Shares of the London-based bank plunged as much as 12 percent in early morning trade before settling down 5.98 percent at 5:39 a.m. EST.
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The bank took a US$1.8 billion restructuring charge, part of the US$3 billion in such charges it flagged in November.
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 deteriorating market environment caused the bank’s gross level of non-performing loans to jump from $7.5 billion at the end of 2014 to $12.8 billion by end-2015, as Winters seeks to recognise bad loans early rather than let them linger on the books. The bank expects to restart paying a dividend this year after cancelling the payout in the second half of 2015 to save money, Benjamin Hung, regional CEO for Greater China and North Asia, said at briefing with reporters in Hong Kong.
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.
He said the bank could either merge its two businesses in Indonesia or sell one, and it has taken further steps to reduce losses in its Korean retail bank.
The surprise annual loss shows the scale of the task facing Winters as he attempts to restore revenue growth and fix a bank’s balance sheet riddled with bad loans made under previous CEO Peter Sands’s expansion-oriented regime.
StanChart’s chief executive officer, Bill Winters, described the company’s performance as “poor”, but he expressed optimism regarding the bank’s recovery.
“We are making good progress on executing our strategy, creating a bank that will generate improved financial performance over time following from our improved cost efficiency, tightened risk controls, and focus on our many core advantages”, he added. It’s hard to predict the full year.
The company also acquired another 20,501 plots of land in the 12 months, with 6,739 plots converted from the group’s strategic land portfolio.
“This strong growth results from working hard to open new outlets as quickly as possible following receipt of an implementable planning consent and from actively managing build programmes to secure improved rates of new home construction on every development site to meet demand”, he said. Loss per share was 91.9 cents, compared to profit of 97.3 cents a year ago.
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It reduced its bonus pool for 2015 by 22% to US$855m, and no annual bonuses were awarded to executive directors or most of its top 200 managers. But it was slow to react to changing conditions both in its markets and in global bank regulation that have weighed on earnings.
