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StanChart: Mgmt Changes To Drive Return Uplift, Credit Neutral Near Term

FINANCIALS

StanChart (STAN LN) mgmt changes. Aiming to improve returns in the longer-term but credit immaterial in the short term, in our view.


  • Key aims: to simplify the group and make it more efficient, driving sustainably higher returns “through each business line”. The weak returns of the CIB (corporate & investment bank) have been a key issue for the group for some years.
  • What’s happening: CIB head (Simon Cooper) and two co-heads are replacing him, and some geographic reporting lines are being redrawn as well.
  • Credit implications: immaterial at this early stage. There is a clear need to drive returns higher within the CIB but that isn’t news to anyone (the CIB consumer three times as much capital as the consumer bank for only roughly double the pre-tax profit). Over the longer term, creating incremental value will require better CIB returns.

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