Standard Chartered targets 18% return and 15% job cuts in new plan

Standard Chartered Plc outlined a new growth strategy that targets a return on tangible equity of over 15% by 2028 and includes a 15% reduction in corporate roles by 2030, as the lender pivots from a lengthy restructuring to a new phase of growth.

"We achieved our 2026 medium-term financial targets a year earlier than planned," CEO Bill Winters said in a statement. "We now have a more focused, streamlined and efficient organisation."

The bank is aiming for a return on tangible equity of approximately 18% by 2030, a significant increase from its previous target of above 12% for 2026. This will be supported by a 5-7% compound annual growth rate in income from 2025 to 2028 and a reduction in the cost-to-income ratio to about 57% in 2028.

The plan signals CEO Bill Winters' confidence in sustaining momentum after years of restructuring. For investors, the key question is whether the bank can execute on its ambitious targets, which rely on focusing on higher-margin businesses and leveraging technology to cut costs, even as geopolitical uncertainty clouds the outlook for its key Asian and African markets.

Productivity Push and Job Cuts

A key part of the new strategy involves a significant productivity drive, with the bank aiming to increase income per employee by about 20% by 2028. This will be aided by a reduction in corporate function and back-office support roles of more than 15% by 2030, as the bank scales up the use of automation, advanced analytics, and artificial intelligence to streamline processes. The company had more than 81,800 full-time employees as of the end of last year.

The move follows similar initiatives by other major lenders, who are increasingly looking to AI to replace manual work and improve efficiency. The bank's "Fit for Growth" restructuring program, which is set to conclude this year, has already delivered $1.5 billion in savings.

New Leadership, New Focus

The strategy update comes shortly after the bank named Manus Costello as its new chief financial officer. Costello, a former equity research analyst who joined the bank in 2024 as head of investor relations, will receive an annual base salary of £1.1 million. His appointment helps to resolve questions over succession after the surprise departure of former CFO Diego De Giorgi, who was seen as a potential successor to CEO Bill Winters.

The bank's new targets will invite comparison with its larger rival HSBC, which is also holding an investor day this week. While HSBC has historically outperformed Standard Chartered, the gap has narrowed significantly in the past year. Winters' task is to convince investors that this recent outperformance marks the beginning of a new growth phase, driven by a focus on higher-margin businesses like affluent retail clients and financial institutions, as well as expansion into digital assets.

This article is for informational purposes only and does not constitute investment advice.