stringer Juliet Hong Kong
is painful transformation of standard chartered finally seeing a glimmer of light.
on April 26, standard chartered group (02888 HK) announced the first quarter of this year in addition to basic pre-tax profit of $539 million, though still fell 63.9% year-on-year, but compared to last year's $876 million loss in the fourth quarter profit successfully.
in this message, the standard chartered shares rose nearly 10% in early trading, London, finished by the end of the day, Hong Kong also significantly narrowed to 1.6% share prices fall, hk $59.4 per share, after fell more than 4%.
"although in the first quarter of the market environment remains challenging, but as the market gradually stabilized, our performance is also gradually improve, set business indicators are improving, trade finance and cash business, we hope to become a leaner, the focus of the bank."Chief executive of standard chartered WenTa thought (Bill Winters) in the performance, said in a conference call.
as of the end of the first quarter of this year, standard chartered business revenue of $3.3 billion, fell 24% year-on-year, compared with edged up 3% in the fourth quarter of last year.At the same time, the total business spending fell 10% to $2.2 billion.
from 2002 to 2002, has been emerging markets as the center of gravity of standard chartered has lasted for high-speed earnings growth for the last ten years, since 2013, however, standard chartered's earnings growth stalled, even last year for the first time since 1989, "see red", posted a pretax loss of $1.523 billion.
loan impairments plunged 58%
due to multiple main market performance decline, standard chartered's non-performing loans has increased dramatically.
according to the bank, according to data released by the end of march this year, the bank's overall nonperforming loans compared with the increase of $425 million to $5.672 billion by the end of last year, mainly involves the combination of some commodities related.
"in the first quarter of the non-performing loan ratio from 4.8% to 4.9%, is still in increase, although growth slowed, we don't think have spent the most difficult period, the revolution has not been successful."Winters said.
at the same time, by the end of the first quarter, the bank loan impairments totaled $471 million, compared with last year's fourth quarter sharply reduced by 58%.Other impairment of 123 million yuan, most involves the investment of capital financing, mainly by the first quarter of debt and stock market volatility.
standard chartered said, enterprises and institutions and business customers loan impairments have fallen month-on-month, individual customer loan impairments continued since the passing of risk management measures and benefit, including tighter approval criteria and sell Chinese Hong Kong, mainland China and South Korea's consumer finance business.Peripheral environment remains challenges, will continue to actively manage their portfolios.
Winters, according to standard chartered continue to shrink in the first quarter of this year commodity exposure of about 8% to $37 billion.In fact, due to falling commodity prices, the bank since the second half of 2013 have been reducing exposure to commodities, by the end of last year, the peak of $61.8 billion to $39.6 billion, nearly 36% decline.
since last may succeed Peter Sands as chief executive, Winters, carried out a series of sweeping "slimming" restructuring plan., including in three years, will the bank $315 billion underperforming risk-weighted assets reorganization or reduce $100 billion, at the same time plan during the four years from 2015 to 2018 to save $2.9 billion in costs.
according to bloomberg data show that standard chartered's assets has been sharply from a record high of $726 billion in 2014 to $640 billion at the end of last year.
sell portfolio "in"
in standard chartered's transformation strategy, selling assets combination occupy the important one annulus.
"at present, we sell combination plan is under way, has made certain progress, some by way of bidding, and others in the form of direct negotiation, this process is very complex, and we expect in the next 12 to 18 months to complete the corresponding sale."Standard chartered group's chief financial officer Andy Halford is said in a telephone conference on the same day.
according to foreign media reports, the bank sold with Essar Group and Cairn Energy related to the compression of a $1.5 billion loan (stressed loans), but the response from the market at present.It is understood that at present only Hong Kong private equity group of intellectual Capital Management (SSG Capital Management) interested in group's non-performing loans, seventy percent are with standard negotiations to buy $1 billion worth of bad loans.
standard chartered HongPiZheng held at the end of February, chief executive of greater China's performance has said at the meeting, to improve quality of assets, the bank settlement and sale worth about a $7.94 billion loan portfolio, accounting for almost 3% of the group's overall loan ($268 billion);Involving $7.512 billion of bad loans, accounting for the group's overall non-performing loan ratio as high as 60%.
the bank plans to sell the loan portfolio mainly from India, industry is given priority to with goods.By the end of last year, the bank suffered earnings stagnation in India, the interest rate fell to a five-year low, and shutdown project amount is rising sharply.The Indian market last year loan impairment from $134 million in 2014 to $439 million.In addition, for the influence of China's economic growth is slowing, Halford is said: "since last year, we have continuously reduce the exposure of the Chinese market for the present the scale of our satisfied. The Chinese government to appease the short-term market panic and has achieved a good balance, long-term, stable growth and launched a series of monetary easing."
last year, the bank's pre-tax profits of $88 million in mainland China, about 45% year-on-year decline.By the end of last year, standard chartered will its net exposure to Chinese market from $71 billion to $71 billion in 2014, all customers for investment grade, 84% of the top five Banks in China.