Job cuts boost Standard Bank

Johannesburg - Shares in Standard Bank Group [JSE:SBK] opened more than 1 percent higher on Wednesday after Africa's largest bank by assets said it was likely to cut jobs.

The group said late on Tuesday that it looks to cut costs due to lower revenue and will likely reduce staff in "head office environments".

Shares in Standard Bank were more than one percent higher in opening trade, outpacing a 0.6% firmer Johannesburg's Top-40 index.

Standard Bank, which is 20 percent owned by Industrial and Commercial Bank of China, is looking to position itself as a full-service gateway to Africa.

Standard has announced to staff that the fresh round of retrenchments will most likely hit managers based in its London and Johannesburg offices.

A confidential email was circulated on Tuesday afternoon signed by group CEO Jacko Maree and Sim Tshabalala, head of Standard Bank South Africa.

The email, which cited cost pressures for the staff reductions, was confirmed by Standard Bank spokesperson Ross Linstrom.

In its interim results to end-June Standard Bank said its earnings rose 11% to R5.9bn during the period under review on the back of improved market confidence and better returns from wealth management business Liberty Holdings [JSE:LBH]. The group also managed to nearly halve its impairment charge from R7bn in the first half of 2009 to R4bn.
 
The dividend was maintained at 141c.

At the release of the results in August, Maree said Standard Bank wants to become a link between international capital markets and Africa, focusing specifically on the oil, gas, telecommunications, power, infrastructure and mining industries as well as the financial sector.

"If you want to play in this game you need a strong dollar balance sheet - not just a strong rand one," said Maree.