Dec. 14 (Bloomberg) -- Standard Chartered Plc’s Chief Executive Officer Peter Sands said the bank levy and additional regulations in the U.K. would cost the lender “north” of $500 million a year.
“It’s a substantial drag,” Sands told members of the House of Commons Treasury committee in London today.
Standard Chartered, which depends on Asia for a majority of its profit, faced calls from investors to consider moving after the British government imposed a bank levy last year to raise 2.5 billion pounds ($3.9 billion) from lenders. The levy will cost it about $190 million this year, Sands said. The balance of the $500 million resulted from British “super equivalence,” he said.
“Our ability to grow and our ability to compete” will be diminished by new bank regulations, Sands, 49, said. The Independent Commission on Banking’s proposals on loss-absorbing capital are “flawed in both maths and logic,” he told the panel of parliamentarians.
Even so, a relocation of headquarters away from London was not inevitable and moving would be a complicated distraction, the CEO said earlier.
HSBC Holdings Plc Finance Director Iain Mackay said on Nov. 9 that the combined cost of the bank levy and the ICB proposals on loss-absorbing bonds would be about $2.5 billion a year, a charge that was “too high” to ignore.
The ICB said in its September final report that banks’ retail units should have a “loss-absorbing capacity” of at least 17 percent to 20 percent.
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