Calls grow for leadership change as Standard Chartered faces new fine

 

The pressure on the Asia-focused bank Standard Chartered to find new leadership increased yesterday as it admitted it is facing a second heavy fine from New York banking watchdogs and reported that first-half profits had fallen by a fifth.

News that the troubled lender was again in the crosshairs of New York’s top banking regulator, Benjamin Lawsky, came two years to the day after he issued a devastating report accusing the bank of sanctions-busting.

Having initially denied the charges, the bank subsequently apologised and paid a $340m (£201m) settlement with Lawsky. Further penalties totalling $327m from the US Department of Justice and the Federal Reserve followed.

Yesterday, Standard Chartered chief executive, Peter Sands, confirmed “ongoing discussions” with Mr Lawksy over “certain issues with respect to the group’s post-transaction surveillance systems and money-laundering controls”.  This, he said, would probably mean an extension of the term of the government monitoring regime the bank is under, plus a financial penalty. But he added: “We believe this will be less than in 2012.”

Investors have been calling for proper plans for a successor to Mr Sands, having seen the bank buffeted by scandal and falling profits since its heyday of surviving the global financial crisis relatively unscathed.

A series of top executives have left the business, leading to reports that big investors including the Singaporean investment fund Temasek want to see new leadership.

Some sources had suggested that yesterday’s profits announcement could include details of succession planning. These did not materialise, although some analysts noted chairman Sir John Peace’s prepared statement referred to how “the intensity of regulatory pressure and political risk, at a time of market weakness, is putting huge pressure on bank boards and management leadership generally”.

As Standard Chartered’s woes mount, Sir John’s position has also come under question. As leader of the board, it is his job to find a successor to Mr Sands. The company has denied any such plans.

Unusually, Mr Sands led yesterday’s conference call with analysts, where he was grilled over figures which showed that in the first six months of the year, adjusted pre-tax profits were $3.3bn on income of $9.3bn, down 5 per cent, driven lower by losses in South Korea and a $432m fall in revenues from the bank’s financial markets business.

Despite pouring money into boosting its compliance function, costs increased by just 1 per cent. But loan losses and impairments surged to more than $1bn. Mr Sands described the results as “clearly disappointing” and warned that there would be no “quick fix” for the bank’s problems.

“It is not what we strive for and not what our investors expect,” he added, blaming the problems on “continued financial markets weakness, challenges in Korea as we reshape our business there, and an uptick in impairment, largely due to a commodity-fraud exposure in China and write-offs relating to pre-crisis strategic investments”.

But with a note of defiance he said: “To put this in context, we made more profit in these six months than in the whole 12 months of 2006.

“We are not struggling to match pre-crisis profitability. We are taking action. It is not knee jerk.”

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Relations Officer

£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable