Morningstar

Morningstar, Inc.

Equity Bottom-Up

Standard Chartered reported a better than peers fourth quarter result though the focus was the investor update, which builds on some of the earlier announced strategic growth initiatives, in our view. Specifics include a further reduction in costs totaling USD 700 million over the next three years, the divestment of its 45% stake in Permata in Indonesia, while targeting annual income growth of 5% to 7%. Underlying operating expense is also expected to increase at below the inflation rate…

There was little in Standard Chartered’s third-quarter result that alters our long-term view on the bank. Costs were contained in the third quarter with operating expense, excluding regulatory costs, 4.7% lower than the previous quarter. This was a positive as higher operating expense was a disappointment in the first-half result. Second-half operating expense will be at a similar level to the first half and our full-year forecast is largely in-line. Combined with the bank's restructuring…

We take a fresh perspective on Standard Chartered, and we believe the bank’s massive upheaval is starting to bear fruit with improved profitability. Higher-than-expected operating expense in the first half was a slight disappointment, but this was offset by acceleration in operating income growth. Our fair value estimate increases slightly to HKD 74 from HKD 71, or GBX 740 from GBX 700, as we factor in the time value of money, offset by slightly lower forecasts. A decline in the bank’s share…

Standard Chartered’s first-half result showed another improvement in the bank’s underlying operations. Both net interest income and fee income increased on the previous half and the year-ago period, while credit costs were meaningfully lower. Improving profitability in recent years has put the bank on a stronger footing from a capital perspective. As such, the bank will reinitiate its interim dividend of USD 0.06, after distributing USD 0.11 per share at the end of fiscal 2017. The common equity…

In line with our profit estimate, Standard Chartered reported full-year 2017 net income of USD 1.2 billion versus a net loss of USD 247 million last year. We will be reviewing our forecasts in consideration of full-year results and will roll our model, which might trigger some changes to our fair value estimate in the range of 5%-10%. However, we will maintain our no-moat rating, along with our negative moat trend, for the time being.
Good bottom-line performance was thanks to the operationally…

Hong Kong

Standard Chartered plc is an international banking group operating principally in Asia, Africa, and the Middle East.  The Company offers its products and services in the personal, consumer, corporate, institutional and treasury areas.

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