Correction to Standard Chartered Shares Fall -- Update (on Wednesday)

By Margot Patrick Features Dow Jones Newswires

Standard Chartered PLC, a laggard among banks restructuring since the financial crisis, said it still sees too many uncertainties to start paying dividends again.

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The Asia-focused bank's shares fell 5.5% despite improved second-quarter profit, after executives said the bank still has a long way to go to improve returns.

The bank is in the throes of a multiyear cleanup after years of rampant growth fizzled out three years ago. Chief Executive Bill Winters has been unloading bad assets and resetting the bank's culture since joining two years ago, but has said it would still take years to get Standard Chartered's return on equity to acceptable levels.

Underlying return on equity in the first half was 5.2%, the bank said Wednesday. Mr. Winters said the target continues to be to get it above 8% by 2020, lower than targets from rivals who started their post-financial crisis restructurings years earlier.

Parts of Standard Chartered were shaky when Mr. Winters took over from a former management team led by Peter Sands. In November 2015, he laid out a plan to cut jobs and relationships with unprofitable clients, and reduce costs. Standard Chartered's balance sheet ballooned in the 2000s as cheap credit from banks helped lift Asian economies.

Mr. Winters said Wednesday the economic health of its markets is mixed, and that there are still question marks on regulatory and accounting rules that could force banks to hold more capital. Holding off on dividends for now "is the cautious thing to do," he said, but the board will watch how the second half goes.

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Standard Chartered's earnings largely met analyst expectations. Revenue in the second quarter was $3.61 billion, up from $3.47 billion in first-half 2016. Net profit for the first half climbed to $971 million from $465 million a year earlier.

The bank has fallen out of favor with investors, with its shares trading at lower valuations than peers because of the continuing restructuring. Mr. Winters said the bank has done much of the heavy lifting to get back on track, but that the "external environment is still weighing on our full potential."

Standard Chartered shares were flat in London before the announcement, then slumped when the bank said dividends won't restart yet. It started reducing, then suspended dividends in 2015.

It has large retail banks in Asia, and services domestic, regional and multinational companies in trade finance and cash management, among other parts of its still-sprawling operations.

Write to Margot Patrick at margot.patrick@wsj.com

LONDON-- Standard Chartered PLC, a laggard among banks restructuring since the financial crisis, said it still sees too many uncertainties to start paying dividends again.

The Asia-focused bank's shares fell 5.5% despite improved second-quarter profit, after executives said the bank still has a long way to go to improve returns.

The bank is in the throes of a multiyear cleanup after years of rampant growth fizzled out three years ago. Chief Executive Bill Winters has been unloading bad assets and resetting the bank's culture since joining two years ago, but has said it would still take years to get Standard Chartered's return on equity to acceptable levels.

Underlying return on equity in the first half was 5.2%, the bank said Wednesday. Mr. Winters said the target continues to be to get return on equity above 8% and eventually 10%, lower than targets from rivals who started their post-financial crisis restructurings years earlier.

Parts of Standard Chartered were shaky when Mr. Winters took over from a former management team led by Peter Sands. In November 2015, he laid out a plan to cut jobs and relationships with unprofitable clients, and reduce costs. Standard Chartered's balance sheet ballooned in the 2000s as cheap credit from banks helped lift Asian economies.

Mr. Winters said Wednesday the economic health of its markets is mixed, and that there are still question marks on regulatory and accounting rules that could force banks to hold more capital. Holding off on dividends for now "is the cautious thing to do," he said, but the board will watch how the second half goes.

Standard Chartered's earnings largely met analyst expectations. Revenue in the second quarter was $3.61 billion, up from $3.47 billion in first-half 2016. Net profit for the first half climbed to $971 million from $465 million a year earlier.

The bank has fallen out of favor with investors, with its shares trading at lower valuations than peers because of the continuing restructuring. Mr. Winters said the bank has done much of the heavy lifting to get back on track, but that the "external environment is still weighing on our full potential."

Standard Chartered shares were flat in London before the announcement, then slumped when the bank said dividends won't restart yet. It started reducing, then suspended dividends in 2015.

It has large retail banks in Asia, and services domestic, regional and multinational companies in trade finance and cash management, among other parts of its still-sprawling operations.

Write to Margot Patrick at margot.patrick@wsj.com

Corrections & Amplifications

This article was corrected at 1417 GMT on Thursday, August 3, 2017 because the original misstated that the target was to be above 8% by 2020 in the fifth paragraph. Standard Chartered is targeting a return on equity above 8% to 10% by an unspecified date, after an earlier target was scrapped to get it above 8% by 2018 and above 10% by 2020.

Standard Chartered is targeting a return on equity above 8% to 10% by an unspecified date, after an earlier target was scrapped to get it above 8% by 2018 and above 10% by 2020. "Standard Chartered Shares Fall as Dividends Stay Suspended -- Update," at 1029 GMT, misstated that the target was to be above 8% by 2020 in the fifth paragraph.

(END) Dow Jones Newswires

August 03, 2017 10:24 ET (14:24 GMT)