Standard Chartered sticks with commodities trade

Standard Chartered chief executive Peter Sands said financing commodity trade will remain an essential part of its business even after falling prices worldwide helped curb a decade of profit growth.

The company was tightening lending criteria to reduce risk from its US$61 billion of credit exposure to commodities, exacerbated by slowing economies in India, China and South Korea, the management said after a three-day meeting with some of its shareholders in Hong Kong.

"It is not an option to ask if we are in commodities or not - they're such an integral part of the business," deputy chief executive Mike Rees said. "This isn't about what some other banks are doing. Commodities are part of the DNA of the bank, we are a trade-finance bank."

Sands and chairman John Peace are under pressure from investors after presiding over a 30 per cent decline in the share price this year, the worst-performing British bank.

London-based Standard Chartered, which makes about three-quarters of its earnings in Asia, is closing businesses and cutting jobs in Korea, China and the Middle East after reporting a drop in earnings this year and last, ending more than a decade of growth. Sands declined to say when the bank would return to profit growth.

"We had very constructive discussions with our investors, how we're getting the bank back on a trajectory of growth and how we're going to improve returns," Sands said of the shareholder meetings. He is "committed to leading the bank" and pledged "tangible progress in 2015".