Standard Chartered to cut as many as 100 retail branches

Standard Chartered said it would cut as many as 100 retail branches and manage more money for the wealthy as it sought to reassure the lender’s biggest investors that it would return to profit growth.

The lender, Britain’s worst-performing bank stock this year, is 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 today.

It said productivity improvements from the branch closures, about 8 per cent of its outlets, will help it reach a previously announced $400 million cost-savings target next year.

"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.

Chief executive officer Peter Sands, 52, is under pressure from investors after a 31 per cent drop in the bank's shares this year, more than double the decline for Barclays, the next worst-performing UK lender.

Standard Chartered, which makes about three-quarters of its earnings in Asia, reported a drop in earnings last year that ended more than a decade of growth, and has cut its profit forecast three times this year.

The bank, which had 1,248 branches worldwide at the end of June, said it plans to boost digital transactions by 10 per cent in 2015. Standard Chartered said three-quarters of the $400 million in cost savings in 2015 will come from its retail, corporate and institutional units, with the remainder coming from “support functions.”

Singapore's state-owned Temasek Holdings is Standard Chartered's biggest shareholder, with an 18 percent stake. The second-biggest, Aberdeen Asset Management, said on November 3rd that Mr Sands should be given the chance to fix the bank, after the Financial Times reported in July that the investment company wanted him gone.

- Bloomberg