Such a move – to a location such as Singapore or Hong Kong – could take two or more years and cost $2.5bn (£1.7bn), but it is looking increasingly appealing.
The tax is charged on UK-based banks’ global balance sheets – a particularly tough measure for Standard Chartered, which is domiciled in Britain but has most of its operations in emerging markets, such as Asia and Africa.
The original plan in 2011 was for the tax to raise £2.5bn per year. As banks’ balance sheets have contracted – achieving one of the tax’s aims – their revenue has fallen, leading to nine hikes in the tax.
But last week’s increase takes it up from 0.156 per cent to 0.21 per cent – a large jump, which is projected to result in an annual haul of £3.8bn.
“Last week’s UK budget may lead the market to attach a higher probability of strategic actions to change domicile and unlock value,” said the note, written by JP Morgan analysts including Raul Sinha.
And he estimates the savings from leaving the UK, plus improved returns would run into the billions of dollars.
“We believe a re-domicile would be accretive despite our assumed $2.5bn one-off costs.”
Meanwhile analysts at Citi believe StanChart will chop back staff in expensive locations including London and much of Europe, and focus resources in the markets in which it operates.
Both JP Morgan and Citi upgraded StanChart, following similar ratings action by Bernstein Research and Barclays, who all praised the appointment of Bill Winters to replace outgoing chief executive Peter Sands.
StanChart’s share price rose another 6.49 per cent yesterday. It has risen by 23.2 per cent since Winters’ appointment was announced in late February.