Standard Chartered's annual profits fall for first time in decade - UPDATE

5th Mar 2014 09:26

- Profits fall on South Korea writedown- Income rises on growth in consumer and wholesale banking- Dividend lifted 10.5 per centStandard Chartered suffered its first fall in annual profits in a decade amid volatile financial markets and difficulties in South Korea.Statutory profit dropped 11% to $6.1bn in the year through December 2013 following a $1bn writedown in the Korean unit in August after lenders in the country were forced to write off personal loans.However, the emerging-markets focused bank tried to reassure investors that it was still an "exciting growth story".Income rose 8% to $19.1bn and normalised earnings per share gained 15% to 225.2 cents, driven by a diversity of customers, products and markets. Growth in Consumer Banking and Wholesale Banking income offset a loss in Corporate items. Chairman John Peace said the group was "focusing on the basics of good banking, in markets we know well, with clients and customers with whom we have deep relationships"."We are entering the new year with strong momentum in both of our businesses and the board remains confident for the year ahead," he added.Chief Executive Peter Sands, however, confessed it was a tough year for the group. He also warned that performance in the first half of 2014 will "remain challenged both at an income and profit level".The dividend was raised 10.5% to 84 cents per share.Consensus still too optimistic on income growth, one broker saysCanaccord Genuity maintained its 'sell' recommendation and 1,200p target price on the stock given as how they expect further cuts to consensus to reflect the lender´s strategy re-focus and the "headwinds" it faces in emerging markets. Thus, analysts at the broker explained that consesus forecasts for 15 per cent growth in income indeed look "challenging". As well, the bank´s private banking and wealth management unit will see competition for clients assets, thus bring pressure to bear on its margins. Shares rose 1.22% to 1,289.50p at 09:59 on Wednesday.RD