it, we won't," Chief Executive Bill Winters said in a statement.
Presenting the bank's first set of results since he succeeded Peter Sands as chief executive on June 10, the ex-JP Morgan Chase & Co investment banker said he is determined to get the group back on track.
"Today's results show the group has some very real challenges, but they are fixable and it is important to remember that there is a strong business at the heart of the group," Winters said in a statement.
Winters has been putting his stamp on Standard Chartered, shaking up the management team and halving the number of regional businesses it has in a bid to improve performance and meet a previously set USD1.8 billion cost savings target by the end of 2017.
Standard Chartered shares were up by 1.0% at 962.30 pence on Wednesday morning.
By Samuel Agini; [email protected]; @samuelagini
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