New | Standard Chartered to exit equity derivatives and convertible bonds business
The British bank follows January cash equities exit with closure of equities derivatives
Standard Chartered said on Monday that it will shutter its equity derivatives and convertible bonds businesses, the latest move under its new chief executive to pare down costs.
In January, the bank announced its exit from institutional cash equities, equity research and equity capital markets businesses and it has promised to review all businesses with poor returns.
Standard Chartered said the latest decision was based on a review of commercial viability and its priority to use capital more efficiently. The exit would be conducted in a phased manner.
Dropping equities derivatives fitted in with a general trend across the industry, where some banks were discontinuing products that supported wealth management operations, said Mark Phin, a London-based analyst at Keefe, Bruyette and Woods.
“The days of having to offer every product for your wealth management business are gone,” Phin said, noting that other banks such as Credit Suisse had made similar cuts.
The days of having to offer every product for your wealth management business are gone
Analysts earlier this year called the closure of the cash equities business “short-sighted”, considering the bank’s renewed emphasis on private banking and wealth management. Shuttering those units would reduce the offering to private bank clients, some analysts argued.