Standard Chartered has become the latest European lender to suffer from a dearth of profitability on an annual basis, with its 2016 missing the mark from street estimates, despite a dramatic reversal off of last year’s $1.52 billion pretax loss.
For 2016 however, the lender posted a pretax profit of $409 million, which despite being in positive territory did reflect a disappointment for investors and analysts who had been pricing in a larger figure.
On a boarder scale, the aggressive cost-cutting mechanisms and agenda that Standard Chartered has executed could finally be starting to show some dividends. Over the past couple of months, the group has jettisoned thousands of its staff, including an announcement of over 15,000 jobs to kick off a global retail strategy to help restore profitability.
Full Steam Ahead
Last November Standard Chartered disclosed plans to offload a tenth of its global corporate and institutional banking headcount. The cuts and strategy have been spearheaded by the bank’s Chief Executive Officer Bill Winters, who is trying to right the ship less than two years into his appointment.
In addition to its profits, Standard Chartered had to grapple with a decline in its revenues, which fell by 11 percent in 2016 to $13.8 billion – this was however a slight bright spot for the group, overtaking a street estimate of $13.7 billion, according to a Bloomberg report.
With the UK banking industry in a state of flux with the ongoing drama of Brexit , it will be interesting to see if Standard Chartered can rebound in 2017. In a more immediate sense, the lender will be contemplating a move to Dublin or Frankfurt, with the Brexit schism looking all but certain.
