The chief executive of Standard Chartered has said speculation over a takeover of the bank is “rubbish” – and despite problems, the Asia-focused bank remains strong.
“The bank is in very good shape,” Peter Sands, who assumed his current role in 2006, stated at the World Economic Forum.
“We have great opportunities in our markets, we have a very clear strategy and we have a great team.”
After a record decade, low postings for 2013 earnings are expected because of tougher regulations, problems in Korea, slowed overall growth in Asia and a senior management upheaval which has so far failed to assuage investors.
Why the big fuss?
It is not surprising that the bank has been the subject of takeover speculation.
Whilst an initial strength of the bank was its focus on emerging markets before and during the global financial crisis, it is now a veritable Achilles’ heel – fueled by a weakened performance in Korea after closing branches and becoming the subject of a customer data leakage investigation.
In addition, the management structure is in upheaval, following a poor performance during 2013 and the recent announcement that the bank’s Financial Chief Richard Meddings is leaving the bank.
Lastly, it remains plagued by Federal Reserve charges totaling USD 200 million after it violated US sanctions against Iran, Sudan, Burma and Libya.
Yet takeover speculation has been rife for the past 30 years, and so far bore no fruit.
Nevertheless, talk that big name rivals such as Barclays, J.P. Morgan, and Santander could be planning a buyout have circulated. And whilst identifying a buyer has so far been pure speculation – one thing is certain: Any buyer would need deep pockets to afford Standard Chartered’s market value of almost USD 55 billion.
Sands also took the opportunity to play down talks he may become chairman.
“I have no plans to do anything else,” Sands noted, before adding he has made it “very clear I have no interest in becoming chairman.”
Business leaders across the World Economic Forum voiced optimism over economic prospects but noted policymakers needed to show caution over the coming key periods.
Sands himself highlighted the dangers of not coordinating banking rules: “We’re still in a situation where there’s a huge amount of change going on,” he noted.
“The biggest headache is the fragmentation of the regulatory agenda and the fact that different parts of the world are putting the emphasis on different things.”
He stated his belief this could lead to “fragmenting global financial markets” – leading to a less secure global trade and investment market.
He also described concerns over China’s shadow banking fiasco as “overblown.”