Here's what analysts are expecting as StanChart welcomes new CEO

A 'turning point' is anticipated.

Barclays expects the appointment of a new CEO to mark a turning point for Standard Chartered and see plenty of scope for the business to be refocused with a material improvement in returns back towards those of Asian peers.

According to a research note from Barclays, in addition, there's an opportunity to allay market concerns on credit quality and the group's capital position.

The incoming CEO can undertake a more radical restructuring and drive a re-rating of the shares, Barclays noted.

Here's more from Barclays:

$5bn provisions and $5bn new capital: Although the current management team has recently begun to target an 11-12% CET1 ratio, which we see as more appropriate for Standard Chartered, concerns around credit quality have yet to be fully addressed.

We estimate that a balance sheet review could lead to up to a further $4.7bn of provisions and that if new management were to immediately rebuild the CET1 ratio to 11.5% then $5bn of additional equity would be required. This sort of action has tended to drive a re-rating of the shares at other European banks.

Turning an 8% RoTE into 14%: Adjusting for the new targeted capital level, we estimate that Standard Chartered delivered an 8% RoTE in 2014 while Asian peers were close to 14% on a similar level of capitalisation. With the Corporate & Institutional division consuming 70% of group capital this needs to be the main focus.

The primary issue here is low revenue returns, which suggests that a detailed review of business line profitability is required. Low returns in Retail Banking look more straightforward to address through downsizing and cost cutting.

The shares remain near all time lows: Although there has been something of a rerating since the announcement of a new CEO, the shares remain close to all time lows at 0.9x tangible book value which is a 50% discount to peers. Despite cutting our earnings forecast 16-21% and the dividend c20%, we believe that the incoming CEO can be a catalyst for a significant rerating of the shares.