StanChart winds down securities business in India

The firm is present in 19 locations; business includes broking, merchant banking

Standard Chartered Securities is winding down several key divisions in India, as part of a global cost-cutting exercise.

In line with its overall decision, the institutional cash equities, equity research and equity capital markets activities in India will be closed. It will, however, continue with retail equity operations but the scale will be reduced, according to a source.

Globally, Standard Chartered is laying off 200 people, of which a little less than 50 will be from India, said the person. The retrenchment process, likely to result in savings of $100 million, is likely to be completed over the next few months.

According to a source, Ratnesh Kumar, managing director (MD) at Standard Chartered Securities (India) Limited Markets, is being retained but could move on due to the reduced scale of operations. Kumar did not respond to a query on the matter.

He has previously helped research teams reach number one position on various polls in his roles at Citigroup and CLSA, according to details on the company website.

Standard Chartered’s move is part of a global attempt to cut its non-core or under-performing businesses. In India, Standard Chartered wasn’t among the dominant foreign banks in terms of league table rankings. Last year, the bank ranked 13, with a total of five deals worth Rs 1,840 crore, according to Bloomberg.

Standard Chartered Securities (India) has a presence in 19 locations and has 27 branches, according to its website. It provided both retail and institutional brokerage services. Other activities include distribution of mutual funds and other financial products, and merchant banking services, according to information available with the BSE.

Standard Chartered Securities' broking operations were created through the acquisition of UTI Securities. Standard Chartered Bank acquired the operations from Securities Trading Corporation of India (STCI) in tranches over 2008-2010. It first acquired a 49 per cent stake in UTI Securities in January 2008. The name of UTI Securities was changed to Standard Chartered-STCI Capital Markets. It took another 25 per cent stake in December that year, raising this to 74.9 per cent.

It completed the third and final part of the transaction on October 2010, whereby UTI became a subsidiary of Standard Chartered Bank (Mauritius) Ltd. It was then renamed Standard Chartered Securities (India) Limited.

Kumar was earlier with Anand Rathi Financial Services. He was MD at Citigroup before that. He has also been associated with research firms such as CLSA and SSKI, as well as rating agency CRISIL.

“As part of the Group’s ongoing review of its client strategy, the decision has been taken to exit the institutionally focused cash equities business with immediate effect. While this has sadly resulted in a number of colleagues leaving the Bank, a transition team will remain to manage the interim period and support our clients,” said Mike Rees, deputy group chief executive, as part of a company statement on the matter.

Previously, Hongkong and Shanghai Banking Corporation had shut its retail broking operations in October 2013. It, too, had entered the business through the acquisition of a local entity, having bought a majority stake in IL&FS Investsmart for $241.6 million in May 2008.
IN EXIT MODE

• StanChart to scale down equities business in India, as part of a global cost-cutting drive
• To shut down institutional broking, investment banking divisions
• The move, likely to be completed in the next few months, might result in savings of $100 million
• Retail broking business to continue but with reduced scale