Standard Chartered (StanChart) reported 4Q2020 pre-tax statutory losses of $449mn as compared to $194mn during the same period in 2019. Annual profits came at $1.6bn in 2020 vs $3.7bn in 2019, down 57%. Major drawdowns to the profits were seen through credit impairment charges of $2.29bn for 2020 as against $906mn for 2019, rising over 2.5x. Of the total credit impairment, $827mn was categorized as Stage 1 and 2 while the remaining $1.47bn was considered Stage 3 with “broadly one-third relating to three unconnected fraud-related Corporate & Institutional Banking client exposures that were reported in 1Q’20.” Net interest margins (NIMs) fell 31bp to 1.31% in 2020 with net interest income down 11% to $6.88bn annually. Financial markets led the division wise income, up 18% followed by lending and portfolio management up 8%. Treasury income was down 42% on the back of falling interest rates and transaction banking income was down 19%. The CET1 ratio was at 14.4%, 60bp above its end-2019 figure. The board proposed a dividend of $0.09/share and announced a share buyback programme of $254mn, the maximum authorized by the regulator. StanChart’s bonds were trading stable – its USD 4.75% Perps were at 100.84, yielding 4.5%.
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