StanChart targets wealthier customers in retail bank revamp
Tuesday, 10 February 2015 00:46
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Reuters: Standard Chartered Plc will shift its retail bank’s focus from mass market to affluent customers and urge more clients to go online as part of a broader restructuring, a senior executive told Reuters.
StanChart’s retail business is one of the first divisions the Asia-focused lender has targeted with cuts, announcing last month it would axe 4,000 retail jobs or 5% of its global workforce and close 80-100 branches.
The moves come as Chief Executive Peter Sands is under increasing pressure to revive the bank’s fortunes after a troubled two years, which abruptly halted a decade of record profits.
Key to fixing the retail division would be stripping out costs, Karen Fawcett, global head of the bank’s retail clients unit, told Reuters in an interview. She wants to reduce the division’s cost-income ratio from 67% to 65% by the end of the year, and ultimately to 55%.
“We have a fantastic business with 10 million clients in 34 countries...but the problem is high costs,” Fawcett said.
One key initiative will be the rollout of an iPad-based platform for recruiting new clients in 10 markets this year and another 10 markets in 2016, she said.
In addition to previously announced closures in South Korea, the bank will also close many branches in Pakistan. Most other markets will also see a few closures, Fawcett said, adding that some branches will be relocated.
StanChart’s biggest headache is South Korea, where tight regulations and competition from local lenders have made it a difficult market for foreign banks.
Fawcett, however, ruled out a sale of the South Korean business, saying StanChart would work instead to improve staff performance.
StanChart’s woes have prompted some of the lender’s top investors to call for Sands to step down
Sky News reported on Friday that Sands had told senior staff on an internal conference call last week that succession planning has already begun.
Fawcett said she had not been present on the call. “Peter is a very competent chief executive and he is running the bank,” she said.
StanChart’s Hong Kong shares were down 0.9% in afternoon trade. They have lost more than a third of their value in the past 12 months.
