Newsletter summary
JPMorgan Chase Research report maintains Standard Chartered's "overweight" rating with a target price of HK $82. First-quarter results exceeded expectations, non-interest income rose 22% year-on-year, driving an improvement in net interest margin, and the market expects earnings per share to rise.
Text of news flash
[JPMorgan Chase released research report that Standard Chartered Group's first-quarter results exceeded expectations]
Standard Chartered Group (02888) outperformed in the first quarter.KingmackerelIn response to market expectations, JPMorgan rated it as "overweight", with a target price of HK $82.
According to the report, the company's non-interest income rose 22% year-on-year, mainly driven by wealth management and financial markets divisions, net interest margin increased by 6 pips month-on-month, and operating expenses were lower than expected.
However, the first-tier ratio of the company's common equity has dropped to 13.Kingmackerel.6%, slightly lower than market expectations, mainly due to the increase in risk-weighted assets. However, the ratio is expected to return to normal by the end of the year.
JPMorgan Chase predicts that the market's earnings per share forecast for Standard Chartered will rise by medium to high digits due to the extended interest rate outlook. In addition, the strong growth of the company's wealth and market segment is expected to receive a positive response from the market.
In the long run, Standard Chartered is expected to provide the market with confidence in tangible shareholder equity returns even if the interest rate cycle is reversed under non-interest income growth and good cost control.