Friday Dec 13, 2024
Friday Dec 13, 2024
Monday, 9 March 2015 00:00 - - {{hitsCtrl.values.hits}}
d to cut costs and shrink its loan book in an effort to quell lingering concerns of balance sheet weakness, underlining the challenge facing incoming Chief Executive Bill Winters.
The bank is braced for a strategic revamp when the former investment banker takes over as chief executive in June tasked with reversing a prolonged slump in profits.
Underlying pretax profits came in at just $ 5.2 billion last year after loan impairments, centred among commodity-exposed businesses, jumped by a third. Standard Chartered said it was premature to call the peak on bad debts but said it had seen no sign of deterioration this year.
Outgoing Chief Executive Peter Sands, who ruled out tapping shareholders for cash, described 2014 as ‘a perfect storm’ of falling commodity prices, persistent low interest rates and negative sentiment towards emerging markets.
He was ousted last week in a boardroom purge that also saw the departure of three non-executive directors and the bank’s veteran head of Asia, Jaspal Bindra. Chairman John Peace is to step down next year amid investor anger at management’s failure to move faster to deal with the bank’s problems.
To arrest the decline in earnings, the bank said it would aim to save $ 1.8 billion from 2015 to 2017 and cut between $ 25 billion and $ 30 billion in risk weighted assets from its balance sheet.
But the bank avoided any major overhaul.
The board continues to believe that there are significant opportunities for the Group in the medium to long term across our footprint, and that is why we have been careful not to take any knee-jerk actions which may damage the long-term prospects of the business,” Peace said in a statement.
It said it was on target to save $ 600 million in headline costs this year, beyond its target of $400 million in savings.
The bank’s board of directors will not take a bonus for 2014.
