Standard Chartered, the British bank that generates most of its earnings in Asia, warned that operating profit at its consumer banking unit would fall this year for the first time in a decade. The London-based bank, whose large business in Asia helped it fare better than other european banks during the financial crisis, said a " double-digit drop "
in the consumer banking results was due to the unprofitable business in South Corea. Revenue for the entire bank is expected to be unchanged this year from $19 billion last year, Standard Chartered said. " We are responding to near-term challenges to ensure we strike the right balance between growth and returns, and have successfully managed costs tightly in light of the pressures on income ", Peter Sands, the chief executive, said in a statement.
After attracting investors during the financial crisis because of its large operations in faster-growing economies in Asia, Standard Chartered encountered some difficulties earlier this year.
Its income suffered from a weekness in currencies in emerging markets and its management abandoned a 10% target for growth for the full year. Some analysts have raised concerns about the growth prospects for the bank as economies in Asia have slowed while costs to comply with stricter financial regulation have increased. Troubles at its South Corean unit, which mainly involves a dispute with regulators and a reduction in its branch network there, led to a write-down of $1 billion on the value of the business in the first six months.
Standard Chartered said that it expected an operating loss of $200 million at the South Corean unit. Excluding that unit, consumer banking earnings are expected to increase more than 5%.
The 150-year old bank has been cutting jobs and seeking to streamline operations to cope with what it has been calling temporary challenges.
A year ago, the bank reached a deal with federal and state prosecutors in the United States over accusations that it had illegally funneled money for Iranian banks and companies. It agreed to pay $327 million as part of a settlement...
