LON­DON-Shares in Stan­dard Char­tered PLC ral­lied yes­ter­day on news that it had agreed to pay US$340 mil­lion to a New York reg­u­la­tor to set­tle ac­cu­sa­tions that it hid il­le­gal trans­ac­tions with Iran and vi­o­lat­ed US sanc­tions law. The New York State De­part­ment of Fi­nan­cial Ser­vices had threat­ened to re­voke the bank's li­cence to op­er­ate in New York, which would have wiped out Stan­dard Char­tered's dol­lar-based busi­ness­es.

DFS's su­per­in­ten­dent Ben­jamin Lawsky said Tues­day that Stan­dard Char­tered Bank will pay the civ­il penal­ty to the state and has agreed to strength­en over­sight of over­seas trans­ac­tions. A hear­ing on the is­sue sched­uled for yes­ter­day in New York City was ad­journed. Shares in Stan­dard Char­tered closed 4.4 per cent high­er in Lon­don trad­ing yes­ter­day at £14.30. The bank's stock had fall­en by near­ly 12 per cent since the New York reg­u­la­tor an­nounced its charges last week.

How­ev­er, Stan­dard Char­tered's deal­ings with Iran are still be­ing in­ves­ti­gat­ed by the US De­part­ment of Jus­tice, the Trea­sury and the Fed­er­al Re­serve. An­a­lysts said yes­ter­day that in­vestors are like­ly to re­main cau­tious about its shares un­til the oth­er in­ves­ti­ga­tions are re­solved. The US im­pos­es fi­nan­cial sanc­tions on its po­lit­i­cal en­e­mies to hin­der their ac­cess to the glob­al fi­nan­cial sys­tem. The goal is to choke off banks and oth­er sources of cap­i­tal, lim­it­ing their eco­nom­ic growth.