Financial News
- 8 August 2012, 11:07
Standard Chartered Bank Punished By Investors
The London-listed Standard Chartered bank has seen £8.2bn wiped from its value, after it was branded a "rogue institution" by US regulators.
The price drop of 16.43% on Tuesday comes on top of a 6% fall before markets closed on Monday, after officials in New York state released a report about the bank's alleged activities on behalf of so-called Iranian entities.
In early trading on Tuesday the loss peaked at more than 24% - temporarily wiping over £10bn from the bank's value.
The New York state department of financial services (DFS) has threatened to strip Standard Chartered of its right to operate in the state, saying the British bank hid $250bn (£160bn) in transactions tied to Iran, in violation of US law.
The DFS said the bank's "flagrantly deceptive actions" had left the US "vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes".
The bank has strenuously denied the allegations, which include claims of stripping out identifying details of transactions concerning Iran.
"The group strongly rejects the position or the portrayal of facts as set out in the order issued by the DFS," Standard Chartered said in a statement, adding that it does "not believe the order issued by the DFS presents a full and accurate picture of the facts."
In its statement the bank also said it disclosed details of an internal review just days ago in its interim results, but that document says the review is still ongoing and therefore incomplete.
The interim result statement said: "As reported previously, the group is conducting a review of its historical US sanctions compliance and is discussing that review with US enforcement agencies and regulators."
Standard Chartered admitted: "The group cannot predict when this review and these discussions will be completed or what the outcome will be."
Investors reacted swiftly to the US claims, both in London and Hong Kong where its shares dropped by more than 20.6% - the biggest ever intra-day plunge.
Standard Chartered operates in 70 countries with a staff base of 87,000 people, and gains some 90% of its profits from emerging markets.
Monday's report comes exactly one month after the bank launched a global advertising campaign for TV, print, outdoor and digital to "reinforce the bank's commitment to making a positive impact on the communities in which it operates".
In promotional literature the bank said: "We've operated for over 150 years in some of the world's fastest-growing markets. We aim to lead the way in Asia, Africa and the Middle East."
Seeking to maximise Asian and African interest in England's Premier League, the bank is a key sponsor of Liverpool Football Club.
what do you think?
marc H
This is yet another example of the yanks desperately trying to destabalize the euro banks so they can go back to being the rulers of the world. Im beginning to think the militant arabs may be right
kyle rambo
America Sneezes and The World Catches a Cold!
Stuart Harley
..what right have the yanks got to comment on our banks.......they started the global problem buy lending foolishly !!!!!!!!!
Allan Evans
In your headlong rush to ahve a go at the Yanks you've failed to see the wood for the trees! Another British Bank caught out on their headlong plunge into the river of greed.
Michael Hawkins
As yet there is little evidence of what the bank has been accused of However - a number of American banks have allready been caught and fined In true American fashion the fines doled out to their own banks are far less severe than to British banks and other foreiign banks Special relationship my rrrs - America look after No1 and sud everyone else
Tony Cross
getting the impression the US seem to run the world, or so they are trying to anyway. flagrantly deceptive actions" had left the US "vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes"....LOL because the US has never had dealings with corrupt regimes by selling them weapons.... leave IRAN alone, the US are hellbent on destroying the middle east for one agenda or another.
Neil C
Stand to be corrected on this Tony, but you will find the Yanks were in both beds in the Iran/Iraq war. America were supplying Saddam, and the CIA were selling arms to Iran to fund the Contra war in South America. That's why Saddam got the a r s e with America. They need to learn that they can help with the world but we don't need their foreign policy.
Scott Cooper
This comment has been removed for violations of our Terms and Conditions.
Neil C
Standard Charter released their report and it states that the transactions were 14 million in sterling, not the jumped up over inflated 160billion. This all was upheld and within the UN sanctions, seems the Yanks are nervous at the moment and are throwing the toys out of the pram. America needs to grow up and get over it, it sponser"s foreign regimes the world over for it's own gain. Get your own back yard in check before looking into your neighbours.
barry
We will never know the truth will we , better ask the Germans about Iran they know them well since 79.
Roger Siviter
Just how much longer are we to keep allowing USA to impose their laws on other countries?
dave
For as long as the British fail to impose their own - for whatever reason.
Chris Robinson
Further proof, if proof were needed, that the whole international capitalist system is rotten to the core. Even the capitalists of different countries are falling out - the wolves devour each other. They need to point the finger away from themselves so they accuse each other of wrong doing when all of them are at fault. Anything to deflect the anger of the millions of ordinary working people. These capitalist will do anything to distract attention from themselves - create a war, use other means of division or scapegoats to prevent maximum unity - nationalism, immigration, race, religion, sexuality and gender issues to keep people divided. What they fear most is a united mass movement of the millions - the only threat to their corrupt, vicious system.
Mike Drouin
seems not a day goes by without a story of corruption in the banking world .
dave
Why are those who caught the bank out being blamed, rather than the bank that comitted the immoral actions in the first place?
Ken Reeves
I think we are all getting a little tired of Uncle Sam and his extraterritorial jurisdiction which is getting past a joke. Iran is and has been selling oil to everyone (you can bet even the Yanks) the claim on jurisdiction is because settlement is in Dollars but hang on how about the US banks who put up letters of credit and guarantees no mention of them. Sorry but this smells and worst of all it again has religious connotations. This is not corruption or money laundering as being termed but trade the US wants to control.
Eric Clutterbean
This comment has been removed for violations of our Terms and Conditions.
Michael Hawkins
As yet there is little evidence of what the bank has been accused of However - a number of American Banks have allready been caught and fined In true American fashion the fines doled out to their own are far less severe than fines given to british banks Special relationship my rrrs - America look after No1 and sud everyone else
Chris Robinson
Our capitalist class have ALWAYS sucked up to their capitalist class.
denis parsons
What else is going to happen on this fine planet of ours? It's starting to get scary.Standard Charter may be a B.B but I bet it's authority is run by f b. "The meek shall inherit the earth." Yes,they'll be buried under it.
Chris Price
7:51am on 7/8/2012
Here we go again