STANCHART TO AXE 15,000 JOBS; NET DIPS ON INDIA BIZ, GLOBAL WOES

HONG KONG: Asia-focused Standard Chartered said it would axe 15,000 jobs and raise $5.1 billion by selling new shares as CEO Bill Winters set out plans to restore profitability to a bank hit hard by an economic slowdown in emerging markets.

It will cut 17% of the workforce to reduce costs by $2.9 billion by 2018, and sell or restructure $100 billion of loans, on a risk-adjusted basis — or a third of its total.

The news of the rights issue and restructuring came as StanChart posted a third-quarter operating loss of $139 million, weighed down by growing global regulatory costs and rising loan impairments in India. Revenue dipped 18% year-on-year.

However, it is not clear how the job cuts will impact India. When contacted, a Walmart India spokesperson refused to comment.

It was the fifth successive quarter of falling revenue for StanChart, hit by an economic slowdown in Asia —where it earns more than two-thirds of its profits — and rising bad loans, as well as weakening currencies in the region compared with the dollar, in which it reports its results.

Winters, a former JPMorgan investment bank boss who took the helm of Standard Chartered in June, described this as an “aggressive and decisive set of actions” to shore up the company.

Its London-listed shares were down 6.2% on Tuesday. They have fallen 31% this year, partly due to expectations Winters would launch a rights issue and also on the Asian slowdown.

“Post restructuring and recapitalisation, StanChart will be a stronger group. But the group will remain a complicated workin-progress,” said Ronit Ghose, analyst at Citi.