HONG KONG: Standard Chartered Bank will exit the institutional cash equities, equity research and Equities Capital Market (ECM) "with immediate effect", a Singapore-based spokesperson told Channel NewsAsia on Wednesday (Jan 8).
The move will lead to about 200 layoffs in the region - part of a wider plan that will see about 4,000 cuts, half of which were made in the last three months of last year, with the remainder expected during 2015, the bank said.
"This decision is purely related to our institutional cash and research business, along with ECM, and does not impact our core strategic aim of supporting the international trade, wealth and fixed income, currencies and commodities (FICC) needs of our corporate and affluent retail client base, under the refreshed strategy announced last year," the spokesperson in Singapore said, adding that a transition team will remain to manage the interim period.
"This will impact around 200 jobs, mainly in Hong Kong, Indonesia, Korea, India and Singapore," the spokesperson said, without offering a breakdown of the layoffs by territory. "There is a minimal presence in the UK and US."
4,000 LAYOFFS PLANNED
The bank's main British office on the same day issued a press release stating that the decision is part of a series of actions being taken to deliver at least US$400 million of cost savings targeted for 2015, as communicated to investors last November. The Group is already on track to achieve this aim, the bank said.
In the Retail Clients segment, the Group’s strategy of focusing on key cities and accelerating the switch to digital has resulted in around 2,000 job cuts announced or completed in the last three months. A reduction of a further 2,000 is expected during 2015, primarily to be achieved by not replacing staff when they leave, the bank said.
The bank - which has been struggling with rising bad loans - will close its stock broking, equity research and equity listing desks around the world, and cut more than 200 jobs, Reuters had reported earlier on Wednesday, quoting an internal memo and unnamed sources.
“(Standard Chartered) has not made any money in the last two years,” Reuters quoted a source as saying. The bank had failed to be among the top 10 banks globally for research or trading at the end of 2013, reported Reuters, citing a survey by Greenwich Associates.
The Asia-focused bank will be one of the first global banks to completely exit the equity capital markets business, according to Reuters. London-based Standard Chartered had said it would aim to cut costs by more than US$400 million in a bid to reverse declining profit growth, Reuters added.
