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Standard Chartered net loss narrowed to $478 million

Standard CharteredStandard Chartered said its troubled principal finance unit toted up a $650 million loss last year, weighing on the bank's efforts to improve returns.

Standard Chartered's net loss for 2016 narrowed to $478 million from $2.36 billion in 2015, but revenue and profit figures fell short of analysts' expectations and the stock fell 5%.

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The emerging-markets focused bank said it sharply marked down its private equity stakes in companies in Africa, Asia and India, as it prepares to exit from the principal finance business in the next couple of years.

It said its risk committee reviewed processes and controls in the unit last year, amid the losses and probes by U.S. and other authorities into alleged bribery at a portfolio company, power plant builder Maxpower Group Pte. Ltd.

Standard Chartered said the unit will be stripped out of its underlying results going forward, with any gains or losses treated as restructuring costs.

The principal finance unit manages around $5 billion for Standard Chartered and external investors. The bank's exposure is around $2 billion.

Standard Chartered's smaller full-year loss was the result of a near-halving in bad loans across its businesses. But revenue dropped by 11% to $13.8 billion from $15.4 billion.

Standard Chartered blamed the fall on a range of factors including negative revenue in principal finance, dollar strength against emerging market currencies and lower client activity.

Fourth-quarter revenue was $3.53 billion, up from $3.26 billion in the fourth quarter of 2015. The bank said significant further improvement is needed.

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