U.K. Stocks Fall, Led by Standard Chartered, Barclays, RBS

By Sarah Thompson

Aug. 12 (Bloomberg) -- U.K. stocks declined for the first time in three days, led by Standard Chartered Plc after Citigroup Inc. said the bank that earns most of its money in Asia may have to raise capital. Barclays Plc and Royal Bank of Scotland Group Plc also retreated.

Trinity Mirror Plc fell after it was cut to ``underweight'' at JPMorgan Chase & Co., which said it expects ``steep declines in national and regional advertising to continue.''

The FTSE 100 Index dropped 32.6, or 0.6 percent, to 5,509.2 at 8:51 a.m. in London. The FTSE All-Share Index decreased 0.6 percent and Ireland's ISEQ Index slid 0.5 percent.

Standard Chartered lost 2.8 percent to 1,555 pence after Citigroup lowered its recommendation to ``sell'' from ``hold.''

The bank ``faces a choice of slower growth or having to raise equity to support its capital ratios,'' London- based analyst Tom Rayner wrote in a note to clients today. ``If the business mix shift towards Wholesale Banking continues, we believe the underlying profitability of the group will be undermined, particularly if the benign credit conditions deteriorate as Asian economic growth slows.''

Barclays, the U.K.'s third-biggest bank, slipped 0.7 percent to 376.75 pence. RBS, the second-largest, fell 0.6 percent to 247.5 pence.

Trinity Mirror, the publisher of the U.K.'s Daily Mirror newspaper, decreased 5.2 percent to 118.5.

``Weakening consumer spending will likely hurt all advertising categories in 2008,'' JPMorgan analysts, including Tim Nollen, wrote in a research note dated today. ``We think 2009 may be just as bad, if not worse.''

The following stocks also rose or fell in the U.K. market. Stock symbols are in parentheses.

U.K. companies:

BPP Holdings Plc (BPP LN) slid 4 pence, or 1 percent, to 411. The U.K. professional training company founded in 1975 said first-half profit rose 15 percent, boosted by higher enrollment at its colleges.

Collins Stewart Plc (CLST LN) lost 1.75 pence, or 1.7 percent, to 105. The U.K. stockbroker that's considering a takeover approach posted an 81 percent decline in first- half profit and said ``difficult'' market conditions will continue into at least next year.

Irish companies:

Independent News & Media Plc (INM ID) fell 2.7 cents, or 1.6 percent, to 1.63 euros in Dublin. APN News & Media Ltd., the Sydney-based publisher in which Independent News has a stake, said first-half profit declined as slower economic growth forced companies to cut back on advertising.

United Drug Plc (UDG ID) added 16 cents, or 4.5 percent, to 3.75 euros. Ireland's biggest medicines supplier said third- quarter trading conditions are ``good'' and it sees full-year double-digit profit growth.

To contact the reporter on this story: Sarah Thompson in London at sthompson17@bloomberg.net.