Standard Chartered has announced a reorganisation to deliver the strategic and financial aspirations outlined at its Investor Day on 11 November 2013.
The Group’s two businesses, Wholesale Banking and Consumer Banking, will be integrated to form one business, organised into three customer segment groups and serviced by five global product groups. Mike Rees (age 57) will take responsibility for this combined business, and will continue to report to Peter Sands, Group Chief Executive. Both Mike’s appointment as Deputy Group Chief Executive and the reorganisation will take effect on 1 April 2014.
Sands said 'The reconfiguration of our business is a critical next step as we implement our refreshed strategy and reinvigorate our growth momentum. At the Investor Day on 11 November 2013, we outlined our new strategic aspirations and revised financial performance framework. On 1 January 2014 we implemented our new, simplified regional structure. Today, we are announcing a new model for the organisation of our business. This will sharpen our focus on distinct customer segments, enabling us to deploy capital, liquidity and investment spend more effectively, and deliver both productivity gains and improvements in the quality of the service and products we offer our customers. Further changes will take place in the support and control functions as they adapt to the reshaping of the business and regions.
I would like to thank both Steve and Richard for their contribution to the success of the Group. Richard has played a key role in the transformation of Standard Chartered over the last decade. Under Steve’s leadership, our Consumer Banking business has made huge strides in developing its digital capabilities and in improving customer service. Steve and Richard are both outstanding leaders, good friends and will be missed. We wish them both well in their future careers'.
The Group outlined its strategic and financial performance aspirations in presentations to investors on 11 November 2013. In these presentations, the Group said that it had sharpened its strategy to focus on banking the people and companies driving investment, trade and the creation of wealth across Asia, Africa and the Middle East. Expanding on this statement of strategic purpose, the Group outlined a refreshed financial framework for delivering profitable growth and capital accretion, and set out five specific aspirations for growing the business. These covered client relationships, trade, wealth, investment, and building scale in priority markets.
The purpose of the reorganisation is to support these aspirations and will enable the Group to:
Focus the deployment of resources more effectively across the whole organisation to capture the biggest growth opportunities in our markets and maximise returns
Serve clients and customers better by grouping them more logically by their needs, while offering a broader and more consistent range of products to all segments, creating further income growth opportunities
Achieve cost savings by removing the duplication that exists both in the two businesses’ product teams and in the functions that support them, including Risk, Finance, Legal and Compliance, Human Resources, and Technology and Operations, and by creating consistent infrastructure and processes
Strengthen its distinctive culture, enhancing collaboration across the Group, providing a stronger, more consistent brand experience and reinforcing the Group’s framework and processes to ensure the highest standards of conduct across all aspects of our business.
The three new customer segment groups are Corporate and Institutional Clients, Commercial and Private Banking Clients, and Retail Customers. To give a sense of relative scale, of the Group’s 2012 income, Corporate and Institutional Clients represent approximately 60 per cent, Commercial and Private Banking Clients 10 per cent, and Retail Customers 30 per cent. The five global product groups are: Financial Markets, Corporate Finance, Transaction Banking, Wealth Products and Retail Products.
The roles of CEO Consumer Banking and CEO Wholesale Banking will cease to exist under the new structure. As a result, Steve Bertamini will step down from the Board as Group Executive Director on 31 March 2014 and will leave the Group by 30 June 2014. Meanwhile, he will work closely with Peter Sands and Mike on the transition to the new structure.
Mike Rees joined the Group in 1990, was appointed to the Board as Group Executive Director in August 2009 and has been CEO Wholesale Banking since 2002. Steve Bertamini was appointed to the Board as Group Executive Director and CEO Consumer Banking in May 2008, and the business has made considerable strategic progress under his leadership. The Board recognises and appreciates the significant contribution Steve has made to the Group.
Bertamini said: 'I am very proud of what the Consumer Banking teams have accomplished across the world over the last five years and wish my friends and colleagues at the Bank all the best in the future'.
As of 1 January 2014, the Group has also implemented a simplified structure of eight geographic regions to enable greater efficiency and effectiveness. Greater China, ASEAN, North East Asia, and South Asia will continue to report to Jaspal Bindra, Group Executive Director and CEO Asia. Middle East, North Africa and Pakistan (MENAP), Africa, Europe and the Americas will continue to report to V. Shankar, Group Executive Director and CEO MENAP, Africa, Europe and the Americas. Both Jaspal and Shankar will continue to report to Peter Sands.
The Group’s global support and control functions have already been reconfigured to align to the new regional structure and will undergo further change in response to the reorganisation of the business. They will continue to report to Peter Sands.
These changes to the Group’s organisational structure represent components of a programme of management actions to execute the refreshed and sharpened strategy, deliver the growth and return aspirations embedded in the Group’s five performance metrics, and adapt to the changes in the regulatory and market environment.
Richard Meddings, Group Finance Director and Group Executive Director has decided that this is an appropriate time to step down from the Board after a long and distinguished career with the Group. During his eleven-year tenure as a Director, and the last seven as Group Finance Director, Meddings has played a critical role in the Group’s growth and transformation. The Board recognises and appreciates his significant leadership contribution. He will step down from the Board and leave the Group by 30 June 2014, enabling a smooth transition to his successor. Meddings joined the Group and Board in 2002, was appointed Group Finance Director in November 2006 and is responsible for Finance and Group Treasury.
Meddings said: 'It’s been a real privilege to work at Standard Chartered and an honour to have served on its Board since I joined the Group in 2002. It’s an excellent bank, staffed by great people and operating in the growth markets of the world. However, after eleven years – seven as Finance Director – and as the Group now evolves into its next phase, this is a natural point for me to step away, which I have announced I will do by 30 June. I look forward to helping Peter, Mike and the team with the transition over the next six months'.
The Board Nomination Committee will lead the process to appoint a new Group Finance Director and an announcement on his successor will follow in due course.
Sir John Peace, Chairman, said 'The appointment of Mike, to work closely with Peter in leading the newly integrated business, will deliver benefits for clients, customers and shareholders. On behalf of the Board and the Group, I would like to thank both Steve and Richard for the enormous contribution they have made and wish them well for the future'.
The Group will announce its Full Year 2013 results on 5 March 2014 with financial data based on the current Group structure. Prior to the Half Year results in August 2014, the Group will restate its 2013 financials according to the reorganisation announced today.
image: © Standard Chartered