UK-based bank Standard Chartered announced a 22% drop in Group operating profit for the first quarter of 2015, at US$ 1.47 billion (€1.35 billion) compared with US$ 1.87 billion (€1.7 billion) for the same period in 2014.
The bank’s Interim Management Statement listed first quarter income down by 1% on a constant currency basis. Headline income of US$ 4.4 billion (€4 billion) was down 4%, 1% of which was the result of business exits.
Peter Sands, Group Chief Executive, commented: “We are on schedule to deliver a Common Equity Tier 1 ratio of between 11% and 12% and sustainable cost saves in excess of US$ 400 million (€365 million) in 2015. Trading conditions remain challenging and the actions we are taking to de-risk, cut costs and build capital are having an impact on near term performance. However, underlying business volumes generally remain strong. We remain confident in the strength of our franchise, the opportunities in our markets and in our ability to build returns to an attractive level in the medium term.”
Earlier this year, Standard Chartered announced the closure of its institutional cash equities, equity research and equity capital markets (ECM) activities, leading to 200 job losses. The decision to close its equities business formed part of its austerity measures announced in November 2014 with the aim of saving $400 million (€365 million) in 2015.
Overall, the Group remains highly liquid and well capitalised, with ratios well above current regulatory requirements. Group Risk Weighted Assets were slightly up on the year end and the bank stated it is well advanced on its plan to take out US$ 25-30 billion (€23-27 billion) in the next two years.
Standard Chartered PLC today announced the closure of its institutional cash equities, equity research and equity capital markets (ECM) activities, leading to 200 job losses, as the Group continues cut costs.
The decision to close its equities business follows further austerity measures announced in November 2014 with the aim of saving $400 million (€340 million) in 2015.
The closure of the loss-making institutional cash equities, equity research and ECM operations will deliver a further $100 million (€85 million) of cost savings in 2016, and will impact approximately 200 roles across seven of the Group’s 70 markets. In 2015 run-rate savings will broadly offset restructuring costs.
Mike Rees, Deputy Group Chief Executive said: “As part of the Group’s on-going review of its client strategy, the decision has been taken to exit the institutionally focused cash equities business with immediate effect. While this has sadly resulted in a number of colleagues leaving the Bank, a transition team will remain to manage the interim period and support our clients.”
Further cuts have been made to the bank’s retail sector, as it moves to a more digital platform, which has resulted in around 2,000 job cuts announced or completed in the last three months, with a reduction of a further 2,000 expected during 2015. Standard and Chartered closed 22 branches in the second half of 2014.
Peter Sands, Group Chief Executive, said: “We are demonstrating action and progress as the management team focuses on delivering returns for shareholders. 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. We are well on track to deliver at least $400 million (€340 million) 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.”
