Standard Chartered reports surprise $1.5bn loss

Standard Chartered reported a surprise full-year loss as loan impairments almost doubled to the highest in the bank’s history. The pretax loss was $1.5 billion in 2015, down from profit of $4.2 billion a year earlier, the London-based bank said in a statement on Wednesday. Excluding some one-time items, pretax profit was $834 million.

Chief executive Bill Winters, 54, is attempting to unwind the damage caused by predecessor Peter Sands’ revenue-led expansion across emerging markets, which left the bank riddled with bad loans when the commodity market crashed and growth stalled from China to India. Since June, Winters has raised $5.1 billion from investors, scrapped the dividend and announced plans to cut 15,000 jobs to help save $2.9 billion by 2018, while seeking to restructure or exit $100 billion of risky assets. “With the capital raise complete, attention returns to the risk line again. We expect impairments to remain high after two quarters of kitchen sinking, but to see some decline,” Chirantan Barua, an analyst at Sanford C. Bernstein Ltd., said before the results were released.

“The market will also keenly follow the extent to which the commodities book -- which had a $43 billion exposure in the third-quarter -- has been run down.” The stock dropped 6.5 per cent to 408.10 pence at 8:20 a.m. in London. The shares rose 5.2 per cent on Monday, narrowing their drop this year to 23 per cent. Winters has been shrinking the lender’s balance sheet after rapid growth under Sands, who was replaced last year after eight years as CEO. Total assets at the lender, which focuses on Asia, the Middle East and Africa, ballooned to a peak of $726 billion at the end of 2014 from $266 billion in 2006, according to data compiled by Bloomberg.

Bloomberg