Banking giant says it saw good performance in Saudi Arabia but also highlights 'underperformance' in the UAE
Macroeconomic and geopolitical headwinds in 2018 impacted income momentum for banking giant Standard Chartered across the Middle East.
Good performance was seen in Saudi Arabia but the UAE was part of an underperformance, also witnessed in West Africa and Southern Africa.
However, the bank said in a statement that it "remains confident that the opportunities in the region will support long-term sustainable growth", adding that it will continue to invest selectively and drive efficiencies.
Underlying profit before taxation of $532 million in the Middle East and Africa was down 17 percent year-on-year driven by lower income partially offset by credit impairment with expenses largely flat.
Underlying income of $2.6 billion was down 6 percent year-on-year due to macro and geopolitical headwinds and material currency devaluation in some of its markets.
Credit impairment was down $38 million year-on-year driven by improved risk profile through tighter underwriting standards while loans and advances to customers were up 1 percent year-on-year and customer accounts declined 6 percent.
Standard Chartered CEO Bill Winters said: "There are still some key markets where we have not yet fulfilled our potential. We are targeting higher-returning income and efficiencies in India, Korea, the UAE and Indonesia. Realising the opportunities those markets present will significantly enhance the group’s financial performance and returns."
Globally, Winters announced plans to reduce costs and improve profitability, as he tries to move the firm beyond a period marked by a weak balance sheet and a series of regulatory penalties.
The bank aims to cut $700 million in costs as part of a new three-year plan that the emerging markets focused-lender hopes will soothe investor concerns over its lacklustre returns.
Standard Chartered said underlying pretax profit in 2018 was up 28 percent at $3.86 billion, while full-year underlying operating income rose 5 percent to $14.97 billion, compared with forecasts of $15.02 billion.
The firm’s private banking unit reported an underlying pretax loss of $14 million in 2018, compared with a loss of $1 million in the previous year.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.