ALMOST a quarter was wiped from Standard Chartered’s market value yesterday as the global banking giant hit back at US allegations it had schemed with Iran to hide $250bn (£160bn) worth of transactions.
Shares in London dived 16.7 per cent after closing down almost 15 per cent in Hong Kong, as investors reacted to claims by the New York State Financial Services Department that the bank routed 60,000 secret transactions to reap hundreds of millions of dollars in fees over nearly a decade.
Yesterday’s spiralling share price meant the bank has lost 24 per cent of its market capitalisation since the shock announcement just before Monday’s close. The stock had earlier slumped as low as £10.92, the lowest level for three years.
Standard Chartered issued a statement early yesterday morning in a bid to salvage its reputation, which has until this week been untarnished by the growing number of scandals engulfing Britain’s top banks.
The bank said “it does not believe the order issued by the DFS presents a full and accurate picture of the facts”.
The fightback comes after the US regulator, led by Benjamin Lawsky, threatened to revoke Standard Chartered’s US banking licence and summoned executives to New York on 15 August to explain its actions, which took place between 2001 and 2010.
The report has put intense pressure on Peter Sands, who was promoted from finance director to chief executive in November 2006, as well as finance chief Richard Meddings, who has been linked with one of the more inflammatory remarks in the report.
Meddings has told friends privately that he doesn’t recall using such language, sources told City A.M.
When a senior London-based director with Meddings’ job title was warned by a North American colleague in 2006 that its Iran dealings could cause reputational damage, the exec is said to have replied: “You f***ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”
Nick Ziegelasch, equity analyst at Killik & Co, said while a fine was likely, the possible revocation of the firm’s New York licence would pose a much more serious threat.
“The bank will be impacted by the sheer scale of transactions that it puts through its US clearing system,” he said.