Standard Chartered sets aside $900 million to cover fines

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Standard Chartered PLC (StanChart) has set aside 900 million dollars to cover fines resulting from regulatory investigations in the United States and Britain, potentially drawing a line under probes which have dogged the bank for years.

In a filing to the Hong Kong Stock Exchange on Thursday, StanChart said the provision related to the potential resolution of U.S. investigations into alleged violations of U.S. sanctions, and for probes relating to foreign exchange trading.

The filing is the first time the bank has quantified the possible cost of the investigations. Previously it said only in filings that it was “not practicable” to estimate the financial impact because the range of potential outcomes was too broad.

StanChart also included in the provision a 102.2 million pound fine from Britain's Financial Conduct Authority related to historical financial crime controls. It said it was considering its options in relation to the penalty.

StanChart has been the subject of multiple investigations by U.S. authorities into its dealings with Iran, which is the subject of heavy U.S. sanctions.

The current investigations are examining the extent to which the bank allowed clients with Iranian interests to conduct transactions after 2007, as well as the extent to which it shared such dealings with authorities at the time of the 2012 settlement.

In October, Chief Executive Bill Winters said U.S. authorities were also investigating whether StanChart breached Iran-related compliance rules as recently as 2013.

Last month, New York's financial watchdog fined StanChart 40 million dollars for attempting to rig foreign exchange transactions from 2007 through 2013, a penalty which the bank said was also included in the 900 million dollars provision.

In the first hour of London trade, shares in the bank were up 1.7 percent compared with a 0.5 percent fall in the blue-chip FTSE 100 index. In Hong Kong, shares of StanChart closed 0.6 percent lower.

“Though the provision amount is not small, it removes some of the uncertainties related to past issues,” said Hao Hong, brokerage BOCOM International's head of research.

StanChart's London shares fell 22 percent last year, compared with the 15.6 percent drop at rival HSBC Holdings PLC.

Source(s): Reuters