STAN Standard Chartered Plc

By Simon Clark, Patricia Kowsmann and Ben Dummett 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (February 28, 2020).

LONDON -- Banks with heavy exposure to Europe and Asia have warned profits could be hit by the coronavirus outbreak as they tell employees to restrict travel and initiate special measures to help customers.

Banking stocks sold off heavily Thursday with shares in several European lenders falling more than 7%. Those retreats outstripped declines in broad stock market indexes, which slid toward correction territory as virus concerns continued to roil global markets.

The spread of the virus will make it more difficult for Asia-focused, London-based Standard Chartered PLC to hit its financial targets, Chief Executive Bill Winters said as the bank warned that profit growth would slow this year.

That warning comes after rival HSBC Holdings PLC said earlier this month that it could take up to $600 million in additional loan loss provisions if the crisis extends into the second half of the year.

Other banks are curbing travel plans, canceling functions, conducting business by videoconference and circulating employee hygiene advice as disruption caused by the virus spreads. Some have introduced relief measures for customers, such as delaying mortgage repayments.

For Standard Chartered, the fallout from the virus coupled with other political headwinds make for a gloomy short-term outlook. Mr. Winters declined to estimate a cost of or worst-case scenario for the impact of the virus but said the bank is in a strong financial position to withstand any outcome.

"We have not put a number on it," he said, adding that his "singular focus" was to get the bank through "a bumpy period."

A quarter of Standard Chartered's Hong Kong branches are closed and there are no face-to-face services in some mainland China branches as a precaution due to the coronavirus outbreak, the bank said. It said some clients affected by the virus can delay repayments on mortgages and business loans. The bank also said it is waiving fees on personal loans, and extending the repayment dates of companies' trade finance loans.

Elsewhere, most banks are following advice from the World Health Organization, with several imposing restrictions on travel to China and Italy.

Citigroup Inc. told employees that all travel into, between and out of all countries in the Asia-Pacific region must be approved by their chief country officer. JP Morgan Chase & Co. employees also need line-manager approval for travel to Italy. HSBC told staff not to book travel to Hong Kong until after April 20, and has banned travel to mainland China until further notice.

Deutsche Bank has imposed staff travel restrictions to and from mainland China, Hong Kong, the affected parts of Italy and South Korea. It asked staff to defer all nonessential travel.

"We continue to monitor the government authorities' assessment and advice and change our procedures accordingly," the bank said in a statement. "We have analyzed where our staff's exposure to the virus may be greatest and are working with local offices to minimize the risk to local staff and travelling populations."

Deutsche Bank also changed the format of a discussion on the state of the global economy due to take place in Frankfurt Thursday evening so that its senior economists could join by videoconference from London and New York, avoiding travel, replacing a sit-down dinner with a cold buffet to make the event easier to hear.

Banks are relying on videoconferencing and other methods of communication to ensure the coronavirus fallout doesn't impede their ability to compete for business. Italy-based SIA SpA is pursuing a possible initial public offering, and some banks without a significant presence in Milan where the payments company is based are pitching for an underwriter role remotely because of their in-house travel restrictions, according to people familiar with the matter. Some Milan-based bankers are still making their case in person, some of the people said.

Bankers said that the broad market selloff is pushing companies in sectors such as energy, retail and travel -- whose businesses are at particular risk because of the virus -- to put on hold any IPO plans that they had been considering, but not made public.

That said, the market volatility hasn't interrupted SIA's plan for a possible IPO, which was announced earlier this month and remains on track, according to a person familiar with the matter.

A spokesman at Swiss bank Julius Baer Group AG, said it is restricting travel in general, and in particular to the affected regions. Earlier this month, it sent 100,000 medical masks to China to help control the outbreak. The spokesman on Thursday said it has a supply of masks for its staff in Asia and Switzerland.

At a conference on financial transaction clearing in Frankfurt Thursday, attendees and speakers from banks and stock exchanges were assessed at check-in by an infrared camera measuring body temperature, according to the organizer. "Our security and paramedic will approach you in case of any indication," a note at the entrance said.

Outside, an ambulance was on standby.

Margot Patrick and Tom Fairless contributed to this article.

Write to Simon Clark at simon.clark@wsj.com, Patricia Kowsmann at patricia.kowsmann@wsj.com and Ben Dummett at ben.dummett@wsj.com

(END) Dow Jones Newswires

February 28, 2020 02:47 ET (07:47 GMT)

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