Standard Chartered PLC (LON:STAN) announced its plan to close as much as 100 retail branches or 8% of its network next year. According to the bank, it will be able to achieve an annual savings of $400 million from the closures and improve its profitability.
Standard Chartered delivered disappointing performance
Standard Chartered PLC (LON:STAN) is conducting a three-day meeting with investors in Hong Kong about its plans to boost profits.
Investors are pressuring the bank to improve its profitability after suffering a 31% decline in its stock value this year. Standard Chartered PLC (LON:STAN) is the worst-performing bank stock in United Kingdom this year. The bank also reduced its profit forecasts three times this year.
Andy Halford, finance director of Standard Chartered PLC (LON:STAN) said, “We recognize our recent performance has been disappointing and are determined to get back on to a trajectory of sustainable, profitable growth, delivering returns above our cost of capital,”
Standard Chartered PLC (LON:STAN) managed to deliver record earnings for ten years, but its performance stopped in summer 2012. The company paid a penalty of $667 million for violating the sanctions of the United States against Iran. It also paid another $300 million fine for failing to fully implement the anti-money laundering surveillance system.
The bank was also impacted by increasing debts in key markets such as China and India. Last month, Standard Chartered PLC (LON:STAN) reported that its profit declined 16% for the third quarter due to higher loan impairments, falling commodity prices and weakening economic growth across Asia.
Standard Chartered growth target
Standard Chartered PLC (LON:STAN) is targeting a 10% increase in assets under management (AUM) to $66 billion in its private bank and wealth management divisions based on its presentation to a group of investors in Hong Kong today.
The bank also aims to improve the performance of its corporate finance bankers and achieve a 10% growth in deals, 10% growth in revenues from its eight priority markets and revenues per banker.
Standard Chartered PLC (LON:STAN) said it will also focus more on its 1.6 million priority customers and 400,000 business clients. The bank has 10 million customers in 34 countries.
“We understand and are responding to the challenges we are facing. You will see further progress in 2015,” said Halford.