BRD.L Share News (BRD)

LONDON (Alliance News) - Standard Chartered Wednesday reported its first annual decline in pretax profit after a decade of growth, as it was hit by emerging market fears and a writedown in its Korean business.

The FTSE 100-listed bank warned that it is facing more challenges in the first half of this year after pretax profit for 2013 came in at USD6.06 billion, down from USD6.85 billion in 2012. Profits were also hit by lower transaction banking income in wholesale banking and higher impairments in the unsecured book in consumer banking.

Chief Executive Peter Sands said the bank is taking action in Korea, but noted that 2014 will still prove challenging for operations in the country. He said the business will be shrunk, with the consumer finance and savings bank subsidiaries to be sold. Cost reduction is also a priority, with staff numbers down by nearly 400 year on year and the branch network down by 24.

Standard Chartered cut its bonus pool due to the weaker performance, avoiding the backlash that Barclays faced when it raised its bonus pool last month despite falling profits.

Admiral Group, meanwhile, is the top gainer on the FTSE 100 after reporting a 7% increase in 2013 pretax profit due to large drop in claims.

In a bizarre moment, the CEO of the company which also owns Confused.com, called 2013 the "year of the baked potato" for the insurance group. "It was a good, solid year, something on the plate that is appreciated but doesn't really grab the spotlight. This is a comfort food set of results," Herry Engelhardt said.

Platinum miner Lonmin is a big loser after talks between the companies and the Association of Mineworkers and Construction Union in South Africa broke down with the sides miles apart.

According to Lonmin, the three major platinum producers proposed a package with wage increases between 7.5% and 9%, with the lowest paid employees receiving a 9% increase in year one, above the current South African inflation rate of 5.4%. The union had eased its own demands, but still wanted a 30% wage increase in year one, which the companies say is unaffordable.

Strikes over pay and conditions, which started on January 23, have significantly affected operations at the mining companies. Lonmin said it will no longer be able to meet its full-year production guidance.

In political news, the situation in Ukraine remains tense but efforts to find a diplomatic end to the crisis have stepped up.

US Secretary of State John Kerry flew to Paris to meet with Russian Foreign Minister Sergei Lavrov for the first time since the Ukrainian Parliament removed President Viktor Yanukovych and appointed a pro-Western interim government.

The US has accused Russia of acting on false pretenses in Ukraine, while Moscow warned of consequences if Washington and the EU impose sanctions. Kerry said Russia was engaging in, "falsehoods, intimidation and provocation" in seizing Crimea, in order to, "create a pretext for further invasion" in Ukraine.

The European Commission said it is prepared to provide a EUR11 billion aid package to Ukraine over the next few years.

The bloc can mobilize an initial EUR610 million in loans "over the next weeks," said European Commission President Jose Manuel Barroso, adding that EUR600 million in grants could also be provided "very fast." Parts of the offer require EU member states' approval.

Elsewhere, investigators from the United Nations have accused Syrian anti-government fighters of committing crimes against humanity for the first time. The Geneva-based UN Commission of Inquiry on Syria had previously only blamed the government for such crimes.

The Commission said that several Islamist groups had systematically detained and tortured civilians and that government forces and its allied militias were continuing systematic murders, torture, rape and enforced disappearances as crimes against humanity.

Israel said it has intercepted a cargo vessel in the Red Sea carrying dozens of advanced rockets sent by Iran to Palestinian militants in the Gaza Strip. The Syrian-made M-302 rockets have a range of up 160 kilometres, Israeli army spokesman Peter Lerner said. This would have improved the capabilities of militants in the coastal enclave and put most of Israel within their range. The vessel was flying a Panama flag and headed to Port Sudan.

A Thai court has approved a third arrest warrant for anti-government protest leader Suthep Thaugsuban. The Criminal Court approved Thaugsuban's arrest on charges of murder and attempted murder for ordering a crackdown on anti-government protesters when he was deputy prime minister in 2010.

In economic news, the Chinese government has set a 7.5% growth target for this year, unchanged from its last year's goal which it exceeded with 7.7% growth, and vowed to build on domestic spending, while also declaring a war against pollution.

Premier Li Keqiang pledged to make breakthroughs on reforms, as the government plans to focus on consumption rather than investment to create a balanced economy. The parliament also agreed a 12.2% rise in the budget for the armed forces.

The EU has turned up the heat on Italy to fix its economy, chiding the eurozone's third-largest economy for its high debt and weak competitiveness. The country is facing an "excessive" economic imbalance that could warrant further EU action, the bloc's executive said, pointing to "the risk of adverse effects" not only for the Italian economy, but also the 18-member eurozone.

India will hold its next general election over nine polling days between April 7 and May 12, the country's Election Commission has announced.

Opposition prime ministerial nominee Narendra Modi appears to have stolen a march over his rivals in the race to be India's next prime minister, but no single party has won a majority in India's 545-member Lok Sabha, or lower house of parliament, since 1984.

The reputation of virtual currency bitcoin has taken another knock after a Canadian exchange, Flexcoin, was shut down after hackers stole all 896 of its its virtual coins on Sunday.

The news came as Japan said it had decided to treat bitcoin as a commodity like gold after the collapse last week of the Tokyo-based Mt Gox, one of the largest exchanges for the virtual currency. The government may impose taxes on profits from bitcoin trading, and is expected to decide that banks and security houses will not be able to treat bitcoin as a financial product.

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FTSE 100: Down 0.6% at 6,782.63
FTSE 250: Down 0.4% at 16,629.88
AIM ALL-SHARE: Up 0.4% at 891.92
GBP-USD: 1.6704
EUR-USD: 1.3724
GOLD: USD1,336.80 an ounce
OIL (Brent): USD108.49 a barrel

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KEY UK CORPORATE NEWS:

FTSE 100: Melrose Industries reported a large increase in profit and revenue for the full-year, largely driven by the GBP2.3 billion acquisition of Elster Group in August 2012 short-term. Legal & General Group reported a 10% rise in 2013 pretax profits, supported by strong growth across the business, particularly its retirement and investment management divisions. BP said it plans to establish a separate business to manage its onshore oil and gas assets in the US Lower 48. The new business will operate separately from the rest of BP and will be designed to adapt to the changing and competitive energy landscape in the region.

FTSE 250: Michael Page International said its 2013 pretax profit rose by 12% as the recruitment company's cost-cutting initiative began to pay off. Online gaming software company Playtech said its founder Teddy Sagi eventually sold a 15% stake in the business after strong demand for his share placing. Carillion reported a fall in profit and revenue for the recent full-year, after it shrunk its UK construction activities by being more selective about the contracts it took during the economic downturn. SOCO International said its pretax profit fell significantly in 2013 on lower revenues and exploration write-off costs, but the company is confident of strong future progress. Private equity firm TA Associates has sold its remaining 10.6% stake in Jupiter Fund Management. Dignity reported higher profits and revenues for its 2013 financial year, helped by strong sales of pre-arranged funeral plans, and said it expects further growth in 2014 despite a slow start to the year. Rentokil Initial has acquired Chilean pest control, hygiene and office services company Bestway, a deal that makes it the biggest hygiene services provider in the country and gives it a platform to expand in Colombia as it continues its push into more emerging markets. Grafton Group reported a strong increase in profits in 2013 as its markets started to recover from the long economic downturn, and it predicted further steady progress this year. BBA Aviation reported a 16% rise in 2013 pretax profit as acquisitions buoyed revenues and it lifted margins and cut its finance costs. It predicted progress in 2014 despite an unexpected slowdown in some businesses.

AIM: Flowgroup shares are up after the company said it expects 2013 revenue to be slightly ahead of analyst forecasts and confirmed that it is on schedule to launch its new boiler product in the second half of 2014. Shares in ServicePower Technologies have risen after it won a multi-year contract with AB Electrolux Home Appliances which it expects to deliver significant revenue. BlueRock Diamonds is doing well after it said it is progressing with trial mining operations, has recovered its first diamonds, and has completed improvement works on its processing plant at Kareevlei in South Africa. Shares in Independent Oil & Gas rose after the group said that it will buy UK licence block 48/22a in the North Sea, which contains a gas discovery that will be renamed Cronx, from Swift Exploration for an initial payment of about GBP468,000. Dekeloil is also trading higher after it met the conditions regarding its tax exemption application in the Ivory Coast, meaning profits from its palm oil extraction mill there are now fully exempt from corporation tax for 13 years. Strategic Natural Resources is a big decliner after it said it is continuing talks with a potential strategic investor about a recapitalisation. Eco City Vehicles is down after its chief executive stepped down to pursue other interests and it warned that trading since the start of this year had got tougher due to increased competition in the London taxi market.

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AFTERNOON WATCHLIST: US ISM Non-Manufacturing PMI, US EIA Crude Oil Stocks change, US Fed's Beige Book
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Thursday's Key UK Corporate Events

stv group Full Year Results
Schroders Full Year Results
Genel Energy Full Year Results
LSL Property Services Full Year Results
Advanced Medical Solutions Group Full Year Results
Management Consulting Group Full Year Results
Unite Group Full Year Results
Aggreko Full Year Results
Aviva Full Year Results
Avocet Mining Full Year Results
Betfair Group Interim Management Statement
Cineworld Group Full Year Results
Cobham Full Year Results
IMI Full Year Results
Balfour Beatty Full Year Results
James Fisher & Sons Full Year Results
Hunting Full Year Results
Inmarsat Full Year Results
Communisis Full Year Results
DS Smith Interim Management Statement
Savills Full Year Results
London Mining Full Year Results
Spirax-Sarco Engineering Full Year Results
Easyjet February Traffic Statistics

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Thursday's Key Economic Events

00:00 US Fed's Richard Fisher's speech
01:30 US FOMC Member Williams speech
06:30 France ILO Unemployment
11:00 Germany Factory Orders
12:00 UK BoE Asset Purchase Facility
12:00 UK BoE Interest Rate Decision
12:30 US Challenger Job Cuts
12:45 EU ECB Interest Rate Decision
13:15 US Fed's William Dudley speech
13:30 EU ECB President Draghi's Speech
13:30 US Initial Jobless Claims
15:00 US Factory Orders
15:30 US EIA Natural Gas Storage change
18:00 US Philadelphia Fed's Plosser speech
23:00 US Fed's Lockhart speech

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By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance

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