Thursday, August 5, 2021
HomeBusinessStandard Chartered axes 15,000 jobs, raises $5.1 bn in capital

Standard Chartered axes 15,000 jobs, raises $5.1 bn in capital

Asia-focused British bank Standard Chartered said it would axe 15,000 jobs and raise USD 5.1 billion in capital after posting a “disappointing” third-quarter loss as it struggles to return to growth.

The job losses are part of a major restructuring that will cost around USD 3 billion, the bank said.

A Standard Chartered spokeswoman said she could not give any further details of the job cuts.

More than half of the restructuring costs would come from potential losses on liquidating assets and businesses, the bank said in a statement.

The remaining charges would be from “potential redundancy costs” of a planned headcount reduction of 15,000, as well as goodwill write-downs, it added.

The bank reported an unexpected pre-tax quarterly loss of USD 139 million compared with a USD 1.53 billion profit a year earlier, in a performance described as “disappointing” by group chief executive Bill Winters.

Revenue was down 18.4 per cent to USD 3.68 billion and impairment losses increased from USD 536 million to USD 1.23 billion for the quarter.

Shares in the bank plunged as much as 6.2 per cent on the Hong Kong stock exchange in the wake of the results — its stock value has fallen 32 per cent in the past year.

“I know a lot of people losing their jobs is not good, (but) from a business point of view, that’s what they have to do,” Hong Kong-based financial analyst Jackson Wong told.

Wong said loan losses were the main reason the bank swung to a pre-tax loss, adding that it needed to “control costs and try to remodel (its) business”.

Standard Chartered announced a plan to raise USD 5.1 billion in capital through a rights issue, and a strategic review that raised its cost-cutting target to USD 2.9 billion between 2015 and 2018.

It added it was refocusing on “affluent retail clients” rather than corporate and institutional banking businesses and would exit or restructure USD 100 billion of assets.

“The business environment in our markets remains challenging and our recent performance is disappointing,” Winters said in a statement filed to the Hong Kong bourse.

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