Standard Chartered warned that profits will fall this year and said the head of its worst-performing business had gone on a long-term break from the Asia-focused bank.
In its second warning on financial performance in just over six months, the bank said operating profit for the first half of this year would fall about 20%, reducing profits for all of 2014.
The bank's shares fell 4.2% to £12.00, down 25% since last August. They were the second-biggest FTSE 100 fallers behind Barclays, whose shares were hit after the New York attorney general accused it of fraud.
Peter Sands, Standard Chartered's chief executive, said the first half of 2014 was disappointing and blamed tough trading at its financial markets business. Lenny Feder, head of financial markets and one of the bank's most senior executives, has gone on a year's "sabbatical" and the bank is understood to be looking for a permanent replacement.
In a trading update, Sands said: "This has been a disappointing first half, with difficult trading conditions, particularly in financial markets. We are making good progress against our refreshed strategy and are taking the right actions in response to a challenging environment – managing costs very tightly, disposing of non-core businesses and optimising the deployment of capital. As we navigate this difficult period, we remain focused on the drivers of value creation for our shareholders, continuing to build our franchise to make the most of the enormous opportunities in our markets."
Sands said in March that the bank expected modest growth in revenue and profit this year after profit for 2013 fell 7% to $7bn (£4bn) last year – the first fall for a decade. He has reorganised the business and pledged to get to grips with the ailing business in Korea, which forced a $1bn writedown last year.
After withstanding the financial crisis and being feted as the star of British banking, things have turned rocky for Standard Chartered. A fine of £415m in late 2012 for breaching US sanctions against Iran was followed by a downturn in financial performance that prompted the bank to abandon its revenue target in November and publish a profit warning the following month.
The bank faced a big rebellion over executive pay at its annual meeting last month as shareholders protested over high pay for worse performance.
Standard Chartered said financial markets income was the biggest challenge for the group. Banks including Barclays have been hit by low volatility in markets, reducing client trading, and regulators' demands that they hold more capital against trading activities.
Writedowns on problem loans will rise by a "high-teens percentage" in the first half, an increase the bank said was in line with expectations. The bank was also hit by a $75m loss on "certain strategic investments".
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