Standard Chartered cuts Key Target as Profit falls

Standard Chartered PLC on Wednesday lowered a key financial target and said it would take fresh action to conserve capital after profit fell sharply in 2014.

Net profit for the year sank 37% to $2.51 billion from $3.99 billion, while adjusted pretax profit was down by 25%, at $5.2 billion from $7 billion.

The earnings had been expected to be poor, and the U.K. bank last week announced that CEO Peter Sands would be replaced in June by former J.P. Morgan Chase & Co. executive Bill Winters. The management change is seen by analysts as paving the way for an expected capital raising and further restructuring at the bank.

Mr. Sands on Wednesday said the results were “clearly disappointing.” He said the bank would cut $25 billion to $30 billion in risk-weighted assets from its balance sheet in the next two years, to help address concerns about the bank’s capital strength. He said the bank is now targeting a return on equity above 10%, lower than the midteens percentage the bank had previously aimed for.

Standard Chartered fared better than most of its rivals during the financial crisis but its profit in recent quarters has been hurt by higher regulatory costs and rising bad loans. The bank rejigged its operational structure last year and cut several thousand retail-banking jobs in Asia.

Source: Market Watch