[ET Net News Agency, 18 February 2021] Standard Chartered (STAN) (02888) is scheduled
to release its FY2020 result on 25 February. Morgan Stanley expects that STAN's revenues
will fall 8% QoQ to US$3.23bn in 4Q 2020. Within this, the research house sees a 2% fall
in NII (net interest income) driven by lower NIM (net interest margin) and a 14% QoQ drop
in non-interest income, partly driven by lower seasonal wealth and markets revenues.
Morgan expects broadly stable revenues in 2021, with growth in markets and wealth
offsetting a 3% YoY fall in net interest income driven by lower NIM (1.20% in 2021 versus
1.28% in 2020). This growth in non-interest income is despite a strong 2020 for the wealth
and markets businesses.
It expects STAN will pay a 13c FY2020 dividend, which is within the 17c possible capital
return the research house estimated, according to the PRA (Prudential Regulation Authority
under the Bank of England) guidelines. Morgan thinks it is possible that STAN will
supplement the dividend payment with a small share buyback.
It retained its "equal-weight" call on STAN, with a HK$51 target price unchanged. (KL)