Remember the advert that went: “Can a bank really stand for something, can it balance its ambition with its conscience," as you saw images of raindrops falling on leaves, children flying kites and Indians playing with colors?
You heard the words: “Simply by doing good, can a bank in fact be great,” as Asian women balanced a load of apples on their heads. And you heard: “here for the long run” as marathon runners dashed to the finish line.
Do you remember the tagline?
“Here for good.”
That was Standard Chartered’s global ad campaign that launched in April 2010, with happy images of emerging market consumers and businesses and a soothing voice-over. The ad symbolized the perfect antithesis to risk-taking Western banks that had nearly brought down the global financial system just 18 months ago.
Now, just over two years after the launch of that very successful campaign, the British lender faces considerable damage to its public image from allegations that it hid $250 billion in transactions related to Iran.
The investigation by New York’s banking regulator, which called the lender a “rogue institution”, has already wiped out roughly $10 billion from the bank’s U.K. market capitalization.
StanChart, as it is known, has strenuously denied the allegations. In a statement released to the press, it said "well over 99.9 percent" of the questioned transactions with Iran complied with all regulations, and the exceptions amounted to $14 million.
Reputation is crucial for any bank. But for Standard Chartered, it’s especially important given that its brand position is underpinned by its clean image.
“Standard Chartered is not an ordinary bank. It has a proud reputation, a management team of high integrity and is known for its magnificent work with the charity, Seeing is Believing,” Investec Securities wrote in a note to clients on Tuesday. You know a bank is different when analysts cite its charity work in their analysis.
“It is of grave concern to see its reputation sullied before the facts are known,” Investec wrote.
“That sense that this is a safe-haven bank… that’s under threat and possibly gone,” Peter Thal Larsen, Assistant Editor of Reuters Breakingviews told CNBC on Tuesday.
According to Larsen, what comes across from the investigation is that the bank has been cavalier about U.S. regulations, raising questions about whether it suffers from “cultural arrogance.”
With so many banking scandals in recent years, it’s inevitable that the presumption of guilt is on the lender. Standard Chartered now faces an uphill struggle to clear its name and prove its innocence. It will also have to fix the hit it’s taken in the eyes of customers and investors.
Another ad campaign anyone?