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Standard Chartered (SCBFF) to Sell AFL Business, Stock Rises
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Standard Chartered PLC (SCBFF - Free Report) shares gained 2.21% on Aug 29 normal trading session on the NYSE after it announced that it has entered into definitive agreements to sell its global aviation finance leasing business to Aircraft Leasing Company (AviLease), owned by Saudi Arabia's Public Investment Fund. This news comes after Standard Chartered announced in January 2023 that it was exploring options for the future ownership of its global aviation finance business.
AviLease was established in 2022 and is headquartered in Riyadh, Saudi Arabia. It provides leasing, trading and asset management services and aims to expand rapidly to become one of the top ten leasing companies in the world as part of its business strategy.
Standard Chartered is expected to enhance its capital position through the divestment, providing scope to continue focusing its efforts on areas where it is most differentiated.
The deal, valued at US$700 million, is expected to close toward the end of 2023 and is subject to adjustments to be made per the net asset value of the business at closing. Standard Chartered continues to be backed by its financial advisor, J.P. Morgan Securities PLC.
The transaction includes the sale of 100% shareholding in each Pembroke Group Limited (Isle of Man), Pembroke Aircraft Leasing Holdings Limited (Ireland) and Pembroke Aircraft Leasing (Tianjin) Limited (China). Upon completion of the sale, these companies will no longer be subsidiaries of Standard Chartered.
The company expects to realize an estimated gain of roughly US$300 million and an approximate 19 basis point increase in its Common Equity Tier 1 capital ratio after the deal is closed. Further, it intends to include the resultant net proceeds of the overall management of its capital and liquidity position and its subsidiaries.
Simon Cooper, CEO of Corporate, Commercial & Institutional Banking and Europe & Americas at Standard Chartered, stated “The sale of our Aviation Finance leasing business allows us to continue focusing our efforts on those areas where we are most differentiated, and make further progress on our Return on Tangible Equity journey.”
Recently in July, SCBFF entered into an agreement with Access Bank Plc for the sale of its shareholding subsidiaries in Angola, Cameroon, The Gambia and Sierra Leone, and its consumer, private & business banking business in Tanzania. The transaction is expected to close over the next 12 months.
The move aligns with the bank’s global strategy targeted at achieving operational efficiencies, reducing complexity and driving scale.
Hence, with such portfolio restructuring moves, Standard Chartered seems well-poised to prosper alongside strengthening its capital position.
Over the past three months, shares of the company have gained 12.8% compared with the industry’s upside of 8.2%.
To progress toward achieving targets outlined at the Investors Day, The Goldman Sachs Group, Inc. (GS - Free Report) entered into an agreement to divest its Personal Financial Management unit to the leading Registered Investment Advisor, Creative Planning. Though the financial terms were not disclosed, the sale will result in a gain and is expected to be completed in the fourth quarter of 2023.
Goldman Sachs Asset Management will continue to provide investment solutions and services to Creative Planning’s wealth management teams as it continues to build a premier investment management platform. These customized solutions are being catered to high-net-worth investors.
The PNC Financial Services Group, Inc. (PNC - Free Report) entered into a definite agreement with a leading global wealth management firm, Insigneo, to sell the Latin American consumer brokerage and investment accounts of PNC Investments, PNC Managed Account Solutions, and PNC Bank.
PNC will continue to support the U.S. banking needs of its international clients moving to Insigneo. Also, it will be retaining the deposit and loan accounts of its customers with brokerage assets and assets under management, which are being sold to the wealth management firm.
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Standard Chartered (SCBFF) to Sell AFL Business, Stock Rises
Standard Chartered PLC (SCBFF - Free Report) shares gained 2.21% on Aug 29 normal trading session on the NYSE after it announced that it has entered into definitive agreements to sell its global aviation finance leasing business to Aircraft Leasing Company (AviLease), owned by Saudi Arabia's Public Investment Fund. This news comes after Standard Chartered announced in January 2023 that it was exploring options for the future ownership of its global aviation finance business.
AviLease was established in 2022 and is headquartered in Riyadh, Saudi Arabia. It provides leasing, trading and asset management services and aims to expand rapidly to become one of the top ten leasing companies in the world as part of its business strategy.
Standard Chartered is expected to enhance its capital position through the divestment, providing scope to continue focusing its efforts on areas where it is most differentiated.
The deal, valued at US$700 million, is expected to close toward the end of 2023 and is subject to adjustments to be made per the net asset value of the business at closing. Standard Chartered continues to be backed by its financial advisor, J.P. Morgan Securities PLC.
The transaction includes the sale of 100% shareholding in each Pembroke Group Limited (Isle of Man), Pembroke Aircraft Leasing Holdings Limited (Ireland) and Pembroke Aircraft Leasing (Tianjin) Limited (China). Upon completion of the sale, these companies will no longer be subsidiaries of Standard Chartered.
The company expects to realize an estimated gain of roughly US$300 million and an approximate 19 basis point increase in its Common Equity Tier 1 capital ratio after the deal is closed. Further, it intends to include the resultant net proceeds of the overall management of its capital and liquidity position and its subsidiaries.
Simon Cooper, CEO of Corporate, Commercial & Institutional Banking and Europe & Americas at Standard Chartered, stated “The sale of our Aviation Finance leasing business allows us to continue focusing our efforts on those areas where we are most differentiated, and make further progress on our Return on Tangible Equity journey.”
Recently in July, SCBFF entered into an agreement with Access Bank Plc for the sale of its shareholding subsidiaries in Angola, Cameroon, The Gambia and Sierra Leone, and its consumer, private & business banking business in Tanzania. The transaction is expected to close over the next 12 months.
The move aligns with the bank’s global strategy targeted at achieving operational efficiencies, reducing complexity and driving scale.
Hence, with such portfolio restructuring moves, Standard Chartered seems well-poised to prosper alongside strengthening its capital position.
Over the past three months, shares of the company have gained 12.8% compared with the industry’s upside of 8.2%.
Image Source: Zacks Investment Research
Currently, SCBFF carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Expansion Efforts by Other Companies
To progress toward achieving targets outlined at the Investors Day, The Goldman Sachs Group, Inc. (GS - Free Report) entered into an agreement to divest its Personal Financial Management unit to the leading Registered Investment Advisor, Creative Planning. Though the financial terms were not disclosed, the sale will result in a gain and is expected to be completed in the fourth quarter of 2023.
Goldman Sachs Asset Management will continue to provide investment solutions and services to Creative Planning’s wealth management teams as it continues to build a premier investment management platform. These customized solutions are being catered to high-net-worth investors.
The PNC Financial Services Group, Inc. (PNC - Free Report) entered into a definite agreement with a leading global wealth management firm, Insigneo, to sell the Latin American consumer brokerage and investment accounts of PNC Investments, PNC Managed Account Solutions, and PNC Bank.
PNC will continue to support the U.S. banking needs of its international clients moving to Insigneo. Also, it will be retaining the deposit and loan accounts of its customers with brokerage assets and assets under management, which are being sold to the wealth management firm.