The FT has run a story today by Patrick Jenkins and Martin Arnold entitled "StanChart's new chief weighs up new challenges". This article is timed with the first "official" day of duty for Bill Winters, the new CEO. The piece identifies for domains that the CEO must surely be thinking through at this point after touring the bank's operations and giving pep talks or otherwise to asset driven bankers.
The four areas which may be in Mr Winter's radar screen include:
- UK bank levy payments, as with all UK banks, StanChart needs to consider the cost-benefit of staying in the UK or moving closer to its clients, in this case in Asia. Such a move might allow it to escape bank levies, which has been written about here before and do not appear to be a sensible way to position banks to support the economy. My vote says there is a strong argument to move to Singapore and match up with DBS or other local player and create an Asian champion of the 21st century... although the levies may be put to rest soon anyway.
- Cost to income ratio, which has moved up 6pts the wrong way in the past year... a culling in the works a la HSBC? I have little doubt the pros and cons will be weighed.
- Capital strength - What a perfect time to raise capital then early in one's tenor? Capital is the keyword these days in banking, firms need to not only manage to today's requirement but tomorrow's market expectations...
- Lastly, stock returns are a consideration. The FT demonstrates StanChart has underperformed, but could cost and capital considerations help to somewhat support share prices here?
Let's watch this space and see what happens with this interesting and well positioned banking brand...
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