Singapore Sovereign Wealth Fund Ready To Dump StanChart Stake: Report

Standard Chartered bank’s large shareholder, the Singapore-government-run investment fund Temasek Holdings, is ready to sell off its entire stake in the troubled British bank, claimed a report by the Financial Times on Monday, with the fund keen to reduce its exposure to financial services amid the present economic uncertainty.

Standard Chartered bank’s large shareholder, the Singapore-government-run investment fund Temasek Holdings, is ready to sell off its entire stake in the troubled British bank, claimed a report by the Financial Times on Monday, with the fund keen to reduce its exposure to financial services amid the present economic uncertainty.

According to FT, Temasek, which manages a worldwide portfolio of around $157 billion, has, over the last year, sounded out potential buyers for their 18 percent stake in Standard Chartered; though recent allegations of the bank’s illicit transactions with Iran had temporarily caused a dip in momentum for the sale.

Last month, Standard Chartered was accused by a U.S. regulator of hiding as much as $250 billion in transactions with Iran. The bank subsequently settled the dispute with a $340 million payment, but its share price had suffered in the immediate aftermath.

[quote]Though Temasek declined to comment on the allegations, FT understands that the fund had withheld its support for the re-election of executive directors, except chief executive Peter Sands and two non-executives, during a recent shareholder meeting.[/quote]

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Temasek became Standard Chartered’s largest single shareholder six years ago after it bought out the 11.5 percent stake of the Khoo family for a small, undisclosed, discount to its then market value of 2.3 billion pounds.

Since then however, plans to merge Standard Chartered with another of the fund’s investments, Singaporean bank DBS, have failed, given the complexities and regulatory hostility to big banking mergers.

Analysts say that that despite their recent troubles, Standard Chartered still trade at a 1.4 times multiple of book value, compared to its European rivals who trade on less than half that.

Representatives at Temasek and Standard Chartered declined to comment to FT on the story, though people close to the situation stressed that there were no formal discussions presently underway with any potential buyer.

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