August 13, 2012

British bank Standard Chartered is rushing to reach a settlement within days over charges it hid transactions tied to Iran and is set to resume talks with U.S. regulators on Monday, sources familiar with the situation said.

The London-based bank's U.S. legal team have got as far as discussing an amount with regulators, indicating progress has been made before a Wednesday deadline, the sources told Reuters.

Standard Chartered could be forced to pay a fine of up to $1 billion to settle the charges, analysts said last week, although there has been speculation that this figure could be higher to assuage the New York banking regulator pressing the case

New York's Department of Financial Services alleged last week that Standard Chartered hid transactions tied to Iran and the regulator's head, Benjamin Lawsky, ordered the bank to explain why it should not lose its licence at a hearing scheduled for Wednesday.

"It looks like, rather than fight this in the courts, they're looking to resolve this, hopefully ahead of Wednesday," said Investec analyst Vivek Raja.

The bank is awaiting information on whether executives will be required to attend and Chief Executive Peter Sands remains in Britain, a source close to the situation said.

Shares in Standard Chartered were up 1.5 percent to 1,346.5 pence at 1045 GMT, the top riser in Britain's FTSE 100 on hopes of an early resolution which would take away the uncertainty of a damaging legal dispute and a higher fine.

Britain's financial regulator said it remained in close contact with the bank and U.S. regulators.

Politicians have also been in close contact over the affair as the loss of its New York banking licence would be a devastating blow for Standard Chartered, effectively cutting off direct access to the U.S. bank market.


Copyright 2014 Thomson Reuters. Click For Restrictions