Singapore's biggest lender DBS Group would be the most likely buyer, added CLSA in a note to clients dated Dec. 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 wrote in the note.

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 [TEM.UL], the biggest shareholder for both StanChart and DBS, also declined to comment.

CLSA revised its forecasts for StanChart's earnings in 2015, projecting a loss of $142 million for the year, a first for the bank in at least 13 years.

The bank's shares soared 7.3 percent in London on Thursday, their biggest-one day gain since March, paring their slump since the beginning of the year to 40 percent. StanChart's stock in Hong Kong <2888.HK> traded 2.5 percent higher mid-Friday afternoon, compared with a 0.1 percent decline in the benchmark Hang Seng index <.HSI>.

The slump in StanChart's shares this year has pushed its market capitalization to $27 billion, an affordable level for several banks with regional ambitions, the CLSA report added.

(Reporting by Elzio Barreto; Additional reporting by Saeed Azhar and Denny Thomas; Editing by Muralikumar Anantharaman)

By Elzio Barreto

Stocks treated in this article : Standard Chartered PLC, DBS Group Holdings Ltd