Hong Kong, December 18 UK bank Standard Chartered could be acquired by a white knight as its recovery could prove to be ‘challenging’, according to broker CLSA, which upgraded shares of the Asia-focused lender on that possibility. Singapore’s biggest lender DBS Group would be the most likely buyer, added CLSA in a note to clients dated December 17. StanChart has seen its shares fall below a forward price-to-book value of 0.5 times this week, making it an appealing target. The lender, which is in the middle of a restructuring under new CEO Bill Winters, has announced a series of moves to restore its profitability, including axing 15,000 jobs and streamlining the bank’s management structure. “The bank’s road to recovery will likely be a challenging multi-year journey. But the worse the situation gets for StanChart, we believe the more likely it is that a white knight will eventually emerge,” CLSA Analysts Asheefa Sarangi and Lester Lim said. The bank declined to comment, while DBS officials pointed to an interview of CEO Piyush Gupta in September when he ruled out the merger of the two banks. Singapore state investor Temasek Holdings, the biggest shareholder for both StanChart and DBS, declined to comment. CLSA revised its forecasts for StanChart’s earnings in 2015, projecting a loss of $142 million for the year, its first in at least 13 years. The bank’s shares soared 7.3 per cent in London on Thursday, their biggest-one day gain since March, paring their slump since start of the year to 40 per cent. The slump in its shares this year has pushed its market capitalisation to $27 billion, an affordable level for several banks with regional ambitions.