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Standard Chartered Cuts 15,000 Jobs

Standard CharteredStandard Chartered, the Asia-focused UK bank, is to cut 15,000 jobs and raise $5.1bn (£3.3bn) to create a “lean, focused and well-capitalised” group.

About $3bn being raised in the rights issue will cover reorganisation costs.

The remainder will be used to strengthen the bank’s balance sheet.

The restructuring was announced as Standard Chartered reported a “disappointing” third-quarter pre-tax loss of $139m for the three months to September.

That compared with a profit of $1.5bn for the same period last year.

Revenue fell 18.4% to $3.68bn and losses on bad loans almost doubled to $1.23bn for the quarter.

The job cuts are part of a restructuring programme to take place over the next three years.

Standard Chartered gave few details about the staff reductions, but the figure could include businesses it plans to sell. It employs 86,000 people.

Bill Winters announced a strategic review of Standard Chartered when he took over as chief executive in June.

He put a new management team in place the following month and analysts had been expecting the bank to seek additional capital to shore up its balance sheet.

Mr Winters acknowledged the challenging business environment facing the bank.

“This is … an aggressive and decisive set of actions to fundamentally shore up the underpinnings of the bank,” he said on a conference call.

Standard Chartered shares fell more than 6% in early trading in London and by 3.2% in Hong Kong.

Michael Hewson, chief market analyst at CMC Markets, told Radio 4’s Today programme that Standard Chartered was “way behind the curve” on cutting costs after it had belatedly concluded that its business model was broken.

 

 

Credit: BBC

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