Standard Chartered reducing 15,000 headcount

Earlier, some Malaysian banks started ‘right-sizing’ which will help the bank to have better cost efficiency. For example, read about RHB’s one here: RHB offering voluntary exit option to permanent staffs  Reported in many medias, Standard Chartered said it would be reducing its headcount after it’s third-quarter loss. Total number of the affected staffs number 15,000. It will also be undertaking an exercise to raise US$5.1 billion (RM21.9 bill) in capital. More than half of those who would be losing their job would be from the potential losses from liquidating assets and businesses. The remaining charges would be from ““potential redundancy costs” and goodwill write-downs.
I have yet to read of any Malaysian banks reporting losses but in a signal that it’s a tough time, Standard Chartered has reported an unexpected pre-tax quarterly loss of US$139mil (RM596mil). This is a total reversal of last year’s US$1.53bil (RM6.56bil) profit. It’s revenue was down 18.4% to US$3.68bil (RM15.78bil) and impairment losses increased from US$536mil (RM2.3bil) to US$1.23bil (RM5.27bil) for the quarter. It’s CEO said, “The business environment in our markets remains challenging and our recent performance is disappointing.” Fortunately, the top management also shared this loss. For this, I give them a thumbs up. They gave up their bonuses after profits fell more than a third in 2014.
Seriously, with the economies slowing down throughout the world and Citibank predicting even a global recession next year, this may not be the last.   Read here: Getting ready for the next global recession? However, one major reason for this loss is also due to competitiveness or even the wrong focus. For long-term growth, no banks should continue to operate without any thought for efficiency. For banks, the more they become more online centric and as people continue to do more of their bankings online, they need even fewer headcounts. I seriously do not think banks will offer job securities like the days of yesterday. Let’s keep adjusting to the world changes.
written on 3 Nov 2015
Next suggested article: Is Malaysia going into a recession?


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