Standard Chartered bank yesterday (March 5) said its net profit fell more than 16 per cent last year and warned of a difficult first half for this year following significant challenges for its South Korean operations.

The London-based lender, which makes 90 per cent of its profits in Asia, the Middle East and Africa, said net profit was $3.99 billion last year, down 16.65 per cent from $4.79 billion in 2012, according to a report in the Gulf Daily News, our sister publication.

Standard Chartered's South Korean retail bank suffered a $1 billion write-down in its value, and produced lower revenue with higher bad loans during the year, culminating in a $162 million operating loss.

Overall operating income fell 1 per cent to $18.67 billion in 2013, compared to the previous year, while annual profit before tax was down 11 per cent to $6.06 billion.

The results follow a decade in which the bank posted consecutive full-year profits. "2013 was a challenging year, for the industry and for Standard Chartered," said its chairman John Peace.

The bank said bad loans across its operations had increased by 35 per cent year-on-year to $1.62 billion.

Consumer banking income for the group grew by 2 per cent to $7.18 billion, while wholesale banking income fell 2 per cent to $11.49 billion.

Commenting on these results, Group chief executive of Standard Chartered Peter Sands, said:
“2013 was a tough year. We have reacted to the near term challenges by sharpening our focus and our strategy as we 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.

“However, our balance sheet is strong, given the strength of our capital and liquidity. We are superbly positioned with a unique network across markets offering huge growth opportunities and we have immensely strong relationships with our clients. We are very clear on what we have to do.

“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.”

The bank said income from consumer banking for Hong Kong rose 11 per cent to $1.56 billion, while income for the same sector from the Middle East and other South Asian regions was up 6 per cent at $801 million.

Its income for consumer banking in Africa increased by 10 per cent to $529 million with Kenya being its largest consumer banking income-generator, growing 11 per cent in that sector alone. – TradeArabia News Service