Standard Chartered is said to have held discussions with bankers on raising at least $4bn as British regulators toughen scrutiny on lenders with exposure to emerging markets in a second round of stress tests, people with knowledge of the plan said.
Bloomberg News reports that while the bank has discussed the option of raising capital, no final decision has been made on whether to proceed with a share sale, said the people, who asked not to be identified because the talks are private. The bank may need as much as $8bn to address a funding gap, according to the people.
Standard Chartered CEO Bill Winters is under pressure to reverse a two-year slide in profit and shares that prompted his predecessor Peter Sands to resign. The bank, which generates almost all of its revenue in Asia, has felt the brunt of a turmoil sparked by plunging commodity prices and concern that China’s economy is slowing more than expected. While Winters has cut the bank’s dividend in half to save $1bn and pledged to reduce risk-weighted assets by as much as $30bn by 2016, some analysts forecast a capital gap of as much as $10bn.
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