Standard Chartered rejigs board; CEO Peter Sands, Asia head Jaspal Bindra to leave

MUMBAI: Peter Sands, chief executive officer of Standard Chartered Plc, and Asia head Jaspal Bindra, were among half-a-dozen executives who quit their positions in a management reshuffle amid fears that poor performance of its once biggest market, India, may also result in the local unit facing the heat and more heads may roll. Chairman John Peace and three other independent directors will also leave the bank, the bank said in a statement.
Bill Winters, a former JPMorgan Chase investment banker, will be the new chief executive of the Asia-focused bank. "After more than eight years as Group Chief Executive, now is the right moment to hand over to new leadership," Sands said in a statement. "It has been my privilege to lead the people of Standard Chartered through a period of extraordinary turbulence and growth." Sands, an Indophile, had applied for a PIO card in 2007. His mother was born in India, and went to school at Mumbai's Cathedral. As the son of a one-time permanent resident of India, Sands wanted the Indian government to count him among the ranks of global Indians. In an interview to ET, he had said, "It (the application) got lost. I don't know where it is. I suspect that it's not going to come through, which is a shame."

Standard Chartered has been under investor pressure due to poor performance leading to increasingly vociferous calls from shareholders for the ouster of Sands.

A few months ago, the bank had to deny rumours of Sands’ exit. The bank posted a 16% fall in its thirdquarter pretax profit at $1.53 billion ( Rs 9,446 crore at Thursday's exchange rate) from a year earlier as loans turned sour. Sands promised to eliminate 4,000 jobs, shut equities trading and save about $400 million ( Rs 2,470 crore) in costs. The bank, which has paid at least $640 million in fine to the US regulators for lax compliance on money laundering, will release full-year earnings on March 4 when it is expected to announce more job cuts.

"Sands was an absolute disaster and the chairman was asleep when it was his job to replace the CEO," David Fergusson, chief investment officer of Singapore-based Woodside Holdings Investment Management Pte, was quoted as saying by Bloomberg News. "Bill Winters is a good choice, a proper banker. It's extremely good they didn’t pick someone internal." Jaspal Bindra, CEO of its Asia business, will also leave this year after 16 years with the bank. Bindra grew up in Kolkata. After graduating from the Xavier Labour Relations Institute in 1984, he joined Bank of America and later the Swiss bank UBS.

He joined Standard Chartered in 1998 as the India unit's chief executive officer. He was promoted to group executive director on the board of Standard Chartered in January 2010, and is currently based in Hong Kong. He worked closely in acquiring the India operations of ANZ, an Australian bank, which gave Standard Chartered’s Indian operations a boost. Temasek, which has a 17.7% stake in the bank and was unhappy about its recent performance, welcomed the changes.

"We take this opportunity to welcome Bill Winters as the next CEO of Standard Chartered, to build on and grow its excellent franchise," Temasek said in a statement. "This on-going process for board renewal must continue as the requirements and challenges facing the banking and financial sector across the world have become much more complex and onerous."

INDIA OPERATIONS UNDER PRESSURE

The bank has huge operations in India, ranking third among the foreign banks by revenues, and the local unit has supplied human resources for much of its operations across the globe. Rana Talwar, was the first Indian to head the bank in June 1997. He was at the helm till December 2001.

Standard Chartered aggressively expanded its corporate and investment banking operations during India's high-growth phase between 2006-2010, which came back to haunt it when the economy slowed down. Its loans to many businesses, including Essar, telecom infra provider GTL and the Anil Ambani group, are said to worry investors who have been clamouring for change.

Eighty per cent of the bank's income in South Asia comes from India. It has been an important market for the British bank so much so that it was the only foreign bank to launch Indian Depository Receipts (IDR) in 2010. The profitability of its India operations has been consistently under pressure since 2011. India, which was the largest contributor to Standard Chartered Group's profits in 2010, fell to the third position in the first half of 2011. It has remained in the third slot since. The profit from Indian operations dipped by 46% to Rs 1,584 crore for the year ended March 2014 compared with Rs 2,960 crore in the same period of the previous fiscal.