REUTERS
Bill Winters took more "painful" steps to turn around Standard Chartered Plc as the bank posted its first annual loss since 1989. The shares fell, Bloomberg reported.
"Our 2015 performance was poor, and in many ways unacceptable" with the drop in income "precipitous," Winters, the company's chief executive officer said on a call with reporters Tuesday. 2016 "will be another difficult year, no doubt."
The Asia-focused lender reported a pretax loss of $1.5 billion in 2015, down from profit of $4.2 billion a year earlier, as revenue missed estimates and loan impairments almost doubled to the highest in the bank's history. The company wrote down the value of its business in Thailand, said it was reviewing its operations in Indonesia, further cut its commodity exposure and eliminated all executives' bonuses.
Revenue declined 15% to $15.4 billion, falling short of analysts' estimates of $15.9 billion in a Bloomberg survey. Loan impairments jumped to $4 billion from $2.1 billion in 2014. When executives look at the 2015 results, it "rips at our souls," Winters said on a call with analysts.
The bank took a $1.8 billion restructuring charge, part of the $3 billion in such charges it flagged in November. That included a writedown of about $1 billion of a portfolio it's deemed too risky and seeking to sell in order to shed $20 billion of risk-weighted assets. Standard Chartered will "continue to take necessary, sometimes painful steps to improve returns," the company said in a presentation to investors.
The CEO has been shrinking the lender's balance sheet after rapid growth under Sands, who was replaced last year after eight years as CEO. Total assets at the lender, which focuses on Asia, the Middle East and Africa, ballooned to a peak of $726 billion at the end of 2014 from $266 billion in 2006, according to data compiled by Bloomberg. The bank had $640 billion of assets at the end of last year, a 12% decrease, the results show.
Since June, Winters has raised $5.1 billion from investors, scrapped the dividend and announced plans to cut 15,000 jobs to help save $2.9 billion by 2018, while seeking to restructure or exit $100 billion of risky assets.