Standard Chartered Stock Down On Q4 Loss, Weak H1 Income View; Resumes Dividend
Shares of Standard Chartered Plc were losing around 5 percent in the morning trade in London after the British banking major reported Thursday a loss in its fourth quarter, compared to prior year’s profit, with weak net interest income. Going ahead, the company projects weak income in the first half and flat income for fiscal 2021.
Further, Standard Chartered announced its plan to restart dividend, recommending the payment of a full-year ordinary dividend of $284 million or 9 cents per share. The Board has also decided to carry out a share buy-back for up to a maximum consideration of $254 million.
For fiscal 2021, overall income is expected to be similar to that achieved in 2020 at constant currency, while first-half income will be lower than last year. The full-year net interest margin should stabilise at marginally below the fourth-quarter level of 1.24 percent. The company expects income to return to 5 to 7 percent growth per annum from 2022.
Further, the company said it is confident to achieve its ambition to deliver a double-digit RoTE. By 2023, the company expects to deliver at least 7 percent RoTE.
Bill Winters, Group Chief Executive, said, “We are weathering the health crisis and geopolitical tensions very well, our strategic transformation continues to progress and our outlook is bright. We remain strong and profitable, although returns in 2020 were clearly impacted by higher provisions, reduced economic activity and low interest rates, in each case the result of COVID-19.”
For the fourth quarter, loss before taxation was $449 million, compared to last year’s profit of $194 million. On a per share basis, the company’s loss was 19.4 cents, wider than last year’s loss of 3.9 cents.
Underlying loss before taxation was $192 million, compared to a profit of $325 million a year ago. Underlying loss per share was 13.5 cents, compared to a loss of 0.4 cents a year ago.
Net interest income declined 7 percent to $1.76 billion from $1.90 billion last year. Net interest margin fell to 1.24 percent from 1.54 percent last year.
Underlying operating income was $3.20 billion, down 11 percent from $3.60 billion last year. Underlying operating profit before impairment and taxation declined 62 percent to $250 million.
In London, Standard Chartered shares were trading at 485.40 pence, down 4.7 percent. In Hong Kong, the shares declined 2 percent to close Thursday’s regular trade at HK$54.10.
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