StanChart shares tumble on Iranian dealings
LONDON: Standard Chartered Plc's shares fell as much as 20 percent on Tuesday after New York's top bank regulator threatened to remove its state banking license, saying the British lender hid $250 billion in transactions tied to Iran. The New York State Department of Financial Services (DFS) said on Monday that Standard Chartered "schemed" with the Iranian government and hid from law enforcement officials some 60,000 secret transactions to generate hundreds of millions of dollars in fees over nearly 10 years.
The British bank, which the regulator called a "rogue institution" also exposed the US banking system to terrorists, drug traffickers and corrupt states, the DFS said.
London-based Standard Chartered was surprised by the statement, even though it has been in talks with US regulators over the matter for years. Its shares were 18.4 percent lower at 12.00 pounds on Tuesday.
The shares had already fallen 6.2 percent on Monday, sliding on the close just as the news emerged.
The regulator's move is a savage blow to Standard Chartered, which has been one of the banks least tarnished during the financial crisis thanks to its focus on Asia and other emerging markets and a conservative capital and liquidity approach.
A top 40 investor in the British bank said he did not expect it to be a lasting problem given the bank's robust defense, but added: "Given that the shares are not especially cheap, particularly in relative terms, it may be the shares remain in the doldrums for a while now that their blameless reputation has suffered a knock." Standard Chartered said the bank "does not believe the order issued by the DFS presents a full and accurate picture of the facts."
The Daily Sun/Bangladesh/ 8th Aug 2012