Standard Chartered board cull attacked as shares tumble again

The departure of two of Standard Chartered's most senior directors in a bloody reshuffle aimed at improving profits rocked the City yesterday, sending the bank's shares down to their lowest level for nearly two years.

In a move that stunned analysts and investors already reeling from a recent profit warning, Standard's chief executive, Peter Sands, said Richard Meddings, the finance director, will leave the bank in June, as will Steve Bertamini, the head of consumer banking, whose current job has been eliminated.

Instead, Mike Rees, the head of wholesale banking who is already the bank's highest-paid executive, having earned $52m (£31m) over the last four years, is to take on Mr Bertamini's division, as well as becoming deputy chief executive.

The 58-year-old ex-JP Morgan banker is to report directly to Mr Sands, who said the restructuring is a "critical next step" in Standard's efforts to improve trading because of problems in its South Korean business and weak trading.

Mr Rees's appointment was widely seen as being a clear sign that he was being lined up by the chairman, Sir John Peace, to succeed Mr Sands. However, some high-level bankers were dismissive: "No one believes that," said one. "The man everyone is watching is Naguib Keraj. He's the king-maker, if not the king." An adviser to the Aga Khan and former boss of JP Morgan Cazenove, Mr Keraj recently joined as a non-executive director.

Insiders say this is only the first round of the blood-letting. As The Independent disclosed last December, there is a long-running power struggle between Sir John and Mr Sands over who is to become the next chairman, as well as disagreements over whether the bank should raise more capital with a rights issue.

One senior banker yesterday described the reshuffle as "a botched compromise where there are no outright winners. Peter Sands got part of what he wanted – Richard Meddings out – and Sir John got part of what he wanted – Peter brought under control by having Mike Rees as deputy. But the question of who succeeds Peter and who succeeds Sir John is still up for grabs and will have to come to a head."

Mr Sands, however, said: "There is no change to my role."

Sources have said in the past that Mr Sands wanted eventually to take over the chairmanship from Sir John – an allegation he denies. The reshuffle makes that now extremely unlikely. Meanwhile, Mr Sands insisted yesterday: "Richard and I are great friends and colleagues... He felt this was an opportunity to step aside and do something different."

Mr Meddings said he had decided to quit during the Christmas holidays. In a statement he praised the bank and board. However, a source said: "Richard is actually furious. He believes he is being made a scapegoat for recent problems and has been used several times as the public face of things that have gone wrong – like sanction busting." That was a reference to the bank being fined in the US over its dealings with Iranian clients.

Shares in Standard fell by another 5 per cent to £12.40, valuing the bank at £30.4bn. They are at their lowest for two years, and a long way from the £18 peak when Mr Sands took over and the bank was making record profits.

Its biggest shareholder, Temasek, a past critic of Standard's board structure, did not comment.

Questions remain over whether Standard, which has robust Tier 1 capital ratios, will need a rights issue to bolster its balance sheet. A cash call has been discussed by the board informally and has been another source of disagreement between directors. Most lenders have shrunk their balance sheets, but Standard Chartered has expanded.

Suggested Topics
News
people'It can last and it's terrifying'
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
Sport
footballStriker has moved on loan for the remainder of the season
Sport
footballFeaturing Bart Simpson
PROMOTED VIDEO
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
News
Ricky Gervais performs stand-up
people
Arts and Entertainment
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
ebooksAn unforgettable anthology of contemporary reportage
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
News
i100
Life and Style
The longer David Sedaris had his Fitbit, the further afield his walks took him through the West Sussex countryside
lifeDavid Sedaris: What I learnt from my fitness tracker about the world
Arts and Entertainment
Word master: Self holds up a copy of his novel ‘Umbrella’
booksUnlike 'talented mediocrity' George Orwell, you must approach this writer dictionary in hand
News
i100
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

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

SQL Implementation Consultant (VB,C#, SQL, Java, Eclipse, integ

£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...

Head of IT (Windows, Server, VMware, SAN, Fidessa, Equities)

£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...

Technical Software Consultant (Excel, VBA, SQL, JAVA, Oracle)

£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering