Standard Chartered PLC Falls On Profit Warning

Standard Chartered PLC’s (LON: STAN) financial markets business suffers from a decline in trade.

Mark Stones

Mark Stones (TMFMumbojumbones) joined The Motley Fool in 2014 and initially worked as a writer for Fool.co.uk, before joining the Fool’s analyst programme. Mark earned a BA in English from Loughborough University. Although he spends more time reading annual reports than Russian literature these days, he still appreciates a novelist’s antipathy toward the accepted view, which is a useful attitude when trying to sniff out hidden gems on the stock market. His approach to investing has been largely influenced by the principles of Warren Buffett and Peter Lynch. He also takes a special interest in the work of healthcare companies. Outside of investing, Mark plays guitar, enjoys good writing and has a guilty passion for combat sports.

Published 26 June, 2014 1:38 pm BST

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Shares of Standard Chartered (LSE: STAN) (NASDAQOTH: SCBFF.US) fell 4% to 1,203p during early trade after the Asia-focused lender warned that full-year operating profit could fall by 20%. This is due to a particularly difficult first half for its financial markets business.

Group head of financial markets, Lenny Feder will take a sabbatical in July, following a period of poor performance from the unit. Mark Dowie, group head of corporate finance, will take the job on an interim basis.

Standard Chartered blamed tougher regulation and lower market volatility for a decline in its trading business. This is the firm’s second warning on performance in six months.

The chief executive, Peter Sands, commented:

“We are making good progress against our refreshed strategy and are taking the right actions in response to a challenging environment – managing costs very tightly, disposing of non-core businesses and optimising the deployment of capital.”

“As we navigate this difficult period, we remain focused on the drivers of value creation for our shareholders, continuing to build our franchise to make the most of the enormous opportunities in our markets.”

Standard Chartered’s half year results are due on 6 August.

Shares of Standard Chartered trade at 10 times last years earnings and after this morning’s price movement investors can secure a prospective income of 4.4%. The decision to ‘buy’, of course, remains up to you.