Standard Chartered may need $4.4bn boost to cover losses

12th Jan 2015 15:49

Standard Chartered could require $4.4bn extra to cover losses from commodities loans, which could force the bank to take on billion-dollar investments, according to analysts.Credit Suisse analysts said on Monday that Standard Chartered may have to raise $6.9bn to boost its capital ratio to 11% by December 2015.Carla Antunes-Silva said: "We think the needed provisioning could be large enough to require further capital measures, such as further equity raisin, and/or dividend reductions."On maintaining its 'underperform' rating on the stock, the broker said: "We believe the last two years of de-rating have been driven largely by weaker revenue and that the asset quality deterioration leg is now setting in."Credit Suisse placed its estimate based on an "adverse" situation where the bank would need $4.4bn to retain its capital ratio, assuming $2.6bn in potential pre-tax provisioning for commodities loans that depreciate and a more substantial risk-weighting on the loans.The bank has suffered from falling profits over the last two years, ending a decade-long period of high earnings. Standard Chartered declined to comment.