Standard Chartered goes on hiring spree

Didier von Daeniken, global head of private banking and wealth management at Standard Chartered, says the bank plans to increase its assets by over $30 billion in the next three to five years. (Reuters)
Updated 15 August 2019

Standard Chartered goes on hiring spree

  • Private banking business caters to wealthy individuals across Asia, Africa, the Middle East and Europe

HONG KONG: Standard Chartered is targeting growing its private banking assets by half to about $100 billion in three to five years, whilst hiring dozens of bankers in Hong Kong and Singapore to do so, a senior executive at the lender has said.

The moves show StanChart has big growth ambitions for the private banking unit that had until recently weighed on the lender’s earnings, with its small size stoking speculation it would be put under review for possible divestment.
The lender will recruit 30-40 private bankers every year in the next two to three years to add to its roughly 300 existing relationship managers, and the bulk of the additions will be in Hong Kong and Singapore, StanChart’s global head for private banking and wealth management Didier von Daeniken told Reuters.
With $65 billion worth of private banking assets, London-headquartered StanChart is a small player compared with UBS which, as per Asian Private Banker data, had assets worth $2.3 trillion and Credit Suisse, with $770 billion last year.
The private banking business accounted for just 3.8 percent of StanChart’s total profit before tax in the first-half of this year.

"Our ambition is to see us cross the $100 billion mark. That makes us a meaningful player in this landscape.”

Didier von Daeniken, StanChart’s global head for private banking and wealth management

“Our ambition is to see us cross the $100 billion mark. That makes us meaningful internally for the group, that makes us a meaningful player in this landscape,” Daeniken said. “Hitting $100 billion can give us credibility internally, help us to attract talent.”
StanChart’s private banking business caters to wealthy individuals across Asia, Africa, the Middle East and Europe, through booking centers in Singapore, Hong Kong, Dubai, India, London and on the island of Jersey.
The unit had weighed on the group’s earnings in the recent past, as it sought to reposition the business to target rich individuals with at least $5 million in investable assets amid stiff competition in Asia, which brings in bulk of its revenue.
Underscoring a potential turnaround, StanChart’s private banking business posted a pre-tax profit of $100 million in the first half of this year, compared with a loss of $5 million in the same period last year.

HIGHLIGHTS

• StanChart to hire 30-40 private bankers per year.

• Bank currently a small player in private banking, with $65bn assets.

• Speculation earlier that small size would force bank to review business.

StanChart’s private banking return on tangible equity, a key measure of profitability, increased to 15.7 percent in the first half of the year compared to a negative 1 percent in the year-ago period, its latest financial report showed.
As part of the plans to bolster assets under management, the private banking unit plans to tap more of the group’s corporate and institutional banking clients in Asia and other emerging markets where it has existing banking networks.
“With $65 billion we are definitely not among the largest, but we are part ... of a company with a large balance sheet, with an unmatched presence locally in all the markets, which really matters when you cover the emerging markets,” Daeniken said.
In the near-term, however, concerns about the global economy and 10 weeks of protests in Hong Kong that have plunged the Asian financial hub into its worst crisis had made clients “more prudent” in their investment decisions, he said.
Daeniken added StanChart’s private banking unit had come a long way “but the task before us is as difficult because we really have to maintain the momentum in a difficult market environment.”


Gulf Marine CEO quits after review sparks profit warning

Updated 22 August 2019

Gulf Marine CEO quits after review sparks profit warning

  • Tensions in the Arabian Gulf, a worrisome global growth outlook and uncertainty over oil prices have recently dampened investor confidence

DUBAI: Gulf Marine Services said on Wednesday Chief Executive Officer Duncan Anderson has resigned as the oilfield industry contractor warned a reassessment of its ships and contracts showed profit would fall this year, kicking its shares 12 percent down.

The Abu Dhabi-based offshore services specialist said a review by new finance chief Stephen Kersley of its large E-class vessels operating in Northwest Europe and the Middle East pointed to 2019 core earnings of between $45 million and $48 million, below $58 million that it reported last year.

A source familiar with the matter told Reuters that Anderson, who has served as CEO for 12 years, was asked to step down. Anderson could not be reached for comment.

The company, which in the past predominantly operated in the UAE, expanded operations and deployed large vessels in the North Sea and Saudi Arabia nine years ago and listed its shares in London in 2014.

Tensions in the Arabian Gulf, a worrisome global growth outlook and uncertainty over oil prices have recently dampened investor confidence.

The North Sea has seen a revival in production in recent years due to new fields coming on line and improved performance by operators following the 2014 oil price collapse.

Still, the basin’s production is expected to decline over the next decade, according to Britain’s Oil and Gas Authority.

“(The CFO’s) review has coincided with a pause in renewables-related self-propelled self-elevating support vessels activity in the North Sea, which will impact several of the higher day-rate E-Class vessels,” Investec wrote in a note.

Gulf Marine appointed industry veteran Kersley as chief financial officer in late May as it sought to halt a slide which has seen the company’s shares fall nearly 80 percent last year and another 23 percent so far this year.

The company said market conditions remained challenging and that it was still in talks with its financial advisors regarding a new capital structure.

“Management, the new board and the group’s advisors, have been in negotiation with the group’s banks on resetting its capital structure and progress has been made,” it said in a statement.

Last year, Gulf Marine said contracts were delayed into 2019 as the company was seen to be in breach of certain banking covenants at the end of 2018.

The company said it was still in talks with its banks and individual lenders with hopes of getting a waiver or an agreement to amend the concerned covenants.