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LONDON, 21 March 2013: On 5 March 2013, I, together with Chief Executive Officer Peter Sands and Group Finance Director Richard Meddings, representing Standard Chartered Bank (the “Group”), held a press conference where certain questions were asked concerning individual employee conduct and compensation in light of the deferred prosecution agreements made with the US Department of Justice and the New York County District Attorney’s Office in December 2012. During that press conference, which took place via phone, I made certain statements that I very much regret and that were at best inaccurate.
Standard Chartered, the UK-based bank, plans to hire up to 4,000 staff in south-east Asia over the next two years, according to its regional chief executive, reports the FT. Ray Ferguson, chief executive for south-east Asia, said the new hires, which follow an unannounced increase of more than 4,000 staff over the past three years, reflected the bank’s confidence in Asia’s economic prospects. Ferguson also said StanChart had no plans to spend the proceeds of a £3.3bn rights issue on an Asian acquisition but rather, intended to expand regionally through organic growth – dismissing suggestions that the bank might be preparing to spend part of the rights issue proceeds on a big acquisition such as DBS, the Singapore bank.
Some of the biggest trade-finance providers, led by HSBC and Standard Chartered Bank, have urged a softening of tough new capital rules, warning that otherwise, world trade could be severely hampered, reports the FT. HSBC, among banks that dominate the trade finance market, said last week it was not prepared to forecast its future capital ratios under the Basel III regime, mainly due to the way the rules affect trade finance, one of its core businesses. Most banks have been detailing the impact of the rules, which increase the risk weightings of assets and narrow the definition of core capital, on their capital ratios. Meanwhile Reuters reports that Standard Chartered said on Sunday that investors representing 98.5 per cent of its shares have signed up for its $5.3bn rights issue, raising cash for the bank in advance of the new rules.
Standard Chartered on Wednesday announced plans for a fully underwritten £3.3bn ($5.2bn) rights issue in an effort to buttress itself from the impact of new global capital rules, the FT reports. Temasek, the Singapore state investment agency that owns just over 19 per cent of StanChart, is understood to be planning to take up its rights in full in order to avoid a dilution of its shareholding. However, the agency is also thought to be keen to avoid breaching the 20 per cent threshold, which could happen if other shareholders in StanChart failed to take up their rights in full.
Dubai plans to tap international capital markets as early as next week with its first bond issue since the Gulf emirate’s debt standstill last November, reports the FT. The Dubai government plans to issue about $1bn in bonds with maturities of up to seven years after a debt-restructuring agreement between its flagship group and creditors this month. HSBC, Deutsche Bank and Standard Chartered have been hired to manage the sale after nearly all creditors signed off on a restructuring plan for $23.5bn of debts to the state-owned Dubai World conglomerate. Bloomberg quotes one Dubai-based fixed income salesman saying that “yield chasers may jump on the offer”.
Vedanta Resources, India’s largest mining company, was on Sunday night finalising a plan to take a 51% stake in Cairn India, a subsidiary of UK oil explorer Cairn Energy, reports the FT. An announcement is expected on Monday morning and would spark a multibillion pound windfall for investors in Cairn Energy, which holds a 62.4% stake in its Indian unit. Under the proposed deal, UK-listed Vedanta will make an open offer for 20% of shares in Cairn India. Cairn Energy will then make up the difference to 51% by selling part of its stake in the subsidiary. Bloomberg adds that Vedanta will finance the deal, valued at about $8.5bn, partly with loans from Standard Chartered.
Britain’s biggest banks are set to pay the vast bulk of a new £2bn-per-year levy announced in Tuesday’s Budget, with as little as a quarter coming from building societies and foreign institutions, the FT reports. Analysts expect the tax to raise more than £1bn ($1.5bn) from Barclays, Royal Bank of Scotland, HSBC, Lloyds Banking Group and Standard Chartered alone in 2011, and nearly £2bn from the same group by 2013, when the Treasury’s total take is expected to reach £2.5bn, according to Keefe, Bruyette & Woods.
Regulatory uncertainties surrounding the sale of Royal Bank of Scotland’s Asian assets could limit the price that bidders are prepared to offer and possibly delay any divestment. The stricken UK bank last month started a process to offload its retail and commercial operations in eight Asian countries. The move has attracted interest from groups including HSBC, Standard Chartered and ANZ, the Australian bank, as well as smaller domestic players.
Standard Chartered Bank on Wednesday said it had agreed to buy Harrison Lovegrove, the oil and gas advisory boutique, for an undisclosed sum. The deal, which is expected to be completed in October, will double the size of the bank’s oil and gas team, bringing in about 30 more front-office professionals and strengthening their offering to Asian companies seeking energy deals in Africa.