January 29, 2015 / 3:48 PM / 3 years ago

Standard Chartered board to discuss CEO succession at meeting: sources

LONDON (Reuters) - Standard Chartered’s (STAN.L) board will discuss succession planning at a meeting in Washington, D.C., on Thursday, people familiar with the matter said, following speculation it was seeking a new chief executive.

An office worker walks past a Standard Chartered logo outside its head office in Singapore January 8, 2015. REUTERS/Edgar Su

The meeting is a regularly scheduled board gathering, the Asian-focused bank said, declining to discuss further details, or the agenda.

However, it was inevitable issues around the succession of Chief Executive Peter Sands would come up, two people familiar with the matter said.

Pressure has built on Sands in recent weeks after a string of problems. Three of the bank’s top 30 investors told Reuters in December that Sands should be replaced, probably in 2015, and scrutiny of his position has intensified this week.

British bookmaker Ladbrokes said it had suspended betting on whether Sands would be ousted or leave this year after taking a small number of bets. Such a suspension is usually a sign that something is regarded as a virtual certainty.

Headhunting firm Egon Zehnder is among the firms assessing potential CEOs, sources have said.

Former McKinsey consultant Sands, 53, steered Standard Chartered through the financial crisis, helping it to 10 years of record earnings, but is now in danger of being ousted after two bad years. He has been CEO for eight years.

Shareholders said there have been strategic, governance and operational mistakes, and Sands was too slow to address problems and had not gone far enough in cutting costs.

The bank’s shares have slumped 35 percent since the start of 2013 to their lowest level for almost six years. They were down 2.1 percent at 886 pence by 10:00 a.m. ET, and have lost 6 percent this week.

Profits for 2014 are expected to fall for a second successive year and losses from bad loans could continue to rise this year as some of its $61 billion of commodities loans sour. Analysts said that could leave the bank needing to raise cash or shrink its lending to improve its capital strength.

“There’s no silver bullet here, the company has to adjust its strategy and it’s also heading into choppier waters on the macroeconomic front,” said Joseph Dickerson, analyst at Jefferies. He estimated impairment losses will rise to $2.7 billion this year, up 68 percent from $1.6 billion in 2013.

Standard Chartered has also faced a string of legal issues in the United States, including having to pay $667 million over sanctions violations involving Iran and other countries.

The bank said this week’s meeting, which began on Wednesday, had long been scheduled for Washington, D.C.

It holds most of its board meetings in London, but holds a couple each year overseas, which often incorporate bigger strategic reviews.

In 2013, it held nine board meetings, including one in Hong Kong and one in Ghana. In 2012, its nine board meetings included trips to Shanghai, New York and Dubai.

Editing by David Clarke and Keith Weir

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