Proactive Investors - For all First Abu Dhabi Bank’s denials of a bid for Standard Chartered (LON:STAN), the UK group's share price (767p) has not been this high since 2018.
No smoke without fire seems to be the market’s reasoning and the possibility of a bid will weigh heavy on management when StanChart unveils its full-year/fourth-quarter results on Thursday.
Analysts are looking for a pre-tax profit of US$574mln (compared to US$1.4bn in the third quarter and a loss of US$331mln a year ago), but the focus will be on the bad debt line.
In October, StanChart mildly spooked its backers by doubling its provisions to US$227mln with US$130mln of that in China, where the Asia-focused bank has some US$3.5bn of exposure to an embattled property sector.
China’s easing of Covid restrictions recently might be of help, but the market will want confirmation and also that the punchy (upgraded) forecast of 13% income growth this year is still intact.
For 2022 as a whole, profits of US $4.7bn, compared to US$3.3bn, is the consensus and US$5bn on an underlying basis.
Operating expenses are tipped to be US $10.6bn with the yearly bad debt charge forecast at US$750mln after a US$250mln fourth quarter write-down.