Who will replace Bill Clarke?

Published: Wednesday July 23, 2008

RBTT managing director Mina Israel is investors' top pick to replace outgoing Scotiabank president Bill Clarke.

Her heart is with Scotia, they say, but if she cannot be wooed, then a Canadian is expected to head the operations. A third possibility is banker Aubyn Hill, who headed National Commercial Bank - Scotia's major rival - four years ago. The Business Observer contacted over a dozen brokerage houses but investors mostly declined comment. The only constant was that one expects the bank's second tier to lead.

"I think they will try to recruit talent from the local market such as Minna Israel or Aubyn Hill," said Michael Parker head of investments at Guardian Asset Management - whose parent company manages the 8th largest block of Scotia shares - 13.5 million units. "Either one would be a suitable candidate."

When Israel was at Scotia she was its leader-in-waiting. Her departure left a void at the bank which has not been filled. As such financial analyst John Jackson feels that the group will initially put a short-term president from the Canadian parent.

"I don't expect them to go outside the group. I think a Canadian will head the bank at least for two or three years on a temporary basis before a local [replacement] is put in place", says John Jackson, financial analyst. Yesterday the Canadian operations did not return calls, nor did the local operations, to say when a replacement would be announced.

"Israel, I don't know if that is going to happen anytime soon," he said alluding to her obligations at RBTT, which might preclude corporate hop-scotching.

"If Minna Israel was there it would be her; she will probably go back, back again it depends on her contract," said Stocks & Securities Ltd managing director Clinton Brooks.

Brooks added that Aubyn Hill would also be a candidate. "Because they have a similar management style," he said.

Clarke, who headed the bank since 1995, was charged with infusing the operations with highly qualified and educated management; even as he was from the old guard. He restructured management and cut jobs in the process.

"He was the axe-man put in place by Canada. And he executed the orders from Canada ruthlessly, except when it came to his departure," said a source close to the bank.

Clarke announced his retirement last Friday, and that his final day would be in October. But the investment community widely feels he was fired.

The bank in Friday's press release countered: "The board refutes any allegations that Mr Clarke has been separated from the bank."

But the bank gave no reason why Clarke would have decided to retire at this time, given his successful tenure as head of the island's top commercial bank. More so the absence of a clearly identified successor fuels the view that Clarke was fired.

Investors are not concerned that Clarke's departure will lead to a fall-off of the bank's performance. Last financial year, Scotia made a net profit of $7.6 billion, a 12 per cent increase over the previous year.

"It is like a ship, the captain does not have to be in the front always, but if there is an iceberg he is there to navigate around it," said Jackson. "In many respects Canada dictates the major thrust of the organisation. ... I don't expect any major deviation from operations."

Jackson's view was supported by the Scotiabank Jamaica's sixth largest shareholder, the National Insurance Fund (NIF), which holds 26.5 millon shares. The NIF fund manager says that Canada will ensure that Clarke's departure will not negatively affect the bank's operations.

"I am sure that they would have been doing succession planning and if they cannot find someone locally, they can always pool persons from aboard". said Audrey Deer Williams. "Minna Israel has been gone for a while, so I think they would have done what they needed to do by now."

Regardless of optimism, Scotiabank's slogan, "you're safe with us", will more than ever be put to the test.


Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20080723T010000-0500_138183_OBS_WHO_WILL_REPLACE_BILL_CLARKE_.asp