Standard Chartered swings the axe
Standard Chartered has launched a major restructuring programme after reporting its first quarterly loss since the Asian crisis in the late 1990s
Standard Chartered has launched a major restructuring programme after reporting its first quarterly loss since the Asian crisis in the late 1990s. It will reduce its workforce of 86,000 by 15,000 over the next three years as part of a bid to cut the bank's cost base by 30%. The bank will scrap the final dividend and restructure around a third of its risk-weighted assets in order to bolster returns. The shares have halved in the past two years as the Asia and emerging-market-focused group has lost its way.
What the commentators said
For years, it denied it needed more capital and "rubbished suspicions of large risky loans in its balance sheet". This quarter's loss, however, shows that there are plenty. The bank took $1.2bn of provisions for them. "They ended up lending to people they shouldn't have touched with a barge pole," according to one shareholder.
The idea now is to shift the emphasis from corporate banking to "affluent retail clients". But this will be "much harder to pull off than it sounds", said Alistair Osborne in The Times. Standard Chartered may have a 150-year-old brand, but competition is intense.The bank's big shareholders, including Aberdeen Asset Management, "should look in the mirror", said Nils Pratley in The Guardian. The market has "smelled trouble" for years, yet the shareholders raised barely a murmur. "They were too willing to believe the boasts from the highly remunerated boardroom."
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.
After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.
His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.
Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.
-
Working from home: is it working?
While Labour plans to make working from home the legal default, some employers are calling workers back into the office. What does the future hold?
By Simon Wilson Published
-
International Investment Summit: will the government's growth plans boost investor portfolios?
News The government is looking to attract investment into UK projects. We explain what this could mean for your money
By Marc Shoffman Published
-
Three laggards to buy for long-term growth
Opinion Some of the best long-term capital-growth opportunities lie in companies that have struggled over the past few years, says professional investor Ben Ritchie. Here, he picks three of his favourites.
By Ben Ritchie Published
-
Banks pass stress test
Features Britain’s seven biggest lenders have passed the second round of annual stress tests – but how resilient are the tests?
By Andrew Van Sickle Published
-
Legal troubles haunt banks
News HSBC has put money aside for legal expenses, while US prosecutors have reopened investigations into Standard Chartered.
By Andrew Van Sickle Published
-
Shares in focus: Can Standard Chartered find its form again?
Features Banking giant Standard Chartered has fallen out of favour with investors. Is it time to buy in? Phil Oakley investigates.
By Phil Oakley Published