HONG KONG: Standard Chartered plans to cut more than 7,000 jobs over the next four years as it boosts adoption of artificial intelligence while targeting growth.
The London-headquartered lender is one of the first major global banks to lay out official plans to cut thousands of jobs, citing AI as a driver to make its operations slimmer as it seeks to increase its profitability and tackle competition.
StanChart said on Tuesday it would cut 15% of its corporate function roles by 2030, which, according to a Reuters calculation, would result in more than 7,000 redundancies out of its more than 52,000 staff in such roles.
The lender has a total global staff of nearly 82,000 and CEO Bill Winters told reporters the reduction will be driven by automation and adoption of artificial intelligence as some staff reskill.
"It's not cost-cutting. It's replacing in some cases lower-value human capital with the financial capital and the investment capital we're putting in," he said.
The cuts, alongside higher shareholder return targets announced in a strategy update, come as StanChart is at the tail-end of a decade-long effort to transform itself from a potential takeover target to a steadily profitable lender.
The bank's Hong Kong-listed shares gained 2.5% in morning trade, against a flat benchmark Hang Seng.
StanChart's move to streamline operations and rein in costs comes as more global firms slash jobs by deploying AI to improve efficiency. And banks globally are scrambling to integrate frontier AI models and fend off rising cyber threats.
The most affected roles will be with the bank's back-office centres, including those in Chennai, Bangalore, Kuala Lumpur and Warsaw, according to Winters.
"Of course we're using AI along the way and AI will be a huge facilitator and enabler of that," he added, referring to its ongoing revamp to automate more of its core banking system.
TARGETING HIGHER RETURNS
StanChart said it would deliver over 15% return on tangible equity (ROTE) in 2028, more than three percentage points higher than in 2025, and building to about 18% in 2030, well above the estimates of some analysts.
The update also comes as StanChart seeks to quell market speculation about succession planning after Winters' 11-year stint at the helm, with the bank saying he will be around for the next few years to see through the latest strategy.
StanChart is underpinning its new target by keeping its focus on higher-margin businesses, including affluent retail clients and financial institutions within its corporate and investment banking division.
Notably the bank pulled forward a goal of attracting $200 billion of net new money to 2028, from the previously set 2029. In the first quarter, the bank reported both its highest wealth revenue and new client money.
StanChart is seeking to deliver stronger growth even as geopolitical uncertainty clouds the outlook for some of its key markets.
Asia-Pacific banks may need to raise loan-loss provisions further if the Iran conflict drags on, as higher energy costs and weaker growth strain borrowers, analysts have said.
StanChart, which focuses on the Asia-Pacific and Africa, set aside $190 million in precautionary provisions linked to the Middle East conflict in the first quarter.
"We are extremely resilient," Winters said when asked about the impact of geopolitical and market risks on its ability to reach the targets.
On Monday, the lender named Manus Costello, investor relations head and equity research veteran, as its permanent CFO, succeeding Diego De Giorgi, who resigned in February after nearly three years with the bank. - Reuters
