British Bank Boardrooms Have Never Seen This Much Drama

(Bloomberg) -- An unprecedented wave of boardroom change is stirring up British banking. At least three of the biggest U.K. lenders may replace their leaders by the end of the year—if not sooner. London-based bank chiefs are struggling against the same headwinds as their European counterparts: subpar growth, low interest rates and increasingly impatient chairmen and activist investors.

Barclays

CEO: Jes Staley
Start Date: December 2015
Former Jobs: Best known for many years at JPMorgan, where he once ran the asset-management business and its investment bank.

At Barclays Plc, home to Britain’s flagship investment bank, activist investor Edward Bramson has long bedeviled Chief Executive Officer Jes Staley with strategy critiques. But this week, Bramson explicitly called for Staley’s removal from the board in the wake of a regulatory investigation into the American-born CEO’s ties dating to his days as a JPMorgan Chase executive in the 2000s to the deceased sex offender and financier Jeffrey Epstein.

“The public interest not only requires the likes of Barclays to set the highest standards, but it also dictates that there should be unvarnished transparency on major ethical questions and on the suitability of individuals that lead them,” Bramson’s Sherborne Investors wrote.

The board has said it fully supports Staley. People with knowledge of the bank’s deliberations have said the bank’s succession plan could see him leave Barclays next year; however, that might depend on how the U.K. Financial Conduct Authority's probe evolves.

“If Staley knowingly continued providing financial services to Epstein, which could have helped to facilitate the latter’s child prostitution activities, in order to reap personal career benefits, it raises the question as to whether he is suitable to be an executive of a financial institution,” according to Sherborne.

Standard Chartered

CEO: Bill Winters
Start Date: June 2015
Former Jobs: Also a former JPMorgan investment-banking boss, and like Staley, was once seen as a potential successor to Jamie Dimon.

Though the stock has lost almost half its value since he took over almost five years ago, Bill Winters is widely viewed as having stabilized Standard Chartered Plc. He’s attacked the Asia-focused bank’s bloated cost base after grappling with historic conduct issues and bad loans.

However, Chairman Jose Vinals has informally approached banking executives this year to gauge their interest in replacing Winters, according to people familiar with the matter, who say his search is not currently part of any formal selection process. Winters himself previously said that his own “specific objective is to tee up the succession candidates.”

Winters had a public spat last year with investors who opposed his pension entitlements, saying their criticism was “immature.” While Standard Chartered eventually cut his retirement allowance, the chairman was not happy with the American-born CEO’s public handling of the situation, some of the people said. StanChart said the chairman and the board would like to keep Winters in the role for “as long as possible,” and that he has no plans to leave.

HSBC

CEO: Noel Quinn (interim)
Start Date: August 2019
Former Jobs: A lifer at HSBC and predecessor firms, he was previously the firm’s head of global commercial banking.

HSBC Holdings Plc Chairman Mark Tucker still hasn’t found a permanent replacement for John Flint, who lasted just 18 months in the CEO job until his ouster in August.

Last week, Jean Pierre Mustier turned him down, opting to stay at UniCredit SpA, the Italian bank the Frenchman is credited with turning around. HSBC, a much larger institution, would likely have offered him a greater pay package.

Interim CEO Noel Quinn, an HSBC lifer, was once believed to be a shoo-in for the role, but the process dragged on and by this year he was no longer believed to be the favorite. The stock has slumped since Quinn unveiled a strategy overhaul last month that promised 35,000 job cuts but fell flat with investors.

Who’s Not in Trouble?

Lloyds CEO: Antonio Horta-Osorio
Start Date: March 2011
Former Jobs: He spent almost 20 years at Spain’s Banco Santander SA, and ran its British business. He previously had stints at Citibank and Goldman Sachs.

Lloyds Banking Group Plc has been a relative island of stability, but there are questions of generational change since Antonio Horta-Osorio has been the CEO for nine years. Britain’s biggest mortgage lender is due to present its next three-year strategic plan in 2021, and it’s unclear whether the Portuguese-born banker aims to stay long enough to deliver it. There’s at least one change at the top coming soon: Chairman Norman Blackwell plans to step down in 2021.

RBS CEO: Alison Rose
Start Date: November 2019
Former Jobs: a lifer at RBS. Rose has worked at RBS and one of its predecessor firms, National Westminster Bank, since joining from university in 1992.

Royal Bank of Scotland Group Plc is likely to be spared any executive turmoil. Alison Rose took over the reins as CEO in November in a well-flagged transition from her longtime predecessor. The first woman to lead one of the big British banks, she will be busy executing a plan to cut back the securities business, renaming the company NatWest after its English branch network, and aiming to take the bank out of state ownership.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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