StanChart to Prune Part of Operations in India
Unsecured retail loan, corporate business and single entity exposure to see cuts; bank to lay off 15,000 staff globally
Standard Chartered (StanChart) Bank, the largest foreign lender in India in terms of branches, has decided to reduce its unsecured retail and corporate business in India as a part of its global restructuring exercise that will cut 15,000 jobs worldwide.
| STANCHART TO REDUCE UNSECURED RETAIL & CORPORATE BIZ IN INDIA |
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"Adoption of a new risk tolerance framework will reduce single-name concentrations and unsecured retail and corporate business, coupled with more active reduction in our China, India and commodities exposures," said a release issued by Standard Chartered Plc, which has been hit hard by an economic slowdown in emerging markets.
It is not immediately known how many jobs in India will be affected for the Asia-focused bank.
Among corporates, the bank has the largest exposure to the infrastructure sector at Rs 9,858 crore, followed by metals at Rs 7,255 crore and then engineering at Rs 6,403 core.
Bill Winters, who was made the CEO of the British lender in June, described the restructuring as an "aggressive and decisive set of actions" to shore up the company.
The bank has not been hiring aggressively in the past few quarters and has in fact said that it will not be replacing staff when they leave. People familiar with the development said that the lender may reduce employees at the branch level and may also shut down the unprofitable branches out of its 100 branches in India. Moreover, certain banking functions may also be merged to keep a lean workforce.
The bank has already started working on a restructuring exercise and has closed several non-core operations. As a part of this the lender had earlier this year closed its institutional cash equities, equity research and equity capital market businesses in India. And the bank had laid off up to about 25-30 people in this exercise. Globally, the bank has also closed 74 branches and rationalised further 20 as a part of the cost saving exercise. Standard Chartered India reported a 93 per cent growth in net profit in FY15 but in the first half of the calendar year the group's total profit declined. The bank posted $276 million loss in the January-June 2015 period versus a profit of $395 million a year ago.
Apart from this, the bank has also aligned the eight existing regions into four new regional businesses-ASEAN & South Asia, Africa & Middle East, Greater China & North Asia, Europe & Americas.
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