Their 2007 profits have taken a slump on the back of high provisions for Lobtrans loans which were not secured. After StanChart announced lukewarm results last week, its share price on the bourse plunged 5.63 percent while Barclays' went down 1.59 percent, pulling the DCI down 0.11 percent in the week.
For Barclays, which officially announced their results on Monday, the slump spilled over into this week. The Lobtrans saga has cost the banking sector around P160 million in impairment charges. Although share prices of financial institutions have been on a free fall due to a price correction exercise since October last year, the latest developments are likely to leave the banks' stock at the lowest end of the curve. Standard Chartered and Barclays, two of the large cap counters whose shares dominate the domestic board, have lost close to half of their value in the six-month bear run. Stanchart fell from around 1,000 thebe in September last year to 600 thebe by close of trade on Tuesday. Barclays Bank had a P73 million exposure which pulled down its 2007 year-end profit before tax by 16 percent from P349 million (2006) to P295 million. StanChart, on the other hand, had a huge P74.9 million impairment charge mainly to cover for losses in the Lobtrans saga which dragged down its profits by 7 percent for the year ended 31 December 2007.
