Standard Chartered mulls division of corporate and investment banking arm; how might this impact consumers?

Standard Chartered Plc is contemplating restructuring its institutional banking arm, which houses its investment bankers and traders, as part of CEO Bill Winters' ongoing efforts to enhance the lender's returns. Sources familiar with the matter revealed that the bank is considering options such as separating its investment bank from its corporate and commercial banking operations, a move that could potentially result in job cuts. However, no final decisions have been made yet, and the discussions are ongoing. A spokesperson for Standard Chartered declined to provide any comments on the matter.

This potential revamp would be the latest in a series of initiatives by Winters to improve the bank's returns, as its shares have underperformed during his tenure. The bank has faced challenges, particularly related to setting aside reserves for non-performing loans associated with Chinese commercial real estate. To counter these challenges, Standard Chartered aims to boost its return on tangible equity above 11% by the end of the year, following actions taken in recent quarters.

The corporate, commercial, and institutional banking division, led by Simon Cooper, is a significant revenue generator for the bank. However, it has witnessed senior departures in recent weeks, indicating potential internal restructuring. Despite challenges, Standard Chartered remains optimistic about its outlook, with its focus primarily on emerging markets in Asia, the Middle East, and Africa.

If Standard Chartered proceeds with job cuts, it would follow in the footsteps of its rivals such as Citigroup Inc. and Goldman Sachs Group Inc. Citigroup recently announced plans to eliminate 20,000 roles under CEO Jane Fraser's leadership, aiming to improve its returns. Similarly, Goldman Sachs reported a 7% decrease in its staff count last year as part of its broader headcount reduction initiative.