The bank analyst community is closely watching Standard Chartered and any signs to increase its capital levels. On Friday, Mizuho Securities reported that the bank may raise up to $10 billion in capital later this year. The bank currently has a CT1 ratio of about 10.5%, and may target a ratio of up to 12% at the same time as other banks in the UK also consider capital raising plans.
Loan losses, growing regulatory and compliance costs, fines, and changing risk models can easily impact this ratio and raising capital given the uncertain operating environment seems like a sensible option for any new management team. Balancing that decision however is the impact upon existing shareholders who would be diluted or otherwise need to add more cash in any rights issue. For more on this story see http://www.bloomberg.com/news/articles/2015-07-22/standard-chartered-must-raise-up-to-10-billion-mizuho-says.
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