In play ?
Bloomberg News reports that Standard Chartered’s planned $5.1bn capital increase will make it a target for potential takeovers with losses on bad loans expected to decline next year, according to analysts at Sanford C. Bernstein.
'With the level of capital that the bank has, footprint to boot and the opportunities in scale, the bank is definitely a target now', analyst Chirantan Barua said in a note on Wednesday.
“If management truly believes this is just a 10% return-on-equity bank five years out when investors start favouring emerging markets again, then they should start shopping out the franchise to acquirers who have either a cost, balance sheet or regulatory advantage. Standard Chartered is then not worth a standing franchise on its own!”
After reporting an unexpected third-quarter loss on Tuesday, CEO Bill Winters, 54, unveiled a plan to boost the bank’s capital buffer by tapping investors for cash, while eliminating 15,000 jobs and scrapping the second-half dividend.
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