Iran Inquiry Is Abrupt Reversal for Standard Chartered
Long a golden child among global banks, the British bank Standard Chartered now wears a somewhat tarnished crown.
The bank’s investors were rattled by accusations that it had schemed with the Iranian government to hide $250 billion in money transfers over nearly a decade. On Tuesday, shares of Standard Chartered fell as much as 25 percent — their sharpest one-day decline in more than two decades — before recovering to end London trading down 16 percent.
The accusations upset a widely held view of Standard Chartered as a banking success story, thanks to its large operations in emerging markets in Asia and elsewhere.
Unlike other European financial institutions hit by the Continent’s debt crisis, Standard Chartered, a London-based bank with roots that date to 1853, continued to report rising profits. Last week, the bank said its net profit for the first half of the year rose 11.3 percent, to $2.86 billion. Around 90 percent of the profit came from developing economies.
Central to Standard Chartered’s business is its ability to facilitate trade between emerging economies and developed countries by clearing transactions in New York City. That ability came under threat on Monday when New York State’s top banking regulator, the Department of Financial Services, said it had grounds to revoke the bank’s license in the state. The bank must appear before the state’s banking superintendent on Aug. 15 to explain why that should not happen.