(Bloomberg) -- Standard Chartered Plc is planning to dump about 3,000 clients of its corporate and investment banking division as part of wide-ranging push to boost firmwide returns.
The exits will ultimately amount to about one-quarter of the London-headquartered lender’s current roster of corporate clients, Chief Financial Officer Diego De Giorgi said in a telephone interview. The moves will take place over the next two years.
“They have one characteristic in common: They are clients that don’t use, or use very little of, our network presence,” De Giorgi said. “They are not using our global capabilities. The might be using our local ones, but very little of our international ones.”
As the world’s largest lenders grapple with regulation and higher capital requirements, it’s meant that those corporate clients that use just one product — say, a large corporate loan — usually don’t meet their internal profitability requirements. That’s led a number of banks, including Citigroup Inc. and Barclays Plc, to lean on clients to use them for other, fee-generating businesses, like cash management or FX trading or risk getting cut.
Despite making up about a quarter of its client base, the customer relationships under review only contributed about $40 million to StanChart’s income over a 12-month period, the bank said. That compares to the $10 billion it makes from its remaining clients.
“We are allowing our people, our relationship managers, our coverage people, to spend more time covering those clients from which we derive higher returns,” De Giorgi said.
The work is part of an effort to boost returns and StanChart said on Wednesday it is “exploring the opportunity to sell all or part of a small number of businesses where the strategic rationale is not sufficiently compelling.”
The company’s shares touched a nine-year high after it unveiled plans to return at least $8 billion to investors in the coming years. The new plans are up from a previous commitment to return at least $5 billion to shareholders by 2026.
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