Standard Chartered just promised to make some radical changes to the bank after the emerging markets lender reported a massive drop in profits.
The UK listed bank, which actually derives 90% of its profits from Asia and originally reports in US dollars, said “profits are down but there’s a plan of action.“
Today, Standard Chartered confirmed in its 2014 results statement that profit before tax tanked 25% to £3.4 billion, compared with £4.6 billion is recorded in 2013.
“2014 was a challenging year and our performance was disappointing, but it was also a year when we took decisive action to refocus our strategy and to reposition the Group for the future and to restore shareholder value,” said the chairman of Standard Chartered, Sir John Peace, in a regulatory statement.
In a bid to calm investors’ nerves and get the banking behemoth back to profitability, Standard Chartered unveiled a range of cost cutting measures.
It said it planned to cut costs by £260 million by the end of 2015 and £1.2 billion in total within the next three years. It also aims to reduce its headcount by the end of the year, even though it cut around 2,000 job cuts in the last three months of 2014.
It currently employs over 70,000 people across 71 countries.
Standard Chartered also revealed that it will exit “15 underperforming and non-strategic businesses” and make a change to its leadership.
This includes replacing Standard Chartered’s CEO Peter Sands by Bill Winters, the man who was famously sacked by Jamie Dimon for flagging up the massive trading risks JPMorgan was taking years ago.
“We are reshaping the Bank to respond to the way our world has changed and to ensure we fulfil our aspiration to bank the people and companies driving trade, investment and the creation of wealth across Asia, Africa and the Middle East,” said Sands in the results statement. “I leave Standard Chartered proud of what we have achieved and confident about what the future holds for this extraordinary institution.”
Sands has held the post of CEO since 2006. However, after two years of problems at the lender, including a £644 million Korean unit writedown, job cuts and £39 billion in loans to commodities companies that are being hit by the 50% slump in oil prices, Sands announced his resignation at the beginning of the year.
However, investors seem happy with the plan. Especially since Standard Chartered is keeping its dividend per share at the same level as 2013, at 86.00 cents (56 pence) per share.
The Standard Chartered stock is shot up over 5.6% within the first two hours of trading.
NOW WATCH: This Video Of The Largest Breakage Of Ice From A Glacier Ever Filmed Is Absolutely Frightening
Business Insider Emails & Alerts
Site highlights each day to your inbox.