PROFITS dipped at Standard Chartered after 10 consecutive years of record earnings, the bank reported yesterday, as ultra-low interest rates squeezed margins.
And the bank’s management suffered a second blow as 22 per cent of investors refused to re-elect the group’s board.
The high figure suggests 18 per cent shareholder Temasek, the Singaporean sovereign wealth fund, may have abstained from the vote at the annual general meeting.
It has previously expressed concerns about the number of executive directors on the board.
Expenses increased on rising headcount and wage inflation in Asia in the quarter, while consumer loan impairments increased on the quarter.
The wholesale arm particularly suffered from market conditions with lower own account volumes, while financial markets income also falling on spread compression.
Despite profit growth in some areas like corporate finance, group profits slid by about five per cent in consumer and investment banking.
However the bank insists the second quarter began strongly with April’s earnings “back at trend levels,” the update said.
“Standard Chartered has stated that “a number of headwinds are now abating” and that the performance in April was more in line with expectations with good client led volume growth without the margin erosion suffered in the first quarter,” said analyst Nic Clarke from Charles Stanley.
“Given the group’s very impressive track record over the last decade we feel management deserves the benefit of the doubt.”
However not all investors were so confident – the bank’s shares fell 4.4 per cent on the day.