Standard Chartered has reported lower income and profits during 2013 mainly due to challenging market conditions. According to Standard Chartered, 2013 was a challenging year for the bank as well as for the industry, which resulted in a 1 percent fall in income to $18,671 million and a decline in profit before tax of 7 percent to $6,958 million.
Volume growth in trade, cash and FX options were up 21 percent, 11 percent and 37 percent respectively. We continue to grow our balance sheet and the longer-term attractions of Asia, Africa and the Middle East remain compelling, it added.
On a Basel 2 basis, our Core Tier 1 ratio is 11.8 percent. SCB also strongly capitalised on a Basel 3 basis, with a CET 1 ratio of 10.9 percent. These capital levels position us well to manage future regulatory capital demands as they evolve.
While the bank expects risk weighted assets to grow in 2014, we intend to maintain healthy capital ratios through a range of measures including driving profitable, capital accretive growth and divesting certain non-core assets.
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."
Standard Chartered profit before tax was down $560 million to $6.9 billion or 7 percent. This was driven by continuing challenges in Korea where operating profit was down nearly $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 $400 million.
Concerns in the second half of the year surrounding the effect of QE tapering, as well as increased regulation, impacted financial markets. Income fell by $564 million half on half, and income in the fourth quarter was 19 percent lower than the third quarter.
Finally, significantly slower realisations and revaluations in Principal Finance resulted in a $206 million fall in revenue.
As a result, Group income of $18.7 billion was 1 percent down on 2012 but with 25 markets each contributing income of over $100 million and 17 markets delivering more than $100 million in profit; Hong Kong, our largest market, grew income 11 percent and operating profit 16 percent.
According to press release, Standard Chartered Bank has been extremely disciplined in managing costs, with expenses for the year at $10.2 billion, only 1 percent higher than in 2012.-PR
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