Standard Chartered (LON:STAN) is bracing for a potential penalty of around $1.5 billion from US authorities for allowing customers to violate Iran sanctions, Bloomberg has reported. The news comes after the Asia-focused lender agreed over the summer to extend its deferred prosecution agreement with the US until the end of December, over having processed payments for sanctioned entities in countries including Iran, Burma, Sudan and Libya.
Standard Chartered’s share price has fallen deep into the red in London this morning, having given up 0.91 percent to 609.90p as of 08:46 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.29 percent lower at 7,474.14 points. The group’s shares have given up just under a fifth of their value over the past year, as compared with about a 1.7-percent gain in the Footsie.
StanChart faces $1.5bn fine
People with knowledge of the matter told Bloomberg that StanChart was facing a $1.5-billion penalty in the US or allowing customers to violate Iran sanctions. The amount is a preliminary assessment based on some of the communications between the bank and the regulators, with final discussions yet to begin. The allegations relate to breaches dating from at least five years ago.
“As previously disclosed, we continue to cooperate fully with the investigation regarding our historical sanctions compliance, and are engaged in ongoing discussions with the US authorities,” the Asia-focused bank said in a statement, as quoted by the newswire.
Analysts on Asia-focused lender
Citigroup, which sees StanChart as a ‘buy,’ lowered its price target on the shares from 910p to 850p. According to MarketBeat, the Asia-focused lender currently has a consensus ‘hold’ rating and an average price target of 7,474.14p.