StanChart share sale boost

LONDON: Standard Chartered Plc raised about US$5.1 billion after 96.8% of the bank’s shareholders exercised their rights in a share sale yesterday, signalling confidence in chief executive Bill Winters’ strategy to turn around the Asia-focused lender.

The new shares are scheduled to trade in Hong Kong on Wednesday, the Londonbased bank said.

Mr Winters, 54, announced the rights issue in November as part of a plan to restore profitability at a bank reeling from losses tied to bad loans after commodity prices slumped and economies from China to India cooled. He is also cutting 15,000 jobs to help save $2.9 billion by 2018, scrapping a second-half dividend and planning to restructure or exit $100 billion of risky assets.

The 705 million new shares include those bought by Temasek Holdings, Standard Chartered’s largest shareholder. The Singaporean state-owned investment firm intended to take up rights for 15.8% of the company’s existing share capital, the bank said last month.

Of Temasek’s 17.2% stake in Standard Chartered, 1.4 percentage points have been loaned out, according to the British lender’s November filing on its capital raising, reducing Temasek’s entitlement in the rights issue to 15.%.

The shares were loaned under the terms of a total return swap agreed in 2013 with Bank of America that expires at year-end.

The bank raised capital in 2008 and 2010 to help fund its expansion under former CEO Peter Sands. This year’s rights issue was fully underwritten by JPMorgan Chase and Bank of America.