The UK-based Standard Chartered Bank has announced today it is shutting down the majority of its institutional global equities business and cutting 4,000 retail banking jobs. The bank took the measures in an attempt to shore up its bottom line and reassure investors that saw its share price drop by more than 40% since 2013.
In its statement, the bank said that it is dismantling its stock broking, equity research and equity listing divisions around the world, leading to 200 job cuts as it exits an unprofitable business in which it failed to build scale. The move is part of an aggressive $400 million cost-savings plan revealed last October.
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In August 2014, American authorities issued a $300 million penalty against Standard Chartered Bank over compliance and anti-money laundering issues for high-risk retail business clients at its SCB Hong Kong subsidiary.
In its retail banking division, Standard Chartered said it has already cut 2,000 jobs in the last three months as part of a switch to digital banking, and it plans to fire another 2,000 employees during 2015. The bank said the retail job cuts should save $200 million in costs this year, while the closure of the equities business should result in $100 million in savings for 2016.
Standard Chartered’s main focus is on Asian markets and its seems the slower growth in many of its core emerging markets hurt its earnings last year. The majority of the jobs cut from the equities business are in Asia in general and Hong Kong specifically. On the retail side more than 900 of Standard Chartered’s branches are in Asia, and it already shut 22 branches in the second half of 2014 as part of a previously announced target of 80-to-100 closures.