Investors should "keep the faith" at StanChart, recommends Investec

10th Jul 2014 11:03

Investec has recommended that investors "keep the faith" at Standard Chartered despite an underwhelming first-half update from the emerging markets-focused bank last month."Standard Chartered's June 26th pre-close trading update was disappointing," said Analyst Ian Gordon, with the bank reported a 3% fall in revenues at constant currency in the first six months of the year."In particular, we were underwhelmed by the [first-half] performance in Corporate Finance (flat H1/H1) as well as marginally higher (up less than 1%) costs in the context of revenue headwinds. Yet we see a strong underpinning for the resumption of revenue-led growth in the second half and beyond."Gordon said he expects earnings per share in the first half to total 95.8 cents, up 9% on the prior year, though this will mainly reflect the non-recurrence of a £1bn goodwill writedown in Korea the prior year and a consequentially lower tax rate."We believe that Standard Chartered still has the strongest capital position in the sector, and we expect it to maintain its interim dividend at 28.8 cents."The broker has lowered its target price from 1,600p to 1,450p but has repeated a 'buy' rating on the stock.The shares were 0.2% lower at 1,197.5p by 11:09.BC