Dividend blow sees StanChart shares fall

STANDARD CHARTERED shares fell as much as 5 per cent 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 per cent.

The bonus boost, which chief executive Bill Winters said was needed to motivate and retain staff, came as the lender swung back to a pre-tax profit of $409m (£326m) 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,” Mr Winters said.

Emerging markets-focused StanChart is in the midst of an overhaul under Mr 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.

Mr Winters said that despite the rise in pay, compensation was still about 27 per cent 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 said.