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."
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