Standard Chartered to cut office space as dividend returns despite profit hit
Standard Chartered will resume its dividend for the full year despite a sharp fall in profit due to the pandemic, as it unveiled plans to slash office space in the coming years.
The London-based lender, which halted its payout last year at the request of the Bank of England, said it will pay a dividend of 9p per share and will launch a buyback of $254m (£179m).
This was despite Standard Chartered’s pre-tax profit dropping 57 per cent in 2020 to $1.6bn, largely caused by higher credit impairments caused by the pandemic.
The bank booked impairments of $2.3bn, more than double the previous year, though it said two-thirds of these charges were recorded in the first half of the year.
Like many of its competitors, however, Standard Chartered recorded strong trading for its investment division thanks to market volatility during the pandemic.
Operating profit from its financial markets unit rose 18 per cent as clients ramped up their investment activity.
Shares in Standard Chartered were more than five per cent down in early trading.
In an interview with Bloomberg, chief financial officer Andy Halford also announced plans to reduce Standard Chartered’s office space by a third in the next three to four years.
It is the latest major bank to reduce its office footprint amid a shift to home working during the pandemic, after HSBC and Lloyds announced similar plans this week.
“We are weathering the health crisis and geopolitical tensions very well, our strategic transformation continues to progress and our outlook is bright,” said chief executive Bill Winters.
“We remain strong and profitable, although returns in 2020 were clearly impacted by higher provisions, reduced economic activity and low interest rates, in each case the result of Covid-19. Looking ahead, our unique exposure to the most dynamic markets in the world puts us in a great position to benefit from the clear signs of recovery there.”
Standard Chartered said it expected to recover from the Covid-19 impact this year, especially in Asia, where it generates two-thirds of its income.
But it warned overall income in 2021 was likely to be similar to last year due to the impact of interest rate cuts around the world.