Jim Armitage: Standard Chartered is still a rich seam for the compliance police

Relations seem cordial between StanChart and Navigant
Bobby Yip/Reuters
Jim Armitage @ArmitageJim10 November 2017

Banks may be getting better, but there still aren’t many you’d want to buy shares in, what with the endless fines, investigations and post-financial crisis red tape.

There is one company in the sector you’d have made a fortune on if you’d bought in a few years back, though: Navigant.

This consultancy became one of the go-to firms for US regulators when they wanted to install “monitors” to miscreant banks. The job: to check they’re complying with court orders to clean up their act on money laundering, sanctions-busting and all the other naughties.

At $1200 an hour or so per operative, that’s been rather lucrative work, which has translated into a near-doubling of Navigant’s share price on the New York Stock Exchange since 2010. You’d have thought Navigant’s compliance mine would have run out of gold by now. After all, the financial crisis which got it started was a decade ago.

Clearly not.

Navigant’s operatives have been in Standard Chartered since 2012’s Iran sanctions-busting case. Yet the programme — which has been extended before — just got pushed forward again until next summer.

Is the bank dragging its feet? Apparently not.

Relations seem cordial between StanChart and the monitor, despite Navigant helping to get the bank fined an extra $300 million a few years back.

The reason it’s taking an age to complete is because the problems at the bank ran so deep, for so long.

That means new personnel, new training, new assurance and testing processes on a global scale.

It’s a massive job, and StanChart bankers and shareholders shouldn’t bet on it not being extended again in July.

Good news for Navigant and the compliance industry. Bad news for StanChart.

Bakkavor from dead

So the dead parrot that was the Bakkavor flotation was only resting. Its bankers may have told us last week it was pushing up daisies, killed by the horrific IPO markets, but actually, it was only stunned. Pining for the fjords.

If you believe the spin, it was revived because a new cache of investors emerged with a keen appetite for Icelandic-owned food companies with interesting pasts.

Nothing whatsoever to do with the fact that the megabanks who’d been flogging this mid-sized float originally priced it too greedily.

Or that Peel Hunt, a specialist in medium-sized firms like this, was promoted to a more active role and sensibly slashed the valuation.

Bakkavor’s not got beautiful plumage but there’s a right price for any bird. Even a second-hand Icelandic Blue.

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