Corporate results: Standard Chartered posts 8% fall in profit

Announces final cash dividend of 15%, in addition to 7.5% interim payout.

KARACHI: The profit of Standard Chartered Bank for 2014 amounted to Rs9.8 billion, down 8.2% from earnings of Rs10.7 billion in the preceding year.

In its consolidated financial results sent to the Karachi Stock Exchange (KSE) on Thursday, Standard Chartered also announced a final cash dividend of 15%, or Rs1.5 per share, in addition to 7.5% interim cash dividend declared during the year.

The bank’s net interest income (NII) for the year increased 13.7% to Rs21.3 billion. While its interest income surged 12% on a year-on-year basis, the bank’s interest expense grew 9.3%, financial accounts show.

High provisions against non-performing loans (NPLs) dented the bank’s net interest income after provisions. Provisions stood at Rs511.3 million in 2014 as opposed to the reversals of Rs1.1 billion provisioning recorded in the preceding year.

Total non-interest income increased to Rs7.4 billion, up 25.8% from Rs5.8 billion in 2013. The increase in non-interest income was led by 9% year-on-year jump in fee, brokerage and commission income along with 22% rise in income generated from dealing in foreign currencies.

According to the bank’s spokesman, loan impairments remained low due to prudent credit expansion and strong risk management. Standard Chartered maintained provision coverage of over 90% against non-performing loans.



“With a tight discipline in administrative costs and excluding one-off reversal last year, the overall costs increased 4% despite inflation and continuous investments,” the spokesman added.

Deposits grew around 3%, with current and savings accounts comprising 92% of the bank’s total deposit base. This means Standard Chartered has one of the lowest costs of deposits in the banking industry.

“We are confident that the actions we are taking will enable us to deliver sustained and profitable growth. There are immense opportunities in the country and we are confident we can translate the strength of our balance sheet and the depth and quality of our client franchise into sustained shareholder value creation,” the spokesman quoted Standard Chartered CEO Shazad Dada as saying.

Published in The Express Tribune, March  6^th,  2015.

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