StanChart settles with UK and US regulators for over $1bn
StanChart will pay just over $1bn to settle two probes with US and British regulators, respectively, relating to the violation of US sanctions against Iran between 2001 and 2014 and the alleged inadequacies of its internal controls.
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The Asia-focused lender agreed to pay $947m (£725.3m) to the US government and another fine totalling £102m to Britain's FCA, in part putting the blame for the violations on two former junior employees, adding that the lender had "cooperated proactively and fully with the authorities' investigations."
Reuters had reported earlier that StanChart was set to pay $1bn (£765m), including the fine from the FCA, in order to resolve the roughly five-year old investigation by US authorities.
Commenting on the group's efforts, StanChart chairman, José Viñals, said: "We recognise that it is only by constantly improving our financial crime controls that we can ensure our business thrives in the long term. In addition, we are committed to partnering with law enforcement and other banks to combat financial crime more effectively."
The probe by US authorities was centred on whether StanChart permitted clients with interests in Iran to carry out transactions via its platform between 2007 and 2014, while the fine from the FCA related to historical financial crime controls.
Although the lender's deferred prosecution agreements with the Office of the District Attorney for New York County and the Office of the District Attorney for New York County were extended for another two years, until 9 April 2021, StanChart said none of the violations or control deficiencies included under the resolution extended beyond 2014.
In February, the lender had already set aside $900m in provisions in order to cover the potential cost of the fines that both regulators might impose.
And now management said it would book a further $190m charge in the first quarter of 2019.
StanChart first reached a $667m settlement with US authorities in 2012, which covered transactions involving Iran spanning from 2001 to 2007, but later discovered other transactions with Iranian clients dating from after that date, leading to a four-year extension of the original two-year deferred prosecution deal.
As of 1511 BST, shares of StanChart were adding 0.82% to 651.40p and bumping up against the 50% Fibonacci retracement of their drop from the highs reached on 23 May and about to enter so-called 'overbought' territory.