No dividend as Standard Chartered reports billion pound loss

Standard Chartered reported on a woeful year on Tuesday, with the company completely destroying 2014's $5.2bn profit before tax, with a $1.5bn loss.

The FTSE 100 bank saw underlying profit before tax dive 84% during the year to $0.8bn (£0.57bn), with the board blaming 'challenging market conditions'.

Underlying operating income was down 15% to $15.4bn.

Standard Chartered's board broke that decline down into four segments. It blamed one-quarter on the lower exchange rates against the US dollar; another quarter on business exits, disposals and de-risking; a third quarter on lower commodity prices and mark-to-market valuations; and a final quarter on lower levels of business activity.

The London-based bank saw underlying operating costs drop 7% to $9bn, though its underlying loan impairment of $4bn represented an increase of 87%.

Around 40% of that increase was related to a number of exposures beyond the board's tightened risk tolerance, it said, and the balance was mainly driven by falling commodity prices and a deterioration of financial markets in India.

"While 2015 performance was poor, the actions we took on capital throughout last year and in particular in December have positioned us strongly for the current macro environment. We have a balance sheet that is resilient and we are in the right markets. We have identified our risk issues, and we are dealing with them assertively," said Standard Chartered group chief executive Bill Winters.

"We are making good progress on executing our strategy, creating a bank that will generate improved financial performance over time following from our improved cost efficiency, tightened risk controls, and focus on our many core advantages," he added.

On a reported basis, the bank made a loss of $1.5bn, after accounting for restructuring charges of $1.8bn, which was within the $3bn indicated in November to cover redundancy costs, impairments and a goodwill write down.

That also took into account a broadly capital neutral credit and funding valuation adjustment of $863m in the fourth quarter, a positive own credit adjustment of $495m, a gain on sale of businesses of $218m, and goodwill impairment of $362m related to Taiwan.

Normalised basic losses per share were 6.6c, down from earnings per share of 138.9c in 2014. Standard Chartered's normalised return on ordinary shareholders' equity was -0.4%, down from 7.8% in 2014.

The bank's board confirmed its earlier decision not to declare a final dividend for the year.

At 0833 GMT, the company's stock was already down 7.02% in London to 405.65p.