StanChart hit by profit fall, shareholder protest
By Lawrence White and Steve Slater
HONG KONG/LONDON (Reuters) - Standard Chartered (STAN.L: Quote) faced a protest from over 20 percent of shareholders over its board structure on Wednesday and warned it could miss this year's revenue target after higher bad debts and falling interest rates hit first-quarter earnings.
Shares in the Asia-focused bank, one of the most consistent performers during the financial crisis, fell over 4 percent.
More than 22 percent of the London-based bank's shareholders abstained or voted against the re-election of four directors at an annual meeting, including probably its largest investor, Singapore state investor Temasek. Almost 13 percent of shareholders also failed to back the bank's pay policy.
Temasek, which owns an 18 percent stake, last year abstained on the re-election of some directors, in part because it wants fewer executives on the board. The investor was considering abstaining again this year, sources familiar with the matter told Reuters before the shareholder meeting. It could not immediately be reached for comment after the vote.
Standard Chartered Chairman John Peace said he had discussed governance with Temasek, and said his bank - which has six executives on its board of 19 people - had a structure that reflected best UK corporate practice.
"They believe in a different model. They expressed a different philosophy to us and I respect that," Peace said.
Standard Chartered said that, despite a weak March, it was still on course to achieve an 11th consecutive year of record profits, driven by strong Asian markets, but it would ease back on hiring to rein in growing wage costs.
The profitability of banks in Asia has been squeezed by ultra-easy monetary policy in the West, which has created a flood of cheap money that has pressured margins for banks competing to lend to fast-growing emerging markets. Continued...