Standard Chartered agreed to pay $340 million to New York regulators to settle claims that it hid transactions with Iran. The UK bank had been accused of laundering around $250 billion and threatened with the revoking of its US banking license by US regulators.
Mick Gilligan, head of research at investment management firm Killik & Co, said: “While this fine does not appear excessive and will not impact the group’s profitability and capital position, it does appear that it is still under investigation by four other US regulators, including the US Treasury and Federal Reserve.
“While this has removed the risk of Standard Chartered losing its licence, there is still uncertainty over the impact from the remaining regulators, with the Wall Street Journal reporting that the US Treasury wants to hold the bank ‘accountable’. We still believe that there has been permanent damage to the bank reputation and rating.”
Standard Chartered has admitted that some of its transactions did break US sanctions, but for an amount of just $14 million.
The settlement terms say Standard Chartered will pay a “civil penalty” of $340 million to the New York State Department of Financial Services (DFS). It will also install a monitor for at least two years who will evaluate money-laundering regulations at the bank’s New York branch and report directly to DFS.
“The New York State Department of Financial Services (DFS) and Standard Chartered Bank have reached an agreement to settle the matter raised in the DFS order dated August 6, 2012,” a statement from the regulator’s superintendent said.
Last week the bank was accused of being a “rogue institution” by DFS. The bank’s CEO Peter Sands was “surprised” when New York’s DFS claimed that Standard Chartered “schemed” with the Iranian government and “left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes”.