SHOCKED investors fled Standard Chartered stocks yesterday on the surprise exit of finance director Richard Meddings, announced alongside a major shakeup of the bank’s structure.
Its shares tumbled more than five per cent at the lowest point, before recoverying to close down 2.17 per cent.
But big shareholders and analysts rallied round to express their faith in the UK-listed bank’s strategy.
The bank is scrapping its two-unit structure of a wholesale banking arm and a consumer banking arm.
From April they will all be in one unit, ending duplication in roles like compliance and regulation – a move expected to cut several thousand of the group’s 89,000 jobs.
The bank will have three customer lines; corporate and institutional clients; commercial and private banking clients; and retail customers.
Chief executive Peter Sands said the previous structure had led to groupthink and needed breaking up to make the bank more innovative.
Meddings said he has chosen this as a good moment to leave after seven years.
“This restructuring makes a lot of sense, it tidies up the bank,” one top 10 shareholder told City A.M. “The wealth management move in particular is sensible – this business has been built up from nothing to something quite big and Standard Chartered is uniquely positioned to use its commercial banking relationships with rich families.”
PROFILE: DEPUTY CHIEF EXECUTIVE MIKE REES
Wholesale banking boss at Standard Chartered Mike Rees is stepping up to become deputy group chief executive.
Previously Rees has headed up the wholesale banking arm, one of the two main businesses that make up Standard Chartered.
Now that it is being consolidated into one business with fewer reporting lines, only the boss of one of the businesses will be needed – consumer banking chief Steve Bertamini has lost out and will leave the bank after a transition period.
As well as streamlining the bank’s reporting structure and board it is also symbolic of the wider reforms, cutting down inefficiencies and unnecessary managers.
Mike Rees joined Standard Chartered in 1990 as the chief finance officer for its global treasury, before moving to Singapore as regional treasurer in 1994.
The finance expert rapidly moved up the ranks, becoming group head of global markets by 2000.
Two years later Rees moved up again, combining those responsibilities with control over all commercial banking products as chief executive of the wholesale banking business.
That was followed with promotion to the bank’s board in 2009, then a step up to the new position of deputy chief executive with the consumer, commercial and wealth management lines reporting to him from April.
Rees graduated from the University of Aston, Birmingham in 1978 and qualified as a chartered accountant.
He is married with four children.