* Full-year income seen "broadly flat" vs 2012
* Market slowdown worsened in Q4 - finance director
* Consumer banking profit down, wholesale profit flat
* Shares fall 7 percent to 16-month low
By Steve Slater
LONDON, Dec 4 Standard Chartered warned
that 10 years of record earnings are likely to end this year,
with profit set to fall because of losses in Korea, a slowdown
in its key Asian markets and tougher regulations.
Shares in the bank, which makes more than 90 percent of its
profit in Asia, Africa and the Middle East, tumbled more than 7
percent to their lowest level for 16 months.
Standard Chartered said on Wednesday that operating profit
in its consumer bank will be down by at least 10 percent from a
year ago because of problems in Korea and profit from wholesale
banking is expected to be flat, leaving overall profit down.
"We've seen significant softening in this fourth quarter,
particularly in financial markets," Group Finance Director
Richard Meddings said.
The bank's London-listed shares tumbled 7.1 percent to 13.30
pounds by 0937 GMT. This was their lowest level since August
2012, when the shares were hit by concerns about a fine from
U.S. authorities for breaking sanctions on Iran.
Analysts said the concern now is the bank's growth
Top-line growth is the key issue, Shore Capital analyst Gary
Greenwood said, adding that potentially higher capital
requirements mean that it will be difficult for the company to
make short-term headway on its return on equity.
Income for the full year is likely to be "broadly flat" from
2012, the bank said, against analysts' expectations for a rise
of about 4 percent.
After a slowdown in financial markets that began in August,
Meddings said the fourth quarter had been weaker than the third
quarter. Particularly hard hit was its rates business, where
activity had been sapped by uncertainty over the direction of
The bank said it is keeping a "tight rein" on costs but they
would be slightly higher than 2012 because of higher compliance
spending and a rise in a British bank levy, while losses from
bad debts are also expected to rise, mainly in Korea.
Standard Chartered has reported 10 consecutive years of
record income and profits but last month scaled back its income
growth target for the next couple of years as slower economic
growth and tougher regulations bite.
The bank expects its Korean consumer banking arm to lose
$200 million this year, with income down 15 percent. The bank
wrote down the value of its Korean business by $1 billion in
August and is restructuring its operations there.
Its businesses in Hong Kong and Africa continue to perform
well, but growth in Singapore has slowed.
The bank has been taking action to reduce spending and
streamline operations in the face of what it described as
near-term problems and said it remains confident in its
long-term growth prospects.
Standard Chartered has cut about 2,000 jobs in the past
year, halting a hiring spree over the past decade that has
trebled its workforce to 89,000.
The bank had been expected to make a pretax profit of $7.4
billion for 2013, up 8 percent from last year's $6.9 billion,
according to the average forecast from 26 analysts polled by