Standard Chartered Stabilizes but Wealth Management Disappoints

Emerging markets and Asia focused Standard Chartered bank has seen its shares fall after the bank reported that revenues and net profit had declined.

In the interim management statement issued today the bank claimed to be on track to deliver in excess of $1 billion in gross cost efficiencies by the end of 2016. Meeting this target it commented would create capacity for investment back into the franchise.

CEO Bill Winters said «We have made progress executing the strategic actions announced a year ago. We now have a stronger balance sheet, reduced concentrations and are becoming more efficient, but income and profit levels are not yet acceptable.»

Winters has worked hard in trying ot reverse the slide that saw the bank suffer its first annual loss for more than twenty five years last year. He has completely restructured the senior management team and has been embracing the use of financial technology across the group.  

Wealth Management Subdued

Income from Private Banking of $125 million was down $21 million or 14 percent quarter-on-quarter. Excluding the previously disclosed $25 million one-off insurance recovery in the second quarter, Private Banking income was up 3 per cent quarter-on-quarter.

Investor sentiment improved in the third quarter and the Group continues to invest in this segment as a strategic priority. There has been a flurry of senior hires in the Asian private business as reported.

The bank continues to build the priority clients business which now accounts for around 40 per cent of total Retail Banking income and can be seen as a potential pipeline for the Private Banking business. 

Hong Kong Regulatory Action

Also included in the statement was a note that Standard Chartered has been informed by the Hong Kong Securities and Futures Commission that it intends to take action against Standard Chartered Securities (Hong Kong) Limited (“SCSHK”) in relation to its role as a joint sponsor of an initial public offering listed on the Hong Kong Stock Exchange in 2009.

If it does take action there may be financial consequences for SCSHK.

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