Dubai: Standard Chartered bank said on Wednesday that its net profit fell 37 per cent in 2014.

The emerging markets focused lender said net profit came in at $2.51 billion (Dh9.22 billion) for the year, down from $3.99 billion in 2013.

Operating income fell two per cent year-on-year to $18.23 billion while profit before tax stood at $5.19 billion down 25 per cent from 2013.

As part of a management reshuffle, the bank said last week its chief executive Peter Sands will step down in June, followed by Chairman John Peace next year. Former JPMorgan investment bank head Bill Winters will replace Sands.

“2014 was a challenging year, and our performance was disappointing. The bank took decisive action last year to reposition itself for the future,” Peace said in a statement.

The bank’s CEO said actions have been initiated to meet the new challenges. “The progress we have made in attacking the cost base underpins our confidence in achieving $1.8 billion in cost savings over the period from 2015 to2017,” said Sands.

The bank saw intense pressure on margins and volume, a significant uptick in impairment and a sharp increase in regulatory-related cost last year. “Some of the decisions we took in the past look less good now than they did at the time, such as Korea, which in 2014 made a loss before tax of $145 million,” Sands said.

The bank’s overall bonus pool shrank 9 per cent for the year prompting executive directors to forgo bonus for the year.

In the Middle East too, revenues and earnings were down compared to last year. While operating income fell $22 million, or 1 per cent, to $1.84 billion, client income fell 2 per cent across the region.

“Strong performances in our markets across the region have largely offset a softer performance in the UAE. Continued spread compression as a result of the low volatility, low interest rate environment offset good levels of customer activity in FX and rates,” the bank said.

Operating expenses in the region were $24 million, or 3 per cent, higher at $984 million predominantly driven by incremental costs from the newly launched Iraq operations and restructuring provisions. Loan impairment increased by $42 million to $89 million. Operating profit was down $89 million, or 10 per cent, to $769 million.