Standard Charter chief Bill Winters declares ‘no excuses’ as he axes bonuses

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Standard Chartered scrapped all annual bonuses for its bosses and made no long-term awards to former chiefs under previous bonus schemes today after its profits plunged by 84%. 

New chief executive Bill Winters said: “The challenging external environment is not an excuse for our performance. We are not unwitting victims. Rather, the external challenges increase our urgent need to take all necessary steps to address the structural and operational issues we have identified as critical to improving returns.”

The emerging markets bank saw its pre-tax profits drop from £5.2 billion to just £834 million as its revenues fell 15% to £15.4 billion. The biggest hit to profits was an 87% rise in bad debt writedowns to £4 billion. 

Winters said: “While 2015 performance was poor, the actions we took on capital throughout last year and in particular in December have positioned us strongly for the current macro environment. We have a balance sheet that is resilient and we are in the right markets. We have identified our risk issues, and we are dealing with them assertively.”

He said that more than 100 senior people had decided not to take annual cash bonuses this year, and that the money saved had been used “to protect more junior staff”.

The bank cut 7000 posts last year as part of its plan to reduce numbers by 15,000.

Previous management, including former chief executive Peter Sands and former finance director Richard Meddings, will collect nothing on long-term share awards made in 2013, since none of their performance targets had been hit. 

“Exactly the same will happen to Andy [Halford, finance director] and me if we don’t hit the 2018 targets set for us today,” Winters said.

Today’s annual report showed that Winters, who arrived in the summer, was paid £2.34 million last year, and given share awards worth up to £8.4 million, while Halford received £2 million in pay and up to £5 million in share awards. 

Even today’s much-reduced profit was less than analysts  had expected, and Standard Chartered shares fell 5%, or 23.3p, to 413p. They have fallen 56% in the last 12 months.

As predicted at the time of last year’s £3.4 billion rights issue, there is no dividend.

At the bottom line the bank reported the first after-tax loss since 1989, of £1.5 billion, after taking in £1.8 billion of restructuring costs and other one-offs. 

Winters said: “Given current market conditions and the early stage of implementation of our strategy, we expect the financial performance of the group to remain subdued during 2016.”

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February 24, 2016 |
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