Standard Chartered seeks US deal on charges of violations of Iran sanctions
Bank unlikely to reach double-digit revenue growth for year as US dollar gains strength
Standard Chartered hopes to reach a co-ordinated settlement with four US regulators before the end of the year on charges related to sanctions on Iran.
The British lender's announcement came as it reported that operating profit for the first nine months grew at a "mid-single digit rate" compared with the same period last year, "or at a double-digit rate" excluding a US$340 million fine over charges of money laundering for its Iranian clients.
Standard Chartered does not release specific figures for first- and third-quarter results.
The bank settled sanctions-busting charges with the New York State Department of Financial Services in August but still faces charges brought by four other regulatory bodies: the US Department of the Treasury, the Federal Reserve, the US Department of Justice and the Manhattan District Attorney.
"It's quite likely we will not be [posting] double-digit" revenue growth for the year, Richard Meddings, group finance director at Standard Chartered, said, adding the bank's income continues to be affected by the strength of the US dollar against Asian currencies.
The bank's shares fell nearly 2 per cent to 1,468 pence (HK$182.70) in London trading as the market reacted negatively to the announcement.
"The issue was that investors think the bank might not be able to deliver double-digit growth, and that's what made people less enthusiastic about the value proposition of the stock," CCB International senior analyst Adam Chan said.
Standard Chartered said Hong Kong, mainland China, Indonesia, the US, Britain and Europe delivered strong growth, and more than offset slowdowns in India, Singapore and Korea.
Meddings said cost remained "broadly neutral" even after including the settlement with the New York State Department of Financial Services and some other provisions.
The bank said it continued to invest in regions such as China.
Standard Chartered's consumer banking business grew at a "mid-single digit rate" for the first nine months compared with a year ago. Deposits, credit cards and personal loans income grew at "double-digit rates" in the first nine months from a year ago, with volume growth compensating for a drop in margins.
Mortgage income picked up compared with the first half while margins remained broadly stable, the bank said. Hong Kong and Korea posted especially strong growth.
On the wholesale banking side, Standard Chartered delivered "double-digit" income growth in the first nine months. Transaction banking business, such as cash management, continued to grow at a "double-digit rate", driven mostly by volume growth, according to the bank.