StanChart's shares plunge after Fitch downgrade, another Singapore-based top exec said to leave

The headquarters of Standard Chartered in London.
The headquarters of Standard Chartered in London.PHOTO: BLOOMBERG

HONG KONG (BLOOMBERG, REUTERS) - Simon Perkins, the Singapore-based global head of aviation finance at Standard Chartered, who has helped the bank expand in the booming industry, is leaving the firm, people with direct knowledge of the matter said.

The move comes days after StanChart announced plans to axe 15,000 jobs cut risky assets as part of a big restructuring to cut costs and improve profitability in the face of a tougher regulatory landscape.

Mr Perkins has been with the bank for more than a decade. StanChart declined to comment and Mr Perkins could not be immediately reached for comment.

Bloomberg News on Thursday reported that Callum Henderson, the global head of foreign-exchange research at Standard Chartered in Singapore, is leaving the bank.

In Hong Kong, StanChart shares slumped after Fitch Ratings downgraded the bank, citing "unfavorable profitability and asset quality trends."

The bank's shares fell as much as 7.1 per cent and were down 4.8 per cent as of 11:30 am in Hong Kong, extending this year's decline to 35 per cent. The benchmark Hang Seng Index slipped 0.9 per cent.

StanChart this week also unveiled plans to tap investors for US$5.1 billion. It said Singapore's Temasek Holdings, the bank's largest shareholder with a 15.8 per cent stake, will be taking up its share of the rights.

While StanChart's chief executive officer Bill Winters's measures to restructure the lender and boost capital address some concerns, implementing the plan could be challenging because of credit risks and high management and staff turnover, Fitch said in a statement. The ratings firm on Thursday cut the lender's credit rating one grade to A+ from AA-, with a negative outlook.

Mr Winters, who took over in June, on Tuesday unveiled 15,000 job losses to help save US$2.9 billion by 2018, with the bank scrapping the second-half dividend. StanChart will also restructure or exit US$100 billion of assets and reduce its riskiest lending in Asia after loan impairments surged. The bank that day reported an unexpected third-quarter loss of US$139 million, compared with a profit of US$1.5 billion a year earlier.

The bank's impaired-loan ratios remain above its peers' and appear to have become more volatile as a result of concentrated sector and country exposures, Fitch said. "Standard Chartered remains vulnerable to volatility from a difficult operating and regulatory environment."

StanChart's "ratings may be downgraded if the bank fails to strengthen earnings and reduce risks or if loan quality deterioration accelerated undermining its capital strength," Fitch said. "Outsized fines or material business restrictions from litigation could also lead to a downgrade."