Standard Chartered 2888

[winston]

vested

ASIA STOCKS TO WATCH Why Standard Chartered Shares Tanked Today

By Isabella Zhong

While StanChart’s earnings were a respectable 6% higher than analyst expectations, its performance fell short of the mark set by rival HSBC (5.HK) last week.

Here’s Northern Trust Capital Markets’ head of Asia research Douglas Morton with more:

Unlike HSBC results last week which beat consensus by 12%, Standard Chartered results have come in with a 6% beat (similarly helped by stable NIMS and lower impairments as was HSBC) but without the increased cash disbursement announced by HSBC’s additional buyback.

Indeed Standard Chartered declared no interim dividend and that and end of year dividend will only be “considered”, which may disappoint some following HSBC’s results on Monday.

ROE recovered substantially from 2.1% last year to 5.2%, but still well below HSBC’s announced 8.8% and with little chance of further improvement in the years ahead in our opinion.

The disappointment for Standard Chartered came in the form of flat revenue (driven by flat QoQ loan growth, below expectations), underlining the potential lack of growth prospects for the Emerging Markets focused bank when compared to HSBC.

Company commentary further underlined this point in our opinion, painting a starkly different outlook when compared to HSBC’s excitement surrounding their Asian prospects (and in particular their OBOR exposure) as announced on Monday.

StanChart also trails HSBC on Asia profitability.

HSBC also paid a 5.6% dividend yield last year, while StanChart didn’t pay a dividend.

StanChart shares have gained 32% this year and trade at 16 times forward earnings, which is higher than HSBC’s 15 times.

Source: Barron's Asia

http://www.barrons.com/articles/why-sta ... 1501747145

[winston]

vested

<Research Report>JPM Lifts STANCHART Target to $86; Rated Neutral

JPMorgan, in its research report, said STANCHART (02888.HK)'s 2Q revenue growth did not rise compared to 1Q.

Coupled with nil interim dividend, the research house expected negative response from market.

However, the research house's view was more positive, considering the bank's CET1 ratio was 13.8%, which was quite abundant.

JPMorgan believed that although nil interim interest was negative in some investors' opinion, the research house considered the decision was reasonable because the bank prioritized its investment need and profitability improvement.

The research house said although the fundamentals of the bank were solid, the valuation was sufficient.

It remained optimistic about the long-term development, hence maintaining the bank at Neutral with target price raised to $86 from $80.

Source: AAStocks Financial News

[winston]

not vested

<Research Report>Citi Expects STANCHART (02888.HK) 3Q Pretax Profit Up 15% QoQ to US$900M

Citigroup, in its report, predicted the 3Q17 profit before tax of STANCHART (02888.HK) to rise 15% quarterly to US$900 million, mainly due to lower loan losses and restructuring charges.

The broker lowered the bank's 2017 profit before tax forecast by 5%, cut the 2018-19 profit forecast by 1%, and raised the 2020-21 EPS forecast by 1%.

Citigroup kept the target price at $95 with rating Buy.

Citigroup expected the bank's 3Q17 revenue to drop 1% quarterly to US$3.6 billion, mainly due to lower market volalitility and 6% quarterly fall in revenue from Corporate & Investment Banking (CIB).

Source: AAStocks Financial News

[winston]

<Research Report>Deutsche Expects STANCHART (02888.HK) 3Q Adjusted Pretax Profit US$937M

Deutsche Bank, in its report, expected STANCHART (02888.HK)'s adjusted profit before tax to be US$937 million in 3Q17, and CET-1 at 13.9%.

The broker expected that impairments will drop quarterly, and believed the market to focus on the revenue performance.

In 1H17, revenue benefited from strong "other income" and "Asset Liability Management (ALM)". Consensus expected the revenue in 2H17 to rise 1% higher than 1H17.

Revenue related to liability should improve due to higher interest rates, but the revenue from financial markets still see pressures.

The target price was kept at $69, reiterating Sell.

Source: AAStocks Financial News

[winston]

not vested

<Post Result>Brokers' Latest Ratings & TPs on STANCHART (Table)

Today, the share price of STANCHART (02888.HK) was subdued and once plunged 6% to hit HK$73.5.

Yesterday (1 November), the bank announced that for the third quarter, underlying pretax profit grew 77.7% yearly to US$814 million, lower than brokers' forecast (US$819 million to US$961 million).

During the period, operating income reached US$3.589 billion, up 3.6% yearly, being the lower end of brokers' forecast (US$3.589 billion-3.677 billion).

Bill Winters, CEO of STANCHART, said the group is undergoing transformation to boost sustainable returns.

Brokers updated their ratings and target prices:

Brokers/ Ratings/ Target prices (HK$)
Citigroup/ Buy/ 95->93.4
JPMorgan/ Neutral/ 86
UBS/ Neutral/ 800p (about HK$82.9)
Goldman Sachs/ Neutral/ 76
Morgan Stanley/ Underweight/ 72->68

Source: AAStocks Financial News

[winston]

vested

Standard Chartered's Sub-Standard Recovery

By Nisha Gopalan Lionel Laurent

A 78 percent surge in pretax income was largely due to lower loan impairment charges and there was no restoration of the dividend, something investors took hardest.

Revenue fell in nearly all of Standard Chartered's markets, apart from Greater China and North Asia, where it rose 9 percent.

Standard Chartered said its common equity tier one ratio at the end of the third quarter was 13.6 percent, 20 basis points below the 13.8 percent the emerging markets lender recorded in the first half of the year.

There's also the risk of more restructuring costs to come. The bank is still in the process of winding down its private-equity unit, which lost hundreds of millions of dollars on soured investments.

Source: Bloomberg

[winston]

vested

<Research Report>Deutsche Upgrades STANCHART (02888.HK) to Hold; Cuts TP to $67

Deutsche Bank, in its report, said that STANCHART (02888.HK) failed to recover the growth for 3Q operating revenue despite showing yearly rise in revenue.

Meanwhile, due to the alteration of business model in 2018, the bank will face short term resistance in asset-related revenue and expenditure.

The research house set STANCHART's 2019-2020 operating revenue projection at a level lower than consensus and believed that the room for downside will be negligible.

In addition, since shares of the bank have retreated (-16% since July and -5% in a single day yesterday), the broker upgraded the investment rating from Sell to Hold and the trimmed the target price to $67 from $69.

Source: AAStocks Financial News

[winston]

vested


<Research Report>M Stanley Trims STANCHART (02888.HK) Target to $68 with Rating Underweight

Morgan Stanley, in its report, said STANCHART (02888.HK) 3Q revenue missed the broker's estimates by 2%, while costs were 4% higher than the broker's estimates, leading to a 12% PPOP miss (PPOP down 9% quarterly).

The quarterly results showed the difficulties in improving ROE, and the broker predicted that given the backdrop of fierce competitions in Asia, the revenue growth of Standard Chartered will be very hard, and the bank will need to cut costs to avoid further rise of cost-income ratio.

The CET-1 of the bank also declined.

Due to lower earnings and tighter capital conditions, the broker cut the target price from $72 to $68 with rating Underweight, as the bank's valuation is not attractive.

Source: AAStocks Financial News

[winston]

not vested

<Research Report>JP Morgan Upgrades STANCHART to Overweight with Target Lifted to $95

JPMorgan, in its report, said that STANCHART(02888.HK) 2018-2020 EPS may come in a surprise for market since the bank has lagged behind since February 2017 with 0.7x 2019 P/B and 8.7x 2020 P/E only which were too low.

The research house met with STANCHART CEO Bill Winters earlier and believed that the bank may embrace mid to long term recovery.

Revenue growth may also send ROE higher. ROE forecast was lifted to 8.4% in 2021 from that of 4.3% this year.

The investment rating was upgraded to Overweight from Neutral and the target price was revised upward to $95 from $86, being included as the top pick among Asian banks.

Source: AAStocks Financial News

[winston]

not vested

Standard Chartered lost 3.9 per cent to HK$62.50 after Bloomberg reported that it may face a possible fine of US$1.5 billion from US authorities for violations against Iranian sanctions.

“We continue to cooperate fully with the investigation regarding our historical sanctions compliance, and are engaged in ongoing discussions with the US authorities.

While we do not comment on the substance of those discussions, we look forward to resolving these legacy issues,” said a Standard Chartered spokesman in a email statement.

Source: SCMP