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Standard Chartered dives as growth stalls

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Shares in Standard Chartered (LON:STAN) slumped after the Asia-focused bank warned that difficult market conditions will mean flat full-year income.

The bank said the tough climate, which began in August, continued through the second half of the year.

Wholesale banking operating profit is expected to be flat compared with last year despite it expecting a pick-up in financial markets, which did not materialise.

Standard anticipates consumer banking income will rise at a low single digit rate for the full-year, hit by weakness in emerging markets’ currencies against the US dollar.

It warned that consumer banking income in Korea, where it has seen the biggest problems, will be down around 15%, reflecting tough market conditions, the de-risking of its portfolio, as well as the impact of the planned sale of the consumer finance businesses.

Standard’s focus on Asia is aimed at benefiting from high growth rates, but the slow progress in 2013, which has been riddled with fears over slowing growth in emerging markets, is likely to be a concern to investors.

Last year, the bank saw operating income rise 8% to US$19bn.

Standard said its review of the year excluded last year's US$670mln settlement with New York regulators for breaching US sanctions with Iran, as well as own credit adjustment and the impairment of goodwill in Korea.

“We are responding to near term challenges to ensure we strike the right balance between growth and returns, and have successfully managed costs tightly in light of the pressures on income,” said chief executive Peter Sands.

The shares tumbled to the bottom of the FTSE 100, down 6.3% to 1,339p each.

Quick facts: Standard Chartered PLC

Price: 450.6 GBX

LSE:STAN
Market: LSE
Market Cap: £14.24 billion
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