StanChart Q1 profits fall 22% as bad debts jump from year ago
[LONDON] Asia-focused bank Standard Chartered said on Tuesday profits in the first quarter of 2015 fell 22 per cent from a year ago as losses from bad loans jumped 80 per cent and trading conditions remained challenging.
The bank, which is trying to turn around its performance after two bad years and will get former JP Morgan investment bank boss Bill Winters as its new chief executive in June, said loan impairments rose to US$476 million fromUS$265 million a year ago. Pretax profit fell to US$1.5 billion in the quarter, down from US$1.9 billion a year ago. “Trading conditions remain challenging and the actions we are taking to de-risk, cut costs and build capital are having an impact on near-term performance. However, underlying business volumes generally remain strong,” CEO Peter Sands said.
Standard Chartered said it was on schedule to get its common equity Tier 1 capital ratio to between 11 and 12 per cent this year and would deliver cost savings of more thanUS$400 million in 2015. Its core capital was 10.7 per cent at the end of 2014, but it did not say what its core capital was at the end of March.
The bank has vowed to cut costs and shrink its loan book in an effort to quell concerns about its capital strength. It said it is well advanced with a plan to reduce its risk weighted assets by between US$25 billion and $30 billion in the next two years.
Shares in Standard Chartered traded 1 per cent lower at 0835 GMT, compared with a 0.8 per cent decline in the European banking index.
REUTERS
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