Standard Chartered PLC CEO Resigns Amid Boardroom Shakeout

Standard Chartered PLC CEO Resigns Amid Boardroom Shakeout
By Cobaltblue25 (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Standard Chartered said Thursday, February 26th that chief executive Peter Sands will be replaced by former JPMorgan executive Bill Winters, amid several investor groups pushing for a change at the helm.

In a dramatic boardroom shakeout, four other directors will also be stepping down following the bank’s poor performance.

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Standard Chartered’s far-reaching shake-up

Bill Winters, who is currently CEO of Renshaw Bay hedge fund and one of the most respected bankers in the industry, will take over as the chief executive of Standard Chartered PLC in June. The Asia-focused bank’s two biggest shareholders, Singapore sovereign fund Temasek and Aberdeen Asset Management – who own over 25% between them – welcomed the changes. As part of the new changes, chairman John Peace will also leave next year.

Standard Chartered’s CEO of Asia business, Jaspal Bindra too will leave this year after 16 years with the bank. Moreover, three of its long standing directors – Ruth Markland, Paul Skinner and Oliver Stocken – too will step down, while two new directors Gay Huey Evans and Jasmine Whitbread will join the board.

The bank’s CEO Peter Sands, a former McKinsey consultant, steered the bank through the financial crisis, helping it to 10 years of record earnings. He has been CEO for eight years, making him one of the longest serving CEOs at a major global bank.

Chairman John Peace said Bill Winters was a “world class banker” who was strongly respected by regulators and clients. Some analysts believe the new CEO’s early tasks will be try to make more cost cuts, potentially reducing its retail banking operations across Asia.

Plethora of problems for Standard Chartered

During a conference call with reporters, Peter Sands said: “We haven’t got everything right, and of course we have faced a huge number of challenges through what has been one of the most tumultuous and turbulent periods in the history of financial markets, but I’m proud of what the bank has achieved”.

Ruth Markland, who will be stepping down soon, has chaired the remuneration committee which has sanctioned controversial pay deals for the bankers. Standard Chartered has been struggling to contain costs and keep bad debts in check. The bank has also been facing regulatory scrutiny in the U.S. following a £415m fine for breaches of sanctions with Iran.

As reported by ValueWalk, the London-based bank was hit last year with a $30 million fine by the New York Department of Financial Services for failing to fully implement an anti-money laundering transaction surveillance system.

Earlier this month, the bank also faced problems as hackers broke into bank accounts held by some Pakistanis.

Last November, the British bank unveiled plans to close as many as 100 retail branches or 8% of its network in 2015, with an aim to achieve an annual savings of $400 million from the closures and enhance its profitability. Last month, the bank said it would be dismantling its stock broking, equity research, and equity listing desks worldwide, eliminating about 200 jobs, as it failed to build scale in the unprofitable businesses.

Investors had been pushing for a change at the helm of the British bank, citing strategic, governance and operational mistakes. They felt Sands had been slow to address the problems.

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Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports
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