It’s hardly on the scale of HSBC, which is culling 35,000 jobs, but Standard Chartered has restarted the restructuring that it began more than four years ago in the early days of CEO Bill Winter’s tenure. In Singapore, home to around 10,000 staff and many of the firm's global heads, one source tells us he expects the cuts to be in the “low triple digits”, and that mainly managers will depart. A spokesperson for the bank did not comment on the Singapore figures, but said the layoffs are not Covid-related and that globally a “small number of roles are being made redundant”.
Still, if you work for the Asia-focused bank in its Singapore or Hong Kong hubs, you will likely feel more secure right now if your team performed well in the first half. “The crisis has put our existing focus on productivity into a whole new light. We are accelerating some elements of existing projects targeted at creating a leaner and more agile organisation,” Winters said in a statement accompanying the bank’s first half results today.
As at US banks, Stan Chart’s traders enjoyed a strong half year. In financial markets, income grew 35% year-on-year for H2 to reach $2.24bn. Rate traders were the real winners, with revenue doubling to $717m, while there were also double-digit percentage gains in foreign exchange and commodities. “The business benefited from heightened market volatility, wider spreads and increased hedging and investment activity by clients”.
In terms of other “products” at Stan Chart, corporate finance revenue was up 2% in H2 “due to increased balances from drawdowns on revolving credit facilities”, while lending and portfolio management income increased 11%, with improved margins and increased volumes in corporate lending.
Anecdotally, technologists perhaps look the most secure in their jobs at Stan Chart. As we reported in June, the bank continues to hire in tech in Singapore, despite its overall freeze on recruitment. It has also been recruiting for its new Hong Kong digital bank, Mox, which is now “in advanced testing and is due to launch shortly”, said CEO Winters. The bank’s “significantly higher investment into our core digital capabilities” has borne fruit during the pandemic, with “many more corporate, institutional and personal clients now engaging with us through digital channels”, he added. Stan Chart has increased its Singapore headcount by 2,000 since 2018, of which more than 1,200 roles are in “future growth areas”, including cyber security, data solutions, analytics, cloud, AI architecture, API, and DevOps.
Wealth management income was down only 1% for the first half, “despite significantly more challenging market conditions, with lower bancassurance sales resulting from reduced branch walk-ins due to COVID-19, partially offset by clients increasingly using digital channels. There was a particularly strong sales performance in FX, fixed income and equities”, according to Stan Chart’s H2 financial results.
First-half declines in other Stan Chart products were more worrying. In transaction banking, long seen as a safe harbour for jobs, revenue fell 14% to $1.52bn, with substantial declines in both cash management and trade. Retail products income reduced 4% in a “lower interest rate environment”, while treasury revenue was down 10% year-on-year.
Despite overall H2 revenue rising 5% to $8.04bn, underlying pre-tax profit fell 25% to $1.95bn as the bank set aside $1.57bn to cover potential bad loans. Stan Chart made 80% of its profit from Asia in the first half.
But CFO Andy Halford delivered some good news for Stan Chart staff on the second-half outlook. “…if economic conditions in our markets do not materially deteriorate in the coming months then, given the substantial provisions we have taken already, we anticipate that impairments in the second half will be lower than those recorded in the first half,” he said in a statement.
Meanwhile, group chairman José Viñals offered some carefully worded reassurance to Hong Kong-based employees, following Stan Chart’s controversial decision in June to support the national security law imposed on the city by China. “We have seen some markets including the US introduce laws or policies relating to Hong Kong and China, the full implications of which are not yet known. We are convinced that more collaboration – not less – is the best way to find a sustainable equilibrium in these complex situations, but we do not expect an easy or quick resolution. We do believe, however, that Hong Kong will continue to play a key role as an international financial hub and we are fully committed to contributing to its continued success,” he said.
Image: Shawnn Tan on unsplash
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