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Standard Chartered PLC (2888.HK)

HKSE - HKSE Delayed price. Currency in HKD
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55.850-0.350 (-0.62%)
At close: 4:08PM HKT
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Previous close56.200
Open56.050
Bid55.850 x 0
Ask55.900 x 0
Day's range55.650 - 56.650
52-week range33.300 - 56.850
Volume432,386
Avg. volume1,270,278
Market cap175.27B
Beta (5Y monthly)1.22
PE ratio (TTM)12.58
EPS (TTM)4.439
Earnings dateN/A
Forward dividend & yield0.70 (1.25%)
Ex-dividend date03 Mar 2021
1y target est9.31
  • Wall Street Giants Get Swept Up by India’s Brutal Covid Wave
    Bloomberg

    Wall Street Giants Get Swept Up by India’s Brutal Covid Wave

    (Bloomberg) -- About 8,300 miles east of Wall Street, on a stretch of Bangalore’s Outer Ring Road, sits what was once the heart of the global financial industry’s back office.Before the pandemic, this cluster of glass-and-steel towers housed thousands of employees at firms like Goldman Sachs Group Inc. and UBS Group AG who played critical roles in everything from risk management to customer service and compliance.Now the buildings are eerily empty. And with case counts soaring across Bangalore and much of India, work-from-home arrangements that have sustained Wall Street’s back-office operations for months are coming under intense strain. A growing number of employees are either sick or scrambling to find critical medical supplies such as oxygen for relatives or friends.Standard Chartered Plc said last week that about 800 of its 20,000 staffers in India were infected. As many as 25% of employees in some teams at UBS are absent, said an executive at the firm who spoke on condition of anonymity for fear of losing his job. At Wells Fargo & Co.’s offices in Bangalore and Hyderabad, work on co-branded cards, balance transfers and reward programs is running behind schedule, an executive said.While banks have so far avoided major disruptions by shifting tasks to other offshore hubs, India’s Covid crisis has exposed a little-discussed vulnerability for companies that have spent decades outsourcing functions to the country. India’s outbreak is intensifying even as vaccinations fuel economic recoveries in other parts of the world, heightening fears of a back-office bottleneck at a time when Wall Street firms have rarely been busier.“This is not a local, India-only problem, this is a global crisis,” said D.D. Mishra, senior director analyst at researcher Gartner Inc. The current wave will be “significantly bigger” and organizations with India-based staff “will need to take action to plan for and mitigate if needed,” Mishra and his colleagues wrote in a note last week.Nasscom, the key lobby group for India’s $194 billion outsourcing industry and its almost 5 million employees, has downplayed the threat to operations. But Mishra and fellow analysts at Gartner say they’re fielding a daily flood of calls from anxious global clients asking about the Covid-19 situation.India’s total coronavirus infections have risen to 21.5 million, of which about a third were added since mid-April. The state of Karnataka, whose capital is Bangalore, reported almost 50,000 new infections for a second straight day, with 30% of all results throwing up a positive result.Experts have warned the crisis has the potential to worsen in the coming weeks, with one model predicting as many as 1,018,879 deaths by the end of July, quadrupling from the current official count of 234,083. A model prepared by government advisers suggests the wave could peak in the coming days, but the group’s projections have been changing and were wrong last month.In Bangalore, Delhi and Mumbai, the three main bases for the financial giants’ operations, infection rates have reached such alarming levels that local governments have ordered stringent restrictions on movement.While the crisis has hit swathes of the nation’s $2.9 trillion economy, the latest wave has notably affected the twenty-something segment of the population that dominates outsourcing companies and is hard to replace. Most of them are English-speaking, technically-skilled workers.Continuity PlanningFor now, back-office units are marshaling part-time workers or asking employees to perform multiple roles and re-assigning staff to make up for those who are absent. They are scheduling overtime, deferring low-priority projects and conducting pandemic continuity planning exercises for multiple locations should the virus wave intensify.A Wells Fargo employee said some work is getting transferred to the Philippines, where staff is working overnight shifts to pick up the slack. The San Francisco-based bank employs about 35,000 workers in India to help process car, home and personal loans, make collections, and assist customers who need to open, update or close their bank accounts. The company didn’t respond to a request for comment.An employee at UBS said that with many of the bank’s 8,000 staff in Mumbai, Pune and Hyderabad absent, work is being shipped to centers such as Poland. The Swiss bank’s workers in India handle trade settlement, transaction reporting, investment banking support and wealth management. Many of the tasks require same-day or next-day turnarounds. A UBS representative didn’t respond to a request for comment.With uncertainty surrounding how soon the Indian government will contain the crisis, one executive who asked not to be identified likened the situation to flying blind without any idea how many employees will be affected from one week to the next.Rebalancing Loads“We are looking carefully at how we can rebalance loads,” Standard Chartered Chief Executive Officer Bill Winters said on an earnings call last week, noting that some work has been routed to Kuala Lumpur, Tianjin and Warsaw. “In any case, we think we are very well provided for.”Barclays Plc CEO Jes Staley said some functions were shifted to the U.K. from India. Call volumes have increased and people are distressed, he said, adding that signs of pressure was something to watch for. The bank has 20,000 employees in India.Last year, when a sudden lockdown ordered by Prime Minister Narendra Modi saw these banks scrambling to keep their operations running, the European Banking Authority said the push to outsource support functions “exposed these banks to operational risks.”After asking their employees to work from home en masse last year, most of them have continued to operate at near 100% work-from-home levels. Natwest Group Plc’s workforce in Bangalore, Delhi and the southern city of Chennai -- accounting for a fifth of its global total -- is completely set up to work from home.Management BandwidthSimilarly, thousands of Goldman employees are working from home, doing high-end business tasks such as risk modeling, accounting compliance and app building. A representative for the bank said workflows can be absorbed by the wider team if needed and there’s been no material impact so far.Citigroup Inc. said there’s currently no significant disruption, while Deutsche Bank AG said employees were working seamlessly from home. Morgan Stanley and JPMorgan Chase & Co. detailed relief efforts they are undertaking, but didn’t elaborate on the impact on their operations. Last week, HSBC Holdings Plc Chief Executive Officer Noel Quinn said he’s “watching it closely” and ruled out any material impact at this stage.Besides worrying about disruptions to operations, employee well-being and securing medical help are also taking up a lot of management bandwidth at every large outsourcing unit.At a recent all-hands, virtual corporate strategy team meeting at Accenture Plc, for instance, the talk wasn’t about the usual pay-raises or promotions. Instead, worker after worker demanded flexibility, reduced workloads and no-meeting Fridays, an executive said, asking not to be named discussing internal company matter.Their size has become a hindrance, one executive said, but it’s not clear where else they can go for talent and scale, he added.“We are telling clients they need to relax service levels and reduce expectations for the coming few weeks,” said Mishra, the Gartner analyst. “This not a normal situation.”(Updates infections and deaths in eighth and ninth paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • ZhongAn, StanChart-backed lenders take early lead in HK digital bank race
    Reuters

    ZhongAn, StanChart-backed lenders take early lead in HK digital bank race

    Online-only banks in Hong Kong backed by China's ZhongAn Online P&C Insurance and Britain's Standard Chartered moved ahead of newly launched rivals as they garnered 70% of deposits last year, the lenders' annual reports showed. The numbers give the first glimpses of the performances of Hong Kong's eight so-called virtual banks, which launched last year and could offer lessons to peers in Asia, with Singapore's digital banks set to kick off operations next year and Malaysia set to follow. The eight banks had total customer deposits of HK$15.8 billion ($2.03 billion) at the end of 2020, their annual reports showed.

  • Bloomberg

    StanChart Profit Rises 18% as Loan Loss Provisions Tumble

    (Bloomberg) -- Standard Chartered Plc reported an 18% rise in first-quarter profits as an improving economic outlook saw it slash provisions against bad debts and its wealth unit posted a record quarter.Credit impairments fell 98% year-on-year to $20 million, helping push underlying pretax profit to $1.4 billion, exceeding a company-compiled consensus forecast of $1.08 billion. The London-headquartered bank also said its financial markets business performed well.“Economic recovery advanced in many of our markets leading to improved transaction volumes and profitability,” Chief Executive Officer Bill Winters said in a statement. “This was particularly the case in our financial markets and in wealth management, which had its best ever quarter.”Standard Chartered shares rose 3.1% at 9:02 a.m. in London. The shares were up as much as 4.6% in Hong Kong trading.Shares in the Asia-focused bank are broadly flat so far this year, trailing peers, with some analysts pointing to slow progress on cost-cutting plans and an uncertain economic outlook. Standard Chartered warned in February that earnings this year were unlikely to grow after central banks around the world cut interest rates to keep Covid-stricken economies moving.Standard Chartered stuck to that outlook on Thursday and said that it will return to income growth of 5% to 7% next year. Credit losses may now be lower this year than earlier expected, it said.CFO InterviewSpeaking in an interview with Bloomberg Television, Chief Financial Officer Andy Halford said it was too early to consider writing back its impairments. A surge in Covid-19 infections in India had yet to have a “visible impact” on its business in the country.Halford said on a call Thursday with journalists that the bank would give more detail on the scale of potential shareholder returns alongside its half-year results, but added that the lender was “very ready, willing and able” to return money to its investors.The bank’s much larger rival, HSBC Holdings Plc, this week posted its best quarter since the pandemic began as optimism grows about the ability of borrowers to repay loans.To help boost profitability, Standard Chartered said it expects to cut its office space by a third and halve its branch network from 800 sites to around 400. It expects a $500 million restructuring charge, with most coming in 2021.Hybrid WorkStandard Chartered is in the midst of a major overhaul of its working arrangements after the pandemic kept most of its employees home for over a year. This month the lender formalized hybrid working across all of its major businesses, with staff given more flexibility on where and when they work.As part of these changes, the bank is reviewing its global property portfolio, which is expected to lead to annual cost savings of at least $100 million. Winters has already given up his own office in the bank’s London headquarters and by the end of the year the lender expects to have scrapped all 881 private offices.Like HSBC, which said this week that it would halve its travel budget, Standard Chartered is expecting a fall in travel costs with Halford saying the amount the bank spent on business travel would “reduce.” He also said that Standard Chartered may bid on the retail banking assets in Asia that Citigroup Inc. is looking to sell.“We are awaiting detailed information,” he said. “Banking is a scale game so where there are opportunities to bulk up on a scale we will have a look at it.”(Updates with share prices in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.