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Standard Chartered has made its second consecutive annual loss as the
emerging markets-focused bank suffered another decline in revenues that offset the benefits of recent cost-cutting and lower bad debt impairments.

StanChart, which is listed in London but mostly operates across Asia,
the Middle East and Africa, reported a net loss of $478m that trailed
analysts’ expectations even though it was an improvement from the
$2.4bn loss it made in 2015 – its first for more than 15 years.

Revenues fell from $15.4bn to $13.8bn. The bank recorded a 40 per cent
fall in impairments for bad loans to $2.38bn last year. Operating
expenses were down 5 per cent at $10bn. Pre-tax profits increased from
$800m to $1.1bn.

The London-listed bank has suffered a tough few years after being
fined by US regulators for sanctions breaches in 2012 and incurring
heavy losses on risky loans to some large Asian clients that turned
bad.

It is rebuilding under Bill Winters, who took over as chief executive
in 2015 and set about shedding $100bn of risky assets, stripping
$2.9bn from its annual cost base and cutting 15,000 of its 86,000 jobs
by 2018.

Mr Winters said:

We made good progress in 2016, cleaning up our balance sheet and fortifying our capital position. We are attacking our cost base,
reinvesting significantly to strengthen our competitive advantages and continuing to enhance our financial crime controls.

Our financial returns are not yet where they need to be and do not
reflect the Group’s earnings potential. Having worked hard to secure
our foundations we are now focused on realising that potential.

The StanChart CEO has promised to tighten its compliance and controls,
and last year warned of a “zero tolerance” approach in a #knowtherules
memo to staff after discovering a lax approach to compliance in some
parts of the bank.

StanChart shares, which have gained 92 per cent in the past year, were
down 6.8p at 744.2p in early trading on Friday.

Copyright The Financial Times Limited 2017. All rights reserved.
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