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Standard Chartered bank to axe 15,000 jobs in cost-cutting shake-up

Published 03/11/2015

Standard Chartered bank has announced a third-quarter pre-tax loss of 90 million pounds
Standard Chartered bank has announced a third-quarter pre-tax loss of 90 million pounds

Standard Chartered is to slash 15,000 jobs worldwide and is making a 5.1 billion US dollars (£3.3 billion) cash-call to investors as part of a major overhaul to shore up the group.

The Asian-focused bank announced the staff cuts under plans to make cost savings of 2.9 billion US dollars (£1.9 billion) by 2018.

Details of its revamp came as the group revealed that it swung into a third-quarter pre-tax loss of 139 million US dollars (£90 million), compared with profits of 1.5 billion US dollars a year earlier (£972 million).

Standard Chartered, which is listed in London, said it has already axed around 5,000 jobs so far this year, taking its workforce down to 86,000.

It declined to break down which regions the latest round of job cuts would impact, although the vast majority of its staff are based across Asia, the Middle East and Africa, with only around 2,000 in the UK.

The job losses will be made by 2018, but the group has already started cutting 1,000 senior managers around the world.

Recently-appointed group chief executive Bill Winters admitted that the bank's third quarter performance was "disappointing".

He said : "We have announced a strategy that makes big changes to how we will manage ourselves going forward.

"We will execute as quickly as possible to get through this transition phase, start delivering improved performance, and ensure our people are focused on providing value to our clients across Asia, Africa and the Middle East."

As well as a rights issue to bolster its balance sheet, the group also announced a restructure to shift its operations away from institutional and corporate banking, towards private banking and wealth management.

It has put a number of its operations under review as part of the overhaul.

Shares in the bank fell as much as 6% after the third-quarter figures.

Standard Chartered, which has its headquarters in London but makes three-quarters of its profits in Asia, has been impacted by challenging trading conditions in emerging markets, in particular once-booming China and India.

Mr Winters, who took over from Peter Sands in June, announced the shake-up having already braced the group for radical changes after delivering a withering assessment of the way the bank was run alongside half-year results in August.

The group said its third-quarter results "highlight a clear need for change" as income fell 18% to 3.7 billion US dollars (£2.4 billion) from 4.5 billion US dollars (£2.9 billion) a year ago.

But the bank insisted the " comprehensive programme of actions" will be enough to reposition and strengthen the group.

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