Newspaper article International New York Times

Standard Chartered Posts $2.4 Billion Loss ; Performance Is the Latest in a Series of Poor Results by Major Global Banks

Newspaper article International New York Times

Standard Chartered Posts $2.4 Billion Loss ; Performance Is the Latest in a Series of Poor Results by Major Global Banks

Article excerpt

The Asia-focused British bank said it had been hit hard by weakness in emerging markets, as well as by the fall in commodity prices.

Standard Chartered, an Asia-focused bank based in London, reported on Tuesday an unexpectedly large loss of $2.4 billion for 2015 after being pummeled by its exposure to emerging markets and bad loans.

It was the latest in a series of weak performances by global banks, amid concerns over a slowing world economy.

Standard Chartered also warned that more than 150 current or former executives were at risk of having their bonuses clawed back if they were found to be responsible for the bank's poor performance.

The bank posted a pretax loss of $1.52 billion for 2015, compared with a pretax profit of $4.24 billion the year before, and it confirmed that it would not pay a final dividend for 2015.

The results marked a difficult 12 months for Standard Chartered, which is in the midst of a shake-up. It has been trying to streamline its businesses since William T. Winters was hired as chief executive last year to turn things around and is aiming to cut costs by $2.9 billion by 2018.

The bank has been hit hard by weakness in emerging markets. Its chief financial officer, Andy Halford, said a decline in income had been partly driven by weaknesses in emerging market currencies as well as by a crash in commodity prices.

He noted that the bank had reduced its exposure to commodities by 28 percent.

Standard Chartered's operating income was $15.4 billion in 2015, a 15 percent drop from $18.2 billion the year before. Operating expenses were $9 billion in the period, 7 percent down from $9.7 billion in 2014.

The bank said its bad loans increased 87 percent, to $4 billion, because of falling commodity prices and a plunge in Indian financial markets.

"While 2015 performance was poor, the actions we took on capital throughout last year and in particular in December have positioned us strongly for the current macro environment," Mr. Winters said in a news release. "We have a balance sheet that is resilient, and we are in the right markets."

Partly as a result of the sharp increase in bad loans, the bank is carrying out "accountability reviews" on more than 150 current and former executives, and may claw back their bonuses, Mr. …

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