Standard Chartered Share Discussion Threads

[skinny] 10/12/2012 16:04

LONDON, December 10, 2012 -- Standard Chartered PLC announces it has reached final settlements with the Office of Foreign Assets Control ("OFAC"), the Federal Reserve Bank of New York, the Department of Justice and the New York County District Attorney's Office regarding historical sanctions compliance and U.S. dollar payment practices primarily between 2001 and 2007.

The settlements are the product of an extensive internal investigation that led the Bank voluntarily to report its findings concerning past sanctions compliance to these U.S. authorities, and nearly three years of intensive cooperation with regulators and prosecutors.

Under the terms of the OFAC Settlement Agreement, the Deferred Prosecution Agreements with the Department of Justice and the District Attorney's Office, and the Cease & Desist Order and Order of Assessment of a Civil Money Penalty with the Federal Reserve, no further action will be taken against Standard Chartered by these authorities if it meets the conditions set out in the agreements.

Among the conditions is payment of a cash amount of $327 million, which will be paid in the second half of 2012.

[miata] 07/12/2012 16:32

Fair comment.

[philo124] 07/12/2012 13:41

£15.80 possible in a good market.

[miata] 06/12/2012 12:26

JPM

Standard Chartered's pre-close trading statement is in line with expectations
in our view with underlying group trends consistent with our 2012 underlying
forecasts despite WB growth being slightly weaker. Our key takeaways are:
1) Income growth is double digit const fx for FY'12, 2) Cost/Income jaws
positive including a $340m DFS charge, 3) Asset quality continues to remain
good (WB impairments lower H2/H1), 4) Progress on US issues likely as
expected. With the shares trading at 1.3x P/TBV for a RoNAV of 15% 2014E
and a 9% discount to local peers on our estimates, we remain OW.

US issues close to resolution. Management indicate that the discussions
with other US agencies on the resolution of the group's historical US
sanctions compliance are likely to conclude shortly with further costs of
c$330m, similar to the initial costs of $340m (total $670m).
 Income growth in line. The group is likely to grow income at high single
digit in 2012 (JPMe 9%) on a reported basis after a c2.5-3% drag from
currency translation. Mgmt indicates that the FX headwinds are easing
which translates into a more helpful backdrop for next year in our view.
 Positive operating leverage: Cost Income jaws are indicated to be positive
including the impact of DFS settlement ($340m) which is a slight
improvement on the previous indication of broadly neutral jaws incl DFS.
 Asset quality remains good. Asset quality trends continue to remain
positive in our view, with WB impairments in H2 indicated to be running
lower than H1. In CB impairments are in line with our expectations with
forward indicators in line with end 2011 levels.
 WB growth slightly lower: Management indicate high single digit growth
for WB for the year, which is slightly weaker than at the 9 month stage,
driven by Financial markets income (weaker in FX and commodities).
Transaction banking revenues are indicated to be up strongly in double
digits and Corporate Finance income is indicated to have had a strong H2
with an excellent pipeline.
 CB trends in line: The group indicates positive jaws in CB with mid single
digit income growth (JPMe 5%). Mortgage income which is down on last
year is expected to recover in H2 relative to H1. Deposit income and
unsecured are up in double digits with wealth indicated to be broadly flat.
 Divisional trends. Africa, Americas, UK & Europe, Malaysia, China and
Indonesia are expected to growth at double digits, with HK high single digit.

[miata] 06/12/2012 12:21

Investec in full

Today's pre-close suggests 2012e reported income of $19.3bn (+9%), costs (ex- US regulatory settlement) $10.5bn (+6%), impairments $1.3bn (flat H2/H1) and u/l PBT $7.6bn (+12%). Investors have a stark choice, in our view. Back loss-making UK domestic banks where the easy pickings have already been had, or lock into STAN at an entry level still below 7x 2016e with a c.4% 2013e dividend yield. STAN may have travelled well ahead of today's statement, but with improving momentum into 2013e, we remain committed buyers.

At a group level, constant currency income is up 11% yoy, (+9% reported), and looking into 2013e, we expect the currency headwind to abate. Wholesale Banking has been the key driver of growth (income +9%, u/l PBT +12%) despite modest softening in foreign exchange and commodities. NIM is flat.

STAN had already demonstrated great flexibility in its cost performance when, at the time of its Q3 IMS, it re-affirmed its commitment to flat jaws in 2012 AFTER absorbing the $340m NY DFS settlement and a c.$90m legacy legal bill. Today's further re-affirmation of positive jaws is very welcome, as is the implicit headroom ahead in 2013e. "Underlying" cost inflation is running at c.3%, facilitating high investment spend with positive jaws. STAN expects to settle all residual US regulatory issues for c.$330m imminently.

We have argued before that with 2011 impairments eight times covered by pre-provision profits and with revenues set to grow by c.$6.2bn from 2011 to 2014e, the impairment outturn really doesn't matter. Be that as it may, the fact that the impairment charge in H2 2012 appears set to be flat vs H1 should further confound the sceptics, with the WB charge actually falling in H2 vs H1.

We expect the actual 2012e outturn to beat current consensus on every line - income, costs, impairments and, (by 2%), underlying PBT. The prospect of the UK bank levy now rising from $210m in 2012e to c.$300m in 2013e may look quite inequitable, but it is not enough to sour a robust outlook.

Buy reiterated.

[m4m] 06/12/2012 11:38

Investec has reiterated its 'buy' rating and 1,800p target price for emerging markets lender Standard Chartered following the group's pre-close trading update, saying the business is 'sitting pretty'.

"STAN may have travelled well ahead of the statement, but with improving momentum into 2013, we remain committed buyers," analyst Ian Gordon said.

[miata] 06/12/2012 08:53

Not quite. Results out end February.

Standard Chartered is on course to deliver another strong set of full year results for 2012.

Pity about allowing themselves to be mugged by the Americans.

[philo124] 06/12/2012 07:26

Results out.

[miata] 29/11/2012 13:53

29 Nov Standard... STAN Nomura Buy 1,467.00 1,443.50 1,600.00 1,600.00

[miata] 14/11/2012 11:59

Bernstein advising short Stan, long HSBC

HSBA has outperformed STAN by ~20ppts this year, and we think fundamentals will continue to play out of both sides. HSBA's Q3 earnings provide further evidence of its improving earnings outlook, with operating expenses and impairments coming in lower than consensus expectations, as in H1 12.We continue to like
management's focus upon more profitable growth markets, with Q3 annualised mortgage loan growth in the UK and Hong Kong of 21% and 13% respectively demonstrating the bank's strength in those regions and management's commitment to deploy capital there where appropriate demand exists.

Good performance on costs indicates continued execution focus and we remain confident that management will be able to comfortably beat their cost reduction target of $3.5 billion by 2013 – in fact updated guidance suggests this may be exceeded slightly. Capital allocation to more profitable growth markets coupled with sustainable cost savings through restructuring and lower impairments in outer years as HSBC runs down its US portfolio should uplift HSBC's return on equity from 8.5% in 2011 to 11%+ in 2013.

On the other hand, STAN's Q3 update continues to highlight the concerns we had raised when we initiated coverage on the stock in March. Income growth seems to have slowed down in Q3 in both consumer and wholesale divisions while pressures on impairments continue, as the benign credit cycle in Asia seems to be
coming to an end. Consequently, we expect STAN's return on equity to fall from 14% in H1 2012 to ~10.3% in H2 2012 and 9.4% in 2013. While HSBA has outperformed versus STAN in the equity markets year to date, STAN continues to trade at a premium to HSBA. Given our fundamental concerns around STAN's
profitability and growth prospects in the medium term, we think that this premium is unwarranted today and will continue to trend downwards in the near future.


But Ian Gordon of Investec disagrees

As STAN's investor trip to Beijing draws to a close today, it finds itself under
attack from its sceptics.
"Expensive on 1.5x book" misses the point that, on c.7x 2016e EPS, STAN appears extraordinarily cheap.
"Rising bad debts" misses the points that (1) they fell in Q3 2012 and (2) we expect 69% ($0.7bn)bad debt growth 2011-14e to be dwarfed by $6.2bn of revenue growth in the same period.
"Slowing Asian growth" is hardly a new concept and misses the point that STAN is still taking share in higher value WB segments. Buy.

Within the UK banking sector, aside from Standard Chartered, only Barclays
(Buy) expects to grow revenues in 2012e. Lloyds (Sell), RBS (Sell) and HSBC
(Hold) have all – as expected – delivered lower YoY revenues for the 9 months
to 30 September 2012.

Arguably the main challenge facing STAN in terms of the scale of its revenue growth in 2012e is FX, notably the Indian Rupee which has depreciated by c.10% YoY. Notwithstanding this headwind, which we expect to abate in 2013e, we continue to forecast 10% growth in 2012e.

In the "short" third quarter of 2012, STAN reported a decline in the impairment
run-rate. The Financial Times criticizes STAN's rejection of quarterly reporting, yet the Company's Q3 IMS would appear to contain all the information that is sought. Over time, we certainly expect the group impairment charge to rise (from low levels), largely reflecting planned mix-shift (and growth) within the Consumer Bank. However, in 2011, pre-provision profits covered impairments
eight times, and we expect revenue growth 2011-14e to cover bad debt growth
nine times. Put simply, the expected bad debt growth simply doesn't matter!

Asian growth is (currently) slowing, yet the reason STAN's Wholesale Bank has delivered c.12% YTD revenue growth reflects very rapid growth in high value products (e.g. corporate finance) and fast-growing markets (eg Indonesia) – more than offsetting recognised headwinds (eg India/Korea).

 Buy recommendation and RoE-g/CoE-g-derived 1800p TP maintained.

[onlyonestorm] 06/11/2012 12:43

Yes Miata, I bought back in @ £13, well £1373 to be exact, after the yankee/self induced fall, I have started activly trading again this last 10/11 months having had a break to work on a few property investments! But dealing shares is warmer in the winter!! LOL

Good Luck Stormy

[miata] 06/11/2012 12:24

I try to keep it going, are you currently invested?

Replacing the Long Term chart with one with a 200 ma would be useful (see post 21).

[onlyonestorm] 06/11/2012 12:20

Cant believe I started this thread in Dec 2001, that's a long time ago!!

Stormy

[miata] 06/11/2012 12:11

Forty page note on STAN by Amit Goel at CS now in the FT Long Room.

[miata] 26/10/2012 10:05

26 Oct Standard... STAN UBS Buy 1,488.50 1,505.50 1,800.00 1,800.00

[guidfarr] 25/10/2012 13:50

Standard Chartered reviewed in November issue of Spread Betting Magazine now out

[guidfarr] 25/10/2012 13:50

Standard Chartered reviewed in November issue of Spread Betting Magazine now out

[guidfarr] 25/10/2012 13:50

Standard Chartered reviewed in November issue of Spread Betting Magazine now out

[philo124] 18/10/2012 15:44

Good. Still holding 1250 in SIPP.

[miata] 18/10/2012 15:42

18 Oct Standard... STAN Oriel Securities Buy 1,478.50 1,487.00 1,800.00 1,800.00

[miata] 16/10/2012 17:24

STAN doing well after than push from Citi.

[kiwi2007] 15/10/2012 12:10

Gets a puff on FTAlphaville this morning.

PM Quick mention of Standard Charted
PM Chartered
PM Not affected by this of course
PM Just note the price -- up 26p at 14.53
PM it's been a bit higher since the NY squabble on iran
PM But well supported
PM We don't have any further info on a possible bid -- which remains pure speculation
PM But we like the story
BE Loads of sellside pushing over recent days.
Standard Chartered PLC (STAN:LSE): Last: 1,452, up 24.5 (+1.72%), High: 1,458, Low: 1,431, Volume: 2.06m
BE
We name STAN as one of our Most Preferred Stocks. During 3Q SC
shares decoupled from the positive tone of the sector, weighed down by fears of
China / EM slowdown, asset quality concerns, a short and sharp shock from New
York and core shareholder stock overhang concerns. SC shares have lagged the
European bank sector by c15% ytd. ......

BE That's from Citi this morning.

Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield
31-Dec-12 12,121.82 4,768.87 135.65p 10.5 1.0 +10% 52.23p 3.7%
31-Dec-13 13,277.52 5,230.97 151.24p 9.4 0.8 +12% 56.63p 4.0%

[miata] 10/10/2012 17:25

798,739 shares traded in the closing auction at 1380p.

[philo124] 25/9/2012 08:50

Chinese are looking to Buy big stake though.