atans1

HoHoHo: Relying on mgt incompetence at StanChart

In Banks, China, Emerging markets, India, Temasek on 11/10/2015 at 6:22 am

Standard Chartered has to hope that a quarter of its top brass really aren’t very good at their jobs. That is the portion of the UK-listed emerging markets bank’s 4,000 most senior staff who will find themselves surplus to requirements, Reuters reported on Oct. 9. Although StanChart could gain from a big cull, it’s a risky move.

http://blogs.reuters.com/breakingviews/2015/10/09/stanchart-takes-bet-on-management-incompetence/

So should HoHoHo and us S’poreans.

Will ang mohs or Indians get terminated? Not many Chinese to sack despite 50% of revenues related to China business. (Related post: StanChart is Little India)

More for HoHoHo to ponder when she returns to work

StanChart’s shares have underperformed the European peer group by 30 percentage points this year. The bank’s 7.7 percent return on equity in 2014 was unacceptable, especially as it was earned on a relatively low 10.7 percent Basel III capital ratio.

— Some bearish analysts reckon Winters should completely cover the bank’s $8.7 billion of non-performing loans to better match Asian peers like DBS. That would cost $4 billion, more than StanChart’s expected $3.1 billion of forecast 2015 pre-tax profit.

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  1. How times have changed, a few short years ago 10.7% CET1 good enough. Don’t think dividend cut and cost reduction will be enough. SC will have to go to market for capital – the only question is what type of capital.

    • At one time low capital showed efficient use of resource. Smart investors like Temasek and GIC bot into SC, Citi, UBS, ML. Then came .. If HSBC had capital of these would have been wiped out. ))))) Fat is good.

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