In a filing with the Hong Kong Stock Exchange, the emerging markets major reveals it has set aside $900 million to cover any potential fines from the U.S. and the U.K.
The worst may be yet to come for Standard Chartered, which earlier this months paid $40 million in fines to the US regulator. According to a filing made with the Hong Kong Stock Exchange, the bank has set aside as much as $900 million to cover any further fines arising out of investigations by the U.S. and the U.K. The stock has lost 60 percent from its five-year high of HK$164 (US$20.9) in May 2014.
Past Misdeeds
The bank explains the provisioning as cover for potential penalties relating to «historical violations of U.S sanctions law» and «previously disclosed investigations» related to foreign exchange trading issues.
An expected $134 million of this money may well find its way to the U.K. as payment to the Financial Conduct Authority in relation to historical financial control lapses.
The bank, which is a big lender to the Middle East as well as Asia and Africa, has been accused of violating U.S. sanctions by processing U.S. dollar transactions for Iranian entities. This, despite signing a deferred prosecution agreement and paying a $667 million fine to avoid criminal charges in 2012.
Worst Case Scenario
Although it is still in negotiations with the U.S. regulator, the bank's provisioning indicates it is hopeful the fines levied will come in under the $1 billion analysts had predicted. These negotiations with the U.S. on a deferred prosecution agreement have been ongoing since 2012.
