Standard Chartered To Pay $340m Fine over Iran Deals

Standard Chartered has agreed to pay New York bank regulators $340m (£217m) in penalty fines for concealing transactions with Iran worth at least $250bn.

Standard Chartered's shares jumped by around 5.5 percent to reach $175 in Hong Kong, after the proposed settlement with the New York State Department of Financial Services (DFS) emerged.

Although a scheduled hearing by the watchdog relating to the transactions has been adjourned, the bank still faces a Federal probe over alleged money laundering.

"The New York State Department of Financial Services (DFS) and Standard Chartered Bank (Bank) have reached an agreement to settle the matters raised in the DFS Order dated August 6, 2012. The parties have agreed that the conduct at issue involved transactions of at least $250bn," said Benjamin Lawsky, New York Superintendent of Financial Services.

Lawksy added that, as part of the settlement, Standard Chartered "shall permanently install personnel within its New York branch to oversee and audit any offshore money-laundering due diligence and monitoring undertaken by the bank." These officials will report directly to DFS.

Standard Chartered issued its short statement pertaining to the deal, which read: "Discussions continue around a settlement including a payment of $340m. A formal agreement containing the detailed terms of the settlement is expected to be concluded shortly."

Although the penalty is seen by many commentators as hefty, Standard Chartered has, crucially, managed to retain the licence for its New York operations.

"From the bank's perspective, they needed to get this behind them. Had this action gone forward, the potential was that they could lose their licence to operate in New York, and that would have been devastating to their operations," Ann Graham, director of the Business Law Institute at Hamline University School of Law in St Paul, Minnesota, told Bloomberg.

Standard Chartered admits that the transactions in question flouted US sanctions on Iran, but maintains that the amount involved was only around $14m.