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StanChart targets US$1.8b of cost cuts after 25% plunge in profits
[LONDON] Standard Chartered said it aims to cut US$1.8 billion in costs the next three years as part of a turnaround plan for the Asia-focused bank after profits fell 25 per cent last year due to a big jump in losses from bad loans.
Standard Chartered said on Wednesday its 2014 underlying pretax profit was US$5.2 billion, down from US$7 billion in 2013. Loan impairments jumped to US$2.1 billion from US$1.6 billion.
The bank said its target to save US$1.8 billion in the period from 2015 to 2017 will include exiting some businesses, but most will come from improving efficiency. It said it was on target to save US$600 million in headline costs this year, beyond its target of US$400 million in savings.
Problems at the bank have built in the last two years, and last week it said Chief Executive Peter Sands will leave in June after eight years in charge, to be replaced by former JPMorgan investment bank boss Bill Winters. It was part of a major management overhaul that will also see the chairman leave next year.