StanChart to cut 15,000 jobs worldwide

Standard Chartered Plc said it would axe 15,000 jobs and raise $5.1 billion by selling new shares as its new chief executive set out plans to restore profitability to a bank hit hard by an economic slowdown in emerging markets.

The firm, which has a 73.89 per cent stake in Standard Chartered Kenya, will cut 17 per cent of the workforce to reduce costs by $2.9 billion by 2018, and sell or restructure $100 billion of loans, on a risk-adjusted basis – or a third of its total.

CEO Bill Winters, a former JPMorgan investment bank boss who took the helm of Standard Chartered in June, described this as an “aggressive and decisive set of actions” to shore up the company.

The news of the rights issue and restructuring came as Asia-focused Standard Chartered (StanChart) posted a third-quarter operating loss of $139 million, weighed down by growing global regulatory costs and rising loan impairments in India. Revenue dipped 18 per cent year-on-year.

It was the fifth successive quarter of falling revenue for StanChart, hit by an economic slowdown in Asia – where it earns more than two-thirds of its profits – and rising bad loans, as well as weakening currencies in the region compared with the dollar, in which it reports its results.

Its London-listed shares were down 6.2 per cent at 669 pence by 0910 GMT, the worst-performing stock on the European bank index. They have fallen 31 per cent this year, partly due to expectations Winters would launch a rights issue and also on the Asian slowdown.

“Post restructuring and recapitalisation Standard Chartered will be a stronger and more focused group. But the group will remain a complicated work-in-progress during the upcoming years,” said Ronit Ghose, analyst at Citi.

SOURCE: BUSINESS DAILY