February 6, 2018 / 10:27 AM / 17 days ago

StanChart prunes coverage, may cut investment banking jobs - sources

HONG KONG/LONDON (Reuters) - Standard Chartered Plc (STAN.L) is looking to drive returns by boosting lending to key industrial sectors and top clients, in a move that could cut about a dozen investment banking jobs as it dials back in areas like private equity, sources said.

Some of those jobs will likely be redeployed in other parts of its main corporate banking unit that StanChart is trying to strengthen, given its aim to increase lending to top companies in its main markets of Asia, Africa and the Middle East, said the sources who have knowledge of the plan.

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 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, another source said.

It will, however, be selective in sectors such as technology and telecommunications that are more heavily dominated by U.S. investment banks, this source added.

The refocusing of its investment banking coverage, which typically includes M&A advisory and equities underwriting, is likely to impact jobs of the so-called “coverage bankers”.

Such bankers with expertise in a specific sector, who offer clients advice on M&A and other banking products, can be costly, at a time when StanChart is shifting the power back towards more traditional “relationship bankers” who control straightforward lending to corporate clients, the same source added.

LIKELY DEPARTURES

The departure of some M&A advisers at StanChart will include those covering sectors including banks and insurance, private equity, and technology and telecommunications, said the people. Among senior bankers leaving StanChart is Hong Kong-based Ken Tung, who led the coverage of private-equity firms in North Asia, said one of the sources.

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 contact details of these officials, while a spokesman for StanChart declined to comment on individual moves.

The sources who spoke to Reuters did not want to be named as the information about the changes is not public.

    “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.

    REVENUE GROWTH

    Skelton and Simon Cooper, StanChart’s CEO of corporate and institutional banking, are driving the changes at the lender. The former HSBC (HSBA.L) bankers joined StanChart in 2016.

    To buoy StanChart’s lending business, key to accelerate its revenue growth, Cooper and his team have been working on simplifying the bank’s handling of its top clients by making the core relationship banker the main point of contact.

    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, another person with knowledge of the matter said.

    (This version of the story was refiled to fix company suffix in first paragraph)

    Reporting by Sumeet Chatterjee in Hong Kong and Lawrence White in London; Editing by Himani Sarkar

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