IFR Asia – February 10, 2018

StanChart

prunes coverage,

may cut IB jobs

STANDARD CHARTERED is shifting its focus by

boosting lending to key industries and

clients in a move that could cut about a

dozen investment banking jobs as it dials

back in areas like private equity, sources

told Reuters.

The Anglo-Asian bank is expanding

into consumer-led industries including

pharmaceuticals and healthcare, while

continuing to build on its strong client base

of oil and gas as well as metals and mining.

It will, however, be selective

in sectors such as technology and

telecommunications that are more heavily

dominated by US investment banks.

Some of those jobs will likely be

redeployed in other parts of its main

corporate banking unit that StanChart is

trying to strengthen.

The changes form part of a two-year

overhaul at the bank – triggered in part by

a spike in non-performing loans in China

and India – that investors hope will help

StanChart return to higher revenue growth.

StanChart is shifting power back towards

more traditional relationship bankers

who control straightforward lending to

corporate clients and away from coverage

bankers, who tend to specialise in M&A and

other banking products.

Among the senior bankers leaving

StanChart is Hong Kong-based Ken Tung,

who led the coverage of private-equity

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Other recent departures include Stephen

Priestley, who led coverage of companies in

Africa and the Middle East, and Darcy Lai,

who covered clients in Greater China and

North Asia.

Reuters could not immediately obtain

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a spokesman for StanChart declined to

comment on individual moves.

StanChart continues to hire in its core

banking business and has in recent months

brought Andrew Au on board as head of

global banking for Greater China and North

Asia, and Rob Snell as global subsidiaries

head.

The bank’s M&A advisory services will

now be more geared towards its existing

priority clients, who would also have credit

appetite to fund acquisitions, one source

with knowledge of the matter said.

“We are investing in the coverage model

and we have built everything around the

client. We want to be relevant to them and

we need to make sure that our coverage

bankers are producing for them,” said

StanChart’s global head of banking, Paul

Skelton.

SUMEET CHATTERJEE, LAWRENCE WHITE

14 International Financing Review Asia February 10 2018

People

&Markets

Macquarie Group

projects record

profit growth

MACQUARIE GROUP said last Tuesday it expected

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ûTOûAûRECORDûOFûABOUTû!BNû53BN û

due to its asset management, proprietary

investing and banking services units.

In a trading update, Australia’s biggest

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in the nine months to end-December from

those “annuity-style businesses” was higher

year on year, offsetting lower earnings from

market-facing businesses.

“The outlook was slightly better than

expected, but they are getting caught in

the overall panic in markets,” said Hugh

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Funds Management, which holds Macquarie

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volatility and a lower Australian dollar,

but risk aversion is driving all listed asset

managers down.”

Macquarie makes money from M&A

advisory and fees from trading in

commodities, shares and currencies, but it

also collects fees based on the performance

of its global funds, which have proven to be

a less volatile source of income.

About 60% of the Sydney-based bank’s

income comes from outside Australia.

“Trading conditions across the group were

satisfactory in the December 2017 quarter,”

CEO Nicholas Moore said in a statement,

adding the bank was “positioned to deliver

superior performance in the medium term”.

Macquarie said its group tax rate would go

down 3%-4% in the medium term as a result

of US tax cuts, although no change was

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Its effective tax rate in the US would fall by

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The bank’s asset-management business,

its biggest-earning unit, saw a 2% quarter-

on-quarter increase in assets under

management as of December 31.

The group said its A$1bn share-buyback

programme remained in place, though it

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Macquarie’s common equity Tier 1 capital

ratio stood at 10.7% as of December 31,

versus 11% as of September 30.

PAULINA DURAN