Standard Chartered Singapore's profit down 6% to US$1,489m in 2016

A weaker demand for Wealth Management products is partly to blame.

Standard Chartered Bank in Singapore (the Bank) reported underlying operating profit before tax of US$416 million for the financial year ended 31 December 2016, an increase of 14 per cent compared to 2015, reflecting early progress against the Bank’s priority to build stronger foundations for long-term sustainable growth and improve financial returns.

Challenging income environment
Income in Singapore in 2016 declined 6 per cent year-on-year to US$1,489 million, reflecting challenging market conditions that led to margin compression and lower Financial Markets activity in Corporate & Institutional Banking; and weaker demand for Wealth Management products. This was partly offset by by higher Deposit Income in Retail Banking and credit and funding adjustment gains in Financial Markets.

Strengthening risk profile
The Bank took decisive actions to improve its risk profile in 2016, resulting in lower loan impairment in Retail Banking and fewer provisions in Corporate & Institutional Banking and Commercial Banking. Total loan impairment fell 60 per cent or by US$158 million year-on-year.

Investing in technology and people
The Bank delivered cost efficiencies in the year, creating capacity to invest in technology and people. The Bank continued to embed digital and innovation into its business operations with an increase in investments in technology by 33 per cent compared to 2015. The Bank also invested in frontline sales in Retail Banking as Singapore remains one of the core markets in the region. As a result of these actions, operating expenses increased by 2 per cent year-on-year.

People development continues to be the lynchpin for growth
In line with the SkillsFuture programme launched last year, the Bank set aside US$1.4 million to launch an initiative for employees who are keen to pursue interdisciplinary capabilities for the workplace. Employees are given three paid days of leave to upgrade themselves and have 50 courses to pick from. The number of courses provided by the Bank is expected to double in 2017.

Segment highlights
Corporate & Institutional Banking – Progress was made in reshaping the business with a focus on returns and efficiencies, while strengthening the client franchise. The business grew its trade and client cash balances in 2016 with trade assets and contingent balances up 18 per cent year-on-year. The Bank was also involved in landmark capital market and corporate finance transactions for clients including the Housing Development Board, Universal Terminal, SembCorp and Singapore Technologies Telemedia. Standard Chartered was also the top international bank for Singapore dollar bond issuances last year.

Retail Banking – The business attracted US$1.4 billion net additional Current Account Savings Account deposits in the year, supported by enhanced client propositions. Deposit income achieved double-digit growth, benefitting from new product offerings such as the re-launch of Bonus$aver account and improved margins. Enhanced end-to-end digital sales processes also resulted in a significant increase in online card acquisition.

Commercial Banking – The business leveraged flow and opportunities across the Bank’s network to grow network income by 12 per cent year-on-year. The Bank also successfully led Singapore dollar bond issuances for clients including Chip Eng Seng and National University of Singapore.

Private Banking – The business invested significantly to enhance its control environment and to improve its technology infrastructure. The quality of the franchise and the differentiated potential for growth has attracted several senior private bankers to join during the year. There was a major focus on acquiring new clients in the year, resulting in a 9 per cent increase.