Shares in Standard Chartered dropped more than 10 per cent yesterday on concerns the emerging markets bank might have to raise billions of pounds of extra capital to weather a slowdown in Asia.
The London-headquartered bank, which is due to issue a trading statement today, is expected to reiterate the position it laid out two weeks ago and say it has no plans to use the UK government’s ￡37bn bank bail-out to raise capital.
Analysts at Citigroup, however, said yesterday that StanChart may need to raise $5bn of capital, of which $3bn is likely to be equity. This would take its core tier one ratio from 6.1 per cent in the first half of 2008 to 7.6 per cent on a proforma basis – in line with HSBC, but below the Asian bank average of 10.5 per cent.