Cooper points Standard Chartered in the right direction
When Bill Winters wanted someone to revamp Standard Chartered’s beleaguered commercial and investment banking unit, he turned to HSBC veteran Simon Cooper. The key to Cooper’s success will be whether he can make the good remaining pieces work as a whole.
|Illustration: Paul Daviz
Standard Chartered is ready to talk. After several years of pain, impairments, write-offs, losses and change everywhere from the chairman and CEO to the troops in the trenches, executives believe the worst is over. It is an attitude that extends to the bank’s commercial and investment banking unit – its biggest division and the heart of the problems the bank has faced. They are talking of the positives again, of a peerless emerging markets footprint, but of using it in a wholly different way.
Perhaps it was the first-quarter results, released on April 6, that relaxed the bank’s management enough to open up. After several years of bad news, starting with a fine for breaching US sanctions in 2012 and culminating in 2015’s first full-year loss since 1989 and a doubling of non-performing loans in a little over a year, the interim numbers for the first three months of 2017 showed progress.
Income was up 8% year on year, loan impairments down 58% and pre-tax profits up 94%, although prior year losses on the principal finance business distorted that somewhat. The balance sheet is buttressed, with $1 billion of additional tier-1 capital raised in January and capital adequacy ratios rising to one of the strongest levels of all European-domiciled banks.