- Decision follows U.K. lender's review of correspondent banks
- Bank of America last week said to stop providing greenbacks
Standard Chartered Plc, the London-based bank with operations in 16 African countries, ended its U.S. dollar services in Angola, days after Bank of America Corp. was said to have halted supplies of dollar bills into the oil producer.
“We have taken the decision to exit the U.S. dollar clearing business and other offshore business we offer to Angolan commercial banks,” the lender said in an e-mailed response to questions Tuesday. The decision followed a review of global correspondent banking relationships as part of efforts to comply with international standards, it said.
Angola ranks among the 20 most-corrupt countries in the world, placing 161 out of 175 nations in Berlin-based Transparency International’s 2014 Corruption Perceptions Index. Bank of America decided to halt the supply of greenbacks to the oil-producing African country, two people with knowledge of the matter said last week.
“We remain committed to Angola and to continuing and growing our business in the country, including our joint venture with Empresa Nacional de Seguros de Angola,” Standard Chartered said. “These restrictions do not affect our local kwanza clearing or any other local interbank activities.”
The decision to end dollar-clearing in Angola, encompassing services such as cross-border payments, collections, trade and investment, comes as Standard Chartered Chief Executive Officer Bill Winters attempts to improve compliance procedures. The bank was fined $667 million in 2012 for breaching U.S. sanctions on Iran and last year agreed to pay another $300 million to U.S. regulators for failing to flag suspicious transactions.
The bank has hired a series of former intelligence officers, including Iain Lobban, a former head of the British surveillance agency GCHQ, and created a board-level financial crime risk committee to oversee the firm’s anti-money laundering, sanctions compliance, corruption and tax crime prevention efforts.
Angola, where people use dollars to hedge against the depreciating local currency, travel in neighboring states and to buy cars and imported goods, is encouraging the use of euros, rands and renminbi as alternatives. The country has devalued the kwanza twice this year as sub-Saharan Africa’s third-largest economy and No. 2 oil producer struggles to cope with a slump in the price of crude, causing the official rate to drop by about 30 percent to 133.90 against the dollar. On the black market, $1 is now worth as much as 270 kwanza, compared with 230 kwanza in September.
Standard Chartered opened a representative office in Angola in 2010 and started operating as Standard Chartered Bank Angola in partnership with ENSA last year, making it the only large British lender on the ground. Some Portuguese banks, including Millennium BCP Investimento, do business in Angola as do FirstRand Ltd. and Standard Bank Group Ltd. of South Africa.
The Office of the Comptroller of the Currency, the regulator of U.S. national lenders, when asked to comment last week on Bank of America’s decision, said it wouldn’t speak on matters pertaining to specific banks. It said it clarified its position on banks’ money businesses in November 2014. In a statement then, the regulator said lenders needed appropriate risk management systems and controls, and that failure to implement these could provide money launderers, fraudsters, terrorists, and other criminals with access to the U.S.’s financial system.