Sunday, December 3, 2023

StanChart PLC attributes lower income and profits to challenging market conditions

Standard Chartered Bank PLC said it has been impacted by margin and spread compression, volatile financial markets and continuing difficulties in Korea which resulted in a 1% fall in income to US$18,671 million and a decline in profit before tax of 7% to US$6,958 million.

The London head quartered bank said it continue to grow the balance sheet and the longer-term attractions of Asia, Africa and the Middle East remain compelling.

Group Chief Executive of Standard Chartered, Peter Sands, admitted in the full year 2013 financial results that 2013 was a tough year adding that they have reacted to the near term challenges by sharpening their focus and the strategy as the bank look to mitigate the impact and adapt to the changing environment.

“Market and trading conditions are more volatile and difficult than a year ago. Whilst current performance momentum is ahead of the second half of last year, performance in this first half will remain challenging at both an income and profit level,” he stated.
Sands said that however, the balance sheet is strong, given the strength of the capital and liquidity.

He appointed out that they are superbly positioned with a unique network across markets offering huge growth opportunities and they have immensely strong relationships with the clients.

“We continue to pay for performance, and given 2013 was challenging, we have reduced the bonus pool. Our senior employees will shoulder a greater share of the impact, and we will pay in bonuses around half what we return to shareholders in dividends,” he said.

He stated that Profit before tax was down US$560 million to US$6.9 billion or 7%. He also explained that this was┬ádriven by continuing challenges in Korea where operating profit was down nearly US$530 million. “We also saw material margin compression in Transaction Banking, following a significant influx of liquidity into our markets, causing a drag to income of nearly US$400 million.”

He raised concerns in the second half of the year surrounding which are the effects of QE tapering, as well as increased regulation, impacted Financial Markets. Income fell by US$564 million half on half, and income in the fourth quarter was 19% lower than the third quarter.


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