Standard Chartered set for second US fine over sanctions breach
Troubled Asia-focused lender is again in the cross hairs of New York’s top banking regulator
James Moore is the Independent's Associate Business Editor and writes the Outlook City comment column from Tuesday to Friday. He also has a keen interest in disability issues and when not attempting to further injure himself playing wheelchair basketball.
Wednesday 06 August 2014
Standard Chartered has admitted it is in line for a second heavy fine from New York banking watchdogs as it reported that first-half profits had fallen by a fifth.
News that the troubled Asia-focused lender is again in the cross hairs of New York’s top banking regulator, Benjamin Lawsky, comes two years to the day after he issued a devastating report accusing the bank of sanctions-busting.
Having initially denied the charges the bank subsequently apologised and paid a $340 million (£201 million) settlement with Lawsky. Further penalties totalling $327 million from the US Department of Justice and the Federal Reserve followed.
Today an embattled Standard Chartered chief executive Peter Sands confirmed “ongoing discussions” with Lawksy over “certain issues with respect to the group’s post-transaction surveillance systems and money laundering controls”.
This, he said, would probably mean an extension of the term of the government monitoring regime the bank is under, plus a financial penalty. But Sands said: “We believe this will be less than in 2012.”
The bank reported adjusted pre-tax profits of $3.3 billion on income of $9.3 billion, down 5 per cent, driven lower by losses in South Korea and a $432 million fall in revenues from the financial markets business.
Despite pouring money into boosting its compliance function, costs increased by just 1 per cent. But loan losses and impairments surged to more than $1 billion.
Sands described the results as “clearly disappointing” and warned that there would be no “quick fix” for the bank’s problems.
“It is not what we strive for and not what our investors expect,” he added, blaming the problems on “continued financial markets weakness, challenges in Korea as we reshape our business there, and an uptick in impairment, largely due to a commodity fraud exposure in China and write-offs relating to pre-crisis strategic investments”.
But with a note of defiance he said: “To put this in context we made more profit in these six months than in the whole 12 months of 2006. We are not struggling to match pre-crisis profitability. We are taking action. It is not knee jerk.”
Sands has been under pressure since reports emerged that shareholders were pressing the board to name a successor. The bank’s board denied this in an unusual announcement to the stock exchange. Following profit warnings and a rash of senior departures, the bank has re-organised, with Sands arguing that the move is already yielding results.
- 1 Hair loss explained: How and why men go bald
- 2 Game of Thrones season 6: Jon Snow theorists believe the Stark may have a twin sister
- 3 Artist takes LSD, draws herself over different stages of the 9-hour trip to show its effects
- 4 A pint of water every day is the key to losing weight, scientists say
- 5 Russia 'accidentally reveals' number of its soldiers killed in eastern Ukraine
Most expensive city to live in for expatriates: Luanda, Angola takes number one spot with Hong Kong and Zurich in top three
Video of Irish 'professional boxer' fighting Istanbul neighbourhood goes viral in Turkey
Irish tourist filmed fighting with shopkeepers in Turkey says they 'messed with the wrong man'
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal get peerages
Moody neurotics are more likely to be creative geniuses, study says
Dresden riots: Protesters in Germany attack refugee buses shouting 'foreigners out'
France train shooting: US soldiers speak of the moment they stopped gunman and 'beat him until he was unconscious'
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith calls for urgent ESA overhaul as part of drive to cut down welfare costs
iJobs Money & Business
£20000 - £25000 per annum + competitive + incentives + uncapped comms: SThree:...
£13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...
£20000 - £25000 per annum + competitive: SThree: Are you passionate about sale...
£25000 per annum + benefits: Ashdown Group: A large financial services company...