SCB, Your CCB Bank ;)

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[h=1]Barclays chairman questions Standard Chartered chief’s other jobs[/h]
The chairman of Barclays has questioned how his counterpart at Standard Chartered has managed to hold down other jobs while chairing the emerging markets bank.
<!-- GUARDIAN WATERMARK --> Sir David Walker, the outgoing chairman of Barclays, said chairing a bank was a full-time job and questioned how Sir John Peace had chaired Standard Chartered alongside fashion retailer Burberry and credit checking company Experian, from which he resigned earlier this year.
“I don’t know how John Peace has done it. And he is Lord Lieutenant of Nottinghamshire,” said Walker. “It’s not that there would be a conflict with me doing something else. It is a joke, I would have no time at all,” the Barclays chairman told the Financial Times.
Walker said he spent five to six a days a week chairing Barclays, after being recruited to chair the bank in the wake of the 2012 Libor-rigging scandal. He will leave next year. He said Douglas Flint, chairman of HSBC, and Lord Blackwell, the new chairman of Lloyds Banking Group, would agree with his view that chairing a bank was a full-time role. Blackwell also chairs Interserve, a support service company which is the FTSE 250 index.


Walker said his view had changed from five years ago when he conducted a review for the then Labour government into the way banks were run. At the time he said chairmen of banks should devote two-thirds of their time to the role. “The change now is I would say it leaves no time,” said Walker.
His outspoken remarks come at a time when the management of Standard Chartered is under pressure to bolster the performance of the bank, whose shares are at a five-year low.
The bank admitted on Monday it was facing the fresh scrutiny of US authorities after being fined more than £400m for breaching sanctions rules two years ago. A deferred prosecution agreement due to expire this week has been extended for three years.
In response, it announced it was setting up a board financial crime risk committee. The shares fell 1% to 934p.

 

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[h=2]TITLE: US extends monitoring of Standard Chartered bank[/h]POSTED: 10 Dec 2014 18:28
URL: http://www.channelnewsasia.com/news/business/us-extends-monitoring-of/1522662.html

US authorities will monitor Britain's Standard Chartered bank for another three years, following the large fines paid in 2012 for sanctions violations, the lender said on Wednesday (Dec 10). LONDON: US authorities will monitor Britain's Standard Chartered bank for another three years, following the large fines paid in 2012 for sanctions violations, the lender said on Wednesday (Dec 10).
Standard Chartered said in a statement that it has "agreed to extend the Deferred Prosecution Agreements (DPAs) entered into in Dec 2012 with the US Department of Justice and the New York County District Attorney's Office."
The lender added that the authorities "have agreed a further three-year extension of the DPAs until 10 December 2017, and the retention of a monitor to evaluate and make recommendations regarding the group's sanctions compliance programme".
Back in 2012, the bank had paid US$667 million to settle charges it violated US sanctions by handling thousands of money transactions involving Iran, Myanmar, Libya and Sudan.
Standard Chartered said it had already taken "a number of steps to comply with the requirements of the original DPAs and to enhance and optimise its sanctions compliance".
Those measures included "the implementation of more rigorous US sanctions policies and procedures, certified staff training, hiring of senior legal and financial crime compliance staff and recently implementing additional measures to block payment instructions for countries subject to US sanctions laws and regulations".
The British-based emerging markets bank also revealed on Wednesday that it was cooperating with "an ongoing US sanctions-related investigation". It added: "Additional time is needed to complete the investigation and determine whether any violations have occurred.
"The group remains committed to full cooperation with the authorities during this investigation, alongside an extensive programme of compliance improvements. The group will provide a further update in the event of relevant future developments."
In August earlier this year, Standard Chartered was hit by US regulators with a US$300 million fine and restrictions on its dollar-clearing business for failing to detect possible money-laundering.

- AFP/ec

 

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Market Report: Standard Chartered and Peter Sands face crunch time in Hong Kong

Peter Sands has embarked on a three-day investor and analyst charm offensive (Photo: EPA)

Oscar Williams-Grut

Published: 11 November 2014

Updated: 11:59, 11 November 2014

For Standard Chartered and boss Peter Sands, it’s “crunch time”.


That was the verdict of Shore Capital’s Gary Greenwood today, as Sands embarks on a three-day investor and analyst charm offensive in Hong Kong.
Calls for the once-revered boss’s head are deafening after the bank last month unveiled its third profit warning in a year and shares fell to a five-year low. Speculation is mounting that the emerging markets lender will have to go cap in hand to investors for cash and Bernstein’s Chirantan Barua yesterday said it may need to raise up to $7 billion (£4.42 billion).

But despite the gloom, Greenwood is a StanChart buyer. It follows a cautious Buy note from Investec’s banking guru Ian Gordon yesterday, who thinks shares are too cheap to ignore.


But, as Greenwood cautioned, this is not a company to “bet the ranch” on, with the possibility of US fines and punishing re-evaluation of assets waiting in the wings. The City was torn — Standard Chartered dipped 2.4p to 939.85p.

The Footsie just about managed to stay in positive territory thanks to strong corporate results, rising 10.20 points to 6621.45.
Just six lines of text took the share price of Renishaw 200p higher to 1972p, as the engineer upped its revenue forecast by as much as 25% and profit expectation by up to 50% in a short and sweet update.

Things are progressing to plan at the Nigerian operations at Afren, the oil and gas explorer told investors today. But it slipped 3.35p to 79.05p, not helped by calls from SP Angel for a “root and branch” review in the wake of the recent payment scandal that claimed the scalp of Afren’s chief exec and three other executives.

US punters are turning off the idea of a flutter on the horses, gaming group Sportech warned today. The company reassured investors it is still on track to hit targets, but fears of a slowdown pushed Sportech 5p lower to 49.12p.

 

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[h=2]TITLE: StanChart to cut up to 100 retail branches next year[/h]POSTED: 11 Nov 2014 23:08
URL: http://www.channelnewsasia.com/news/business/stanchart-to-cut-up-to/1466954.html

Standard Chartered Plc plans to cut as many as 100 retail branches next year to help save US$400 million a year to improve profitability. LONDON: Standard Chartered Plc said on Tuesday (Nov 11) that it plans to cut 80 to 100 retail branches, or up to 8 per cent of its network, next year as it sought to improve profitability.
The British lender said productivity improvements from the branch closures would help it reach a previously announced US$400 million cost-savings target in 2015. It is also targeting 10 per cent growth in assets at its private bank and wealth divisions, according to a presentation to a group of its largest shareholders in Hong Kong.

The bank said the return potential of its retail bank was being restrained by high costs, with its cost-to-income ratio in the first half of this year - excluding consumer finance - sitting at 67 per cent.
"Our recent performance has been disappointing and we are determined to get back on to a trajectory of sustainable, profitable growth, delivering returns above our cost of capital,” Finance Director Andy Halford said in the presentation, which was posted on StanChart's website.
He said the bank was aware of investor concerns, including whether its cost cutting plans went far enough. He also acknowledged their concerns over a rise in bad debts and non-performing loans, and whether management was doing enough to tackle the problems.

The bank is under pressure to improve performance after three profit warnings this year and a 30-per cent plunge in its share price.
The bank, which had 1,248 branches worldwide at the end of June, said three-quarters of the US$400 million in cost savings next year would come from its retail, corporate and institutional units, with the remainder coming from support functions.
StanChart also plans to increase the number of digital transactions, targeting 10 per cent growth next year. About 47 million digital transactions were made in the first half of the year. The bank also outlined new strategies for its client segments and product groups.

StanChart will continue on Wednesday its presentation, which is part of a three-day roadshow for analysts and investors, outlining plans on how it will turn around its business.

 

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[h=1]Standard Chartered Hit With First S&P Downgrade in Two Decades[/h][h=2]S&P move could make it more expensive for bank to borrow money[/h]

By M Rochan
November 29, 2014 10:54 GMT

Standard Chartered hit with first S&P downgrade in two decades.Reuters

Ratings agency Standard & Poor's (S&P) has cut its credit rating on Standard Chartered for the first time in two decades, citing the "tough period" the Asia-focused bank was going through and its weaker credit-worthiness when compared to that of its peers.
S&P cut its long-term issuer credit rating on Standard Chartered to "A" from "A+", with a negative outlook -- a move that could make it more expensive for the London-headquartered bank to borrow money.
S&P said it had lowered the bank's risk position assessment to "adequate" from "strong".
S&P also said weaknesses at the bank included its complex operations and the concentration of loans in single borrowers.
However, the ratings firm noted that the lender was well funded and liquid and was diversified by region and asset class, and that asset quality should "remain steady at worst" in 2015 versus 2014.
The downgrade marked S&P's first since it assigned Standard Chartered a rating in 1994.
In late October, Standard Chartered said it was looking to cut costs by $400m (£256m, €321m) in the wake of dismal third-quarter results.
Peter Sands, chief executive at Standard Chartered said: "We are redoubling our focus on costs. Achieving this will require further rationalisation of our branches, more standardisation and automation, and reconfiguration or exit of certain businesses."
StanChart reported a 16.3% decline in third-quarter profits primarily owing to expenses related to the restructuring of its South Korean business and increased bad loans.
Pre-tax profit for the quarter ended 30 September declined to $1.5bn from $1.8bn in the corresponding period of the previous year.
Operating income for the quarter was up 1% to $4.5bn.


© Copyright 2014 IBTimes Co., Ltd. All Rights Reserved

 

[babuSingh]

how can they cut down branches? Isnt they supposed to be "here for good"?
Contradicting leh.....

 

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PM Lee once said: Foreigners help create good jobs
Protected December 30th, 2014 | Author: Contributions

PM Lee
The MOM announced today that it has revoked the work pass privileges of a PRC-owned company Prime Gold International Pte Ltd for discriminatory hiring practices.

According to the Ministry, Prime Gold was retrenching Singaporean workers and filling their positions with new foreign workers to curb problems like job redundancy and running losses.

But truth be told, Prime Gold is merely the tip of the iceberg and it is at most a medium size company with not much bargaining power with the PAP Government.

We know through market chatter and anecdotal evidence that many MNCs and banks in Singapore have been engaging in such discriminatory hiring practices for a long time.

This is especially prevalent in the financial industry, an example being Standard Chartered Bank.

A cursory check through LinkedIn uncovered that an overwhelming majority of its middle and senior management ranks are filled with foreign Indian nationals.

It is also common knowledge that once you hire a foreign Indian national in the Senior or Middle Management position, the entire department will be filled with their nationals, with locals being crowded out or leaving out of frustration at the “ethnic” glass ceiling that eventually manifests itself.

Lee Hsien Loong once infamously said that “foreigners create good jobs” but where are these “good jobs”? Operation assistants? Junior executives?

Foreign investments can benefit a nation in the long run only when the knowledge and expertise brought in are transferred over to locals who are then given the opportunity to take up leadership positions.

Otherwise, the country will become a quasi-banana republic with a stratified society dominated by a ruling plutocracy of business, political, and military elites while the majority of the population engage in production extraction at the lower ranks to prop up the economy.

The recent Fair Consideration Framework is a sham because it exempts jobs that pay a fixed salary of $12,000 and above from its hiring guidelines.

If the PAP is really sincere about addressing unfair hiring practices, it should start looking at turning these guidelines into laws and expanding their coverage to plug all loopholes.

The Alternative View

 

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[h=2]Standard Chartered Q1 profit down 22%[/h]Profit before tax for the three months ended Mar 31 fell 22 per cent to US$1.47 billion from US$1.88 billion in the same period last year, the bank said in a filing to the Hong Kong stock exchange.HONG KONG: Asia-focused British bank Standard Chartered said on Tuesday (Apr 28) its first-quarter profit fell more than 20 per cent year-on-year, missing analysts' expectations.
Profit before tax for the three months ended Mar 31 fell 22 per cent to US$1.47 billion from US$1.88 billion in the same period last year, the bank said in a filing to the Hong Kong stock exchange.
The figure was below the average estimate of US$1.6 billion predicted by four analysts polled by Bloomberg News.
"Trading conditions remain challenging and the actions we are taking to de-risk, cut costs and build capital are having an impact on near-term performance," group chief executive Peter Sands said in the filing.
Sands said the bank's underlying business volumes "generally remain strong".
Loan impairment increased 80 per cent to US$476 million from US$265 million last year, while operating income for the period fell four percent year-on-year.
Former JPMorgan investment bank head Bill Winters is to replace Sands, who had issued profit warnings in the past year that sparked shareholder calls for a boardroom cull.
Bosses at the bank announced in March that they would forgo their bonuses after 2014 profits fell by more than a third.
The British lender said profit after tax for 2014 came in at US$2.51 billion, down from US$3.99 billion in 2013. It described the result as "disappointing".
Standard Chartered said in January it would axe 2,000 jobs around the world this year as it tries to make savings of US$400 million in a structural overhaul.

 

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* StanChart says home under constant review


BY -
APRIL 28
* StanChart says home under constant review
* Bank tax to cost $540mln this yr vs $366mln in 2014 -CFO
* Q1 pretax profit down 22 pct to $1.5 bln as bad debts jump
* Says on track to deliver core capital of 11 pct this year
(Releads with finance director comments on domicile)
By Steve Slater and Matt Scuffham
LONDON, April 28 - Asia-focused bank Standard
Chartered said the location of its headquarters was
under constant review and a sharp increase in a tax on banks in
Britain meant it was watching the situation closely.
"At the moment it's something we're watching, we're looking
at, we're thinking about, but at this point in time there's no
change in our position," Andy Halford, Standard Chartered's
finance director, said.
"Clearly the increase in the (bank levy) number this time is
pretty significant," Halford told reporters on Tuesday.
Halford was speaking after the bank reported a 22 percent
drop in profits in the first quarter as losses from bad loans
jumped 80 percent from a year ago and trading conditions
remained challenging.
Some shareholders have told Reuters they want Standard
Chartered to follow its rival HSBC and formally review
the location of its headquarters after a jump in the bank tax in
Britain this year.
The tax has increased eight times since being introduced in
2010 to ensure banks make a "fair contribution" after the
financial crisis.
HSBC's review of its domicile sparked a political row ahead
of a national election in Britain on May 7, putting the
spotlight on party policies on whether Britain will stay in
Europe and how much banks should be taxed.
Halford estimated Standard Chartered would pay about $540
million under the bank levy this year, which would represent
about 11 percent of expected pretax profits and be up from $366
million in 2014.
"The general reaction of shareholders is we're happy that
you as a management team are giving this thought and we expect
that with full detailed knowledge you will come to the best
conclusions for the business," Halford said.
He said there were a range of factors to consider as well as
the bank levy, including the skill and availability of labour,
other tax issues, regulatory issues and London's strength as a
financial centre and its "neutrality" as a headquarters for a
bank that operates across dozens of Asian countries.
Singapore, the hub for most of Standard Chartered's
businesses, would be the most likely destination if it chose to
move, industry sources have said.
The bank is trying to turn around its performance after two
bad years and will get former JP Morgan investment bank
boss Bill Winters as its new chief executive in June.
Standard Chartered's loan impairments rose to $476 million
from $265 million a year ago. Pretax profit fell to $1.5 billion
in the quarter, down from $1.9 billion.
The bank said it was on schedule to get its common equity
Tier 1 capital ratio above 11 percent this year and would
deliver cost savings of more than $400 million in 2015.
Its core capital, a measure of financial strength, was 10.7
percent at the end of 2014, but it did not say what its core
capital was at the end of March.
The bank has said it will cut costs and shrink its loan book
in an effort to deal with the market's concerns about its
capital strength. It said it was well advanced with a plan to
reduce its risk weighted assets by between $25 billion and $30
billion in the next two years.
Shares in Standard Chartered were down 1 percent by 1020
GMT, in line with a decline in the European banking index

 

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The Shanghai branch of Chartered bank began operation in August 1858. Initially, the bank's business dealt specifically with large volume discounting and re-discounting of opium and cotton bills. Although there was a gradual rise in opium cultivation in China, the imports of opium still increased from 50,087 picul in 1863 to 82,61 picul by 1888. Transactions in the opium trade generated substantial profits for Chartered bank. Later, the Chartered Bank also became one of the principal foreign banknote-issuing institutions in Shanghai.

 

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[h=1]Standard Chartered Hires U.K. Surveillance Chief as Risk Adviser[/h]
Standard Chartered Plc hired Iain Lobban, a former head of GCHQ, the surveillance arm of Britain’s intelligence agencies, as the bank improves controls after being fined for money-laundering failures and breaching sanctions.
Lobban, who led GCHQ from 2008 to 2014, will join the board’s financial crime risk committee and be one of its senior advisers, Standard Chartered said in a statement Wednesday. Three advisers were appointed to the committee last month, including the former president of Interpol.

After being fined $667 million in 2012 for breaching U.S. sanctions on Iran, the bank was required to install an independent monitor to ensure compliance with sanctions and money-laundering rules. In August, it agreed to pay another $300 million to U.S. regulators for failing to flag suspicious transactions.


“We look forward to having the benefit of his extensive experience as we advance our financial crime-fighting efforts,” Chairman John Peace said of Lobban in the statement. “Cyber-security has been at the heart of Sir Iain’s role in recent years.”
GCHQ, whose full name is the Government Communications Headquarters, is the nation’s listening post, tracing its roots to Bletchley Park and Britain’s efforStandard Chartered picked former JPMorgan Chase & Co. banker Bill Winters to replace Peter Sands as chief executive officer this year. Sands lost the confidence of investors in the wake of the compliance failings, a falling share price and stagnant earnings.
Standard Chartered hired Boon Hui Khoo, former president of Interpol, as an external adviser to the risk committee in March, alongside Frances Townsend, a former homeland security adviser to U.S. President George W. Bush, and Lazaro Campos, the former head of Society for Worldwide Interbank Financial Telecommunication, the financial-messaging network known as SWIFT.
The committee oversees the firm’s anti-money laundering, sanctions compliance, corruption and tax crime prevention efforts, according to Standard Chartered’s website. It also has responsibility for the bank’s commitments under its 2012 and 2014 U.S. regulatory settlements.ts to break Nazi Germany’s Enigma machine. Its duties include scanning Internet traffic for terror threats.

 

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Standard Chartered faces pressure to cut links to Australian 'carbon bomb' project

UK bank lent $680m to the company building one of world’s largest coal mines in Queensland, according to court testimony, despite publicly saying it is not funding the project.

One of the UK’s largest banks, Standard Chartered, has lent $680m (£448m) to a company building one of the biggest coal mines in the world, according to legal testimony that casts doubt over the bank’s public stance that it is not funding the controversial ‘carbon bomb’ project.


Standard Chartered, which is headquartered in London but does most of its business abroad, is now under pressure to cut all links to the Carmichael mine and railway in Queensland, Australia, the A$16.5bn (£8.5bn) mega project proposed by an offshoot of the Indian conglomerate Adani.

At least 11 international banks have distanced themselves from funding new coal mines in the Galilee basin, but Standard Chartered is seen as a more crucial player, because it is advising Adani on its Queensland coal business.


Standard Chartered is one of the UK’s biggest banks, but it doesn’t have a single branch on the British high street.


The bank’s low-profile reflects its international focus. Standard Chartered traces its roots back to two Victorian banks that bankrolled the cotton, tea and tobacco trade with imperial India, and later the diamond fields and gold mines of Kimberley. Today it earns almost 90% of its income from Asia, Africa and the Middle East.

 

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[h=1]Standard Chartered Tumult in Middle East as Exits Quicken[/h]Nowhere, perhaps, is the turmoil at Standard Chartered Plc more evident than in the Middle East, as an exodus of top managers and exits from regional businesses threaten to undermine the bank’s top five position in debt capital markets.
While Viswanathan Shankar, Dubai-based chief executive officer for Europe, the Middle East, Africa and the Americas, is the highest profile departure to date, others are rapidly following. Afaq Khan, global head of Islamic banking, Mohsin Ali Nathani, CEO for the United Arab Emirates and Hassan Jarrar, CEO for Bahrain, are all leaving or will do so, according to people with knowledge of the matter who asked not to be identified.
The departures coincide with a push by local banks to muscle in on the bank’s traditional strength as an arranger of syndicated loans and bond deals in the Gulf. National Bank of Abu Dhabi has risen six positions since the end of 2013 to second on bond transactions this year, the spot Standard Chartered held at the end of 2013, according to data compiled by Bloomberg. The London-based bank is in fifth place this year. Emirates NBD, the largest Dubai bank, is another local lender also climbing the rankings, advancing to sixth so far this year, compared with ninth in 2013.


“Standard Chartered is scaling back from parts of this region as it focuses on rebuilding its capital base by selling non-strategic businesses,” Shabbir Malik, a banks analyst at investment bank EFG-Hermes Holding SAE, said by email from Dubai on Wednesday. “This creates an opportunity for regional banks, which are generally well capitalized and have strong ties with the region, to grow through acquisitions.”
[h=2]Bank Exits[/h]Standard Chartered plans to offer its three branches in Oman to local lenders while retaining its corporate and institutional clients in the country, three people with knowledge of the matter said last month. It’s also closing its small and medium enterprise loans business in Bahrain over the next two years, according to people familiar. It’s also scaling back at its Qatar retail business to focus on wealthy clients.
“They have a well-established franchise in the region so it would be good for other banks to take over those businesses,” Chiradeep Ghosh, an analyst at Securities & Investment Co., said by phone from Bahrain. “They have operations in many countries, so it isn’t a wrong strategy to wind up some activities if it doesn’t make business sense.”
On the personnel side, Raheel Ahmed, global head of strategic transformation for retail clients based in Dubai and Singapore, and Deanna Othman, head of retail banking in Qatar are also leaving, people with knowledge of the plans have said.
[h=2]Management Changes[/h]The regional departures come amid a restructuring at the top of the bank, which reported a slump in profit in the last two years as slowing growth in Asia -- where it earns most of its revenue -- sparked loan defaults. CEO Peter Sands will be replaced by former JPMorgan Chase & Co. investment banking co-Head Bill Winters in June. Chairman John Peace will leave in 2016, while Jaspal Bindra, head of Asia, stepped down from the board in April.
The Middle East, North Africa and Pakistan accounted for about 10 percent of Standard Chartered’s revenue last year. Operating profit fell 10 percent to $769 million as overall lending dropped 3 percent to $22.8 billion. Lower income in the region was mainly because of high levels of liquidity, the absence of market volatility and increased competition from regional banks, Standard Chartered said in its annual report.
“As part of the bank’s refreshed strategy, we continue to review our businesses across our various markets,” Dubai-based spokesman Ramy Lawand said in an e-mailed response to questions.
The bank is also considering the sale of part of its remaining private equity investments, three people with knowledge of the matter said earlier this month.
Standard Chartered rose 0.3 percent to 1,059.50 pence as of 10:22 a.m. local time in London. The stock has risen 10 percent this year, compared with a 6.5 percent rise in the FTSE 100 Index.

 

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[h=1]Barclays chairman questions Standard Chartered chief’s other jobs[/h]
The chairman of Barclays has questioned how his counterpart at Standard Chartered has managed to hold down other jobs while chairing the emerging markets bank.
<!-- GUARDIAN WATERMARK --> Sir David Walker, the outgoing chairman of Barclays, said chairing a bank was a full-time job and questioned how Sir John Peace had chaired Standard Chartered alongside fashion retailer Burberry and credit checking company Experian, from which he resigned earlier this year.
“I don’t know how John Peace has done it. And he is Lord Lieutenant of Nottinghamshire,” said Walker. “It’s not that there would be a conflict with me doing something else. It is a joke, I would have no time at all,” the Barclays chairman told the Financial Times.
Walker said he spent five to six a days a week chairing Barclays, after being recruited to chair the bank in the wake of the 2012 Libor-rigging scandal. He will leave next year. He said Douglas Flint, chairman of HSBC, and Lord Blackwell, the new chairman of Lloyds Banking Group, would agree with his view that chairing a bank was a full-time role. Blackwell also chairs Interserve, a support service company which is the FTSE 250 index.


Walker said his view had changed from five years ago when he conducted a review for the then Labour government into the way banks were run. At the time he said chairmen of banks should devote two-thirds of their time to the role. “The change now is I would say it leaves no time,” said Walker.
His outspoken remarks come at a time when the management of Standard Chartered is under pressure to bolster the performance of the bank, whose shares are at a five-year low.
The bank admitted on Monday it was facing the fresh scrutiny of US authorities after being fined more than £400m for breaching sanctions rules two years ago. A deferred prosecution agreement due to expire this week has been extended for three years.
In response, it announced it was setting up a board financial crime risk committee. The shares fell 1% to 934p.

Clearly this Brit is not as competent as PAP MP Yeo Guat Kwang.

 

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Ten question Bill Winters must answer about Standard Chartered (and one he can put off)

Investors have seen the shares slide from more than £18 to nearly £10 - they will want to know how the new boss can reverse that


It is unlikely that Bill Winters will be armed with anything as clichéd as a 100-day plan when he takes over as chief executive of Standard Chartered from Peter Sands. But the former JP Morgan banker is sure to know that his honeymoon period won’t last long.

Investors in the bank have seen the share price slide from more than £18 to nearly £10 over the past two years. They will want to know how the new boss can reverse that slide – and fast.

Perhaps that’s why Winters gave himself a head start, taking up residence at the bank (if not yet the chief executive’s office) at the beginning of May. Insiders report that he has spent the last month politely interrogating staff about the bank’s balance sheet and costs.

Here are some of the most pressing matters the American must address.

1. Decide whether Standard Chartered needs to raise fresh capital. The bank’s common equity tier one ratio was 10.7pc at the end of last year, not far off its target of hitting 11pc by the end of this year. But some investors would rather it was closer to 13pc. The bank also divides opinion among analysts. The pessimists believe Standard Chartered has lots of dodgy loans on its books and will need to raise capital or cut its dividend (or both) to pay for impending writedowns. The optimists argue that won’t be necessary. Winters must quickly make up his own mind on the matter.


2. Discover the skeletons on the bank’s balance sheet. Winters knows about debt: his first job in London was as JP Morgan’s head of European fixed income in 1992. He also knows about risk, having helped pioneer the US bank’s push into credit derivatives. He’ll need that experience, given the persistent questions about Standard Chartered’s balance sheet (especially loans that it has made in India and China). Winters may well advocate lancing the boils. In 2012 he wrote a restructuring plan for the Royal Bank of Scotland – one of three commissioned by Chancellor George Osborne – that suggested splitting off £110bn of non-performing assets into a bad bank. But shrinking Standard Chartered’s balance sheet too quickly – and alienating clients in the process – carries its own risks. Winters will have to strike a careful balance.

3. Assess how exposed Standard Chartered is to the downturn in commodities. Analysts at Credit Suisse believe that the loans the bank has made to miners and other commodity producers are a particular area of concern. Internally it’s considered less of a worry. But Winters will want to take a close look nonetheless.

4. Toughen up the bank’s lending criteria. Standard Chartered needs to get better at assessing risk. It also needs to become more disciplined about ensuring that it gets a decent return on its risk-weighted assets – and in a reasonable time frame. Banks often make loans at a loss in order to win other business. Critics claim Standard Chartered is not ruthless enough about ending relationships with clients if that business is not forthcoming.

5. Cut costs. One Standard Chartered banker marvels at the number of managing directors on each of the conference calls he dials in to – a sure sign that the organisation is over-staffed. The bank’s corporate finance division looks particularly ripe for rationalisation. It houses project and export finance, structured finance, structure trade finance, leveraged finance, principal finance. The clue is how similar those labels are – it suggests there are lots of people doing very similar things.

6. Decide whether the bank is spreading itself too thin. Standard Chartered prides itself on having long-standing operations in many countries where other banks fear to tread. But it could be argued that some of the bank’s problems stem from the fact that it has too many clients. And part of the reason it has too many clients is that it’s in too many countries. However, Standard Chartered is, to a large extent, defined by its international network. Cut back too far and you risk damaging one of the bank’s main competitive advantages.

7. Shake a lot of hands in Asia. Winters’ predecessor Sands had his pluses and his minuses. But he was undoubtedly a master of cultivating relationships with the policymakers and clients in Standard Chartered’s crucial Asian markets. This part of the world is far from unknown to Winters – he ran JP Morgan’s investment bank, which had extensive operations in Asia. However, he’ll need to clock up the air miles in the coming months.

8. Smoke the peace pipe with global regulators. The downward slide in the bank’s share price started in 2012 when it settled with American regulators for defying sanctions on Iran. Winters, who sat on the UK’s Independent Commission on Banking chaired by Sir John Vickers, may have a slight advantage in brushing up the bank’s reputation – he knows how regulators think, having effectively been one for a short time. However, that will be no substitute for rolling out new compliance processes and technology – an area in which European banks are, by some estimates, two years behind their US rivals.

9. Inspire the troops. Winters can’t spend his whole time with clients or regulators. This was a trap that Sands, who was internally considered something of an absentee chief executive, is thought to have fallen into. The diary of a global bank chief executive can fill up fast with external meetings. But Standard Chartered staff have had a tough few years and will need a lot of love from their new boss.

10. Recruit a top team. As well as a new chief executive and a new chief financial officer, Standard Chartered will soon have a new chairman and a host of new board members. At the executive level, Winters needs to find a new head of risk, and a new head of legal and compliance – vitally important positions in a modern global bank. He’ll also need to decide whether he needs a new deputy.

11. Move? Winter will inevitably face questions about whether Standard Chartered should move its headquarters from London, where it must pay a national bank levy that is calculated against its international balance sheet, to Asia, where it does much of its business.
This, however, is one question that the new chief executive should be allowed to dodge. For a few months at least.

 

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New StanChart boss faces cash call, dividend squeeze


* New CEO Winters starts on June 10
* Addressing capital shortfall is his priority -investors
* Winters could raise $5-10 bln in a rights issue - analysts
* Dividend also expected to be cut, assets sold

LONDON, June 1 (Reuters) - Standard Chartered's incoming Chief Executive Bill Winters is expected to raise capital and cut the bank's dividend later this year, potentially forced to act by a tough stress test of its Asian loans, investors and analysts said.
Few believe the ex-JPMorgan rainmaker will miss the chance to bolster the balance sheet during his honeymoon at the Asian-focused lender, especially as Britain's Prudential Regulation Authority plans a fresh assessment on how shock-proof banks have become since the financial crisis.
The bank has already outlined ambitions to raise a key measure of its capital strength by the end of this year and Winters is expected to sound out investors on further capital raising plans after he takes the reins on June 10.
If he chooses not to raise capital, he could find his strategic choices crimped for at least two years and profits have already shown the strain of trying to "muddle through", analysts said.
"The approach we think that would protect medium term shareholder value best would be to take decisive action by raising capital up front, followed by balance sheet and business restructuring and a return to growth in the ongoing core bank," said Jason Napier, banking analyst at Deutsche Bank.

Napier estimated the bank needs to raise $5.25 billion.

"Given the choice, a highly regarded new chief executive would probably always plump for the budget to accelerate balance sheet growth and restructure the business as rapidly as the organisation can stand, and write down any existing assets that might be in doubt," he said.
This year's PRA "stress test" could hurt Standard Chartered as Asian exposures, a mainstay of its balance sheet, will be tested hard over a 5 year scenario.
The test will include a sharp slowdown in China's growth, deep recession in Hong Kong, a plunge in commodities prices and currencies and losses from trading book positions.
Several analysts and investors said the bank needed between $5 billion and $10 billion to get its common equity Tier 1 ratio (CET1) to the 12-13 percent shareholders expect.
Its ratio was 10.7 percent at the end of last year, and Standard Chartered said it has plans in place to lift this to at least 11 percent by the end of this year.
"$5 billion sounds sensible - the CET1 needs to head to 13 percent over time and with some provision top-ups and restructuring charges, you could easily make a case for $5 billion," said one shareholder, who asked not to be named.
"The PRA stress tests this year may also add impetus to raise as it will be more rigorous than last time on emerging markets," he said.
Jefferies analyst Joe Dickerson said the capital position was "a cause for concern" for investors and estimated the bank needs $8.8 billion in capital, while Investec analyst Ian Gordon estimated the capital need at $4.5-$7.5 billion.

DIVIDEND CUT ON CARDS

Winters could provide a clear indication of strategy alongside half-year results in early August, but he may not set out his full plans until later in the autumn, one banking industry source suggested.
The bank had a $5.2 billion rights issue in 2010, but its capital advantage over most peers has been wiped out since.
Winters could deploy less dramatic options to avoid a lengthy and complex rights issue, including cost cuts and simplifying the bank's structure by exiting some countries.
The bank is cutting assets by $25-30 billion on a risk-adjusted basis, or one-tenth of its balance sheet.
Winters could supplement that by raising up to $3 billion from a quick-fire share sale to institutional investors, which would follow a $1 billion cash saving after investors opted to take its last dividend in shares. But that meant 69 million new shares were issued - effectively a mini rights issue.
Hugh Young, managing director of Aberdeen Asset Management Asia, the bank's second largest shareholder, said he was "ambivalent" about the need for a cash call, and said having lots of capital stashed away would keep the bank balance sheet strong but could drag down its returns.
Analysts are forecasting a dividend cut to 75c from 86c in 2014, but some said it should fall to 65c or less so payouts are less than half of expected earnings.
Winters could also come under pressure to review whether the bank should move its headquarters to Asia from London - although analysts and investors said that should wait until after capital and strategic concerns have been addressed.

 

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[h=1]Barclays, Standard Chartered & HSBC drawn into FIFA scandal[/h]01 Jun 2015 | 08:17

Some of the largest British banks have launched a review to determine whether allegedly corrupt payments involving football officials have passed through their books.
Barclays, Standard Chartered and HSBC are among banks understood to be looking over their books to determine whether they adhere to anti-money laundering and bribery rules, according to reports.
Though there is no suggestion of wrongdoing, the banks are trying to determine whether allegedly corrupt transactions worth thousands of dollars could have passed through unnoticed.
US officials last week indicted seven senior members of football association FIFA over bribery and corruption claims, sparking a global scandal.
The three major banks feature in the indictment document, along with other peers, but no allegations are made in the document by the regulator.
They are understood to be conducting the review as a precautionary measure to ensure they comply with the relevant rules, the Telegraph reports.
It quoted a Standard Chartered spokesperson as saying: "We are aware that two payments cleared by Standard Chartered are mentioned in the indictment. We are looking into those payments and will not be commenting further at this time."
The reviews are internal rather than a response to official requests from the Serious Fraud Office, the paper added.
UK lenders' AML practices have come under scrutiny in the US in recent years. Standard Chartered paid $300m to the US regulator last year for failing to tighten money laundering controls, with HSBC also fined over AML failures.

 

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Standard Chartered Loses Advantage Over Peers

Equity analysts have cut the economic moat for global bank Standard Chartered from narrow to none because of rising regulatory costs and slow economic growth in emerging markets


We are reducing our moat rating for Standard Chartered (STAN) to none from narrow. While we continue to think that its network across emerging markets is attractive to its international trade oriented clients, we think that increasing regional competition, rising regulatory costs, and slowing economic growth in its markets will make it difficult for Standard Chartered to significantly out earn its cost of equity.
Standard Chartered's regulatory costs, including the amount of capital it must hold, have increased significantly, which has made it more difficult for the bank to earn excess returns. Like all global banks, it faces higher operational compliance costs than it did before the crisis, and uniquely as it complies with its settlements of money laundering charges.
Capital costs have increased also: Standard Chartered's equity/assets ratio has increased from 5.1% in 2008 to 6.4% at the end of 2014, and we expect it to increase to just over 7% as the bank gives in to shareholder and regulatory demands that it hold more capital.
This will make it mathematically more difficult for the bank to earn attractive returns, holding return on assets constant. Standard Chartered is designated as a bucket 1 global systemically important bank, or G-SIB, which means it is subject to greater regulatory scrutiny than non-G-SIBs and must hold additional risk-absorbing capital worth 1% of risk-weighted assets.
This puts it at somewhat of an advantage relative to its biggest competitors, HSBC and Citigroup, which must hold additional capital of 2.5% and 2.0%, respectively, but at a disadvantage to regional competitors not designated as G-SIBs. Standard Chartered may also be at a competitive disadvantage relative to Chinese competitors that will not be required to meet the not yet finalized total loss absorbing capital requirements.
Standard Chartered’s U.K. domicile may further put it at a cost disadvantage relative to competitors, as it is subject to the U.K. bank levy. In 2014, it paid a levy of $366 million, equal to 8% of operating profit.
While the recent dip in Standard Chartered’s profits is largely cyclical, we think that its historical returns may not be as strong of evidence of a moat as they may appear. The bank's loan losses have risen sharply as China's growth has slowed and commodity prices have tumbled, and evidence is growing that Standard Chartered may have garnered high returns by taking on more risk than competitors. For example, commercial real estate and mining and quarrying increased to 10% and 8% of wholesale loans in 2014, respectively, from 7% and 7% in 2010.

 

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[h=1]Standard Chartered is ‘platinum’ employer [/h]THE local office of Standard Chartered Trust Group has become the first in the island to receive platinum accreditation from Step for its employer training scheme.


Alongside promoting qualifications from the Society of Trust and Estate Practitioners, the company is now able to self-certify the continual professional development of Step members on its staff and drive forward ‘on the job’ training initiatives.
Standard Chartered has taken part in a pilot of the scheme this year before Step rolls it out more widely in 2016.
Through that involvement, it has become one of just three Step platinum training partners worldwide.
Trevor Kelham, managing director and CEO of the local operation, said he was proud of the progress made in the Guernsey office – which employs some 50 people, nearly half of whom are Step-qualified.
‘In a challenging business environment training budgets are often among the first to be cut, but absolutely not at Standard Chartered – we have turned that on its head. It is exactly the time we need to tell our people that they will always be the most important cog in our engine,’ he said.
Mr Kelham said that the in-house training was able to include non-technical elements of career development, such as soft skills, leadership and mindfulness.
He believed that the accreditation would assist the company in recruitment in the future.

 

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[h=1]New Standard Chartered Chief to Cut More Costs as Review Begins [/h]Standard Chartered's new chief executive has said the bank must bolster its finances after years of disappointing performance in which the company "made mistakes".
Bill Winters, on his first day in charge of the bank, said the bank would be "reviewing all aspects of our capital strength" in the coming months.
His comments, made in a letter sent to the bank's 91,000 staff, suggest that Standard Chartered may cut its dividend, or raise capital via a rights issue.
The bank enjoyed a decade of unbroken profit growth until 2013, but its annual profits have declined and its share price has fallen heavily in the last two years.
Shareholder pressure forced the long-time chief executive Peter Sands out earlier this year, following a report in The Daily Telegraph. Chairman Sir John Peace will follow him out of the door next year, and several other board members are also in the process of departing.
Mr Winters, the former head of JP Morgan's investment bank, is expected to speed up a cost-cutting drive and cast a fresh set of eyes on Standard Chartered's business, which is largely focused on Asia, the Middle East and Africa.
Some analysts and investors believe the bank will have to raise billions in a rights issue, although Mr Sands repeatedly insisted this was not necessary. "After a long period of strong growth, the past several years have been challenging for all of you. We have made mistakes and our performance has suffered," Mr Winters told staff.
"We need to reinforce our foundations; streamline our business; strengthen our financial position; and re-orient the bank for better returns on our capital. Only then will we be positioned for longer-term growth.
"Our capital strength is a key priority. Capital strength is a competitive advantage, especially in tough economic times. We are reviewing all aspects of our capital strength as part of our broader business review."
Standard Chartered shares rose 5.8pc and have now risen 13pc since Mr Winters' appointment was announced in late February.
Part of the share price movement is likely to have been down to unconfirmed reports suggesting that George Osborne was going to raise the possibility of relief on the bank levy in his Mansion House speech last night.
One of Mr Sands' last significant acts as chief was to announce a new round of cost cuts, which will include thousands of job losses, in an attempt to improve the bank's capital position.
However, many expect Mr Winters to make more radical and faster changes.