British bank’s shares rally following $340-million settlement
Investors seemed to approve Standard Chartered’s decision to pay $340 million to New York banking regulators as they boosted the British bank’s stock.
Standard Chartered’s shares rose more than 4% in London trading Wednesday, a day after the bank’s settlement with New York’s Department of Financial Services over contentions it concealed prohibited transactions with Iranian clients. U.S. sanctions prohibit transactions with Iran.
The British bank stood to potentially lose its New York banking license, a fate averted by the settlement involving what New York Gov. Andrew Cuomo called the state’s largest-ever banking fine, according to the New York Daily News.
Analysts also came to the bank’s aid Wednesday. Ian Gordon, an analyst at Investec, was quoted by the website Financial News saying: “It is a grossly unjust settlement. There is no attempt to claim that the settlement is based on any formulaic or financial assessment of wrongdoing.â€
But Standard Chartered’s regulatory troubles in the United States aren’t over. The bank has been under investigation by federal and Manhattan prosecutors, as well as the U.S. Treasury and Federal Reserve.
Peter Sands, the bank’s chief executive, remains in the U.S. as Standard Chartered looks to reach a broad settlement with the other agencies, according to the Reuters news agency.
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