StanChart earnings held back by capital improvement, says Credit Suisse

Credit Suisse has lowered its price target for emerging markets-focused lender Standard Chartered from 880p to 850p and kept an 'underperform' rating, causing shares to slip on Wednesday.

The Swiss investment bank said StanChart is "trading earnings for capital".

"The company is now prioritising building capital by holding back growth, but we think that gives up future earnings," warned analyst Carla Antunes-Silva.

She said that the risk-reward balance at the bank remains "unattractive" and believes new management will significant restructure the balance sheet and capital position.

The bank has forecast an adjusted pre-tax profit of $4.95bn in 2015, down from the $5.01bn reported last year. It expects negative operating 'jaws' (expense growth being larger than income growth), with a higher bank levy, inflation and regulatory expenses.

For the first quarter, results of which are due on 28 April, Credit Suisse has pencilled in an adjusted pre-tax profit of $1.46bn on revenues of $4.60bn.

The stock was down 2.1% at 1,042.5p by 11:40.