Losses incurred on commodities loans could force Standard Chartered to source an additional US$4.4bn in capital, according to an explosive research note by Credit Suisse analysts.

The note recommends that the Asia-focused bank’s shares are set to underperform. Forecasters are also predicting that the commodities slump may prove costly to many other exposed banks.

When contacted by GTR, Standard Chartered spokesperson Simon Kutner said: “We don’t comment on analysts’ notes.”

In the research note, analysts led by Carla Antunes-Silva, said that Standard Chartered “was ‘watchful’ of its commodity exposures in May 2014 – some months before the sharp fall in oil prices”.

That crude has suffered such a dramatic and prolonged slide in the months since will be of grave concern for the bank: oil prices this week fell below US$45 per barrel.

Furthermore, relative economic slowdowns in its key Asian markets India, China and South Korea have led Antunes-Silva to speculate that Standard Chartered will approach its shareholders for a fresh injection of up to US$6.9bn in order to raise its core capital ratio to 11% by the close of 2015.

“We think the needed provisioning could be large enough to require further capital measures, such as further equity raising, and/or dividend reductions,” reads the note. “We believe the last two years of de-rating have been driven largely by weaker revenue and that the asset quality deterioration leg is now setting in.”

The mood among the commodity analyst community is generally bearish – meaning Standard Chartered, which has lost 28% of its share value over the course of the last year, may be facing tougher times still.

“We have been bearish on the oil price for some time but think the current falls in the oil price are overdone. We expect Brent to end the year at around US$60/barrel. If prices stay below US$60/b for any length of time, there is likely to be a much bigger supply response – cuts – and ultimately higher prices in the future,” Caroline Bain of Capital Economics tells GTR.

Analysts are not optimistic about the prospects for the soft commodities market, with consecutive years of bumper harvests of major grains and soybeans meaning stocks are high, with the danger of oversupply being very real.

Meanwhile, the slowdown in East Asia has subdued metals’ prices for some time and this is expected to continue, with a number of mammoth iron ore mines due to come online in 2015, adding to a market already drowning in its supply.

The note was released in the same week Standard Chartered announced 4,000 job cuts, mainly in its institutional cash equities, equity research and equities capital market divisions. However, a spokesperson said that the aim of these cuts is to support the bank’s commodities and trade businesses.

“This decision is purely related to our institutional cash and research business, along with equities capital market, and does not impact our core strategic aim of supporting the international trade, wealth and fixed income, currencies and commodities needs of our corporate and affluent retail client base, under the refreshed strategy announced last year,” says the bank’s spokesperson in Singapore.