StanChart fires S’pore execs to cut costs

December 16, 20155:43 pm293 views

STANDARD Chartered has axed at least half a dozen oil and gas advisory banking roles in recent weeks, ending an eight-year attempt to build a global energy mergers and acquisitions (M&A) team as new CEO Bill Winters moves to rein in costs, people familiar with the matter said.

Asia-focused lender Standard Chartered expanded its energy M&A advisory team just before the global financial crisis by acquiring Harrison Lovegrove, a well regarded boutique advisory firm for oil and gas. At that time, more than two dozen bankers came over to Standard Chartered from Harrison Lovegrove.

But Mr Winters, who is cutting 15,000 jobs globally to restore profitability, is getting rid of expensive specialised bankers and taking a step to reduce the bank’s global ambitions in the M&A space.

The senior managing directors to leave the bank include the London-based head of the energy M&A team, three people aware of the situation said. The sources declined to be identified.

Four Singapore-based managing directors in the team were also let go, the sources added, including one, who was an expert on energy and power financing, in July. Some less senior bank executives were also axed.

E-mails sent to the bank executives went unanswered. A Standard Chartered spokesman declined comment on the departures.

The downsized team is now led by Alok Sinha and most of its members are based in Singapore, the sources said.

The bank wants to move away from depending on advisory fees, and rely more on revenues generated by selling forex hedging products used in M&A transactions, the sources said.

“The model of pure advice doesn’t fit with Standard Chartered’s new scheme of things. It’s an expensive proposition,” one person familiar with the development said.

The sharp fall in oil prices has resulted in less M&A opportunities in the energy sector, in particular from national oil companies who were key drivers of deal-making, resulting in less work for bank executives.

The changing landscape has resulted in some other investment banks, including Nomura Holdings, trimming their oil and gas M&A teams in recent months although the scale of the reductions was smaller, separate sources said. Nomura declined comment.

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