[HONG KONG] Standard Chartered is closing its global equities business, according to an internal memo seen by Reuters on Thursday, as chief executive Peter Sands tries to reverse the bank’s fortunes by cutting costs.
The Asia-focused bank, which is struggling with rising bad loans after a decade of record profits came to an in 2013, will dismantle its stock broking, equity research, and equity listing desks worldwide, two sources said, axing more than 200 jobs. “They are shuttering the business globally because it has not made any money in the last two years,” one of the sources said.
A spokesman for Standard Chartered declined to comment.
Standard Chartered launched its equities business in November 2008 when it acquired brokerage Cazenove from JPMorgan. However the London-based bank has struggled to make headway in the business, failing to rank among the top ten banks globally for research or trading at the end of 2013, according to a survey by Greenwich Associates.
Standard Chartered would be one of the first global banks to completely exit the equity capital markets business, which involves underwriting stock offerings for companies.
The move comes despite a boom in equity underwritings in Asia that saw fees for the industry rise 74 per cent in 2014 after a three-year decline.
Standard Chartered last year said it would target more than US$400 million in cost cuts as it seeks to reverse a decline in its profit growth that has put pressure on Sands.