* FD Meddings to step down from board by end of June
* Wholesale banking head Rees to run combined business
* Rees emerges as heir apparent to CEO Sands
* Consumer banking head Steve Bertamini will also leave
* Shares down 4 pct
(Recasts, adds comments from executives, analyst, pay details)
By Matt Scuffham and Steve Slater
LONDON, Jan 9 Standard Chartered has
named Mike Rees deputy to chief executive Peter Sands, making
the wholesale banking chief the new heir-apparent at the
Asia-focused lender after its highly-regarded finance director
announced he was leaving.
The shock departure of Richard Meddings sent StanChart
shares to an 18-month low. Meddings had been seen as frontrunner
to succeed Sands and his decision to go as part of a
reorganisation deprives the group of a key executive as it
enters a new era of weaker growth.
StanChart had warned last month that its 10-year record of
earnings growth would likely end and to combat that slowdown,
the bank said on Thursday it would combine its wholesale and
consumer banking units from April.
Rees will run the combined business and become deputy chief
executive, a new role. As part of the reorganisation, Steve
Bertamini, head of consumer banking, will also leave.
Analysts said the changes put Rees, a 24-year veteran of
StanChart whose wholesale unit has been its growth engine, in
pole position to succeed Sands, in charge since November 2006.
"It is obvious from the bank's disappointing results in the
past year or so that a major change is needed. The senior
changes seem to position Rees as Sands' obvious successor," said
Jim Antos, analyst at Mizuho Securities Asia Ltd.
Meddings said the decision to quit as finance director by
the end of June was his own and had not been prompted by the
board or any outside parties. "After 11 years on the board of
this bank and seven years as finance director it seems a natural
time to step away," he told reporters.
Meddings' decision, taken over Christmas, helped send
StanChart's London-listed shares down 4 percent to their lowest
since summer 2012, when New York's regulators threatened to
revoke its banking licence after it broke sanctions on Iran.
Even before the latest slide, the stock was bucking a
positive industry trend, having lost 18 percent in the past 12
months against an 18 percent sector climb..
Meddings said the possibility of being overlooked as a CEO
candidate had not been a factor in his decision.
Sands also said CEO succession plans had nothing to do with
the changes and denied any disagreements among board members
over the bank's capital strength, dismissing speculation the
bank could be forced to raise funds from shareholders.
"We remain very comfortable with our capital position and
have no plans (for a rights issue of new stock). We have a
unified board which is fully behind the strategy ... which we've
announced today," Sands told reporters.
Some analysts have expressed concern over the bank's growth
prospects, saying potentially higher capital requirements could
make it difficult for the company to make short-term headway on
its return on equity.
StanChart makes more than three-quarters of its profits in
Asia, Africa and the Middle East, which helped it come through
the 2008 financial crisis relatively unscathed and made it a
stock-market favourite because of its exposure to faster growth
in those emerging markets.
But after a decade of sustained growth, the bank has hit a
rocky patch and said in December its earnings had been hit by
big losses in Korea, a slowdown in its key Asian markets and
Sands denied Bertamini had paid the price for the bank's
problems in Korea, where it has been forced to write off $1
billion after an overhaul of personal debt restructuring
processes allowed more forgiveness on long-term loans.
He said the reorganisation would help StanChart sharpen its
focus and deploy capital more effectively.
Meddings had been tipped for other top jobs as well as being
seen as a likely replacement when Sands steps down.
But he was last month stripped of responsibility for risk
oversight, due to concerns expressed by Britain's financial
regulator. Sources said the regulator was concerned about
StanChart's combination of risk and finance roles, rather than
any issues with Meddings himself.
Meddings hit the headlines in 2012 when it was revealed he
had cursed Americans in a conversation cited by a New York
watchdog pursuing a money laundering case against the bank.
Rees, one of the world's best-paid bankers, will see his
overall earnings potential drop in his new role. StanChart said
his basic salary will rise to 975,000 pounds from 735,000 in
April, but as part of his change of role, the bank anticipated
his maximum earnings potential will fall 40 percent.
He was paid a total package of $12.2 million in 2012.
(Additional reporting by Lawrence White in Hong Kong; Editing
by David Holmes)