Standard Chartered share price: Lender books $900m for UK and US fines

Standard Chartered (LON:STAN) has set aside $900 million to cover fines resulting from investigations on both sides of the Atlantic, the blue-chip lender has revealed. The move comes ahead of the Asia-focused bank’s full-year results on Tuesday, which are set to conclude this FTSE 100 reporting season.

Standard Chartered’s share price has been subdued in London in today’s session, having given up 0.52 percent to 613.60p as of 13:42 GMT. The shares, however, are outperforming the FTSE 100 which currently stands 0.94 percent lower at 7,160.43 points, pressured by hefty declines in Centrica (LON:CNA) and BAE Systems (LON:BA).

StanChart books $900m

Standard Chartered announced in a statement to the London Stock Exchange this morning that its fourth-quarter results would include a provision of $900 million. The charge relates to potential penalties relating to an investigation by the US authorities relating to historical violations of US sanctions laws and regulations, as well as an investigation by the UK Financial Conduct Authority concerning the group’s historical financial crime controls.

“This provision reflects management’s current view of the appropriate level of provision,” the Asia-focused lender pointed out, cautioning that the investigations “might ultimately result in a different level of penalties”.

Analysts weigh in on move

“The provision is huge and unexpected,” said Steven Leung, a sales director at brokerage UOB Kay Hian, as quoted by Reuters, adding, however, that the impact on StanChart’s share price might be limited if the profit hit meant that future earnings could be flattered by the low comparison with last year.

Bloomberg meanwhile quoted Citigroup analysts as commenting in a note that “settlement of all material outstanding regulatory issues is a positive development that helps clear the decks for the strategy update next week”.

As of 14:09 GMT, Thursday, 21 February, Standard Chartered PLC share price is 613.60p.