Sunil Kaushal, currently the India and South East Asia chief executive for StanChart, has been promoted to the top regional job as of October 1.
StanChart appoints new chief executive of Middle East and Africa as bank downsizes to cut costs
Standard Chartered has appointed a new chief executive to lead its business in the Middle East and Africa as the bank undertakes a global overhaul to help it become profitable again.
The move is part of a previously announced plan to reduce costs at the emerging market specialist lender by US$1.8 billion in the next two years, and remove overlapping layers of management.
Instead of eight global heads, the bank will now only have four. They will oversee Greater China and North Asia; ASEAN and South Asia; Africa and Middle East, and Europe and Americas.
The lender has been badly hit as the value of most commodities, which underpin the economies of many emerging markets including that of the Arabian Gulf, have fallen sharply.
Sunil Kaushal, currently the India and South East Asia chief executive for StanChart, has been promoted to the top regional job as of October 1, while Christos Papadopoulos, the current top executive for the region, will leave the bank at the end of the year.
The post of chief executive for the Middle East and Africa also includes Pakistan.
“The group needs to kick-start performance, reduce its cost base and bureaucracy, improve accountability, and speed up decision-making,” said Bill Winters, the bank’s chief executive.
“The new structure will help achieve all of these critical objectives and will be in place as we communicate a comprehensive plan to address the group’s performance by the end of the year.”
The bank said Mr Papadopoulos led the creation of Standard Chartered’s capital market business in Saudi Arabia and its entry into Iraq, both of which are now strong contributor’s to the lender’s regional performance.
As part of the global shake-up, StanChart said it was reducing its eight regional blocks around the world into four units. Ben Hung will lead the bank’s operations in Greater China & North Asia, Ajay Kanwal will be head of Asean (the Association of South East Asian Nations) and South Asia, while Europe and the Americas will be directed by Tracy Clarke.
StanChart follows HSBC, its main rival in many emerging markets, in declaring a shift in its focus and strategy.
Last month HSBC said it was selling its banking operations in Brazil and Turkey to focus on emerging markets in Asia. It also said its UAE business featured prominently in its growth plans.
In recent years, many other emerging market banks have opened shop in Dubai, the region’s de facto financial hub, as they seek stable growth.
Most of StanChart’s problems have stemmed from the fact that more than 90 per cent of the bank’s business comes from emerging markets, and growth in these commodity-rich parts of the world has slowed in the past couple of years as the price of everything from oil, steel and palm oil collapses amid a drop-off in demand from heavy consumers such as China.
At the same time, emerging market currencies have weakened against the dollar and deficits have widened. Loans to businesses that are sensitive to the fluctuation of commodity prices have also not helped.
Not only is StanChart’s core lending business suffering, but the bank has also been battling regulatory woes.
It was fined $300 million in August by the New York Department of Financial Services for suspicious transactions involving clients in Hong Kong and the Middle East. As a result, StanChart announced in August it would close the majority of its SME accounts in the UAE.
Follow The National’s Business section on Twitter