- Standard Chartered pledged $1 billion in financing toward pharmaceutical manufacturers and distributors, health care providers and non-medical companies that have volunteered to make ventilators, face masks, sanitizers and protective equipment to fight the coronavirus pandemic, the bank said Monday in a press release.
- The move comes as the bank told staff it is freezing external and internal hiring for two months and will likely cut bonuses for 2020, according to a memo seen by Reuters.
- The money the bank is saving on employee travel costs will be reinvested in technology to improve staff members' remote-work experience, the memo said.
European and U.S. banks that have committed to raising money toward outbreak relief have previously either created their own medical equipment fund — as Santander announced last week — or simply donated capital. Santander Chairman Ana Botín and CEO José Antonio Alvarez are contributing half of their salary and bonus this year toward the fund, the bank said. Meanwhile, Wells Fargo and Bank of America have each donated $100 million or more toward housing stability, small business and financial health, medical response capacity, food insecurity and increased access to education during the pandemic.
Standard Chartered’s backing of the makers of medical supplies — and companies transitioning to that model — will come through loans, import/export finance or working capital for day-to-day business operations. In that sense, the effort is structured more similarly to Goldman Sachs’ 10-year, $750 billion climate policy.
"Clearly there’s a cost for companies to switch into these hugely in-demand items, so it's an area where we can help them get up and running more quickly," Simon Cooper, StanChart’s CEO of corporate, commercial and institutional banking, said in the press release. "At the same time, we want to make sure that existing manufacturers and service providers get the support they need."
The bank also wants to identify companies looking to switch into or add anti-COVID-19 products to their output but haven't yet indicated so.
"Our industry teams are looking across our client base and, given our understanding of clients' current manufacturing processes, we’re assessing which companies might want to consider adding these items to their production line," Simon said.
Standard Chartered’s outbreak relief effort comes amid a larger focus on redirecting money. In its internal memo Monday, the bank said it expected it must make "sensible adjustments" to any variable compensation for 2020 because its finances were "likely to be challenged," Reuters reported. The bank’s bonus pool was worth £1.3 billion ($1.6 billion) in 2019.
The bank also said it would reprioritize discretionary investment for the time being, according to the memo.