Standard Chartered, the emerging markets-focused bank, has insisted that it continued to offer “huge growth opportunities,” and reassured investors on its capital position as it reported the first drop in profits in ten years.
The bank admitted 2013 “was a challenging year,” as it reported an 11.4 per cent drop in pre-tax profits to $6.06 billion, after it was hit by an-already announced $1 billion impairment charge at its South Korean operations, turbulent financial markets, falling margins, and a slowdown in growth in Asia.
However, the bank provided assurance on its capital position, which had been the cause of some concern ahead of the results, with some even raising the possibility of a rights issue. The bank’s Basel III Common Equity Tier 1 ratio of 11 per cent, a key measure of financial strength, came in at 11.2 per cent, ahead of many analyst forecasts.
“While we expect 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,” said Sands on Wednesday. Shares of Standard Chartered have fallen nearly 30 per cent over the past year amid concerns over a slowdown in Asia, which constitutes the bulk of its business.
In November last year it said it was abandoning its target of double-digit growth, while in January it announced an overhaul of its business, including plans to merge its consumer and corporate banking divisions.
Unlike other UK banks that have garnered criticism over the level of 2013 bonuses, Standard Chartered announced that the bonus pool for 2013 had fallen to 15 per cent, while dividends rose by 10 per cent to 84 pence.