Standard Chartered Bank Ghana Plc
Rating: HOLD

• In the aftermath of the Domestic Debt Exchange Programme (DDEP), our assessment of Standard Chartered Bank Ghana Plc (SCB) reaffirms its status as a high-quality bank.
• Despite the DDEP-induced losses, SCB’s Capital Adequacy Ratio (CAR), excluding regulatory forbearance, remained at comfortable levels. This positions the bank favourably to resume dividend payments post-2025, once the dividend suspension is lifted, in our opinion.
• Adding to the appeal, SCB has no exposure to Government of Ghana Eurobonds, providing insulation from the potential impairment charges which will arise from the restructuring of these instruments.
• SCB has also registered some improvement in its asset quality profile and the bank’s lean business model continues to positively impact cost outcomes, in our opinion. However, the anticipated decrease in yields, driven by cooling inflation and sluggish credit growth in 2024, limits our bullish outlook in the short-term.
• SCB’s robust solvency position and operational efficiency puts the bank in a place of advantage to capitalize on opportunities at the onset of the economic recovery cycle. The market has recognized SCB’s potential, evident in the stock’s share price recovery in 2H2023 and the recent price gain this year to GHS 19.25 (+9.7% YTD), subsequent to our “2024 IC Big Ideas” publication where we initially issued an “ACCUMULATE” rating. Resultantly, we move to update our recommendation on SCB to “HOLD” with a fair value of GHS 20.90 per share following the recent price action.