Join our community of smart investors

Standard Chartered disappoints

Standard Chartered has released more disappointing news, yet the shares now look too cheaply rated given the lender's long-term prospects in Asia
October 29, 2014

Asian-focused lender Standard Chartered (STAN) disappointed investors with a subdued third-quarter update. Notably, the third quarter impairment charge rose 87 per cent on 2013's third-quarter charge, to $539m (£334m), and management now expects second-half underlying profit to come in below last year's corresponding figure.

IC TIP: Buy

Standard's increasing impairments, however, should come as no great surprise. The bank has already flagged up its credit quality issues, especially in Korea where a government-sponsored debt-forgiveness scheme has hit hard. On the upside, the bank is targeting over $400m of cost savings during 2015, while a 10.7 per cent Basel III-basis tier one equity ratio - reported at the half-year stage - suggests a thoroughly healthy capital cushion.