The market doesn't seem convinced by bid rumours surrounding emerging market lender Standard Chartered (STAN). Talk that Australian bank ANZ (ANZ:ASX) could be interested in the FTSE 100 constituent fails to trigger a large movement in the target, merely rising 0.6% to £12.99.
After a decade of growth the bank issued three profit warnings in 2013 thanks a $1 billion write-down in Korea, rising bad debts and currency turmoil in India. News that Richard Meddings is stepping down as finance director in June after seven years has led to concerns that the bank could be facing capital issues.
In response it has implemented a cost-cutting programme that includes merging its wholesale and consumer units to help improve performance, which saw it lose 14% of its value last year.
ANZ looks a logical suitor as it has ambitions to expand its Asian business. Yet analysts at Citigroup have described the deal as ‘possible, but unlikely’.
It is not hard to see why the bank has been the centre of takeover gossip. It has strong businesses in Hong Kong and Africa and is well capitalised with a 10.6% core tier 1 ratio. The bank trades on a 9.3 times earnings and has a 4.5% prospective dividend yield based on 2014 market forecasts.