StanChart upgraded to buy on new management focus

Standard Chartered has been upgraded from ‘hold’ to ‘buy’ by Berenberg, citing recent events giving it three key catalysts for the company to change.

In a note released on Thursday, it said the bank is no longer a “loser” and now has “a core business to focus on, enough capital to afford change and external management”.

“Most importantly, new management has introduced a risk/return focus, moving away from the historical focus on growth.”

Berenberg said current valutaions of 0.55x its tangible book value give a margin of safety despite a number of concerns.

“To trade back to TBV, management needs to rebuild confidence in the balance sheet,” it said.

“We see the new return and risk focus as the first part of that.”

It also noted that delivering early on its 8% return on equity target and keeping 2018 costs below 2015 levels would also help.

Standard Chartered was also given the Berenberg ALPHA stamp of approval with a new target price of 750p, giving it a 50% upside.

Shares in the bank had dropped 7.4p (1.43%) at 1408 GMT to 508.9p per share.