atans1

StanChart a takeover target?

In Banks, Emerging markets, Temasek on 22/09/2010 at 5:24 am

(Updated on 13 October)

No not Temasek as predator. Remember it has 18% of StanChart.

But what abt JP Morgan? Top FT reporter Francesco Guerrera analyses

The international conundrum is more complex. JPMorgan earns some 75 per cent of its revenues in the US, a slow-growing, developed country. By contrast, Citi derives some 40 per cent of its revenues from Latin America and Asia, emerging economies with a bright future that are also HSBC’s stomping ground.

Those lenders’ competitive advantage is their ability to offer boring-but-lucrative commercial banking and cash management services to thousands of companies.

JPMorgan has a deep commercial banking network in the US – its most profitable business – but lags overseas.

The bank already works with more than 2,000 foreign companies but Mr Dimon would love to get that number to nearer 4,000 and do more with each of them.

To this end, JPMorgan is adding 250 bankers and $50bn in extra lending to lure foreign companies. But that could take decades and the bank might want to shorten the wait with bolt-on acquisitions (as its investment bank did with Britain’s Cazenove and RBS Sempra).

The recent moves by Heidi Miller, a veteran executive, to lead the international effort, and Doug Braunstein, a takeover specialist, to the role of finance chief, certainly point in that direction.

But, as my GPS intones when I get lost, “there is a better way” – in theory at least – and it leads to Standard Chartered.

A well-run, commercial and retail bank with strongholds in Asia, Latin America and Africa, StanChart could be the answer to Mr Dimon’s problems.

It would not come cheap – its valuation is well above JPMorgan’s – and a bid by Mr Dimon would trigger a war with HSBC and China’s ICBC, among others.

But JPMorgan’s good health affords its chief the luxury of time.

On 12 October 2010, StanChart was up 2% on rumours that JP Chase would bid.

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  1. [...] Could DBS be a takeover target for StanChart? The latter has just launched a 3.2bn sterling rights issue which would make it one of the top 20 banks by market cap. Temasek would surely be glad that one of  its best performing investments relieves it of a dog of an investment. StanChart is itself the subject of talk that JPMorgan wants it.http://atans1.wordpress.com/2010/09/22/stanchart-a-takeover-target/ [...]

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