Standard Chartered Still Reviewing HQ Relocation

(RTTNews) - Standard Chartered Plc (SCBFF.PK, STAN.L), the Asia focused bank, on Tuesday said it is still reviewing whether to shift its headquarters out of London, at a time when banks in Britain face higher levy and regulatory costs.

"At the moment it's something we're watching, we're looking at, we're thinking about, but at this point in time there's no change in our position," said Andy Halford, finance director of Standard Chartered.

Halford said Standard Chartered would pay about $540 million under the bank levy this year, an increase from $366 million in 2014.

Apart from the higher bank levy, other factors that may prompt Standard Chartered to shift its headquarters include skill and availability of labor, other tax and regulatory issues as well as London's strength as a financial hub, said Halford.

Standard Chartered is not alone. Recently, HSBC Holdings Plc (HSBA.L, HSBC) said it would review on moving its headquarters out of the UK, citing higher tax and regulatory costs.

The Conservative-Liberal Democrat coalition government in the UK introduced an annual levy on bank balance sheets in 2011, and the rate was raised this year.

Also on Tuesday, Standard Chartered reported a 22 percent drop in pre-tax profit for the first quarter, hurt by bad loans and tough trading conditions.

The bank reported pre-tax profit of $1.47 billion for the first quarter, compared with $1.88 billion in the prior year.

Operating income for the quarter was lower by 4 percent at $4.4 billion, compared with $4.57 billion last year.

Standard Chartered's loan impairments rose to $476 million from $265 million a year ago.

"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," said CEO Peter Sands.

"However, underlying business volumes generally remain strong. We remain confident in the strength of our franchise, the opportunities in our markets and in our ability to build returns to an attractive level in the medium term," added Sands.

Sands said the bank is on schedule to deliver a Common Equity Tier 1 ratio of between 11 and 12 percent and sustainable cost saves in excess of $400 million in 2015.

STAN.L closed Tuesday at 1,080.00 pounds, down 35.50 pounds or 3.18%, on a volume of 15.7 million shares.