Standard Chartered shares rise on settlement
Aug 15, 2012, 3:03 PM
LONDON (AP) – Shares in Standard Chartered PLC opened 4 percent higher in London Wednesday, a day after it agreed to pay $340 million to a New York regulator to settle accusations that it hid illegal transactions with Iran and violated U.S. sanctions law.
New York states’ Department of Financial Services had threatened to revoke the bank’s license to operate in New York, which would have hit Standard Chartered’s dollar-based businesses.
In a brief statement to the market, Standard Chartered said Wednesday that it “continues to engage constructively” with other U.S. agencies including the Department of Justice, the Treasury and the Federal Reserve.
Shares briefly shot up to 1,473 pence, just above the 1,470 pence closing price on Aug. 6, the day the New York agency announced its charges.
Despite the positive bounce on Wednesday, analysts said investors are likely to remain cautious about Standard Chartered shares until the other investigations are resolved.
“While not wishing to down play the magnitude of such a settlement, we think this is an excellent outcome for the group, in terms of the size of the settlement, the fact that the banking license has been retained and the speed with which the issue has been resolved,” said Gary Greenwood, analyst at Shore Capital in London.
Richard Hunter, head of U.K. equities at Hargreaves Lansdown Securities, said the bank “appears to have taken its rap on the knuckles and is preparing to move on.”
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