 "Restructuring to have limited impact on Standard Chartered India")
Standard Chartered Bank (StanChart), the largest foreign lender in India in terms of branch network will not remain insulated from the global restructuring that the lender is undertaking. However, people familiar with the development say that the impact in India will be limited.
"Since it is a global restructuring, there is no way that India can escape being impacted. However, the impact will be felt most at the senior level the most where there will be consolidation and realignment of jobs. It may percolate to the lower level as well but that won't be significant," said a person close to development requesting anonymity.
The rationale for the top management being hit the most is simple, explained another person familiar with the development. "This is a part of the cost cutting exercise and therefore the letting go of some people on the top will translate into higher savings compared to the ones at the junior level."
It is likely that the restructuring exercise will be over in the next 30-45 days. Standard Chartered bank declined to comment on it.
This is part of the bank's overall strategy to deliver at least $400million of cost saves targeted for 2015. The bank has already started working towards this and has closed several non-core operations. As a part of this the lender had earlier closed its institutional cash equities, equity research and equity capital market (ECM) businesses in India. As a part of this the bank had laid off up to about 25-30 people.
Globally, the bank has also closed 74 branches and rationalised further 20 as a part of the cost saving exercise. Apart from this the headcount is also down by 4,000 year to date. The bank had said that it will not be replacing staff when they leave.
Apart from this, the bank has also aligned the eight existing regions into four new regional businesses-ASEAN & South Asia, Africa & Middle East, Greater China & North Asia, Europe & Americas.
Standard Chartered India reported a 93 per cent growth in net profit in FY14 but in the first half of the calendar year the group's profit declined. The bank posted $276 million loss in the January-June 2015 period versus a profit of $395 million a year ago.
