StanChart Asia CEO: Focus on Banker Bonuses 'Unfair'
Fresh regulations on banker bonuses is a risk for Standard Chartered, warned CEO of the bank's Asia division, Jaspal Bindra, who said an unfair amount of attention has been paid to the issue.
Late last week, the European Union (EU) put forward a plan to cap banker bonuses at at 100 percent of salary, or twice that with shareholder approval. Extravagant banker bonuses, which came under sharp criticism following the global financial crisis, have been partly blamed for triggering excessive risk-taking by investment banks.
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"When any industry goes through the situation that the banking situation goes through, it is only logical," said Bindra, referring to the attention given to the banker bonus debate. "The last thing we would like to do is give up on performance-oriented culture that we have cultivated over a long time now," he said.
Stanchart, which on Tuesday reported a pretax profit of $6.9 billion for 2012, logging its tenth year of rising annual profits, revealed it had cut its bonus pool by 7 percent to $1.4 billion, and within that CEO bonuses were slashed by 10 percent to $1.4 billion.
The bank also said in the earnings report that fresh regulations, invoicing tougher liquidity and capital rules and a UK bank tax were costing it "well north" of $500 million a year, and could reach $800 million.
(Read More: StanChart CEO:Banking 'Attacked' From All Sides)
But on the whole, the Bindra was optimistic on Asia, saying the bank had got off to a great start for 2013.
"We are in the right markets, and in great shape in terms of balance sheet and liquidity," he said, highlighting Angola and Cambodia as regions the bank was eyeing for expansion.
"The ten year record performances that we have delivered are largely a result of the proportionality effect. Markets here are still growing three to four times than they are in the West."
Correction: In an earlier version of the story, we inaccurately stated that the European Union (EU) put forward plans to cap banker bonuses earlier this week. They have actually struck a provisional agreement late last week.