Boston, MA 03/05/2013 (wallstreetpr) – Standard Chartered Plc (LON:STAN) is wising up on its employee bonuses and announced it wil cut bonus pool by 7% to $1.43 billion in order to make room for a shareholder return of 56.77 cents per share.
The decision to cut bonuses came after the bank’s corporate lending unit suffered decline in margins from a regulatory fine imposed on banks operating and transacting in US. The US financial services department had accused the British bank of being involved into money laundering activities with its Iranian clients in August last year. Benjamen Lawsky, the head of the bank said the bank had been handling wire transfers on behalf of account’s that were opened without much verification.
Despite the fact that the operating costs for British banks are on the rise for quite sometime now, the bank has managed to maintain profitability. It earned $1.78 billion from its consumer banking unit which was 7.8% more as compared to the last year earnings. The corporate banking sector declined a little (i.e. by 1.5%) to $1.54 billion as the bank had to pay as much as $667 million for violating US sanctions, last year.
The oldest bank in Britain seems to be following a much more logical strategy for employee compensations as compared to the Citigroup Inc (NYSE:C) which is the largest bank in America. After the bonus cut the total figure of employee compensation is les than 50% of retained earnings; corporate taxes and dividends paid are also much higher than the employee bonuses.
Citigroup Inc (NYSE:C) shares were up 1.02% and currently trading at $43.37