British lender Standard Chartered overhauled its top management in an effort to set up effective systems for monitoring money laundering activities and other operational efficiencies.
British lender Standard Chartered overhauled its top management in an effort to set up effective systems for monitoring money laundering activities and other operational efficiencies.
The bank was fined at least twice in the US for failing to catch certain high value, high risk transactions. Warning of weak monitoring systems also came from the Hong Kong monetary authority.
Three profit warnings later and a plummeting share prices over the last one-and-a-half years got major shareholders of StanChart -- Temasek and Aberdeen -- to demand for an overhaul its board. Bowing to shareholders' demand the global bank on Thursday announced a new global CEO and a new head for its largest market Asia, in place of incumbents Peter Sands and Jaspal Bindra respectively.
According to a bank release, the former JPMorgan CEO Bill Winters will replace the embattled incumbent group chief executive Sands from June. According to PTI, the London-headquartered bank also asked Bindra, the present chief executive of Asia, which is its largest profit centre to leave by April. Bindra, who was also the country head of its India operations, served the bank for 16 years.
Bank's shares fell 30% since January 2014 amid its troubled Korean business and slowing growth across Asia.
The bank had also got on the wrong side of the law for the second time in 2014 after the New York Financial regulator imposed a $300 million penalty for lapses in its anti-money laundering procedures. The bank at that time said it "accepts responsibility for and regrets the deficiencies in the anti-money-laundering transaction surveillance system at its New York branch. The group has already begun extensive remediation efforts and is committed to completing these with utmost urgency."
Earlier in 2012, the bank was forced to cough up $340 million to the office of Benjamin Lawsky, the New York's Superintendent of financial services to settle allegations it had improperly handled transactions for Iranian customers. The Hong Kong Monetary authority had also raised concerns about its anti money laundering activities.
But the Asian operations of the bank are profitable. "Asia is one of the big profit centres and the bank has seen the best Asia years. I am a big fan of Bindra and I will miss him in the bank," said a bank employee in Mumbai. "He must be getting into something more interesting," he added.
The largest overseas lender by branch network in India also said in a statement that its present chairman John Peace will leave the company some time next year. Bindra, 54, who is also the group executive director, will step down from the board from April 30. It has not named the new Asia CEO.
Sands, 53, has spent 13 years both as group chief executive since 2006, making him the longest serving head of any major European bank, and previously as group finance director with the Asia-focused bank.
Under Sands' tenure, total assets of StanChart nearly trebled to $690 billion in June 2014 from $266 billion in 2006. The bank also said three longest serving independent directors will also step down from the board.
The massive overhaul of the board at the British lender comes following a slew of problems surfaced for the bank, which prompted leading share-holders to call for change. Winters, who currently runs Renshaw Bay asset management firm in London, will get a 1.15 million pounds in annual pay and his total potential compensation is as much as 4.6 million pounds, the news agency PTI said.
Winters was ousted by the current JPMorgan CEO Jamie Dimon in September 2009 after 26 years at the bank and later served on the British government-sponsored independent commission on banking.
Standard Chartered is the only foreign bank listed on the domestic exchanges through Indian depository receipts (IDRs) which closed up 1.7% on the BSE at Rs 88, against the main benchmark Sensex which shed 0.9% or over 231 points spooked by the lacklustre railway budget and ahead of the general budget.
According to PTI, the 53-year-old Winters is one of the most respected bankers in the industry and has wide experience in investment banking and regulatory issues. Winters will join the StanChart board in May and take over from Sands in June. Making the announcement, chairman Peace said, "Bill has the right experience and skills to drive the StanChart group's new phase of growth," adding he will remain the chairman until next year to help transition.
Standard Chartered statement said Sands will stand down from the board and as group chief executive in June, while 65-year-old chairman Peace will leave during the course of 2016.
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