Standard Chartered share price subdued amid fears of tougher stress test next year

on Dec 17, 2014
Listen, Wednesday, December 17: Standard Chartered (LON:STAN) is set to face a tougher stress test next year as the Bank of England (BoE) turns its attention to mounting risks abroad. The FTSE 100-listed lender — which makes about two-thirds of its revenue in Asia — comfortably passed the BoE’s 2014 health check, which tested banks against domestic risks, such as a sharp fall in house prices and a significant rise in interest rates. Next year, however, Britain’s central bank plans to increase scrutiny of geopolitical, currency and commodity risks.

Mark Carney, governor of the BoE, said yesterday: “You can expect [that] we will look towards some of those global risks much more closely – they will figure more prominently. Given the footprint of some of our largest banks in Asia and the risk profile in Asia, quite frankly, you can expect that would be a component of it.”
The Bank’s apparent focus on emerging markets comes amid growing concerns about the sharp fall in the Russian rouble. However, Carney played down any potential threat to the UK from Russia’s escalating crisis.

Standard Chartered’s common-equity tier-1 (CET1) capital ratio — a measure of financial strength – came in at 7.1 percent in this year’s assessment by the BoE. Although the second-highest, the figure was lower than last year’s 10.5 percent and was a ‘bit of a concern,’ said Tom Rayner, an analyst at Exane BNP Paribas. The BOE “has not fully tested the Asian portfolios,” he added, as quoted by Bloomberg yesterday.
As of 11:02 GMT, Standard Chartered’s shares were trading 0.89 percent lower at 890.10p. According to the Financial Times, as of 12 December 2014, the consensus forecast amongst 63 polled investment analysts covering Standard Chartered has it that investors should hold their position in the company.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.


Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals.

Learn more
Finance & Banking Stock Market