StanChart to take $900 million charge over US, UK probes

NEW YORK: Standard Chartered Plc is booking a $900 million charge tied to regulatory probes in its fourth-quarter results, a move that will erode earnings as its top executive prepares to unveil a turnaround plan.

The provision will cover the UK bank’s estimates for potential penalties from investigations over US sanctions violations, currency trading issues and financial-crime controls, the company said on Wednesday. The emerging markets lender has been bracing for a possible US fine related to past dealings with Iran, and the charge may indicate a settlement is close.

CEO Bill Winters is due to present his plan to improve profitability when the bank reports full-year results on Tuesday. He may also announce a new round of cost cuts to boost a share price that’s down around 40% since he took over in June 2015.


The provision could wipe out the majority of the bank’s second-half profit. Joseph Dickerson, an analyst at Jefferies Financial Group Inc, said in a note this week he estimated the firm would post pretax profit of $1.4 billion in the last six months of 2018, excluding litigation costs. Shares of Standard Chartered rose as much as 1.3% in early London trade.

“Settlement of all material outstanding regulatory issues is a positive development that helps clear the decks for the strategy update next week,” Citigroup Inc. analysts wrote in a note to clients published Thursday. Other global banks are grappling with soaring legal expenses. A French court on Wednesday ordered UBS Group AG to pay more than $5 billion over a tax-evasion case, the biggest fine for a Swiss bank.