Source: Sharecast
The British bank, which specialises in emerging markets, is being investigated by the US over historical sanctions compliance and a significant fine has already been pencilled in by the market.
But according to Bloomberg, the amount now being considered by the authorities is around $1.5bn, 50% higher than most estimates.
The shares were in the red in morning trading in London, off 5.5p at 610p.
But despite this, ShoreCap analysts retained their recommendation on the stock.
In a note to investors, they said: “Our fair value calculations for the big banks already include a discount for tail risk to capture legacy litigation and conduct risk. In the case of Standard Chartered, where we have a fair value of 935p, 52% upside, we apply a 5% discount, equivalent to $2.1bn, which is more than enough to capture the potential fine.”
Shore added that Standard Chartered has surplus capital of around $3.2bn, which was “more than enough to absorb a fine of such magnitude without requiring the group to raise fresh equity”.
According to Bloomberg, final discussions over the size of the fine have not started, but the $1.5bn figures was based on preliminary discussions between the bank and regulators. Standard Chartered has not commented on any potential fine, other than to confirm that the bank is cooperating fully with the investigation.
The west has a long history of imposing sanctions on Iran and in May, President Donald Trump withdrew the US from a deal to loosen sanctions.
