Standard Chartered cuts 15000 jobs, raises 3.3 bln pounds

Revenue fell 18.4 per cent to $3.68bn and losses on bad loans nearly doubled to $1.23bn for the quarter. The bank posted its pre-tax quarterly loss of 139 million US dollars compared with a 1.53 billion USA dollars profit a year earlier.

There was however no convincing explanation of how management might fix this alarming revenue attrition, or why Q3 performance should not be extrapolated, apart from general assumptions that commodities would rebound and that the Fed Funds rate would be 125basis points by 2018, thus improving the profitability of the bank’s deposit base by roughly $800 million (but apparently without any corresponding downturn in Hong Kong or Asian asset quality, which a period of Fed hiking would undoubtedly accelerate).

The London-based lender had about 86,000 employees at the end of June.

Bill acknowledged the challenging business environment facing the bank.

“We’ve tried to achieve a very high level of capitalisation to buffer ourselves against eventualities and we think we are very well capitalised to deal with any of the challenges that could come our way”.

Standard Chartered announced on Tuesday that it is cutting15,000 jobs, or about 17 percent of its workforce.

In other Standard Chartered PLC news, insider Lowth, Simon bought 69 shares of the company’s stock in a transaction that occurred on Tuesday, August 25th.

His concern was that Standard Chartered was “way behind the curve” on cutting costs. The Bank of England will publish results on December 1.

Besides strengthening the balance sheet, the capital raising will help fund a planned US$3 billion investment over three years into strategic opportunities, technology and upgrading regulatory and compliance systems, the lender said.

The story has become clearer.

So, whilst Standard Chartered’s shares have lost 58% of its value over the past two years, I would still prefer to avoid investing in the bank.

Standard Chartered’s “ratings may be downgraded if the bank fails to strengthen earnings and reduce risks or if loan quality deterioration accelerated undermining its capital strength”, Fitch said.

The rights issue had the backing of Temasek, Singapore’s state investment firm and Standard Chartered’s largest shareholder. Investec upgraded Standard Chartered PLC to a hold rating and set a GBX 970 ($14.97) target price for the company in a research report on Thursday, July 9th.