Thursday, January 8, 2015 10:16 am
Standard Chartered said Thursday it would close a swathe of its global equities business and axe 2,000 jobs around the world this year as it tries to make savings of $400 million as part of a structural overhaul.
The Asia-focused British bank said it had already announced or completed 2,000 job cuts in its retail clients business in the past three months, but 2,000 more were “expected during 2015” in the same segment.
Closing its cash equities, equity capital market and equity research operations would lead to a further 200 job losses, it said in a statement.
“We are well on track to deliver at least $400m of cost saves for 2015, and we are now focusing on achieving further cost savings for 2016 and beyond as we continue creating capacity to invest in the group’s core businesses,” chief executive Peter Sands said.
Cuts in the retail clients business would contribute to around half of the planned $400 million savings for 2015.
The closure of the equities operations would deliver around $100 million in savings next year, it said.
“We are continuing to take significant action on costs by exiting or reconfiguring non-core and underperforming businesses, and by increasing the efficiency of our core businesses,” Sands said.
The statement added that 22 branches had been closed in the second half of 2014 and it expected to achieve its target of 80-100 closures.
Hong Kong-listed shares in the bank rose 2.86 percent to close at HK$115 Thursday, while the benchmark Hang Seng Index rose 0.65 percent.
“Investors should feel reassured that Standard Chartered is moving forward on its cost-cutting measures,” Hong Kong-based analyst at UOB-Kay Hian Edmond Law told Bloomberg News.
“It’s the right direction to focus on its core business.”
Standard Chartered, which makes 90 percent of its profits in Asia, the Middle East and Africa, saw its net profit fall 16 percent for 2013 as it faced increased competition in Asia and troubles turning around its South Korean unit.
In August US regulators hit it with a $300 million fine and restrictions on its dollar-clearing business for failing to detect possible money-laundering.