StanChart axes 15,000 jobs, announces US$5.1b capital-raising plan after Q3 loss

Standard Chartered posted a third-quarter operating loss of US$139 million on Tuesday.
Standard Chartered posted a third-quarter operating loss of US$139 million on Tuesday.PHOTO: REUTERS

HONG KONG (AFP) - Asia-focused British bank Standard Chartered said on Tuesday (Nov 3) it would axe 15,000 jobs and raise US$5.1 billion (S$7.12 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 US$3 billion, the bank said.

A StanChart spokesman said she could not give any further detail on 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 US$139 million compared with US$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 US$3.68 billion and impairment losses increased from US$536 million to US$1.23 billion for the quarter.

The bank announced a plan to raise US$5.1 billion in capital in the wake of the results and a strategic review that upped its cost reduction target to US$2.9 billion between 2015 and 2018.

It added it was refocusing on "affluent retail clients" rather than corporate and institutional banking businesses.

"The business environment in our markets remains challenging and our recent performance is disappointing," Mr Winters said in a statement filed to the Hong Kong stock exchange.

"The plans we have outlined today significantly reallocate resources to change fundamentally the mix of the group towards more profitable and less capital intensive business," he said in a separate statement detailing the strategic plan.

Stanchart employs more than 86,000 jobs worldwide.

The bank already said in January it would axe 2,000 jobs around the world in 2015 in an attempt to make savings of US$400 million in a structural overhaul.

It had already shed 2,000 jobs in the three months before January.

A spokesman in Singapore told the Straits Times that of the 15,000 gross headcount reduction by 2018, the bank has already substantially completed senior staff exits of 1,000 roles.

"At this point of time, there are no further details on breakdown we can share,"  she said.  

StanChart saw its profits plunge in the first half of the year, with net profit slumping 36.7 per cent in the six months to June compared to the period in 2014.

Bosses at the bank gave up their bonuses after profits fell by more than a third in 2014, sliding 37 per cent to US$2.51 billion.