LONDON (Reuters) - Standard Chartered Plc said it faces another fine from New York's financial regulator for problems related to detecting transactions vulnerable to money laundering, piling more pressure on the Asia-focused bank and its bosses.
The London-based bank said Wednesday the New York regulator had identified issues in its surveillance system - part of its anti-money laundering systems and controls - which was likely to result in a monetary penalty, remedial action and an extension of a 2-year monitoring period.
The monitoring was imposed in 2012 after Standard Chartered was fined $667 million by U.S. regulators for breaking U.S. sanctions on Iran by hiding transactions and for lax anti-money laundering systems.
The latest problem emerged two years to the day that the New York regulator Benjamin Lawsky called the bank a "rogue institution" for the extent of its sanction busting.
Standard Chartered is likely to pay a penalty of between $100 million and $340 million for its latest problems, a person familiar with the matter said before the results were released.
Standard Chartered disclosed the investigation as it reported a 20 percent fall in pretax profit in the six months to the end of June to $3.3 billion. The bank had warned in June that profits would be down by about a fifth as its investment bank revenues were hit by weak trading activity.
The bank has had a rough time ever since Lawsky shocked the bank with his original allegations, and some investors have called for change at the top. The bank last month rejected reports it had stepped up succession plans for its Chairman John Peace and Sands, who has been CEO for 7-1/2 years. The bank said its board was united behind both Sands and Peace in restoring the bank to profitable growth.
Standard Chartered had posted its 10th successive year of record earnings on the back of booming Asian markets just a week before Lawsky's allegations in 2012.
Since then big losses in Korea, a slowdown in investment banking and the impact of tougher regulations have marked a stunning reversal of fortune for the lender.
Standard Chartered makes more than three-quarters of its profits in Asia, Africa and the Middle East, which helped it come through the 2008 financial crisis relatively unscathed, but it expects 2014 profits to fall for a second successive year.
The bank has announced several changes in senior management and shifts in structure and strategy to improve performance.
(Reporting by Steve Slater and Matt Scuffham. Editing by Carmel Crimmins)
