Bank haunted by past sins

Hard to remember now, but there was a time when Standard Chartered held its head high as the only major British-listed bank that had not significantly blackened its name in the financial crisis.

That reputation for probity was blown to smithereens in 2012 when it admitted to concealing hundreds of billions of pounds of illicit dealings with Iran, breaching sanctions against that country.

It was a terrific embarrassment. The bank’s cheerleaders had been spinning a line that, as a British institution, it was being unfairly persecuted by an over-ebullient american regulator.

all the bank had done, its bosses initially argued, was try to help a few innocent pistachio sellers export their wares.

Within days that defence had crumbled. The bank submitted to a stonking great fine in return for a deferred prosecution agreement, and a monitor was installed in its offices, for a probation period that was meant to end in 2014.

I mention all this because Standard Chartered is still haunted by those Iranian dealings, all these years later.

The bank slipped out a statement to the Stock Exchange over the quiet Christmas period a few weeks ago – nice try, but we spotted it anyway – saying the monitor would be staying in situ until the end of March this year. We now know why.

Bosses are braced for another bunch of heavy fines and have been forced to set aside $900m to pay for them.

The lion’s share is believed to relate to new fines for sanctions breaches involving Iranian clients of its dubai branch. No wonder the bank appointed tough former top UK regulator Tracey Mcdermott in a gamekeeperturned-poacher move to be its head of compliance. She will have plenty to keep her busy.

Serco revival

IT ISN’T all gloom in the outsourcing sector, despite the collapse of Carillion last year, and the troubles of Interserve. Over at Serco, the chief executive rupert Soames describes himself with wry humour as ‘miserably cheerful or cheerfully miserable’.

What he means is that Serco got its crisis in early, several years before its peer group, and is now on the road to recovery.

Its shares are up 30pc since december and although they are still worth a lot less than they were five years ago, the company is heading in the right direction.

The return of a dividend is in sight after a long drought. Payouts could resume in 2020 after some big loss-making contracts have been wound down.

There is also positive news for the sector as a whole. It has gone virtually unnoticed against the bigger drama in Westminster, but the Government earlier this week brought in an ‘outsourcing playbook’ to reduce the risk of Carillion-style disasters.

It’s a horrible name but a good idea: it will introduce stronger checks and monitoring of companies and their finances, more stringent risk assessments and an evaluation of whether government should carry out projects in-house or put them out to private companies. There will also be ‘living wills’, so if companies do go bust they can be wound down with a minimum of disruption to public services.

despite the chaos in Westminster over Brexit, some parts of the Government machine are still functioning well behind the scenes, which is good to know. But one reason Serco’s fortunes have picked up is that it is not overexposed to a difficult UK market, but does 60pc of its business overseas. In winning overseas contracts, it has in the past benefited from Britain’s image abroad as a country with stable and efficient governance, which may be rather less of a selling point in future.

Grounded

FLYBE is in another tangle, as if the row over its cut-price rescue deal were not enough.

This one is over its treatment of a pilot who made critical comments in an email about airline boss Christine OurmieresWidener, which were read out to her live on BBC radio.

The unnamed pilot was out of line for making forthright remarks so publicly, and it was painful to hear Ourmieres-Widener, who is plainly striving to make the best of a horrible situation, being ambushed on air.

The airline won’t say why the pilot was suspended and it is always possible it was for some other reason.

But if it was over the email, then Flybe looks heavy-handed and vindictive.

The airline has made much of saving jobs and keeping planes in the air. It should stick with that laudable aim and let this pilot resume duties.