StanChart CEO eyes fresh plan to boost profitability

Bloomberg

Standard Chartered Plc is working on a three-year plan to improve profitability as a share slump this year puts pressure on the emerging markets lender to boost returns.
While operating expenses fell by 1 percent in the third quarter and were below estimates, its key measure of profitability is still lagging. The bank said on Wednesday that it will present its strategy in February to improve “financial returns” after the stock dropped by almost a third in 2018.
“Standard Chartered is a poster child for all the major risks circulating the sector — global slowdown, trade warns, regulatory overhang,” said Edward Firth, an analyst at Keefe, Bruyette & Woods in London. However, “we are encouraged by talk of a new plan to be announced with full year results that we expect to be far more focussed on costs.”
Controlling costs, coupled with an improved return on equity — a measure of a company’s profitability — may help dispel some investor concern that Chief Executive Officer Bill Winters would need to resort to deep cuts to improve its performance. Standard Chartered’s quarterly results, which also showed a third-quarter profit beat earlier, came after strong earnings from HSBC Holdings Plc this week and could boost investor confidence in the outlook for large banks.
The bank’s shares surged as much as 4.7 percent in early morning trade in London after the third-quarter results.