This news, together with a poor set of numbers sent shares in the bank down 9% to 649p by late morning on Tuesday.
It has also been forced to cancel its 2015 dividend as revenues have been squeezed by the broad emerging markets malaise. The banks said it will cut around 15,000 of its 90,000 strong workforce.
These decisions are the outcome of a strategic review initiated by chief executive Bill Winters in July.
“The business environment in our markets remains challenging and our recent performance is disappointing,” said Winters. “Today we have announced a strategy that makes big changes to how we will manage ourselves going forward. We are positioning the Group for improved return on equity on a strengthened capital base. We will execute as quickly as possible to get through this transition phase, start delivering improved performance, and ensure our people are focused on providing value to our clients across Asia, Africa and the Middle East.”
“Today’s Q3 IMS reports an awful $139m underlying loss for Q3 2015 versus consensus estimates of a £903m profit, and is accompanied by the launch of a 2-for-7 £3.3bn rights issue,” said Investec analyst Ian Gordon. “As we feared, the worst aspect of the result is a broad-based collapse in revenues, down 18% year on year to $3.7bn, but this is also accompanied by broadly flat costs and a further rise in impairments to $1.4bn hence the grim reality.”
