StanChart may see a white knight takeover

HONG KONG • British bank Standard Chartered could be acquired by a white knight as its recovery could prove to be "challenging", according to broker CLSA, which upgraded shares of the Asia-focused lender on that possibility.

Singapore's biggest lender DBS Group would be the most likely buyer, added CLSA in a note to clients dated Thursday. DBS said there was "no basis" to the report.

StanChart has seen its shares fall below a forward price-to-book value of 0.5 time this week, making it an appealing target.

The lender has announced a series of moves to restore its profitability, including streamlining its management structure.

"The bank's road to recovery will likely be a challenging multi-year journey. But the worse the situation gets for StanChart, we believe, the more likely it is that a white knight will eventually emerge," CLSA analysts Asheefa Sarangi and Lester Lim wrote in the note.

A DBS spokesman told The Straits Times: "There is no basis to the report and it is not on our agenda."

DBS officials earlier pointed to an interview of chief executive Piyush Gupta in September, when he ruled out the merger of the two banks.

Temasek Holdings, the biggest shareholder for StanChart and DBS, declined to comment.

CLSA revised its forecasts for StanChart's earnings in 2015, projecting a loss of US$142 million (S$200 million) for the year, a first for the bank in at least 13 years.

The slump in StanChart's shares this year has pushed down its market capitalisation to US$27 billion, an affordable level for several banks with regional ambitions, the CLSA report added.


A version of this article appeared in the print edition of The Straits Times on December 19, 2015, with the headline 'StanChart may see a white knight takeover'. Print Edition | Subscribe