Standard Chartered‘s annual profit has more than halved, dropping 57% – missing analyst estimates – to $1.6bn as Covid-19 hits performance.

Despite its downward performance, the Asia, Africa and Middle-East focused bank has said it will resume paying a dividend and has announced a $254m buy-back scheme.

Credit impairment charges for 2020 more than doubled compared to 2019 to $2.3bn due to the Covid-19 pandemic. The bank noted that most of these charges occurred towards the beginning of the year.

Bill Winters, group chief executive of StanChart, said: “We are weathering the health crisis and geopolitical tensions very well, our strategic transformation continues to progress and our outlook is bright. We remain strong and profitable, although returns in 2020 were clearly impacted by higher provisions, reduced economic activity and low interest rates, in each case the result of Covid-19.

“I am proud of the way our colleagues around the world have responded to the challenges of the pandemic by supporting each other, our communities and our clients. Looking ahead, our unique exposure to the most dynamic markets in the world puts us in a great position to benefit from the clear signs of recovery there.”

Resuming dividends 

Earlier today, StanChart also told Bloomberg TV that it will likely cut its office space by a third in the next three to four years. This comes after its rival HSBC announced it was to cut office space by almost half and re-focus its efforts towards the Asian banking market.

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On Tuesday 23 February, HSBC released its 2020 results, which showed profits were down by a third. The bank also said it would resume its dividend.

In today’s announcement, StanChart said it would issue a dividend of $0.09 per share. Meanwhile, HSBC will return to $0.15 per share to investors.

José Viñals, StanChart Group Chairman, said: “The proposed full-year dividend and share buy-back programme together is the maximum we are authorised by our regulator to return to shareholders at this stage, being 0.2 per cent of our risk-weighted assets as at 31 December 2020.

“Having now resumed it, we expect to be able to increase the full-year dividend per share over time as we execute our strategy and progress towards a 10 per cent return on tangible equity.”

StanChart expects its overall income in 2021 to be similar to that of 2020 and predicts income to return to 5-7% growth from 2022 onwards.

The bank is also expected to continue cost-cutting measures, with plans to cut 85,000 jobs in the coming year.