LONDON/HONG KONG (Reuters) - Standard Chartered (STAN.L) said former JPMorgan (JPM.N) investment bank boss Bill Winters will take over as chief executive in June, replacing Peter Sands in a major management overhaul following two years of problems.
Investors had been pushing for a change at the helm of the Asia-focused bank citing strategic, governance and operational mistakes, and saying Sands had been slow to address troubles including a U.S. fine for breaking sanctions to losses on commodities loans.
Winters, 53, is currently CEO of the Renshaw Bay hedge fund he founded and is one of the most respected bankers in the industry. He has wide experience of investment banking and regulatory issues.
The bank’s two biggest shareholders, Singapore sovereign fund Temasek and Aberdeen Asset Management - who own more than 25 percent between them - welcomed the changes which will also see Chairman John Peace leave next year.
“From what we know at this point, this is an amazingly astute choice,” said Jim Antos, a Hong-Kong based analyst at Mizuho Securities Asia Ltd.
Antos said Winters could force “real change” at the bank and has strong credibility with U.S. and UK regulators, “which is exactly what the bank needs.”
Standard Chartered shares jumped 5 percent on the news of the appointment before trimming gains amid concerns the bank is now more likely to launch a rights issue to address concerns about its capital strength.
By 1244 GMT (7:44 a.m. EST) Standard Chartered shares were up 3 percent at 956 pence. They have fallen 30 percent since the start of 2013.
Analysts said there could be more changes in management, although Peace said Mike Rees, the deputy CEO and head of the wholesale bank, was staying in his role.
Winters, who is originally from New York but has dual U.S. and UK citizenship, will join Standard Chartered’s board in May and take over from Sands the following month. He will be based in London, where he has lived for the past 22 years.
Winters described Standard Chartered as “a special bank”. He will be paid up to 6.9 million pounds ($10.7 million) a year, including a base salary of 1.15 million pounds, the same in an “allowance” and up to 4.6 million in annual bonus.
He will be granted shares to compensate him for any losses when he leaves Renshaw Bay, the London hedge fund and asset manager he founded four years ago named after a bay on a lake in New York State where his grandparents have a cabin. Standard Chartered declined to say how much the compensation could be.
Winters joined JPMorgan in 1983 as a trainee in New York and moved up the ranks to become co-CEO of its investment bank from 2004 until 2009, when he left following a falling out with Chief Executive Jamie Dimon.
Winters then became one of five members of a British government commission that analyzed how banks could be made structurally safer. The panel’s recommendations that firms should separate their domestic retail banking operations is being implemented.
Peace said Winters was “a world class banker” who was strongly respected by regulators and clients.
Investors started calling for change at the top of Standard Chartered early last year. Three of the bank’s top 30 investors told Reuters in December that Sands should be replaced in 2015.
In addition to a potential rights issue, Winters’ early tasks will be to try to make more cost cuts, potentially by reducing its retail banking operations across Asia, analysts said.
Former McKinsey consultant Sands, 53, steered Standard Chartered through the financial crisis, helping it to 10 years of record earnings. He has been CEO for eight years, making him one of the longest serving CEOs at a major global bank.
Sands could be paid up to 8 million pounds when he leaves, mostly in previous share awards that have not yet vested, although the bank’s recent weak performance means the awards are likely to be much less than the maximum.
“We haven’t got everything right and of course we have faced a huge number of challenges through what has been one of the most tumultuous and turbulent periods in the history of financial markets, but I‘m proud of what the bank has achieved,” Sands told reporters on a conference call.
“I‘m delighted Bill is going to be taking the mantle from me in June.”
Some investors have urged Standard Chartered to make wider changes in the board, and the bank said Jaspal Bindra, CEO of its Asia business, will also leave this year after 16 years with the bank.
It said a further three long standing directors will step down - Ruth Markland, Paul Skinner and Oliver Stocken - and said two new directors will join the board - Gay Huey Evans and Jasmine Whitbread.
Additional reporting by Saeed Azhar in Singapore; Editing by Sinead Cruise and Anna Willard