Standard Chartered PLC

Standard Chartered Plc (LON: STAN) is a British multinational banking company, with headquarters in London, the United Kingdom. In the year 1969, through the merger of two separate banks-the Standard Bank and the Chartered Bank, Standard Chartered Bank was formed, with the aim of capturing the efficiencies of regional diversity.

On 27^th February 2020, the company will release the full-year results.

Recent News
On 12^th December 2019, the company announced that its wholly-owned subsidiary Astra and Standard Chartered Bank have entered into the Deal with Bangkok Bank to sell their respective 44.56 per cent equity interests in Permata.

Financial Highlights (for the nine months ended 30 September 2019)
For 9M FY 2019 period, the net interest income surged by 7 per cent to USD 7,028 million, due to an increased contribution from trading book assets in financial markets and volume growth. The company’s operating income increased by 3 per cent to $11,674 million for 9M FY2019 against the $11,373 million for 9M FY18, while on a constant currency basis, the operating income increased by 5 per cent for the period.

Underlying profit before tax surged by 12 per cent to $3,847 million for 9M FY2019as compared with the corresponding period of the last year. Statutory profit before tax climbed by 3 per cent to $3,519 million from $3,408 million for 9M FY2018. Profit for the period declined by 3 per cent to $2,268 million for 9M FY2019 against the same period in 2018. Underlying basic earnings per share surged to 75.7 cents for 9M FY2019 versus 67.1 cents for 9M FY2018. Statutory basic EPS reduced to 60.5 cents as compared with the corresponding period of the last year.

Share Price Performance

Daily Chart as at December-13-19, before the market closed (Source: Thomson Reuters)

On 13th December 2019, Standard Chartered PLC shares were trading at GBX 706.40 at the time of writing before the market close (at 2:42 PM GMT), down by 1.62% against the previous day closing price. Stock's 52 weeks High and Low are GBX 742.60/GBX 573.80. The company's stock beta stood at 1.37, reflecting the higher volatility as compared to the benchmark index. 

The shares of the company have delivered a positive return of 4.52 per cent in the last week. In last one year, the company’s stock has given investors 0.34 per cent of a negative return.

Conclusion
The company continue to emphasis on executing the strategy with the objective of delivering a 10 per cent return on tangible equity by 2021, but there are growing headwinds from the combination of continuinggeopolitical tensions and expectations of declining near-term global growth and interest rates. Standard Chartered PLC had shown decent financial performance. There was an increase in the profitability of the company, but the bottom-line performance has slightly declined for the period. However, the company’s operating income declined from multiple geographic locations such as Africa & Middle East and ASEAN & South Asia for the current period. The company expect costs in the second half to be slightly higher, while full-year costs could grow below the rate of inflation. The company said they are well prepared for Brexit, with its German business operational and providing a strong base to grow the continental Europe franchise. Presently, the company is trading near the 52-week High, raising doubts at its upside potential at the current price level.

On the basis of risks as aligned with the business operations, we recommend investors to keep a “Watch” on the stock at the closing price of GBX 718 (as on 12th December 2019), while any correction with support from few catalysts needs to be evaluated at a later stage.

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