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Bloomberg
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. The emerging markets len-der has been bracing for a possible US fine related to past dea- lings with Iran, and the charge may indicate settlement is close.
Chief Executive Officer 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 percent 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 percent 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.
Other global banks are grappling with soaring legal expenses. A French court ordered UBS Group AG to pay more than $5 billion over a tax-evasion case, the biggest fine for a Swiss bank. While UBS said it will appeal, the penalties make up more than its entire profit for 2018.
Standard Chartered settled a currency trading investigation last month and said it received a notice from the UK’s Financial Conduct Authority over the financial-crime controls.