StanChart warning of slow growth rattles investors

Standard Chartered has warned of muted income growth this year due to the poor performance of its South Korean consumer banking business, with an operating loss of up to US$200 million.

Despite a worse-than expected fourth-quarter performance, the bank's management gave a positive outlook for its depressed margins, but some analysts questioned how the bank could offset the potential rise in losses.

"The uncertainty of the geographic performance and margin outlook puts pressure on its share price," Maybank Kim Eng Securities analyst Steven Chan said. He assigned a "sell" on the bank's shares and a price target of HK$172.20.

The stock plunged 6.8 per cent to 1,333.5 pence in early London trading after the pre-close trading update was announced. It edged down 0.65 per cent in Hong Kong before the announcement to close at HK$182.60.

The Asia-focused British lender's business had been worsening in the fourth quarter from the previous term amid a decline in its financial markets arm, its finance director Richard Meddings said yesterday.

The bank said the income for the full year was "broadly flat" with last year in the statement, without giving specific numbers. The impairment loss would be larger in the second half than the first.