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Banking & finance
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Standard Chartered considers revamp of institutional banking arm to boost returns

  • The London-listed bank’s returns have suffered in recent years as it was forced to set aside more in reserves for souring loans tied to Chinese commercial real estate
  • Options include separating its investment bank from its corporate and commercial banking operations, according to people familiar with the matter

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Standard Chartered makes almost all of its money in Asia, the Middle East and Africa. Photo: Edmond So
Bloomberg
Standard Chartered is considering restructuring its institutional banking arm, the unit that houses the firm’s investment bankers and traders, as part of the latest effort by chief executive officer Bill Winters to improve the lender’s returns.

The lender has been weighing options including separating its investment bank from its corporate and commercial banking operations, according to people familiar with the matter. The move could lead to job cuts and is one of several possibilities being weighed with no final decisions made yet, the people said, asking not to be identified discussing matters still under consideration.

A spokesman for Standard Chartered declined to comment.

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The revamp would be the latest effort by Winters to improve Standard Chartered’s returns. The bank’s shares have languished under the 62-year-old CEO and currently trade about 40 per cent below where they traded when he took the reins in 2015.
The London-listed bank’s returns have suffered in recent years as it was forced to set aside more in reserves for souring loans tied to Chinese commercial real estate. In recent quarters, it has been taking actions to boost its return on tangible equity (ROTE) above 11 per cent by the end of this year. Rival HSBC Holdings, though, has said it is on track to achieve returns in the mid-teens for 2023.
The bank’s shares have languished under CEO Bill Winters and currently trade about 40 per cent below where they traded when he took the reins in 2015. Photo: Bloomberg
The bank’s shares have languished under CEO Bill Winters and currently trade about 40 per cent below where they traded when he took the reins in 2015. Photo: Bloomberg

“This is a business that has performed well through challenging markets in recent years,” Standard Chartered’s then-chief financial officer Andy Halford said in October. “We are feeling positive about the outlook as we push through the 10 per cent ROTE level for the first time in many years and on to 11 per cent and above thereafter.”

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