Standard Chartered Bank losses mount, divi passed, to raise $5bn

Standard Chartered plans to raise $5.1bn in a rights issue as the bank reported an unexpected quarterly loss and says it will pay no final dividend for this year.

Published on:

03 Nov 2015, 5:40 am

By Stephen Morris and Alfred Liu

(Bloomberg) — Standard Chartered Plc said it planned to raise 3.3 billion pounds ($5.1 billion) in a rights issue as the bank reported an unexpected quarterly loss and said that it would pay no final dividend for this year.

People walk past the head office of Standard Chartered bank in the City of London February 27, 2015. Incoming Standard Chartered Chief Executive Bill Winters will need to take tough decisions that predecessor Peter Sands deemed unnecessary, in order to reverse a two-year slump in the bank's fortunes, according to some insiders and bankers. REUTERS/Eddie Keogh (BRITAIN – Tags: BUSINESS)

The two-for-seven issue priced at 465 pence per share will boost the lender's common-equity Tier-1 capital ratio to 13.1 percent from 11.5 percent, the lender said in a statement on Tuesday. Largest shareholder Temasek Holdings Pte intends to take up rights for 15.8 percent of existing share capital, the bank said.

The pretax loss of $139 million for the third quarter compared with a $1.53 billion profit a year earlier, the London-based bank said in a separate statement. The average of five analyst estimates compiled by Bloomberg was for a $903 million profit.

Read also: More executive shake out at StanCha – now seeks new corporate business boss

"The business environment in our markets remains challenging and our recent performance is disappointing," Chief Executive Officer Bill Winters said.

Winters, 54, is struggling to revive the lender after its value halved over the past two years. The bank's plans to raise capital come with British regulators set to publish stress tests next month.

Its stock has declined 26 percent in London this year.

Dividends