Standard Chartered said to probe banker expenses, personal loans

[MUMBAI] Standard Chartered Plc has been conducting a probe into its bankers' conduct, including cases of padding expense reports and improperly lending money to colleagues, people with knowledge of the matter said.

The investigation led to the departure of several bankers in Dubai in the past six months, including at least three managing directors, after Standard Chartered found they personally lent money to other employees in violation of internal compliance rules, two of the people said, asking not to be identified as the information is private.

Chief executive officer Bill Winters said this week Standard Chartered needs to tighten up "everything" around its controls including risk management, expenses and compliance.

Last year, the bank appointed the former UK surveillance chief as a senior adviser and named an ex-Interpol president to the board's financial crime risk committee.

Standard Chartered has been seeking to improve controls after being fined in the past four years for money-laundering failures and breaching Iran sanctions. Though Standard Chartered has a "fantastic" ethical culture, "there was a looseness" to the way the bank was managed during the bank's years of outperformance and "little mistakes got amplified," Mr Winters said in a April 26 interview with Bloomberg Television in London, speaking generally about the firm.

A spokesman for Standard Chartered declined to comment. Standard Chartered entered into a deferred prosecution agreement as part of the 2012 US sanctions settlement and has been under the scrutiny of an independent monitor.

It said in 2014 that it "accepts responsibility for and regrets" deficiencies in its anti-money laundering surveillance.

Separately, Mr Winters, 54, is attempting to unwind the damage caused by predecessor Peter Sands' revenue-led expansion across emerging markets, which left the bank riddled with bad loans when the commodity market crashed and growth stalled from China to India.

Since joining in June with a mandate to turn around the struggling lender, Mr Winters has picked a new management team, sold 19 businesses and identified US$100 billion of risky assets he wants to restructure or exit.

BLOOMBERG