Standard Chartered says no imminent CEO succession plans as heat rises

Jul 24 2014, 16:21 IST
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Asia-focused bank Standard Chartered Plc rejected reports it had stepped up succession plans for its chairman and chief executive, who are under growing pressure from shareholders after a troubled two years.

Standard Chartered said its board was united behind both Chief Executive Peter Sands and Chairman John Peace in restoring the bank to profitable growth.

"No succession planning is taking place as a result of recent investor pressure," the bank said.

"The board wants to be absolutely clear that it is united in its support of both Peter Sands and Sir John Peace, and the management team, in delivering the refreshed strategy, restoring the bank to profitable growth and delivering returns for our shareholders."

The Financial Times said Peace is considering a succession plan that could see Sands replaced in the next year, citing three people familiar with the matter.

Shareholders and bank industry sources have previously told Reuters there is growing pressure on management. One shareholder said he wanted Sands to go. Others said the CEO had time to show a turnaround is on track this year, and there was more unhappiness with Peace.

"The high water mark was the half year results two years ago. Since then there's been an endless stream of things going wrong," said Chris Wheeler, analyst at Mediobanca, saying Sands could face a tough 12 months as there was no obvious catalyst for improvement.

Standard Chartered's London-listed shares were down 0.49 percent at 1023 GMT, bucking a 1.63 percent rise by the European bank index, and taking losses in the last 18 months to 28 percent.

Standard Chartered last month warned that profits this year would drop for the second year in a row, after a decade of record earnings on the back of roaring Asian growth.

The bank makes more than three-quarters of its profits in Asia, Africa and the Middle East and came through the 2008/09 financial crisis relatively unscathed.

A reversal in fortunes started in summer 2012 when it paid $667 million for breaching U.S. sanctions over Iran. Problems in South Korea and India have followed, added to by a slowdown in Singapore and margin contraction in trade finance.

"Up until two years ago he (Sands) did a very good job with a good management team and a lot of stability. But now he's being measured against that success, and once the downward spiral starts it's difficult to turn it without dramatic change," Wheeler said.

Sands, who has been CEO for 7-1/2

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