Standard Chartered shares tumble
Standard Chartered strongly rejected the portrayal of its handling of Iran-related transactions by New York's top bank regulator, which branded the British bank a "rogue institution".
The New York State Department of Financial Services (DFS) has threatened to strip Standard Chartered of its state banking license, saying the British bank hid $250 billion (€201 billion) in transactions tied to Iran, in violation of US law.
"The group strongly rejects the position or the portrayal of facts as set out in the order issued by the DFS," Standard Chartered said in a statement today, adding that it does "not believe the order issued by the DFS presents a full and accurate picture of the facts."
The DFS yesterday said the British bank "schemed" with the Iranian government and hid from law-enforcement officials some 60,000 secret transactions to generate hundreds of millions of dollars in fees over nearly 10 years.
At the same time, it exposed the US banking system to terrorists, drug traffickers and corrupt states, the department said.
The loss of a New York banking license would be a devastating blow for a foreign bank, effectively cutting off direct access to the US bank market.
Standard Chartered processes $190 billion every day for global clients, the New York bank regulator said.
The market value of the company tumbled $16 billion today after New York's bank regulator threatened to remove its state banking licence
Shares in the Asia-focused bank were down 23.5 per cent at £11.25 by 11.20 GMT, their lowest in three years, taking their losses to
30 percent since the news surfaced just before yesterday's close.
Volume in the bank's shares was a hefty 580 per cent of its 90-day daily average in just over an hour of trading, compared with the FTSE 100 index's total volume of 14.5 per cent.
Nomura cut its stance on StanChart to "neutral" from "outperform", saying the allegations made against the bank appeared serious and it sees material headline risk for the stock.