LONDON (Reuters) - Standard Chartered (STAN.L) is a facing “a significant challenge” to meet its 2018 cost reduction targets and will likely cut jobs, freeze hiring and reduce investment, its chief financial officer said in an internal email.
“We have made virtually no progress since May when we adjusted our budgets in reducing our cost base,” StanChart CFO Andy Halford wrote in the email sent to senior managers at the bank earlier this month and reported by jobs website efinancialcareers on Friday.
A Standard Chartered spokeswoman confirmed the veracity of the email.
“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,” the spokeswoman said.
The email comes ahead of the bank’s third quarter earnings on Oct. 31, and shines further light on the battle Chief Executive Bill Winters is facing to boost revenues while reining in spending.
A recent slowdown in income will likely continue into the fourth quarter, Halford said in the email.
Asia, Africa and Middle-East focused StanChart has seen a slump in its fortunes over the past few years, as a restructuring under Winters repaired a balance sheet hit by reckless lending in the previous decade but left the bank struggling to achieve profit growth.
The internal email to senior managers urged them to submit cost-cutting plans that should include job cuts, a freeze on external hires and a reduction in spending on travel.
Most critically the email suggests the managers should consider axing planned investments, which the bank in previous results quarters has hailed as a tonic to revive its flagging income.
Reporting By Lawrence White; Editing by Kirsten Donovan and Jane Merriman