Broker snap: CS sees StanChart beating some of its estimates

18th Sep 2012 11:13

Following Standard Chartered´s Investor Day, analysts at Credit Suisse (CS) have decided to remain Neutral while maintaining their price target of 1,460p. This was despite the lender reiterating existing targets and with management seen remaining confident. Thus, says Credit Suisse, "we see the risks and rewards as evenly balanced at current levels, although in the short term there could be positive news flow on the US litigation". More specifically, StanChart reiterated the group´s main financial targets which are: double digit income growth; flat costs jaws; double digit EPS growth and medium term mid-teen RoE. The bank aspires to reach profit before taxes of $10bn in 2016 profit before taxes in Wholesale Banking - Divisional targets were reiterated (mid-teens client income growth with flat jaws). There was a further comment that $10bn operating profit by 2016 would not be 'unreasonable' (FY 2011 $5.2bn) which would be ahead of Credit Suisse´s expectations (of $6.8bn 2014E).In consumer Banking, high single digit income growth is targeted, with Korea being the main drag (by circa 200 basis points). Management reiterated a focus on unsecured and SME lending from secured (in line with CS expectations).AB