Investec sees limited impact from $300m US fine at StanChart

20th Aug 2014 10:59

The news of $300m fine by US regulators failed to dampen the demand for Standard Chartered shares on Wednesday, with Investec providing a lift after reiterating its 'buy' stance on the stock.The bank agreed the settlement with New York's Department of Financial Services (NYDFS) for deficiencies in its anti-money procedures at its New York branch.Standard Chartered will now face certain temporary restrictions on opening dollar accounts for Hong Kong clients, while certain clients from United Arab Emirates will be more closely monitored. "The scale of this financial penalty appears (to us) to be very high in relation to its alleged failings, but as in 2012, Standard Chartered appears quite unable to protect itself against the NYDFS," said analyst Ian Gordon."In addition to the financial penalty, so-called 'remedial measures' appear to be slightly more intrusive than anticipated on 6 August."Nevertheless, Gordon said the fall-out from the fine appears "contained", with the vast majority of the bank's businesses unaffected.He said that adverse earnings impact of the measures should be limited to 1-2% across the group.Investec maintained a 1,450p target price for the stock, which was up 0.6% at 1,224.5p by 10:35.BC