American Underworld $ex Trade

Bad loan fears may have sparked the turmoil at Standard Chartered, but it looks like a deeper rethink of the bank’s businesses is needed to restore investor confidence in its future.

Former J.P. Morgan banker Bill Winters formally takes the reins as chief executive of the emerging markets-focused bank on Wednesday. As an outsider, he should bring the detached unsentimental view that can allow more radical restructuring.

Standard Chartered’s stock is down 18% over the past year since its initial profits warning. It has been worse, but the stock staged a big recovery in March after the bank had announced a change in leadership and reported bigger cuts in risky exposures than investors had expected.

The bank is closing a small equities business and cutting costs in retail banking, but its capital base remains weak compared with peers and against its own target. A big dividend cut looks inevitable, while a multibillion-dollar rights issue remains a strong possibility.

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