Standard Chartered PLC (LSE:STAN)’s chief’s flippant comment about the bank’s share price not being very good has been echoed by analysts at Berenberg, who say fair value should be 65% higher
“Results provided clear confirmation that recent improvements in the bank’s returns can be sustained. Importantly, revenues and net interest income (NII) can grow even as interest rates fall,” said Berenberg.
Costs were also shown to be under control while return on tangible equity was above 10% for the first time since 2014.
Restructuring costs of up to US$1.5bn over three years are a price worth paying for the gross cost savings.
Perceived risks from Chinese commercial real estate also continue to abate, in Berenberg’s view.
Cumulative returns may be closer to US$6bn given expected capital generation which should support a 9% annual total yield, in Berenberg’s view.
A new target price of 1,050p has been set, up from 1,000p, with Buy still the recommendation.