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OPINION

Updated March 13th, 2024 at 16:47 IST

Bill Winters pulls a poor man’s Jamie Dimon

Standard Chartered's CEO Bill Winters had last year just inched past his target of a 10% return on tangible equity.

Antony Currie
Antony Currie
Bill Winters
Bill Winters | Image:Bill Winters
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Do unto others. Standard Chartered's CEO appears to be channelling his former boss at JPMorgan. On Tuesday Bill Winters unveiled an overhaul that will result in the departure of Simon Cooper, the longstanding head of its corporate bank who was widely regarded as the emerging markets-focused lender's next leader. Jamie Dimon has proven adept at ousting potential heirs, but Winters' move is a poor imitation.

Winters has first-hand experience of the tactic. He was considered to be a contender for the top job at the U.S. megabank. Then in 2009 Dimon replaced him atop the investment bank division with Jes Staley. He, too, became a JPMorgan CEO candidate until he was sidelined four years later and quit before going on to lead Barclays.

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Such changes, though, have been easier for Dimon to make. First, he has long had a habit of rotating executives through different roles - most recently in January - giving the bank a deep bench of experienced leaders. Second, he usually has had good earnings and, as a consequence, investors on his side.

Winters is working on the former, having last year just inched past his target of a 10% return on tangible equity. That was a mediocre goal, however. Shareholders don't believe it is sustainable: the stock trades at just half its tangible book value.

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Moreover, Cooper deserves much of the credit for improving the lender's performance. His division, which makes up two-thirds of the bank's revenue, last year exceeded most of its 2024 goals, including reducing risk-weighted assets, and is close to another of winning more business from financial institutions. That helped boost the unit's return on tangible equity last year to 19.5%, up from 13.5% a year before and up from very low single digits when he joined in 2016.

Like Dimon after his management reshuffles, Winters for now looks more secure in the job he has held for almost nine years - even more so if Chair Jose Vinals leaves next year as many expect. Yet the bank's improved earnings may not last, not least with China's slower growth and the prospect of central banks around the world cutting rates sooner rather than later. Winters last month softened targets for the next couple of years.

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If performance falls short, Winters will look badly exposed. The board wouldn’t be completely without internal options for the top job: new investment-bank co-heads Roberto Hoornweg and Sunil Kaushal, or just-arrived finance chief Diego De Giorgi could all eventually be candidates. But they are unproven in their current roles. That’s a worry directors ought to have avoided.

Article co-authored by Anshuman Daga 

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Published March 13th, 2024 at 16:47 IST

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