Standard Chartered is set to cull an unspecified number of branches in the Middle East, as part of plans to cut up to 100 locations in emerging markets next year in a bid to save $400 million.
The global lender announced on Tuesday that it would shut down the branches across the Middle East, Africa and Asia as it attempts to shore up profitably. Standard Chartered had 1,248 branches across the world in June, with more than 10 million customers in 34 countries.
The bank has issued three profit warnings and has suffered a 30 percent drop in its share price. It has had to pay $667 million for violating US sanctions on Iran in 2012, and has been affected by a rise in bad debts in China and India.
"We recognise our recent performance has been disappointing and are determined to get back on to a trajectory of sustainable, profitable growth, delivering returns above our cost of capital," Standard Chartered’s finance director, Andy Halford, told a meeting with investors in Hong Kong on Tuesday, according to Reuters.
The bank has not yet decided which countries in the Middle East, where it has a presence in five of the Gulf states, plus Jordan, Lebanon and Iraq, will be affected.
A spokesperson from Standard Chartered told Arabian Business that: “They [the branches that will be closed down] will be drawn across our franchise in Asia, Africa and the Middle East”.
The UAE, where Standard Chartered has 14 branches, is the bank’s fifth-biggest market. The news is another blow to the bank, following the announcement last month that it would close thousands of small and medium-sized enterprise (SME) accounts in the country, citing pressure from US regulators to cut its risk following the 2012 settlement.
In a statement at the time, Standard Chartered said it would honour existing borrowing agreements with customers with loans, allowing them to pay back outstanding amounts under the existing repayment timetable. It would make every effort to minimise the inconvenience, it said.
Those affected by Standard Chartered's exit have an annual sales turnover of between $1 million and $35 million, it added.
In August, the UAE Central Bank said the lender would be liable to legal action, after it announced that between 1,400 and 8,000 of its accounts in the country would be closed, as part of a $300 million settlement in the US over alleged money laundering.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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