Standard Chartered share price: Investors urge for clarity on the bank’s capital position

on Mar 3, 2014
Updated: Apr 9, 2020
Listen Monday, March 3rd: Standard Chartered (LON:STAN) shareholders have urged the emerging markets-focused bank to use this week’s preliminary results to explain its capital position in detail. Investors are concerned over the future earnings growth in the Asia business and a $1 billion (₤597 million) write-off from the struggling Korean division. Standard Chartered’s shares were trading in the morning, 24.50p or 1.94 percent lower at 1,240.50p.

Analysts’ consensus forecast for the year to December is for a slight drop in adjusted profit before tax to $7.1 billion (₤4.2 billion) on income of $18.85 billion (₤11.3 billion).
A top investor in Standard Chartered was quoted by The Telegraph as saying: “I think they’ve got to put their capital position beyond doubt. They don’t have a capital problem – but they need to explain their capital situation to the market.”

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Shares in Standard Chartered have declined by 12 percent over the last six months against a market that has rallied six percent. Concerns about the bank’s future were compounded by the surprise resignation of Richard Meddings in early January, after seven years as chief financial officer.

While business in Asia is ailing, Standard Chartered has assured that the 16 percent annual increase in African revenue seen over the past five years is “sustainable” as the demand for banking products in the continent rises amidst robust economic growth. “There is huge interest in Africa; it is a continent of hope and of rising world interest,” Viswanathan Shankar, chief executive officer for EMEA said in a February 20 interview in Dubai. “If you look at World Bank data 7 of the top 10 fastest-growing economies over the next 10 years are projected to be in Africa.”

**Standard Chartered to reveal plans for circumventing the EU bonus cap**
Standard Chartered is expected to become the latest UK-based bank to reveal plans to dodge a European cap on bonuses. Under new EU rules that came into effect on January 1 banks cannot pay bonuses of more than two times an employee’s salary. To circumvent these rules, Standard Chartered will reveal a new system of ‘allowances’. They will be paid on a quarterly basis and won’t depend on performance but rather on the employee’s role.

Standard Chartered’s bonus pot for 2013 is expected to have declined to ₤750-₤850 million from ₤900 million for the previous year.
**Analysts on Standard Chartered**
UBS lowered its price target on Standard Chartered’s shares to 1,515.00p from 1,680.00p in an investor note sent on Friday last week. It currently has a ‘buy’ rating on the stock.
Seven equity analysts rate Standard Chartered as a ‘sell’, 16 give it a ‘hold’ rating and 14 are calling it a ‘buy’. The shares have a consensus rating of ‘hold’ and an average price target of 1,535.11p.
**As of 11.00 UTC buy Standard Chartered shares at 1,241.60p.**
**As of 11.00 UTC sell Standard Chartered shares at 1,241.40p.**


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