Standard Chartered bank has been slipping off the stock market dramatically. The bank is now trying to get back bonuses paid to its staff which is the reason for its current problems, but lawyers and experts find these steps legally difficult.
Standard Chartered banks chief executive Bill Winters said the bank could still recover the bonuses given to 150 senior officers if they are found guilty of breaching internal rules during their time with the company, as per Reuters.
Evening Standard noted that Winters also said the 2015 performance was poor, but the actions that they took on capital last year has placed them in a good position for the emerging macro environment. He added that they already identified their risk issue and are dealing with the matter assertively.
Standard Chartered admitted their first annual loss in 26 years which is due to bad loans that started from $7.5 billion at the end of 2014 and swelled up $ 12.8 billion by the end of 2015. Winters added that shares in the emerging market bank fell dramatically which was mainly caused by a new restructured ring plan and a multi-billion loan impairment costing $1.5 billion in losses during the year 2015 as reported by Financial Times.
According to experts, the idea of clawing back these funds might be a very reasonable idea but will be a nightmare to enforce. Amongst the banks worldwide, British has the toughest rule on banker pay. These rules cut bonuses of bankers that were found guilty of irresponsibility and breaching compliance regulations.
But according to Anna McCaffrey, a senior associate in the employment practice at Taylor Wessing, even if banks have a well-made clause regarding clawbacks, it would be difficult to prove that a person's behavior has led to a particular result. It faces different challenges like difficulty of claiming back the funds if the banker has moved it to another company or a different country.
Lawyers recognized the difficulties that banks face whenever they tend to impose clawbacks but this legal move could give reassurance to the company's weary investors. It also shows that the bank is serious in making those guilty parties accountable for their actions. Standard Chartered banks stocks plummeted to 31% this year.
