Standard Chartered Plc Chief Executive Officer Bill Winters stripped his deputy Mike Rees of powers in a push to gain more direct control and speed up cost cuts.
Winters, 53, who took over from Peter Sands last month, appointed a new 13-member management team reporting directly to him, while taking over responsibility for all three of the firm’s main divisions from Rees in October, the bank said in a statement on Sunday. The team will develop a plan by year-end “to address the future performance of the group,” it said.
Standard Chartered enlisted Winters, a former co-head of JPMorgan Chase & Co.’s investment bank, to take over after Sands failed to reverse a drop in earnings over the past two years. The London-based lender, which generates most of its earnings in Asia, is eliminating some 4,000 jobs to help save about $1.8 billion in costs through 2017.
“The group needs to kick-start performance, reduce its cost base and bureaucracy, improve accountability and speed up decision making,” Winters said. “I am working with a talented and experienced management team to create a bank that delivers strong returns and sustainable profitability.”
The shares rose 1.3 percent to 1,030 pence at 9:16 a.m. in London, the biggest intraday jump since July 16. They have increased about 7 percent this year after slumping 29 percent in 2014
Rees didn’t return a phone call seeking comment.
The management team will begin meeting immediately, though appointments won’t be formalized until October.
The executives include the heads of the bank’s three main divisions -- the corporate and institutional bank, commercial and private bank and consumer banking -- as well as regional and operational chiefs to simplify the firm. The changes will phase in from October to be fully in place by January.
Rees joined the bank in 1990, rising to become deputy CEO in April 2014. He was the best paid board member last year and has been awarded about $72 million in the six years after the financial crisis, according to company filings.
As the architect of Standard Chartered’s corporate and investment bank, Rees weathered Sands’ departure and a management exodus that included Viswanathan Shankar, the former head of Europe, the Middle East, Africa and the Americas, and Jaspal Bindra, the ex-Asia head. Chairman John Peace also is set to leave next year.
Before the overhaul, all heads of products reported to Rees, while Shankar and Bindra were in charge of regions.
Rees “was in charge of pretty much everything, now he’s in charge of what?,” said Sandy Chen, an analyst at Cenkos Securities Plc in London, who has a buy on the shares. “By putting himself as the key decision-maker on top, Winters can oversee the profit-enhancing reforms more effectively.”
On his first day as CEO in June, Winters pledged to “eliminate waste and excess.” Standard Chartered will focus investment on areas where “we are very good or can be very good” and divest others, he said at the time.
Under Sands, the firm had reported a 30 percent drop in pretax profit in 2014, hurt by legal bills. The lender is scheduled to report first-half results next month.
Halford will assume responsibility for the group investor relations function, corporate real estate services and global sourcing starting in October. Winters, Halford and Rees remain group executive directors under the new structure.
The following are the new management team members:
- Andy Halford, the chief financial officer
- Mark Dowie, interim CEO of corporate and institutional banking
- Anna Marrs, CEO of commercial and private banking
- Karen Fawcett, CEO of retail banking
- Tracy Clarke, head of compliance, human resources and the regional division for Europe and the Americas
- Ben Hung, regional CEO for greater China and North Asia
- Ajay Kanwal, regional head of ASEAN and South Asia
- Sunil Kaushal, regional CEO Africa and Middle East
- Doris Honold, chief operating officer
- David Fein, general counsel
- Michael Gorriz, chief information officer
- Pam Walkden, chief risk officer