Standard Chartered Hit By Billions In Losses From Commodity crash

[Arl arse]

Now that even the pundit brigade has confessed that crashing crude may not be the "unambiguously good" event all of them had sworn as recently as a month ago it surely would be, and stocks are beginning to comprehend that plunging oil may well be rather "unambiguously bad" because without EPS growth (energy is well over 10% of S&P EPS), without multiple expansion (rumor has it the Fed will hike this year), without a jump in stock buybacks (energy companies account for 30% of the buyback growth in 2015 according to Goldman) and without a boost to GDP (energy capex plans are imploding), the only way is down. But there was one key element missing from the "bad" scenario: impaired banks. At least until now, because as Reuters reports, Asia-focused bank Standard Chartered is the first (of many) bank facing billions in losses resulting from the crude crash.

 

The bank, which recently has been on a firing spree and even exited its entire equity business, will likely need $4.4 billion of extra provisions to cover losses from commodities loans, potentially forcing it to raise billions of dollars from investors, analysts said on Monday.

 

From Reuters:

 

Credit Suisse analysts said the losses could force Standard Chartered to raise $6.9 billion to improve its core capital ratio to 11 percent by the end of the year. "We think the needed provisioning could be large enough to require further capital measures, such as further equity raising, and/or dividend reductions," analyst Carla Antunes-Silva said in a note.

 

Standard Chartered's shares were down 2.3 percent at 923 pence by 1330 GMT, the weakest major European bank.

There were previous hints, completely ignored by the markets of course, that things at this China-heavy bank are going from bad to worse: a jump in Standard Chartered's bad debts in the third quarter has prompted concern that it could face heavy losses from commodities loans after the fall in the price of oil and commodities.

 

The loss could be lower...

 

Credit Suisse's estimate was based on an "adverse" scenario that would see the bank need $4.4 billion to maintain its capital ratio, based on a potential $2.6 billion of pretax provisioning for commodities loans that sour and a higher risk-weighting on the loans.

Then again, considering that the "adverse" scenario in the ECB stress case didn't even consider the current deflationary environment, the loss could be far higher. Which means capital raises are on deck, and logically Credit Suisse said the bank could announce a rights issue or cut the dividend at its 2014 results, due on March 4.

 

 

"We believe the last two years of de-rating have been driven largely by weaker revenue and that the asset quality deterioration leg is now setting in," said Credit Suisse, maintaining its "underperform" rating on the stock. Analysts at JPMorgan and Jefferies also cut their target prices on the stock on Monday, saying that credit quality could deteriorate.

 

Standard Chartered CEO Peter Sands is under pressure after a troubled two years in which profits have fallen, halting a decade of record earnings. Some investors have said that Sands should go or the bank should set out succession plans.

 

http://www.zerohedge.com/news/2015-01-13/first-many-standard-chartered-hit-billions-losses-commodity-crash

[Trumo]

Apparently, we're talking to Japanese company Nomura about becoming the club's new main sponsor.

[TheHowieLama]

Hope there is nomura the crappy jersey designs

[jacco maccaco]

Apparently, we're talking to Japanese company Nomura about becoming the club's new main sponsor.

For some reason my head heard Nakatomi rather than Nomura then.....been one long shit day.

 

Give me my Detonators Rodgers.

 

[ZonkoVille77]

I hope they fold.

[Nightcat]

They should hire Ian Ayre  as CEO and sell themselves to FSG. They will buy low and sell high and be profitable. Moneyballs.

 

har har har har

[SilverSong]

So many industry buzzwords in that article. Trying to read it I felt like Santas Little Helper. Bla bla, bla bla. Ultimately we all need to remember that money is man made and as such is actually a load of bollocks. Money, inflation, interest, fiat, fractional reserve banking, its all absolute bollocks and we are beholden to it. Until it fails and history teaches us that it will.

[KopOut]

Standard Chartered may be an investment bank, they may not be, I have no idea, but the real issue here is the completely deregulated banking industry. Ever since 1999, certain regulators in the U.S. (mainly republican) have been calling for the reinstatement of The Glass Steegall Act. This would separate out investment banking from commercial banking - something that was designed to prevent a repeat of the 29 crash. F.D.R. will be turning in his grave right now.

 

http://en.m.wikipedia.org/wiki/Glass–Steagall_Legislation

[Section_31]

Chedit Crunch.

[Alan Sex]

Apparently, we're talking to Japanese company Nomura about becoming the club's new main sponsor.

That's some serious dick in vagina logo action right there.

 

[AngryOfTuebrook]

That's some serious dick in vagina logo action right there.

 

And for that reason, I'm in.

[AngryOfTuebrook]

Liverpool FC pushed Suarez under the bus for Standard Chartered, so fuck'em.

[ratcatcher]

Nomura? Japanese? Fucking whale murderers. Im out!

[El Dangerous]

So many industry buzzwords in that article. Trying to read it I felt like Santas Little Helper. Bla bla, bla bla. Ultimately we all need to remember that money is man made and as such is actually a load of bollocks. Money, inflation, interest, fiat, fractional reserve banking, its all absolute bollocks and we are beholden to it. Until it fails and history teaches us that it will.

Shut up Russell Brand. When money fails our futures will be decided by fight to the death tournaments staged outside KFC's across the world. Only the strong will survive and there won't be any room for back combing and skinny jeans.

[stringvest]

Shut up Russell Brand. When money fails our futures will be decided by fight to the death tournaments staged outside KFC's across the world. Only the strong will survive and there won't be any room for back combing and skinny jeans.

 

that is fab.

[SilverSong]

Shut up Russell Brand. When money fails our futures will be decided by fight to the death tournaments staged outside KFC's across the world. Only the strong will survive and there won't be any room for back combing and skinny jeans.

Nice. Good job for me that I neither back comb or wear skinny jeans.

[thompsonsnose]

So many industry buzzwords in that article. Trying to read it I felt like Santas Little Helper. Bla bla, bla bla. Ultimately we all need to remember that money is man made and as such is actually a load of bollocks. Money, inflation, interest, fiat, fractional reserve banking, its all absolute bollocks and we are beholden to it. Until it fails and history teaches us that it will.

Have you got biscuit tins filled with Sovs and Crowns?

I know someone who is stacking like crazy.

His floorboards are gonna give out soon.

Small amount of physical metal is a good idea in my opinion.

[El Dangerous]

Nice. Good job for me that I neither back comb or wear skinny jeans.

In that case I'll see you in the Thundedome, just outside KFC!

[El Dangerous]

Nice. Good job for me that I neither back comb or wear skinny jeans.

In that case I'll see you in the Thundedome, just outside KFC!

[SilverSong]

Have you got biscuit tins filled with Sovs and Crowns?

I know someone who is stacking like crazy.

His floorboards are gonna give out soon.

Small amount of physical metal is a good idea in my opinion.

I wish. Foresight and planning are not strong points of mine. El Dangerous now seems to have me pegged as some sort of socio anarchist whereas the truth is rather more mundane. Early forties, blue collar, wife and 4 kids. I do however hold the opinion that our current financial system is doomed to failure. No bloody idea how long it will take. Probably not in my lifetime but as already mentioned I have kids.

[Tony Moanero]

Arsed.

[deiseach]

The reality that a a shower of parasites, thieves and robber barons like Standard Chartered can have any influence over Liverpool should be in 'The shitness of modern football' thread.

[KopOut]

7

 

Have you got biscuit tins filled with Sovs and Crowns?I know someone who is stacking like crazy.His floorboards are gonna give out soon.Small amount of physical metal is a good idea in my opinion.

It'll be worthless. Gold a little less so.However some will survive.

[KopOut]

https://www.community-exchange.org

[stringvest]

https://www.community-exchange.org

 

these are a great idea - there is one (or something very similar) in my area.