Citi bumps up target price for StanChart

StanChart's first-half fee and trading income probably took a hit from market volatility while the deleveraging of its liquidation portfolio likely weighed on net interest margins, Citi said.

The broker estimated the lender would report a pre-tax loss of -$533m for the first six months of its financial year, with revenues down by 21% but up by 7% versus the previous half.

However, a return to profitability for the full-year was on the cards, Citi estimated, bumping up its estimate for earnings per share at the Asia-focused lender in 2016 to 5.5 cents, from a loss.

Citi's estimates for 2017 and 2018 EPS on the other hand were lowered by 14% and 5%, respectively, "mainly due to a slower recovery in revenues and higher investment-related expenses. This is partially offset by a lower CoR."

Even so, automatically rolling forward its valuation methodology by one year meant the target price rose from 465p to 570p.