Standard Chartered (StanChart) India, the largest foreign lender in terms of branches, has decided to reduce 10% of its workforce from the corporate and institutional banking (CIB) division. In India, 40-50 people could be asked to leave as a part of this restructuring exercise.
According to sources, the bank has a total workforce of 500-550 people in the CIB division. “It is likely that about 50 people will be asked to leave but typically, the bank may try and absorb a few people internally in other divisions and so the net impact may be around 40 or so,” said a source. CIB contributes to the bulk of revenues for the bank.
According to another person familiar with this development, the rationale behind this exercise is to reduce duplication of work. Since Simon Cooper took over as head of the CIB division two years ago, he has been stressing on a leaner and more efficient workforce, the person added. “The management’s idea is to make it a more relationship manager-driven model where one person is only interacting with the client to avoid duplication and increase efficiency.”
It is also likely that most people who’ll be asked to leave will be in the senior to mid-senior level. This restructuring exercise is being carried out across the globe and layoffs are likely to happen in other markets, too.
“We’re making our corporate and institutional banking division more efficient... We’re putting our relationship managers at the centre of client relationships; diversifying our client portfolio and improving processes such as client on-boarding times and how we make lending decisions,” Stan Chart said in an emailed response.
The email response added: “We are removing duplication in roles and managing our costs to protect planned investments in technology and people. It means that a small number of existing roles will be impacted. We will continue to move investment to where it can generate the greatest returns and focus on the markets which offer the greatest opportunity.” Globally, in the quarter ended September, income from the CIB division was $1,596 million, up 2% quarter-on-quarter.
Under the group’s new CEO Bill Winters, the lender has taken several restructuring exercise in the past few years. Earlier, the bank had stated that as a part of this overhaul, they would close several non-core operations. As a part of this, the lender in the last calendar year also closed its institutional cash equities, equity research and equity capital market businesses in India. With this, the number of people who were laid off was around 30.
Last year, the bank had said that as part of its restructuring plans to ensure that the lender is profitable, it would be laying off 15,000 people. The total workforce in India stands at around 8,000. Despite the fact that the lender has improved its profitability in the past few years, Winters believes that they still need to improve their profit.
“We have made progress executing the strategic actions announced a year ago. We now have a stronger balance sheet, reduced concentrations and are becoming more efficient, but income and profit levels are not yet acceptable. Putting our clients’ needs back at the heart of everything will improve our performance,” said Winters after the announcement of their September quarter results.