STANDARD CHARTERED PLC (SCBFF, Financial), after a long period of shareholder discontent, has appointed Bill Winters to be the company's new CEO. He will succeed the current CEO Peter Sands in June 2015. Bill Winters was formerly J P Morgan Chase & Co (JPM, Financial) executive. After the announcement was made public, shares of the company surged up to 3%. The company is now seeking to reverse faltering earnings.
SCB reckoner
Standard Chartered, the British bank provides financial and banking services. The company has its headquarters in London. Standard Chartered is named due to the merger of The Chartered Bank of India, Australia and China, and Standard Bank of British South Africa. The bank has its primary listing on London Stock Exchange. Most of the bank's profit comes not from UK, but from Asia, Africa and the Middle East. Surprising, isn't it?
The number mix
The market capitalization of the bank is 22,904.62 million GBP. The current P/E ratio is 8.422 (ttm). Their 5 Year Dividend Growth was estimated to be around 4.28%. The total share value however, decreased 0.8% this year. The company which offers services in the personal, corporate, institutional, consumer and treasury areas has however, experienced a drop in revenue in the third quarter 2014. Though performance in the fourth quarter was better than the third quarter, the company is still taking strides in improving their overall position. Hence, the decision to replace the CEO shouldn't come as a surprise.
The change
It is said that Winters will render his services to the bank in May and will take on the role as the CEO a month later. Peter Sands came under the radar after the bank's share price continued to fall in the last two years. The bank was involved in a series of scandals that included violations of sanctions. The business in the Asian markets has been plummeting since 2013. Most of the revenue earned is from the Asian region. Businesses in this area have been closing down, and jobs are being cut. The overall scenario is going for a toss and decisions had to made with immediate effect.
Ten of Standard Chartered shareholders said that they wanted the current CEO to step down immediately. This accelerated the process of the step-down. The chief executive of Aberdeen Asset Management, Martin Gilbert, said that Bill Winters is an excellent choice to be the new CEO. His former experience at JP Morgan will help in facilitating growth. His leadership will be invaluable to take on the great franchise such as Standard Chartered. Winters is expected to receive a base salary of $1.8 million. All said and done, Peter Sands did contribute to Standard Chartered to a great extent in the past. He managed to sustain the company during the 2008 financial crisis without government aid. He was the longest-serving CEO for the company. Under his management, the total asset value of the bank increased from $266 billion in December to $690 billion.
source: By Cara Chow (Charlotte1125) via Wikimedia Commons
Team restructuring
The entire executive team is being wiped out over a period of time. The current chairman Sir John Peace will step down next year. However, the new replacement for the post of chairman has not been named. It is possible that Naguib Kheraj, the non-executive director will replace Sir John. Asia Chief Executive Jaspal Bindra will also step down. He was employed with the bank for a period of sixteen years. Three non-executives, Ruth Markland, Paul Skinner and Oliver Stocken who have served the company for a long time are also being replaced by two new employees –Â Gay Huey Evans and Jasmine Whitbread. The company has now decided to reduce the number of board members to 14. These changes are being done to bring about a fresh perspective and to ensure a succession plan balancing stability.
