HONG KONG: Departing chief Peter Sands has ruled out a share issue while promising stronger capital this year and higher returns in future. That suggests the emerging market bank's position is less bleak than some fear. However, it also leaves successor Bill Winters with less wiggle room.
Standard Chartered on March 4 reported a 30 percent decline in pre-tax profit for 2014, its second decline in full-year earnings, but promised to rebuild capital ahead of the arrival of its new chief executive.
Income was down 2 percent at $18.2 billion, while expenses fell 3 percent to $9.95 billion. However, provisions for bad loans rose by 32 percent to $2.14 billion. The bank also wrote off the remaining goodwill on its loss-making Korean business, triggering another $758 million non-cash charge.
Normalised return on equity was 7.8 percent.
The bank maintained its full-year dividend at 86 cents and promised to raise its common equity Tier 1 capital ratio to 11-12 percent in 2015, from 10.7 percent at the end of 2014. It also promised to raise its return on equity above 10 percent in the medium term.
Standard Chartered announced last week that Chief Executive Peter Sands would step down in June, to be replaced by former JPMorgan executive Bill Winters.
Executives said they would not take any variable compensation for the year.
At 0830 GMT, Standard Chartered shares were up 4 percent at 1,014 pence.
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