Asia and emerging markets focused Standard Chartered will not be issuing a dividend this year, after announcing pre-tax profits that failed to meet analysts’ expectations.
Chief Executive Bill Winters described the results as «good progress», but said the figures were still not up to scratch. In Asia, Hong Kong remained the largest contributor to Standard Chartered (SC) both by income and profits.
In its Private Banking income was impacted by market volatility and actions taken to improve the risk profile of the segment. The division recorded underlying profit of $32 million in 2016 compared to a profit of $99 million in 2015 owing to lower income and higher expenses, which more than offset the benefit of lower loan impairment.
Declining Assets Under Management
Assets under management declined 4 percent to $54 billion as growth in Hong Kong was offset by actions taken to improve the risk profile in other markets as well as maturing deposits.
Expenses rose 36 percent year-on-year to $463 million, or an increase of 17 percent excluding a one-off insurance credit in 2015.
New Senior Private Bankers
This increase was driven by a step-up in investment to enhance the control environment, the upfront cost to upgrade the core banking platform and the hiring of new senior private bankers.
Going forward the bank is seeking to broaden its product offering to attract new clients with assets under management of at least $5 million.
Barclays Raided
During 2016 SC picked off several senior Barclays private bankers who chose not to join Bank of Singapore (BoS) following its acquisition of the U.K bank's Asian wealth management business.
