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* StanChart to suspend or exit some businesses
* Large amount of suspect transactions came from HK and UAE
* Bank "accepts responsibility for and regrets thedeficiencies"
* Board already under pressure following decline in profits
* Analysts say impact on revenue will be minimal (Adds closing shares, analyst comment)
By Jonathan Stempel and Matt Scuffham
NEW YORK/LONDON, Aug 20 (Reuters) - A $300 million fine onStandard Chartered for lapses in anti-money launderingcontrols has piled pressure on the bank's board, coming after aseries of transgressions and a drop in earnings that hadprompted calls for change at the top.
Chief Executive Peter Sands has faced criticism followingbig losses in Korea, a slowdown in investment banking and theimpact of tougher regulations. The bank warned in June thatprofit would fall in 2014 for a second straight year.
Some investors have already questioned the futures of Sandsand Chairman John Peace, prompting the bank to reject reports inJuly that it was stepping up plans for their succession.
The civil settlement announced on Tuesday by BenjaminLawsky, the New York State financial services superintendent,came two years after Standard Chartered agreed to pay $667million to a variety of U.S. regulators to resolve similarcharges, including $340 million to Lawsky's office.
"The broader issue is that it creates a distraction formanagement. This is an unhelpful development," said Jefferiesanalyst Joe Dickerson.
A monitor appointed in 2012 uncovered shortcomings in thebank's surveillance systems that caused a "significant number ofpotentially high-risk transactions" to go undetected, accordingto a consent order signed by Sands.
"If a bank fails to live up to its commitments, there shouldbe consequences," Lawsky said in a statement. "That isparticularly true in an area as serious as anti-money-launderingcompliance, which is vital to helping prevent terrorism and vilehuman rights abuses."
The latest settlement calls for Standard Chartered's NewYork branch to suspend the processing of dollar-denominatedpayments, known as dollar clearing, for high-risk businessclients at its Hong Kong unit.
A significant amount of the potentially high-risktransactions the system has failed to detect originated from itsHong Kong unit and branches in the United Arab Emirates,according to the statement.
Standard Chartered will also end high-risk small- andmid-sized business client relationships in the United ArabEmirates, and obtain approval from Lawsky's office beforeopening U.S. dollar-clearing accounts for new clients. It willretain a monitor for another two years.
The decision will impact a few hundred of StanChart's retailbusiness clients in Hong Kong, which represent a smallpercentage of the bank's client base in the city, an industrysource with direct knowledge of the matter said.
Standard Chartered shares rose following news of the fine,which had been anticipated, and were up 0.3 percent at the closeof trading in London on Wednesday.
FUTURE RISKS
Espirito Santo analyst Shailesh Raikundlia said he expectedthe settlement to have a small impact on Standard Chartered'srevenue but said the bank would be prepared to lose that incometo mitigate future conduct risks.
Investec's Ian Gordon said he believed the restrictions inHong Kong related to a small subsection of Standard Chartered'scommercial clients business in Hong Kong, the entirety of whichcontributed $87 million to the bank's first-half profit.
In a statement, Standard Chartered said it "acceptsresponsibility for and regrets the deficiencies" in itsanti-money laundering surveillance system in New York, and iscommitted to fix the problems with "utmost urgency".
It also said it "remains fully committed" to the Hong Kongand UAE markets, and that the vast majority of its clients andbusinesses, as well as its U.S. licenses, were unaffected.
The bank is based in London but makes most of its money inAsia, Africa and the Middle East.
Earlier in August, the bank's head of Asia operations,Jaspal Bindra, said banks were being penalised too harshly forlapses in anti-money laundering efforts, although StanChartlater distanced itself from his comments.
The Hong Kong Monetary Authority (HKMA), the city's de factocentral bank, said in a statement on Wednesday it had beenclosely monitoring Standard Chartered's anti-money launderingand anti-terrorism financing controls.
"Although we have identified some areas for improvement,they are not issues that cause significant supervisoryconcerns," the HKMA said in a statement.
StanChart's monitor is Ellen Zimiles, a Navigant ConsultingInc managing director and former federal prosecutor.
The bank's earlier settlement with Lawsky resolved chargesthat it concealed an estimated $250 billion of transactionslinked to Iran, violating U.S. sanctions.
U.S. regulators have in recent years also punished otherEuropean banks including Barclays Plc, BNP Paribas SA, HSBC Holdings Plc and UBS AG forrunning foul of laws against money laundering, or doing businesswith blacklisted countries.
BNP's $8.83 billion settlement is the largest, but StandardChartered's is unusual by making the bank a repeat offender. (Additional reporting by Steve Slater in London, Karen Freifeldin New York and Saikat Chatterjee and Anne Marie Roantree inHong Kong; Editing by Jeffrey Benkoe, Cynthia Osterman and DavidClarke)
