Standard Chartered Bank: Valuation and Capital Structure
(3 pages of text)
Case (Pub Mat)
Following a turbulent 2014 for Standard Chartered Bank, the bank’s largest shareholder, Temasek Holdings, began showing indications that it was seriously considering offloading at least a portion of its massive shareholdings in Standard Chartered Bank. This case seeks to provide a fair valuation of Standard Chartered Bank’s intrinsic value, as well as rationalize the most appropriate way for Standard Chartered Bank to raise funds to satisfy the higher capital requirements under Basel III regulatory rules. Assuming that Standard Chartered Bank decided to hold on to its significant bank investments and to raise funds to satisfy the higher capital requirements, what could be some possible financing alternatives? Would it help to attract more bank deposits, raise debt, or go for a seasoned offering? What would be the impact of these financing alternatives? Finally, what would be a suitable recommendation on how to raise the funds if one took the valuation results into consideration?
This valuation case can be used in an advanced undergraduate or MBA course in corporate finance or financial management. It presents an opportunity for students to:
Understand the valuation of a financial institution.
Review the discounted cash flow valuation of an entire company.
Perform sensitivity/scenario analyses on some of the assumptions.
Conduct a relative valuation analysis using various peer multiple methods.
Finance and Insurance
Singapore, Large, 2015
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