Banking giant Standard Chartered PLC yesterday announced a return of dividends for shareholders after a two-year hiatus as it reported a surge in annual profit following restructuring and cutbacks.
The Asia-focused lender said it would pay out a full-year dividend of US$0.11 per share, citing “improving financial performance and strong capital.”
It also said pretax profit last year jumped 175 percent year-on-year to US$3.01 billion.
Standard Chartered CEO Bill Winters described the performance as “steady rather than spectacular,” but said it had improved significantly.
Winters replaced former CEO Peter Sands in 2015 after calls by shareholders for a boardroom cull in response to profit warnings.
The London-based bank was ahead of plans to remove “inefficient cost,” Winters said, adding that it had focused investment in areas including business in China and Africa.
The results fell just short of Bloomberg analysts’ expectations of US$3.1 billion in pretax profit.
Huarong International Securities (華融國際金融) analyst Jackson Wong (黃志陽) said the bank needed to find a new focus for growth, rather than concentrating on cutbacks, adding that HSBC Holdings PLC was in a similar position after missing some profit forecasts last week.
“They don’t have a core way to grow their business,” Wong said. “Because they cannot find growth, they cut more cost, and if they cut more cost, they have less resources to find growth as well.”
However, Wong said Standard Chartered’s dividend payout would keep investors happy.
“Obviously, from the business environment standpoint, they are in a much better shape than last year,” he added.
Standard Chartered swung back to profit in 2016, a year after scoring its first annual loss in more than a quarter of a century as it struggled to cope with the effect of bad debts and misconduct fines.
The London-based bank announced 15,000 job cuts around the world that year and said it would exit or restructure US$100 billion of assets to refocus on affluent retail clients.
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