Standard Chartered reduces key financial target
Standard Chartered PLC informed that it has lowered a key financial target and also informed that it is going to take new action in order to conserve capital after profit dropped sharply last year.
It has been informed that net profit fell 37% to $2.51 billion from $3.99 billion. It is expected that the earnings will be not good. An announcement was made by the bank that former J.P. Morgan Chase & Co. executive Bill Winters is going to replace Chief Executive Peter Sands. Departure of Mr. Sands was announced last week after months of pressure from some shareholders to put new leadership in place after two years of waning earnings.
According to Mr. Sands, the results were clearly unsatisfactory. Mr. Sands has informed that the bank is going to slash $25 billion to $30 billion in risk-weighted assets from its balance sheet in the next two years. The bank will take this step in order to aid address concerns about the bank's capital strength.
He also said that bank is presently targeting a return on equity above 10%, and it is lower than mid-teens percentage the bank had earlier expected for. According to Chairman John Peace, the bank is planning to enhance capital by reducing assets and costs.
According to experts, the bank maintained a $0.86 a share dividend for last year. Standard Chartered is based in London and it is focused on Asia. Standard Chartered fared better as compared with its competitors at the time of the financial crisis but its profit in recent quarters has been affected by higher regulatory costs and increasing bad loans. It has been reported that the bank also cut many retail-banking jobs in Asia.