CLSA: ‘White knight could target Standard Chartered bank’

UK bank Standard Chartered could be acquired by a white knight, because its recovery could prove to be “challenging”, according to broker CLSA, which upgraded shares of the Asia-focused lender on that possibility.

Singapore’s biggest lender, DBS Group, would be the most likely buyer, said CLSA.

StanChart has seen its shares fall, making it an appealing target.

The lender, which is in the middle of a restructuring, under new CEO Bill Winters has announced a series of moves to restore its profitability, including axing 15,000 jobs and streamlining the management structure.

“The bank’s road to recovery will likely be a challenging, multi-year journey. But the worse the situation gets for StanChart, we believe the more likely it is that a white knight will eventually emerge,” CLSA analysts Asheefa Sarangi and Lester Lim wrote.

StanChart declined to comment, while DBS said there was “no basis to the report, and it is not on our agenda”.

Singapore state investor Temasek Holdings, the biggest shareholder for both StanChart and DBS, also declined to comment.

CLSA revised its forecasts for StanChart’s earnings in 2015, projecting a loss of $142m for the year, a first for the bank in at least 13 years.

The bank’s shares dipped 0.5% at one stage yesterday, in London, after soaring 7.3% on Thursday.

Reuters