StanChart Said to Revamp Investment Banking to Boost Revenue

JOHANNESBURG (Capital Markets in Africa) – Standard Chartered Plc has revamped its investment banking division in a push to boost income from existing clients, as the Asia-focused lender attempts to restore revenue growth after years of missing targets, two people familiar with the move said.

Paul Skelton, who heads global banking, has divided his unit into five industry segments and five regions to simplify and improve relationships with clients, said the people, who asked not to be identified because the changes aren’t public. The firm decided on the new structure after surveying customers last year, who told executives the firm was cumbersome to deal with, had frustrating technology and compliance procedures, and sent too many different bankers to see them, the people said.

The lender is aiming to generate more business from each client by installing a relationship manager as a single point of contact, who will develop a more detailed strategy and cross-sell a wider range of products from across the bank’s securities unit and commercial, consumer and private banking arms, one of the people said. Industry or product experts, such as debt or advisory bankers, will be brought in to talk to clients only when needed.

The changes may lead to some job cuts, one of the people said. The bank is in the middle of a program to eliminate 15,000 jobs by 2018. In November it said it was cutting about 10 percent of staff at its investment bank as part of that plan.

Winters Turnaround
A spokesman for Standard Chartered declined to comment.

Chief Executive Officer Bill Winters, more than a year and a half into the job, has a lot riding on the fortunes of the investment bank. Standard Chartered missed profit estimates last year and the CEO said his nascent turnaround has “quite a long way to go” and hinges on faster revenue growth, without which the bank won’t be able to hit targets and restore a dividend. 

Winters has replaced most top executives at the securities unit and charged Simon Cooper, a former HSBC Holdings Plc executive, with turning around the division. Cooper in turn hired Skelton to run the banking side, which includes capital markets and advisory operations, and Roberto Hoornweg to run the financial markets and trading business. Operating income at the corporate and institutional bank fell 10 percent to $6.5 billion in 2016 after the firm cut dealings with low-return clients and efforts to clean up misconduct issues depressed performance.

Global banking’s financial institutions group has been divided into two coverage segments: one for banks and broker-dealers, run by Heidi Toribio, and another for investors, insurers, public sector and development organizations, run by Jeremy Amias, according to the people familiar with the matter and company memos seen by Bloomberg News.

David Law has been named head of a new financial and strategic investors group that deals with private-equity firms and sovereign wealth funds.Mark Ebbinghaus is in charge of commercial real estate, while Ajay Jain manages global subsidiaries.

Skelton has also appointed new regional banking lieutenants. Bharat Padmanabhan will run southeast and south Asia; Darcy Lai will head greater China and North Asia; Scott Barton will lead Europe; Stephen Priestley will head Africa and the Middle East; and Amias and Michael Kruse are responsible for the Americas.

The bank also named V. Anantharaman head of a newly formed global industries group that oversees energy and natural resource companies, general industries and the commodity traders and agriculture group, as well as coverage of financial institutions, a separate person familiar with the decision said earlier this week.