grahamsdisciple wrote:I'm surprised that guys are reacting like this to Stanchart. Can someone correct me if I'm wrong, but these guys are actually reporting their provisions. Mind you if you look at their provisions this year, they are actually provisioning accounts on watchlist from last year financials, this year they aren't giving any loans. They are taking the pain this year for growth next year and beyond, like pruning leaves. In my view this is the time to buy.
Also with their long record of consistency and discipline, I'm more confident about what is in their books than say Equity, KCB, NBK or even Coop.
Again, can someone please correct me if they think my reasoning/logic is wrong.
Correct. StanChart takes provisions as needed. Some say it takes more than it should in the name of prudence.
Some banks will have to take (increase) huge provisions for NPLs in 4Q whereas StanChart is already taking provisions throughout the year. They also tend to run their losses on Bonds through the P&L and with higher Bond yields come greater losses in the value of the portfolio.
I would not mind buying StanChart at 150 with an eye on the future.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett