Standard Chartered Plc (STAN)’s new pay policy was opposed by 41 percent of voting shareholders as the U.K. bank said first-quarter operating profit fell by a “high single-digit percentage.”
The pay revolt at the lender’s annual meeting is the biggest faced by a U.K. bank this year, after 24 percent voted against Barclays Plc’s compensation report. Standard Chartered’s profit declined in the quarter amid weakness in emerging-market currencies and its financial-markets business, the London-based bank said in a statement today.
Revenue growth in the period dropped by a “low single-digit percentage” from a year earlier, said the company, which generates more than three-quarters of its earnings in Asia. Chief Executive Officer Peter Sands last year suspended a target to increase revenue by at least 10 percent, after writing down its South Korean business by $1 billion.
“The difficult market conditions that began last year have continued into the first quarter of 2014 and remain through April and into May,” according to the bank’s statement.
Standard Chartered stock in London gained 2 percent to 1,306.5 pence today, taking its drop this year to 3.9 percent.
The vote against Standard Chartered’s pay policy comes after Standard Chartered changed the structure of its long-term bonus awards. It compares with about 7 percent who opposed its compensation report last year.
“We are clearly concerned that a significant minority of shareholders voted against the bank’s new remuneration policy,” the company said in a statement. “We acknowledge their views, will reflect on them, and continue our dialogue with our shareholders and the governance bodies in order to address them properly.”
Sands, 52, said Nov. 11 that the bank will review its businesses to cut back or withdraw from less-profitable markets.
The company’s growth in some markets had been offset by weaker performances in other countries, especially South Korea, where revenue fell $110 million from a year earlier, Standard Chartered said.
The bank posted its first decline in full-year profit in more than a decade last year amid writedowns and lower revenue in Korea. The bank is selling its two consumer-finance units in that country, Jaspal Bindra, head of the lender’s Asian business, said March 6.
Declines in currencies especially India’s rupee and the Indonesian rupiah had dragged on income, Standard Chartered said. Revenue from its financial-markets business sank 16 percent in the first quarter amid “challenging market-wide conditions,” it said.
Standard Chartered is the last big U.K. bank to release details about its first-quarter performance. This week, Barclays Plc (BARC) reported a bigger-than-expected drop in profit as a decline in revenue from trading bonds, currencies and commodities cut earnings from the investment bank by 49 percent.
HSBC Holdings Plc (HSBA), the other British bank that focuses on emerging markets, said yesterday first-quarter profit fell 20 percent as gains from asset sales dwindled and investment-banking revenue slipped.
Standard Chartered said in January it would merge its consumer and corporate-banking business to cut costs as Finance Director Richard Meddings said he would leave and the head of corporate banking, Mike Rees, was named deputy CEO.
The company may sell its consumer-finance unit in Hong Kong, Sands said on a conference call with reporters in March. The lender has said it’s looking at options to divest its consumer-banking business in Lebanon and plans to sell its Geneva-based private bank.