Deutsche Bank reiterates 'buy' on StanChart, says higher rates will boost profits

Robert Noble at Deutsche Bank reiterated his 'buy' recommendation for shares of StanChart, forecasting that the lender's profitability was set to expand significantly through 2024, boosted by interest rates.

As well, the shares were offering "substantial value", they said, estimating that they were trading on a 2024 price-to-earnings multiple of 4.3 and 0.4 tangible book value.

Yet the lender was targeting a return on tangible equity of greater than 10.0% by 2024.

Noble did however concede that StanChart was unlikely to show the improvement in so-called 'jaws' during the first quarter required by the longer-term path to its target for a RoTE of greater than 10.0%.

Indeed, he believed that it would take some time to close the valuation gap.

The analyst nevertheless bumped up his target price from 610.0p to 620.0p.