LONDON, April 28 — Standard Chartered Plc reported first- quarter profit that missed analysts’ estimates, with all but one division reporting lower earnings in Peter Sands’s final results as chief executive officer.

Pretax profit fell 22 per cent to US$1.5 billion (RM5.34 billion) from the year-earlier period, the London-based lender said in a statement today. That missed the US$1.6 billion average estimate of four analysts in a Bloomberg survey.

Standard Chartered hired Bill Winters, 53, a former co-head of JPMorgan Chase & Co’s investment bank, to take over as CEO in June after Sands struggled to reverse two years of declining earnings and a slump in shares. The board has come under pressure from investors to move to Asia as UK taxes on banks continue to rise, with Finance Director Andy Halford saying today that a move in domicile is “something that we continue to keep under review.”

“We sense a bit of organisational water-treading until the new CEO Winters gets stuck in,” said Sandy Chen, an analyst at Cenkos Securities Plc in London with a buy recommendation on the shares. “Winters’ top priorities are relatively clear: clean up corporate governance and risk management in order to reduce regulatory pressures, cut costs” and “use disposals to top up capital ratios.”

The shares fell 0.7 per cent to 1,108 pence at 10.20am in London. They have increased about 14 per cent since the management overhaul was announced on February 26 after losing almost half their value over the previous two years.

Loan impairments

Standard Chartered’s retail operation was the only division to report rising earnings in the three months through March 31. Commercial banking income fell by 17 per cent, the most of any unit, to US$259 million. Income from corporate and institutional clients fell 5 per cent to US$2.5 billion, while private banking income decreased 4 per cent to US$152 million.

Loan impairment “remains elevated” in the first quarter, especially among corporate and institutional clients, rising 80 per cent to US$476 million compared to last year, according to the statement. Operating expenses rose 1 per cent to US$2.5 billion amid “continued significant investment in improving conduct and compliance systems and processes,” the bank said.

“Trading conditions remain challenging and the actions we are taking to de-risk, cut costs and build capital are having an impact on near-term performance,” Sands wore in the statement. “However, underlying business volumes generally remain strong.”

The CEO didn’t participate in the media call today.

Bank levy

Adding to the bank’s cost burden, Standard Chartered could pay about US$540 million toward the bank levy this year, up by about US$170 million from 2014, according to Halford.

“The increase in the numbers this time is pretty significant,” Halford told reporters. “Our position hasn’t changed, the board will continue to review as new information comes up,” he added, when asked about re-domiciling.

HSBC Holdings Plc, which paid 750 million pounds (US$1.4 billion) in bank levies last year, the most among major British lenders, has also said it’s reviewing whether to leave London, just days before an election next month.

The bank is “on schedule” to increase its common equity Tier 1 capital ratio, a measure of financial strength, to between 11 and 12 per cent and save more than US$400 million under a cost reduction program this year, according to Sands. The capital ratio was 10.7 per cent at the end of December.

New management

Under Sands, the lender reported a 30 per cent slump in pre-tax profit in 2014, hurt by faltering economic growth in Asia, plummeting commodity prices and rising costs tied to misconduct such as the rigging of global currency markets. The bank is eliminating some 4,000 jobs and shutting equities trading to save about US$1.8 billion in costs through 2017.

Among the new CEO’s tasks will be choosing a new management team. Executives to leave this year include Asia CEO Jaspal Bindra and Viswanathan Shankar, head of Europe, Middle East, Africa and Americas. Chairman John Peace also plans to step down in 2016.

Standard Chartered is the first of Britain’s five largest lenders to release first-quarter results. — Bloomberg