StanChart raises $7 billion in share sale

Standard Chartered chief executive officer Bill Winters (below) has also scrapped a second-half dividend and unveiled plans to restructure or exit US$100 billion of risky assets. The bank was hit by losses after commodity prices fell and economies in
Standard Chartered (above) chief executive officer Bill Winters has also scrapped a second-half dividend and unveiled plans to restructure or exit US$100 billion of risky assets. The bank was hit by losses after commodity prices fell and economies in Asia cooled.PHOTO: BLOOMBERG
Standard Chartered chief executive officer Bill Winters (above) has also scrapped a second-half dividend and unveiled plans to restructure or exit US$100 billion of risky assets. The bank was hit by losses after commodity prices fell and economies in Asia
Standard Chartered chief executive officer Bill Winters (above) has also scrapped a second-half dividend and unveiled plans to restructure or exit US$100 billion of risky assets. The bank was hit by losses after commodity prices fell and economies in Asia cooled. PHOTO: BLOOMBERG

Rights issue part of plan to restore bank to profitability

LONDON • Standard Chartered raised about US$5.1 billion (S$7.2 billion) after 96.8 per cent of the bank's shareholders exercised their rights in a share sale yesterday, signalling confidence in chief executive officer (CEO) Bill Winters' strategy to turn around the Asia-focused lender.

The shares will be listed in Hong Kong and the first trading day is expected to be next Wednesday, the London-based bank said in a statement yesterday.

Mr Winters, 54, announced the rights issue last month as part of a plan to restore profitability at a bank reeling from losses tied to bad loans after commodity prices slumped and economies from China to India cooled.

"We will continue to focus on executing our strategy and restore our bank to sustainable, profitable growth, and deliver good returns for our shareholders," Mr Winters said in the statement.

The CEO is also cutting 15,000 jobs to help save US$2.9 billion by 2018, and has scrapped a second-half dividend and unveiled plans to restructure or exit US$100 billion of risky assets.

The 705 million new shares include those bought by Temasek Holdings, Standard Chartered's largest shareholder, according to the statement.

Temasek intended to take up rights for 15.8 per cent of the company's existing share capital, the bank said last month.

Of Temasek's 17.2 per cent stake in Standard Chartered, 1.4 percentage points has been loaned out, according to the British lender's November filing on its capital raising, reducing Temasek's entitlement in the rights issue to 15.8 per cent.

The shares were loaned under the terms of a total return swap, agreed in 2013 with Bank of America and expiring at the end of this year, according to a person familiar with the situation.

A Temasek spokesman declined to comment. Mr Mark Tsang, a Bank of America spokesman in Hong Kong, also declined to comment.

Standard Chartered's stock in Hong Kong sank 0.7 per cent as of yesterday afternoon. The lender's London-listed shares fell 1.3 per cent on Thursday, taking their drop this year to about 44 per cent.

The bank previously raised capital in 2008 and 2010 to help fund its expansion under former CEO Peter Sands. This year's rights issue was fully underwritten by JPMorgan Chase & Co and Bank of America.

Meanwhile, Standard Chartered has appointed Mr Topsy Mathew as corporate finance head for South Asia and Asean.

Mr Mathew, who was mergers and acquisitions head for South Asia, the Middle East and North Africa, will retain his position overseeing South Asian mergers and acquisitions, the bank said on Thursday.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on December 12, 2015, with the headline 'StanChart raises $7 billion in share sale'. Print Edition | Subscribe