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UPDATE - Standard Chartered now looking at domicile issue

Published: 02:01 29 Apr 2015 AEST

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Standard Chartered (LON:STAN) has become the latest big bank to consider leaving the UK due to the increased cost of the bank levy.

Following quarterly numbers today, finance director Andy Halford told a conference the issue was now a focus, adding a move of domicile was being reviewed but no decision made as yet.

The tax on banks has increased eight times since it was introduced five years ago after the financial crisis.

Last week, HSBC, Britain's biggest bank created waves by saying it could move its HQ elsewhere.

Earlier, at Asia focused Standard its bad debts headache resurfaced again in its latest quarter as profits tumbled by more than a fifth.

Peter Sands, chief executive, said trading conditions remained challenging, while actions to de-risk, cut costs and build capital were also having an impact on near term performance.

“Underlying business volumes generally remain strong,” he said.

Sands is stepping down in June to be replaced by US veteran Bill Winters in what is expected to herald a major overhaul of the colonial bank.

Chairman Sir John Peace and Asia head Jaspal Bindra are also standing down, while recently, Standard, alongside Asia-focused rival HSBC, has been tipped as a candidate to change its domicile from London to Asia due to the heavy cost of the UK bank levy.

Profits for the three months to March fell 22% to US$1.47bn, with an 80% in rise in loan impairments to US$476mln a major contributor.

On a quarter–by-quarter basis, Sands said the impairments situation had improved, especially in retail, due to its efforts to improve the quality of its loan book.  Loan impairments in Corporate and Institutional, while down on the previous two quarters, remained elevated.

"We are on schedule to deliver a Common Equity Tier 1 ratio of between 11% and 12% and sustainable cost saves in excess of US$400mln in 2015,” he added.  

All areas of the business saw lower income with the exception of retail where there was a 2% increase on a year ago.

Corporate finance income dropped by 10%, personal loans fell by 15% and trade finance by 9%. The loan book overall rose by 2% to US$295bn.

Shares fell 3.18% to 1,080p.

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