SHARES in Standard Chartered soared by more than six per cent before closing mostly flat yesterday, demonstrating investor confidence in the bank’s new chief executive Bill Winters despite reporting disappointing results.
The company said that adjusted pre-tax profit had slumped 44 per cent to $1.82bn (£1.17bn) in the six months to the end of June.
The bank also cut its dividend for the first half of the year to 14.4 cents a share, from 28.8 cents a year earlier.
But it also increased its tier one common capital ratio from 10.7 per cent at the end of last year to 11.5 per cent at the end of June.
While such a move should allay concerns that the bank will be forced to take steps to shore up its capital buffer, Winters said yesterday that the bank could still raise cash in the future if it is needed for the “long-term benefit of the group”.
Yesterday marked the first set of quarterly financial results for Winters, who joined the bank in June, and analysts said yesterday that they demonstrated the challenges he faces in turning around the struggling bank’s fortunes.
Yet the fact the bank’s shares surged as much as 6.5 per cent at the open suggested that Winters, a well-liked former head of JP Morgan’s investment bank, is up to the challenge.
Since taking over from former chief executive Peter Sands, Winters has overhauled Standard Chartered’s management structure by introducing a new, 13-strong team to streamline the running of the bank.
Winters was candid about Standard Chartered’s struggles yesterday, saying: “The bank has some real challenges.”
“We’re working through a legacy of a focus on growth over risk discipline and returns, together with an emerging markets slowdown,” he said, adding: “We’ve also been too slow to take our decisions, whether on costs, people or strategy.”
Sands had lost favour with investors as the bank repeatedly reported disappointing earnings amid an emerging market slowdown and a number of scrapes with regulators.