London’s burning money: More banks switch focus to Asia as Standard Chartered plans 15,000 redundancies after gigantic $139 million quarterly loss
London has long remained the world’s largest financial center, and until this day accounts for almost half of global interbank FX order flow, handled by just six banks with vast, multi-billion pound enterprises in Canary Wharf and the Square Mile. Today, however, yet another indicator that large financial institutions are turning their attention away from […]
London has long remained the world’s largest financial center, and until this day accounts for almost half of global interbank FX order flow, handled by just six banks with vast, multi-billion pound enterprises in Canary Wharf and the Square Mile.
Today, however, yet another indicator that large financial institutions are turning their attention away from London and toward Asia has become evident as Standard Chartered PLC (LON:STAN) announces its plans to make an astonishing 15,000 redundancies as part of its plan to to raise $5.1 billion (£3.3 billion) with most of this figure coming from a rights issue, in order to create what the company hopes will be a “focused and well capitalized group.”
The company’s Asian focus has been in place for quite some time, however the firm’s quarterly report which was issued today did not make for comfortable reading for stakeholders, as the financial giant reported a massive $139 million pre-tax loss for the three months ending September 30 this year, resulting in collapsing share prices.
Today, the share prices fell by a maximum of 9.6% and were down 7% at 663.5p during the latter part of the trading session today, adding further demise to the 30% which the stock has fallen during the course of the year.
Revenues dropped by 18.4% to $3.68 billion and despite lessons learned during the credit crunch of 2008 and 2009 which affected all British banks, $1.23 billion worth of loans went bad at Standard Chartered in the quarter ending September 30.
Last year, Barclays offloaded part of its European operations and looked seriously at making a 19,000 reduction in headcount, even prior to having to pay over $330 million in regulatory fines and settling a civil class action law suit in relation to FX rate manipulation. Yesterday, the previously London-centric HSBC reported its quarterly revenues and, whilst they were quite the company’s fortunes were opposite of Standard Chartered for the quarter with a 32% increase in revenues, the firm still continues to concentrate on the booming Asia Pacific region.
With Hong Kong and Singapore both bastions of secure interbank trading, Singapore being the largest institutional trading base in Asia, the access to a vast array of nouveau riche investors is right on their doorstep.
