After charismatic chairman of Banco Santander (LSE: BNC) (NYSE: SAN.US) Emilio Botin died in September, his daughter Ana Botin quickly took the helm to carry on the family line.
Ms Botin, head of Santander UK until 2010, has quickly stamped her authority on the bank in a major executive reshuffle. After just two months in the role, she has ousted chief executive Javier Marin who had been in the job for less than two years. Mr Marin will be replaced by the incumbent chief financial officer Jose Antonio Alvarez, with Jose Garcia Cantera taking on the CFO role.
There are also three new independents appointed to the board.
Describing the outgoing CEO, Ms Botin said that he had “led the commercial transformation of our bank […] while also improving our profitability and efficiency“. But presumably not quick enough.
Fix those dividends
One thing Santander did need was to have its wacky dividend policy overhauled, and we’d already seen some signs of change. In recent years the bank has been paying very high dividends which were not remotely covered by earnings — in 2012 we saw a 9.6% yield of 60 cents per share, while earnings per share only reached 23 cents.
That was possible only because most Spanish shareholders took scrip instead of cash, but Santander really needs to get itself more in line with international banking policies. We should see dividend cuts this year and next, and I hope the new CEO will speed up the process.
Santander shares are up 10.5p (1.9%) to 572p.
Further East
Another bank that looks like it needs a shake-up is Standard Chartered (LSE: STAN), which saw its shares slump to a 52-week low of 898.2p on 20 November. The price is up a little to 938p as I write, but it’s still down 36% over the past 12 months.
Much of Standard Chartered’s misfortune can be blamed on slowing Chinese growth, and an interest rate cut last week showed that the government is taking it seriously. But that’s clearly not the whole picture, as shares in regional competitor HSBC Holdings have fared significantly better. HSBC is down a relatively benign 8.8% over 12 months to 635p, and it’s actually recovered nearly 7% since its low point on 10 July.
Standard Chartered’s operational performance in South Korea has been well documented, and chief executive Peter Sands has been coming under pressure for some time over the bank’s tardiness in fixing its structural problems.
Time for a new broom?
A shake-up at the top could be just what Standard Chartered needs right now — I wonder if Ana Botin fancies taking on another chairmanship?