“We are positioning the group for improved return on equity on a strengthened capital base”, the lender’s new group Chief executive Bill Winters said.
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Britain’s financial watchdog has two open investigations against British bank Standard Chartered, the lender’s CEO said on Tuesday.
The losses in the bank, which is looking to raise $5.1bn in new capital, are partly attributable to falling commodity prices and the challenging conditions of certain markets, most notably China.
Standard Chartered shares fell as much as 11 percent, the worst intraday performance since August 2012, and traded 8.9 percent down at 650.20 pence at 11:50 a.m.in London.
Whether it was the dive into the red, low-return targets set by Winters or the cancelling of the full-year dividend, investors sold off the bank’s shares in Hong Kong and London.
Stanchart’s job cuts follow competitors Deutsche Bank and Credit Suisse Group outlining in recent weeks plans to eliminate as many as 28,000 positions combined, Reuters said. Jefferies global, which has an “underperform” rating on the stock, contends that such are the losses and write-offs that the bank has not raised adequate capital.
Winters, former co-head of JP Morgan, took the reins from Peter Sands in June after shareholder calls for a boardroom cull following profit warnings.
Standard Chartered will cut 17 per cent of its workforce as soaring impairments added to Mr Bill Winters’ woes, underlining the new chief executive’s challenge in turning around the bank as he tapped investors for US$5.1 billion (S$7.1 billion).
The capital-raising plan came as part of a completed strategic review, that will also see the bank restructure businesses that together consume $100 billion in risk weighted assets, one-third of the group’s total. Shares have fallen 32 percent this year. Standard Chartered employs 86,000 people and makes about from operations across the Middle East, Asia and Africa.
“Standard Chartered’s management is taking the right steps to address the bank’s problems”, said Hugh Young, managing director of Aberdeen Asset Management Asia. “Since the calendar year closing for the bank is in December, we are hoping that the bank will get a CEO soon”, said a banker privy to the information.
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Mr. Winters said that US authorities were probing whether the bank did business with Iranian clients after 2007 and if regulators were made aware of this when Standard Chartered settled previous sanctions breaking allegations in 2012.
