ANZ Could Explore Standard Chartered Takeover, Citi Says

Australia & New Zealand Banking Group Ltd., (ANZ) the country’s most Asia-focused lender, could explore an acquisition of Standard Chartered Plc (STAN), although a combination is unlikely, Citigroup Inc. analysts said.

“A deal would be possible but unlikely,” Citigroup analysts Craig Williams and Ronit Ghose said in a note to investors today. Melbourne-based ANZ’s market capitalization is about 50 percent higher than Standard Chartered, they said.

Standard Chartered last week named Mike Rees as deputy to Chief Executive Officer Peter Sands as the London-based bank combined its corporate and consumer-banking units to cut costs. Chief Financial Officer Richard Meddings, 55, and Steve Bertamini, 49, head of the consumer-banking unit, will both leave the company in the first half.

Full-year revenue will probably be little changed, the bank has said, after earlier scrapping a sales-growth target of at least 10 percent and writing down its South Korean business by $1 billion. The shares dropped 14 percent in 2013, making it the worst performer among Britain’s five biggest banks.

ANZ CEO Mike Smith said in an interview with the Wall Street Journal today that a major acquisition is unlikely. He said that “it would be nice to have what I have always called a transformational acquisition, but I have always said the stars have to align,” according to the newspaper.

‘Better Fits’

The Citigroup analysts said the role of Temasek Holdings Pte, Singapore’s state-owned investment firm that holds 18 percent of Standard Chartered, and regulators would be “critical” to a creating a “dual-listed company.”

“Other institutions, with similar international ambitions but lower levels of profitability than ANZ may be better fits as acquirers,” they said.

A spokesman for ANZ and a Standard Chartered spokeswoman, Neema Patel, declined to comment.

ANZ has a market capitalization of A$85.9 billion ($77.9 billion), while Standard Chartered, based in London is valued at about 31.3 billion pounds ($51.5 billion).

Standard Chartered rose as much as 1.36 percent in London and was up 7 pence, or 0.5 percent, to 1,293 pence at 1:30 p.m. local time. ANZ fell 0.73 percent to A$31.33.

To contact the reporters on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net; Howard Mustoe in London at hmustoe@bloomberg.net

To contact the editor responsible for this story: Simone Meier at smeier@bloomberg.net

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