Press releases coming from London have astonished the global financial market on reporting Standard Chartered Plc.’s first yearly loss since year 1989. Market Watchers have come up with an estimate of approx. US$ 2.36 billion net loss (last year) – bearish from a net profit of US$ 2.51 billion (last year).
[According to MarketWatch: Asia accounted for 69% of revenues in 2015, slightly BULLISH from 68% a year earlier. Hong Kong remains the largest contributor to the bank in terms of revenue and profit, though revenue fell 11% to US$ 3.53 billion, while profit before tax fell 18% to US$ 1.49 billion.Bad loans nearly doubled in the year, to US$ 4 billion from US$ 2.14 billion. Revenue slumped to US$ 15.44 billion from US$ 18.24 billion, while operating costs were slightly bearish at US$ 10.48 billion from US$ 10.75 billion.]
“It rips our soul every time we look at the results. We fully recognize that the performance in 2015 was poor and in many ways unacceptable.” –Executive Bill Winters
The strategies laid forward by bank last year, to work up with, have been on a go. The plan execution hereby incorporated disposing off US$ 100 billion in assets and a cut of around 15,000 employments. Moreover, the bank raised approx. US$ 5.1 billion in fresh capitals from its shareholders, last year.
According to Winters, the earning estimate scale might remain the same for this year. However, right after bank re-bounced at 5%, the shares dropped down at 11%. The stock has dropped around 60% since Mr. Winters took in-charge of chief executive in June, 2015.
INSIGHT: Standard Chartered’s reliance on Asia and its large commodities lending book, at around US$ 39.6 billion, has made it a punching bag this year for stock investors with a dim view on emerging markets, energy and mining.
The recent estimate scale shows worst-than-expected earnings:
“Every line looks weak, with sizable revenue attrition, little evidence of cost savings and huge impairments.” – Citigroup’s analysts
Furthermore, the bank states to have had lost approx. US$ 300 million in commodity related revenue due to bearish crude and dollar dominance over global currencies. Similarly, the bank faced a loss of US$ 400 million following business sell-offs and terminations.