Aberdeen set to back Standard Chartered rights issue

Aberdeen_AssetAberdeen Asset Management, Standard Chartered’s second largest shareholder, has said it will back the bank’s $5.1billion (£3.2bn) rights issue.

Shares in Standard Chartered fell sharply yesterday after the Asia-focused UK bank said it would raise $5.1bn (£3.3bn) and cut 15,000 jobs by 2018.

The restructuring was announced as the bank reported a “disappointing” third-quarter pre-tax loss of $139m for the three months to September.

That compared with a profit of $1.5bn for the same period last year.

Hugh Young
Hugh Young

Hugh Young, Aberdeen’s managing director in Asia, said Standard was “taking the right steps to address the bank’s problems”.

Mr Young said “The plan outlined seems sensible and it is clear where the bank now wishes to focus its business.

“We have been encouraging the bank to put its capital position beyond doubt, so we are supportive of the rights issue.”

Shares in Standard Chartered fell as much as 10 per cent on Tuesday and were down 7 per cent at 663.5p in late trading. The stock has fallen more than 30 per cent this year.

Revenue fell 18.4 per cent to $3.68bn and losses on bad loans almost doubled to $1.23bn for the quarter.

There was further bad news as Standard Chartered said it was the subject of two investigations by the Financial Conduct Authority relating to monitoring of sanctions and anti-money laundering compliance.

The job cuts are part of a restructuring programme to take place over the next three years, but gave no details.

The bank employs 86,000 people worldwide, but only about 1,800 in the UK.

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