The Times - UK (2021-12-21)

40 2GM Tuesday December 21 2021 | the times

Business

on the US currency. The PRA asked the

bank to adhere to a higher liquidity

accounting standard to ensure that it

did not run into difficulties.

The bank’s employees made five

errors in reporting back to the author-

ity. That meant that regulators “did not

have a reliable overview of its dollar

liquidity position”, the PRA said. In one

instance, the bank notified the author-

ity of the error only after a four-month

internal investigation.

The crackdown on Standard Char-

tered is the latest recent action taken

against banks. Last week HSBC was

fined almost £64 million by the FCA for

1

Energy bills for households in

Britain could soar to a record

£2,000 a year from April as

high wholesale costs force the

regulator to increase the price cap

by more than 50 per cent, experts

have warned. Ministers are

examining options to try to reduce

the scale of the increase. Page 12

2

New North Sea oil and

gasfields could be approved to

take into account “minimising

reliance on imports” when

deciding whether to issue licences.

The government published

proposals for tests to meet a

“climate compatibility checkpoint”

for new licences. Page 12

3

Pret A Manger has been told

to rethink how it advertises its

drinks subscription service.

The high street café chain’s deal

offers five hot and cold drinks a

day for £20 a month. However,

customers frustrated by the

unavailability of some drinks have

complained to the Advertising

Standards Authority. Page 17

4

Spider-Man: No Way Home,

which opened in cinemas last

week, has generated global

ticket sales of $587.2 million. This

puts it on course to overtake

No Time To Die, Daniel Craig’s

final outing as James Bond, with

sales of $774 million, as biggest

English-language film of the year.

Page 19

5

Renewed fears that surging

coronavirus infections could

prompt tighter restrictions

triggered a sell-off in markets. The

FTSE 100 endured its worst day in

three weeks. Pages 39, 44

6

A £4 billion takeover of

Selfridges by Central Group,

of Thailand, and Signa Group,

of Austria, is close to agreement. A

sale of the department stores

group by the Canadian Weston

family could be announced as this

week. Page 39

7

Osborne & Little, the

wallpaper company controlled

by George Osborne’s father,

made a profit of £558,000 in the

year to March, strengthened by a

£3.6 million loan under the

coronavirus business interruption

scheme. Page 39

8

Standard Chartered must pay

a £46.5 million fine for failing

to report its liquidity in dollars

to the regulator in an accurate and

timely way. The bank was not

“open and co-operative” with the

watchdog and displayed “failings

in its regulatory reporting

governance and controls”.

9

Bosses at BrewDog have

sought to draw a line under

allegations of a “toxic culture”

after completing an in-depth

review of the business. In June the

Scottish brewer, which is mulling a

flotation, was hit by allegations of

sexist and misogynistic behaviour

towards female staff and “toxic

attitudes towards junior staff”.

10

The insolvency profession

will be governed by an

independent regulator

with powers to seek compensation

for victims of malpractice, under

government proposals. Ministers

are planning tougher regulation

for insolvency firms after

allegations of misconduct and

conflicts of interest. Page 42

Need to know

Standard Chartered fined

£46.5m for report failures

Katherine Griffiths Banking Editor

Standard Chartered must pay a

£46.5 million fine for failing to report its

liquidity in dollars to the regulator in an

accurate and timely way.

The bank, which is based in Britain

but does most of its business in Asia and

Africa, was not “open and co-operative”

with the watchdog and displayed “fail-

ings in its regulatory reporting govern-

ance and controls” between March

2018 and May 2019.

The fine is the largest to be imposed

by the Prudential Regulation Authority

on a bank in an enforcement action

that it has brought by itself. The regu-

lator monitors the safety and sound-

ness of large banks and only rarely

imposes fines on institutions, unlike the

Financial Conduct Authority, which

oversees firms’ actions towards cus-

tomers and recently has taken action

against NatWest and HSBC over

money laundering.

Sam Woods, the Bank of England’s

deputy governor for prudential regula-

tion and the PRA’s chief executive, said:

“Standard Chartered’s systems, con-

trols and oversight fell significantly

below the standards we expect of a

systemically important bank and this is

reflected in the size of the fine.”

The bank is also being penalised for

the delays in reporting to the regulator.

The problems began in 2017, when

the regulator became concerned about

potential dollar outflows from Stan-

dard Chartered, which is highly reliant

failings that may have led to terrorist

financiers, modern slavers and fraud-

sters going undetected. Days earlier

NatWest was fined £265 million for fail-

ing to stop a money-laundering scheme

after a criminal case in the High Court.

Simon Morris, of CMS, the law firm,

said: “The three fines against major

banks for weak money-laundering con-

trols, poor transaction reporting and

weak capital reporting, plus insufficient

openness, show that both the FCA and

the PRA are fed up with cornerstone

firms that still don’t have the right

systems and controls in place.”

Standard Chartered said that it

accepted the PRA’s findings. “These

errors did not affect Standard Char-

tered’s overall liquidity position, which

remained in surplus throughout the

period,” it said. The bank qualified for a

30 per cent discount for settling early.

Standard Chartered’s shares fell 5¾p,

or 1.3 per cent, to 426¼p amid a market

sell-off. Edward Firth, an analyst at

Keefe, Bruyette & Woods, a broker,

said: “In the context of Standard’s

market capitalisation of £13 billion, the

£47 million fine is immaterial.”

The regulatory action is a blow for

Bill Winters, 60, the bank’s chief execu-

tive, who has been on a drive to improve

internal controls and standards at the

business after the financial crisis. It is

also an embarrassment for Tracey

McDermott, 52, Standard Chartered’s

head of conduct, financial crime and

compliance, who used to be acting boss

of the FCA.

N

ervousness

about

catching

Covid so

close to

Christmas kept people

at home and sent

takings at most pubs,

bars and restaurants

down by more than

40 per cent on what

should have been their

busiest weekend of the

year (Ashley

Armstrong and Tom

Howard write).

In a survey by UK

Hospitality, the

industry body, just over

50 per cent of venues

reported a drop in

revenue of at least

40 per cent for the

weekend just gone,

while 20 per cent said

that revenues had

dived by more than

60 per cent.

Yesterday UK

Hospitality described

the findings as a

“disaster”, adding that

“hopes for a better

2022 already lie in

tatters”.

Kate Nicholls, its

chief executive,

repeated her calls for

the government to

extend business rates

relief and to lower the

VAT rate. “These

Pubs and shops

rue a nightmare

before Christmas

Behind the story

W

hen Bill

Winters

was

named as

the next chief

executive of Standard

Chartered in

February 2015, shares

in the struggling bank

jumped by almost

3 per cent (Katherine

Griffiths writes).

Finally, thought

shareholders, here

was a veteran of Wall

Street who could get

to grips with a

sprawling business

that had just issued a

string of profit

warnings.

It hasn’t worked out

that way. Standard

Chartered shares

have halved during

Winters’ tenure,

which has coincided

with a period of

historically low

interest rates —

making growth highly

challenging for most

large banks — and

international political

tensions, in particular

in Hong Kong, the

bank’s profits

powerhouse.

Supporters of

Winters, 60, believe

that such an

environment has

undermined any

achievements that he

might have nailed

otherwise.

One senior banker

who knows Winters

well said he worked

“phenomenally hard”

and was “all over the

detail”, but that he

had been operating at

a time of strong anti-

globalisation

headwinds, which are

particularly difficult

for a bank aiming to

expand a network

that spans the world.

Despite a strong

desire to prove

himself at Standard

Chartered, there is a

growing view that

Winters may be

preparing for an exit,

almost seven years

after joining the bank.

The Prudential

Regulation Authority

fine will not help with

his legacy, observers

said, but the real

cloud will be that

Winters has failed to

demonstrate how the

bank gets out of its

strategic bind and on

to a path to growth

that will fire up its

share price.