Stan­dard Char­tered board to dis­cuss CEO suc­ces­sion at meet­ing

The Pak Banker - - COMPANIES/BOSS -

Stan­dard Char­tered's board will dis­cuss suc­ces­sion plan­ning at a meet­ing in Wash­ing­ton to­day, peo­ple familiar with the mat­ter said, fol­low­ing spec­u­la­tion it was seek­ing a new chief ex­ec­u­tive.

The meet­ing is a reg­u­larly sched­uled board gath­er­ing, the Asian-fo­cused bank said, de­clin­ing to dis­cuss fur­ther de­tails, or the agenda. How­ever, it was in­evitable is­sues around the suc­ces­sion of Chief Ex­ec­u­tive Peter Sands would come up, two peo­ple familiar with the mat­ter said. Pres­sure has built on Sands in re­cent weeks af­ter a string of prob­lems. Three of the bank's top 30 in­vestors told Reuters in De­cem­ber that Sands should be re­placed, prob­a­bly in 2015, and scru­tiny of his po­si­tion has in­ten­si­fied this week.

Bri­tish book­maker Lad­brokes said it had suspended bet­ting on whether Sands would be ousted or leave this year af­ter tak­ing a small num­ber of bets. Such a sus­pen­sion is usu­ally a sign that some­thing is re­garded as a vir­tual cer­tainty.

Head­hunt­ing firm Egon Zehn­der is among the firms as­sess­ing po­ten­tial CEOs, sources have said.

For­mer McKin­sey con­sul­tant Sands, 53, steered Stan­dard Char­tered through the fi­nan­cial cri­sis, help­ing it to 10 years of record earn­ings, but is now in dan­ger of be­ing ousted af­ter two bad years. He has been CEO for eight years.

Share­hold­ers said there have been strate­gic, gov­er­nance and op­er­a­tional mis­takes, and Sands was too slow to ad­dress prob­lems and had not gone far enough in cut­ting costs.

The bank's shares have slumped 35 per­cent since the start of 2013 to their low­est level for al­most six years. Prof­its for 2014 are ex­pected to fall for a sec­ond suc­ces­sive year and losses from bad loans could con­tinue to rise this year as some of its $61 bil­lion of com­modi­ties loans sour. An­a­lysts said that could leave the bank need­ing to raise cash or shrink its lend­ing to im­prove its cap­i­tal strength.

"There's no sil­ver bul­let here, the com­pany has to ad­just its strat­egy and it's also head­ing into chop­pier wa­ters on the macroe­co­nomic front," said Joseph Dick­er­son, an­a­lyst at Jef­feries. He es­ti­mated im­pair­ment losses will rise to $2.7 bil­lion this year, up 68 per­cent from $1.6 bil­lion in 2013.

Stan­dard Char­tered has also faced a string of legal is­sues in the United States, in­clud­ing hav­ing to pay $667 mil­lion over sanc­tions vi­o­la­tions in­volv­ing Iran and other coun­tries.

The bank said this week's meet­ing, which be­gan on Wed­nes­day, had long been sched­uled for Wash­ing­ton, D.C.

It holds most of its board meet­ings in Lon­don, but holds a cou­ple each year over­seas, which of­ten in­cor­po­rate big­ger strate­gic re­views.

In 2013, it held nine board meet­ings, in­clud­ing one in Hong Kong and one in Ghana. In 2012, its nine board meet­ings in­cluded trips to Shang­hai, New York and Dubai.

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