Business

Standard Chartered shares slump on shock loss

Stan Chart Image copyright Reuters

Shares in Standard Chartered plunged on Tuesday after the Asia-focused bank revealed a $1.5bn (£1.1bn) loss.

Chief executive Bill Winters, who took over from Peter Sands last year, described the performance over 2015 as "poor".

The bank will take a $4bn charge on writing down the value of its loans, driven by falling commodity prices and deterioration of Indian markets.

Shares in the bank tumbled by 4% to a record low of 418.7p.

Standard Chartered was forced to raise £3.3bn in a rights issue last year and announced a major cost-cutting drive which includes the loss of 15,000 jobs from its 86,000-strong workforce.

Sir John Peace, Standard Chartered's outgoing chairman, said: "While our 2015 financial results were poor, they are set against a backdrop of continuing geo-political and economic headwinds and volatility across many of our markets as well as the effects of deliberate management actions.

"Our share price performance has also been disappointing, underperforming the wider equity market, which has seen broad declines driven largely by the same macroeconomic concerns."

It is the first time since 1989 that Standard Chartered has reported a full-year loss.

Mr Winters announced that he and other members of the management team will not receive a bonus for 2015 and that Standard Chartered will introduce a new incentive programme that will only pay out if targets are met.

Mr Winters will be paid $2.4m for last year but could earn $8.4m by 2018 if he hits the new targets.

The chief executive was one of 200 business leaders who signed a letter calling for Britain to remain in the EU.

Mr Winters said that while he did not think Britain staying in or leaving the EU would impact Standard Chartered "one way or the other", he said: "We think the UK is an integral part of Europe."

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