Standard Chartered warns of 20% profit dip in first half of year

Thursday 26 June 2014 15.09
Standard Chartered makes 90% of its profits in Asia, the Middle East and Africa
Standard Chartered makes 90% of its profits in Asia, the Middle East and Africa

Standard Chartered bank today warned that operating profit for the first half of 2014 will be 20% lower compared to the same period in the previous year, citing "difficult trading conditions". 

The London-based lender said stronger income from regions such as China and Africa was offset by weaker performance in India, South Korea and Singapore. 

"This has been a disappointing first half, with difficult trading conditions, particularly in financial markets," Standard Chartered's group chief executive Peter Sands said in a filing sent to the Hong Kong Stock Exchange. 

The bank said income from its financial markets operations was the "main challenge" for the group, with regulatory changes impacting foreign exchange rates. 

"We are making good progress against our refreshed strategy and are taking the right actions in response to a challenging environment," Sands said. 

The group said it expects loan impairment to be "up by a high-teens percentage" in the first half of the year with group income expected to be down by a "mid-single digit" percentage compared to 2013 for the same period. 

In March, the bank, which makes 90% of its profits in Asia, the Middle East and Africa, said net profit fell more than 16%last year to $3.99 billion and warned of a difficult first half for 2014. 

It said then that its South Korean retail bank had suffered a $1 billion write-down in its value and produced lower revenue with higher bad loans during the year. 

In November last year the bank lowered its annual revenue growth target to a range of 7-9% for the next couple of years, from an initial forecast of at least 10%.