* Bank rejects reports it is bowing to investor pressure
* Bank says united in support of CEO and chairman
* Profits set to fall in 2014 for second year running
(Adds background, views of shareholders, analyst comments)
By Steve Slater and Aashika Jain
LONDON, July 24 Asia-focused bank Standard
Chartered Plc rejected reports it had stepped up
succession plans for its chairman and chief executive, who are
under growing pressure from shareholders after a troubled two
Standard Chartered said its board was united behind both
Chief Executive Peter Sands and Chairman John Peace in restoring
the bank to profitable growth.
"No succession planning is taking place as a result of
recent investor pressure," the bank said.
"The board wants to be absolutely clear that it is united in
its support of both Peter Sands and Sir John Peace, and the
management team, in delivering the refreshed strategy, restoring
the bank to profitable growth and delivering returns for our
The Financial Times said Peace is considering a succession
plan that could see Sands replaced in the next year, citing
three people familiar with the matter.
Shareholders and bank industry sources have previously told
Reuters there is growing pressure on management. One shareholder
said he wanted Sands to go. Others said the CEO had time to show
a turnaround is on track this year, and there was more
unhappiness with Peace.
"The high water mark was the half year results two years
ago. Since then there's been an endless stream of things going
wrong," said Chris Wheeler, analyst at Mediobanca, saying Sands
could face a tough 12 months as there was no obvious catalyst
Standard Chartered's London-listed shares were down 0.49
percent at 1023 GMT, bucking a 1.63 percent rise by the European
bank index, and taking losses in the last 18 months to
Standard Chartered last month warned that profits this year
would drop for the second year in a row, after a decade of
record earnings on the back of roaring Asian growth.
The bank makes more than three-quarters of its profits in
Asia, Africa and the Middle East and came through the 2008/09
financial crisis relatively unscathed.
A reversal in fortunes started in summer 2012 when it paid
$667 million for breaching U.S. sanctions over Iran. Problems in
South Korea and India have followed, added to by a slowdown in
Singapore and margin contraction in trade finance.
"Up until two years ago he (Sands) did a very good job with
a good management team and a lot of stability. But now he's
being measured against that success, and once the downward
spiral starts it's difficult to turn it without dramatic
change," Wheeler said.
Sands, who has been CEO for 7-1/2 years, has restructured
the bank to boost profitability but it has been unsettled by a
raft of management changes, including the exit of Richard
Meddings as finance director.
That left the most obvious internal successors to Sands as
wholesale banking boss Mike Rees or Asia CEO Jaspal Bindra,
analysts said. Naguib Kheraj, the former Barclays finance chief
who is on the bank's board, is seen as the most likely
replacement for Peace.
The bank said on Thursday that "robust and considered"
succession plans for all of the senior leaders were in place and
it discussed succession planning regularly with shareholders.
That includes with Singapore sovereign fund Temasek, which
is the bank's biggest investor with an 18 percent stake and
encourages strong succession planning in all its portfolio
companies, according to a person familiar with Temasek.
(Additional reporting by Saeed Azhar; editing by Andre Grenon
and David Clarke)