STANDARD Chartered kicked off what will be a contentious bank reporting season today, with booming profits and a bonus pot of £1 billion to be shared by staff.
A small few will get millions each.
That reflects a strong year for the banking industry, and, the bank said, intense competition for talent. The bonus pool is up 38% on last time.
Salaries across the group will rise 4.8%.
Profit for 2021 doubled to $3.3 billion, an amount that disappointed the market and prompted a shift in strategy.
It took a $300 million hit on the value of its stake in the China Bohai Bank, but did announce plans for a $750 million share buyback.
That pleased investors somewhat, but the shares still took a hit, down 24p to 524p.
Chief executive Bill Winters said he will cut $1.3 billion of costs as part of a goal to grow income by 8% to 10% in the next two years.
Since it is strictly a City bank with a strong Asian focus, news of its bonus pot will be less controversial than others.
NatWest and Barclays, high street players with investment banking arms, are sure to face heavy fire over their own bonus payments to top producers in the face of a wider cost of living crisis.
NatWest unveils results tomorrow and is expected to report that it handed out £300 million in bonuses – a 40% increase.
That will raise eyebrows given that it is still 52% owned by the government.
The City remains sceptical about Standard’s performance. Ian Gordon at Investec thinks the bank’s shares are undervalued, but dubbed recent returns “mediocre”.
Richard Hunter at interactive investor said: “Standard has kicked off the reporting season with generally improved figures, but the results are for the most part disappointingly light of expectations. The company is optimistic on prospects for the coming year, particularly in the fast growing Asian region where the company has particular focus. It sees the results of decades of investment and presence in the area coming home to roost, with particular emphasis on Affluent and Mass Retail customers.”
Winters said: “We have committed today to a set of far-reaching actions, to deliver a return on tangible equity of 10 per cent by 2024. Our refreshed strategy has proved resilient and delivered our return to growth in the second half of 2021. We remain fully focused on driving continued business momentum in 2022, together with substantial shareholder returns.”
