Standard Chartered halves dividend as first-half profit slides

[LONDON] Standard Chartered Plc halved its dividend after first-half profit tumbled by 44 per cent as Chief Executive Officer Bill Winters said he's prepared to raise capital if needed.

Adjusted pretax profit fell to US$1.8 billion from US$3.3 billion in the year-earlier period as bad loans continue to hurt performance, the London-based bank said in a statement. Revenue of US$8.5 billion missed analysts' US$8.8 billion estimate. The bank cut its dividend to 14.4 cents per share.

"Today's results show the group has some very real challenges, but they are fixable," said Mr Winters, who presented his first set of earnings since taking over two months ago. "If we decide we need capital for the long-term benefit of the group, we will raise capital." Mr Winters, 53, a former co-head of JPMorgan Chase & Co's investment bank, took over from Peter Sands after two years of declining earnings and a slump in shares. With a rout in commodity prices pushing up bad loans and rising costs for misconduct weighing on earnings, the CEO may have to plug a capital shortfall of as much as US$10 billion, analysts estimate.

The shares swung between gains and losses after the results were released, and rose 1.5 per cent to 968.4 pence at 9:24 am in London.

The bank has been "too slow to take hard decisions, whether on costs, people or strategy," Mr Winters said. "The group saw most of the challenges it faced as cyclical, and maintained a focus on income and asset growth at the expense of returns. It is clear to me that we are seeing structural changes, and we need to reposition for this reality."

BLOOMBERG