- The London-listed bank’s value has plunged by a third since Winters took over in 2015
- But Standard enjoyed a rebound, reporting a 19% rise in profits to £4bn.
- It increased the dividend, announced a £790m share buyback and a £1.2bn cost-cutting plan.
‘C**p’ Performance: Bill Winters
The boss of Standard Chartered has admitted that the lender’s share price performance has been ‘bullshit’.
Bill Winters’ blunt assessment came as the Asia-focused bank released full-year results yesterday.
The London-listed giant’s value has plunged by a third since Winters, the longest-serving chief executive of a major UK bank, took over in June 2015.
However, Standard Chartered enjoyed a significant rebound as it reported a 19 per cent rise in profits to £4 billion, increased its dividend and announced a £790 million share buyback as well as a three-year plan. years to reduce costs by £1.2 billion. .
The shares closed up 4.9 per cent, or 29.4 pence, at 635 pence.
The bank, which has no branches in the UK and operates in markets including China, Hong Kong and Singapore, is best known in Britain as the shirt sponsor of Liverpool FC.
Winters said the lender was in a “prime position” to take advantage of strong economic growth in Asia and an expected fall in global interest rates.
Risks to this include slowdowns in major economies, sustained inflationary pressure, a sluggish real estate market in China and increased geopolitical tensions, he said.
But Winters added: “Our share price reflects little of our optimism about the outlook and appears heavily influenced by downside concerns.”
Winters said “the concerns are real and we take them seriously” but believed the bank’s value “will become increasingly clear to the broader market as we continue to grow our earnings.” And he was more frank on a call with reporters, saying, “The stock price sucks.” I know it will be a date.’
Winters said he needed to address misperceptions that costs are too high, the bank is too complex and that it is “too spread out” across multiple products, customers and markets.
He added: “We will be fully focused on addressing shareholder concerns because we are completely optimistic about our delivery.”
The chief executive’s comments reflected issues that are specific to Standard Chartered but come at a time of broader concerns about UK stock market valuations.
That has persuaded companies such as chip design giant Arm Holdings to list in New York instead of London. Another example of the trend was seen this week when drugmaker Indivior said it planned to move its primary listing to Wall Street. Low valuations have also made UK companies vulnerable to takeover speculation, with retailer Currys this week becoming a target of interest from US and Chinese predators.
Concerns about Standard Chartered also reflect problems in China, where the economic recovery has been slow and the property market is in crisis. Yesterday’s results saw it record a £121m writedown on its stake in China Bohai Bank, adding to a £552m charge taken over the past year.
Standard Chartered also took a direct hit from £222m set aside to cover credit losses related to the country’s beleaguered property sector. It comes after rival HSBC earlier this week took a £2.4bn hit on its stake in a Chinese bank.
Gary Greenwood, a banking analyst at Shore Capital, said he agreed with Winters’ comments on the share price, but added that the bank had struggled with returns during the CEO’s time in charge “during the which has consistently underperformed its return on equity targets.”
- Winters saw his salary rise to £7.8m last year from £6.4m in 2022. The 22 per cent jump was largely due to a big rise in long-term stock awards, which rose more from 70 per cent to £3.3 million. His annual bonus was 2.5 per cent lower, at £1.46m.
