Standard Chartered to cut 15,000 jobs following Q3 losses

0
118

The London-based Asia-focused bank, Standard Chartered, has announced that it is going to slash 15,000 jobs after posting what it called a “disappointing” third-quarter loss.

A Standard Chartered statement said on Tuesday that the bank will also raise its capital by USD 5.1 billion as it struggles to return to growth.

The statement added that the job cut was part of a major restructuring plan that will cost around USD 3 billion, AFP reported.

A Standard Chartered spokeswoman, who made the announcement, said she could not give any further details of the job cuts.

According to the bank’s statement, more than half of the restructuring costs is to come from potential losses on liquidating assets and businesses, while the remaining charges will be due to “potential redundancy costs” of a planned job reduction of 15,000, as well as goodwill write-downs.

The bank reported an unexpected pre-tax quarterly loss of USD 139 million for the third quarter of this year while it had made a quarterly profit of USD 1.53 billion a year earlier, prompting the bank’s chief executive, Bill Winters, to describe its performance as “disappointing.”

During the same quarter, the bank’s revenue fell 18.4 percent to hit USD 3.68 billion as impairment losses increased from USD 536 million to USD 1.23 billion.

“The business environment in our markets remains challenging and our recent performance is disappointing,” Winters said in a statement filed to the Hong Kong bourse.

Also issuing a separate statement, Winters noted, “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.”

Winters, former co-head of JP Morgan, took control of the bank from Peter Sands in June.

Revelations on the bank’s poor performance caused its shares to plunge as much as 6.2 percent on the Hong Kong stock exchange. The value of Standard Chartered stocks has fallen 32 percent in the past year.

“I know a lot of people losing their jobs is not good, (but) from a business point of view, that’s what they have to do,” Hong Kong-based financial analyst Jackson Wong told AFP.

Earlier in January, the bank announced that it would axe 2,000 jobs around the world in 2015 in a bid to save USD 400 million in a structural overhaul. The announcement came after the bank had already cut 2,000 jobs in the three months leading to January.

LEAVE A REPLY

Please enter your comment!
Please enter your name here