Standard Chartered shares rally on US settlement

What is Standard Chartered accused of? The BBC's John Moylan explains

Standard Chartered shares have rallied after it agreed to pay $340m (£217m) to New York regulators to settle claims that it hid transactions with Iran.

The bank, accused of laundering as much as $250bn, had been threatened that its US banking licence may be revoked.
Shares opened 4.3% higher in London trade before easing slightly.
The bank had admitted that some of its transactions did break US sanctions, but said the amount totalled just $14m.
Ian Gordon, an analyst with Investec Securities, said the risk of further regulatory costs appeared to be "sufficiently contained" and that the deal may help the bank's shares rebound.
Oriel Securities, a stockbroker, upgraded Standard Chartered's shares to "buy" from "reduce", helping the recovery in investor confidence in the bank.
The BBC's New York business correspondent Mark Gregory said the $340m to be paid was a "hefty penalty, but nothing like as hefty as it could have been" if the two parties had not negotiated a settlement.
The deal has removed the risk of the bank losing its state banking licence, investors said.
'Engage constructively' According to the terms of the settlement, Standard Chartered will pay a "civil penalty" of $340m 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 controls at the bank's New York branch and report directly to the regulator.

"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.
"The parties have agreed that the conduct at issue involved transactions of at least $250bn."
A short statement from Standard Chartered simply confirmed a settlement of $340m had been reached.
"A formal agreement containing the detailed terms of the settlement is expected to be concluded shortly," it added.
The bank also said it continued to "engage constructively" with other US authorities.
"In addition, DFS examiners shall be placed on site at the bank," the statement said.
Finally, the settlement provided for permanent staff at the bank's New York office to audit any money-laundering controls.

Who is Standard Chartered?

• Standard Chartered is headquartered in London and its chief executive and chairman are based in the UK capital
• Its roots are in Asia; the Chartered Bank was founded by Royal Charter and opened in Bombay, Calcutta and Shanghai in 1858
• Standard Chartered Bank was formed in 1969 through the merger of Standard Bank of British South Africa and the Chartered Bank of India, Australia and China
• It currently makes two-thirds of its profit in Asia; only 10% of its operating profit last year came from the Americas and Europe
• It currently has 1,700 offices in 70 territories
• The bank made a pre-tax profit of $6.8bn in 2011
• The bank's New York office was first granted its foreign-branch bank licence in 1976

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