* Pretax statutory profit $409 mln tops $366 mln consensus
* No dividend for 2016
* $215 mln loss from stake in Indonesia bank unit
* Global staff bonus pool up 5 percent
(Adds loss in PE unit, extension of AML monitor, analyst quote)
By Lawrence White and Sumeet Chatterjee
LONDON/HONG KONG, Feb 24 Standard Chartered
shares fell as much as 5 percent on Friday as the
British bank said it would not pay a dividend for 2016 due to
restructuring costs, but increased its staff bonus pool by 5
The bonus boost, which Chief Executive Bill Winters said was
needed to motivate and retain staff, came as the lender swung
back to a pretax profit of $409 million for 2016, a year after
reporting its first loss in more than a quarter of a century.
The move comes after rivals reported shrinking bonus pools
due to underwhelming results.
"We continue to ensure that our pay remains competitive, and
rewarding good performance. We had a meaningful improvement in
performance ... so we concluded that this small increase was
appropriate," Winters told reporters on a conference call.
Emerging markets-focused StanChart is in the midst of an
overhaul under Winters that has seen it shed 15,000 jobs and
close its stock trading unit. Other underperforming units such
as its private equity business are also earmarked for the chop.
Winters said that despite the rise in pay, compensation was
still about 27 percent lower than what the bank paid out in
dollar terms in 2012.
StanChart will not pay a dividend for 2016 to shareholders
as its restructuring is not complete and the bank faces
regulatory uncertainty, Chief Financial Officer Andy Halford
told reporters on a conference call.
The profit result beat the $366 million expected by
analysts, Thomson Reuters data showed.
The bank's shares fell as much as 5 percent in London before
recovering to be down 2.8 percent by 1235GMT.
Former JPMorgan executive Winters has expressed
dissatisfaction with the bank's performance, last November
branding its income and profit levels unacceptable.
"Our financial returns are not yet where they need to be and
do not reflect the group's earnings potential," Winters said in
Previous StanChart chairman John Peace said last year
Standard Chartered would risk a staff exodus if it cut bonuses,
responding to investor anger over high pay when the bank is not
paying a dividend. It said in November 2015 that it was
scrapping its final dividend.
Winters himself received total pay for 2016 of 3.4 million
pounds, excluding an additional long-term incentive plan if
performance targets are met.
A total of 139 employees earned over 1 million euros ($1.06
million), with the highest earning 6-7 million euros, according
to the bank's statement.
The results showed that StanChart is still suffering losses
from underperforming parts of its business that it is trying to
shed, including its private equity division and Indonesian bank.
Its principal finance unit, which houses the private equity
business and which it is winding down, lost $650 million in
The lender said exposure to the diamond and jewellery
sector, a business the bank is also exiting, drove impairments
up to $795 million in the second half of 2016 from a $606
million charge in the first half.
StanChart also reported a $215 million loss from its stake
in Indonesian lender PT Bank Permata Tbk, on rising
bad loans and restructuring costs.
StanChart is seeking to reduce its interests in the
Southeast Asian country to a single entity to comply with
regulations, either by merging its branch with Permata or
selling its stake in the local lender.
Indonesian tycoon Tahir last month expressed interest in
buying all of Permata, starting with StanChart's stake.
"Standard Chartered is making some progress, with costs
falling and the group's 'bad bank' being rapidly wound down. The
problem is the smaller core business that the bank is aiming for
isn’t performing all that well," said Nicholas Hyett, equity
analyst at Hargreaves Lansdown.
The bank also said it expects an additional extension to
U.S. supervision by an independent monitor over its anti-money
The lender settled with the New York State Department of
Financial Services in 2014 after the head of that body, Benjamin
Lawsky, called the bank a "rogue institution" over lapses in
surveillance of transactions at its New York branch.
StanChart on Friday said it expects a further extension
beyond the two years agreed at that time, confirming a Reuters
($1 = 0.9446 euros)
(Reporting by Lawrence White and Sumeet Chatterjee, additional
reporting by Andrew MacAskill and Michelle Price; editing by
Jason Neely and Keith Weir)