You are here
Standard Chartered said to hire consultant in search for new CEO
[LONDON] Standard Chartered Plc hired executive search firm Egon Zehnder to find a successor to Chief Executive Officer Peter Sands, according to person with knowledge of the process.
Standard Chartered's largest shareholders have told the bank they want Sands, 53, replaced, a second person familiar with the matter said, who asked not to be identified because the succession plan is private. Investors would prefer a candidate from outside the firm, such as an executive at emerging-markets-focused lender HSBC Holdings Plc, the person said.
The CEO is the bookmakers' favorite UK leader to depart this year after slowing economic growth in Asia and rising costs for bad loans prompted the bank to cut its earnings forecast three times in 2014. Aberdeen Asset Management Plc and state-owned Singapore investment firm Temasek Holdings Pte, the two largest shareholders, have been pressing Chairman John Peace to develop a succession plan, one of the people said.
"While there's no surprise Sands is under pressure, it's not good to see the CEO in the news," said Christopher Wheeler, an analyst at Atlantic Equities LLP in London, with a neutral rating on the shares. "It's very untidy and people hate instability. It's not clear who will take the role next and what they'll bring to the table." The shares fell as much as 2.3 per cent, the most of any large British lender, and traded 1.2 per cent lower at 939.6 pence at 10:19 a.m. in London. The shares fell 29 per cent last year.
"Peter and the management team are focused on executing the group's refreshed strategy, delivering growth, cost savings and shareholder returns, and have the full support of the board in achieving this," Jonathan Tracey, a company spokesman based in London, said in an e-mailed statement. The UK Telegraph reported Temasek and Aberdeen were pushing for a replacement for Sands on Saturday.
Tessa Curtis, a spokeswoman for Egon Zehnder in London, and Hugh Young, a Singapore-based managing director at Aberdeen, declined to comment on Monday. "We don't comment on speculation," Jeffrey Fang, a spokesman for Temasek, said in a text message.
Sands became CEO in November 2006, making him the longest-serving boss of any major European bank. Under his tenure, total assets increased to US$690 billion in June from US$266 billion in December 2006, according to data compiled by Bloomberg. Earlier this month, he announced the biggest job cuts in his tenure in a bid to reassure investors that management can stem two years of falling earnings and shares.
Egon Zehnder is also searching for replacements for other senior executives at Standard Chartered, said the person with knowledge of the matter. A plan for new leadership may be announced next month or when the firm reports annual earnings March 4, the Financial Times reported. The bank is also set to appoint two non-executive directors, the newspaper said. John Cryan, a former finance chief at UBS Group AG who stepped down last year as head of Europe for Temasek, was among people approached for such a position, the FT said.
"The group is clearly aware of its disclosure obligations in respect of executive directors, and we are not making any announcement," Standard Chartered's Tracey said. "The chairman announced a multiyear refresh of the board in 2011, and we will make any further announcements on this in due course." Viswanathan Shankar, the lender's group executive director and CEO of Europe, Middle East, Africa and Americas, said Sands "is here for good" in an interview on CNBC last week.