Broker snap: StanChart nearing Iran settlement, Investec says 'buy'

29th Nov 2012 15:31

Investec has reiterated its 'buy' rating and 1,800p target price for emerging markets bank Standard Chartered on the back of reports that the lender is close to a settlement over the 'Irangate' saga.According to media report, from The Wall Street Journal and others, a final $300m settlement is pending to settle all residual US regulatory issues regarding transactions with Iranian clients that may have violated US sanctions against the country. This follows the $340m that StanChart paid in August to the New York regulator.Analyst Ian Gordon from Investec said: "A combined settlement of c.$600m would appear very large in relation to the small number of technical breaches which Standard Chartered committed, and arguably disproportionate when compared with previous regulatory sanctions for more material breaches by other banks. "Be that as it may, we believe that such a settlement is now broadly in line with market expectations, and would be taken as a small positive."Gordon said he expects StanChart's pre-close trading update on December 6th to offer "fresh encouragement" that the company can still grow revenues by 10% this year in spite."Moreover, after delivering c.$19.4bn of revenues in 2012e, as headwinds abate, expect a slight acceleration in reported revenue growth in 2013e."Investec said that "STAN appears cheap and the operational outlook is bright".Shares were up 1.52% at 1,465.5p on Thursday afternoon.BC