As we reported yesterday, Standard Chartered is getting ready to cut some costs, and some heads. After seeing a copy of the email sent by CFO Andy Halford to Bill Winter's global management team two weeks ago, on October 5th, we can elaborate on the bank's intentions.
Having made little progress in cutting costs since May, Halford states that the bank faces a significant challenge in meeting its $10.2bn external cost target for 2018. He suggests that matters have been made worse by an income slowdown, which will likely continue into the fourth quarter. Because of this, he says the bank needs to act more aggressively to close its divisional budget gaps in the remaining months of the year.
Halford's suggested remedies include headcount reductions, particularly at the senior end where he says cuts should be meaningful, and in high cost locations -where staff are clearly more expensive. He also suggests restrictions on external hires, a mandatory holiday period in December for contract staff, restricted travel and entertainment costs - particularly for internal meetings, and potentially a reduction in investment expenditure.
The email finishes with a call for business leaders to submit their cost cutting plans by October 10th. So, there are already people at Standard Chartered who know what's coming next.... With markets slow and revenues likely to end the year lower than expected, Standard Chartered's management may not be the only ones sending this kind of email in the months to come.
The bank provided this comment: “We have previously stated that our second half expenses will be similar to our first half expenses. That remains our view - as we will confirm in our third quarter results update on 31 October”.
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