It's been a rough year for European banks. Standard Charter is the latest bank to feel the pain. The bank has been crushed by the slowdown in emerging markets and the rout in commodities. As a result of poor performance, the bank announced drastic changes, including 15,000 job cuts and shedding $100b of assets while raising over $5b in new capital.
Like Deutsche, StanChart is getting rid of its riskiest assets, and those in marginal countries where it can’t make a return. In StanChart’s case, this amounts to nearly a third of its whole balance sheet ($105 billion out of a June 30 total of $326 billion in risk-weighted assets). And like Deutsche and Credit Suisse, the new strategy makes a big deal of targeting “more affluent retail clients” as it goes after a piece of the more stable wealth management business. It’s also raised its target for annual cost savings by $1.1 billion to $2.9 billion. Like Credit Suisse (but in contrast to Deutsche), StanChart is admitting that it’s going to need a lot more capital to do all this while it gets the regulators off its back.