Standard Chartered Plc’s profit missed estimates in the third quarter as the lender took charges related to investments in China.
The bank’s pretax profit fell 2% to $1.32 billion in the period, missing analyst estimates compiled by Bloomberg of $1.5 billion, according to a statement on Thursday. Operating income rose 6% in the quarter, driven by an increase in lending income and wealth management.
Provisions for loan losses increased, reflecting the uncertain trajectory of Asia’s biggest economy. It took a $186 million charge on Chinese real estate and an impairment of $700 million on China Bohai Bank.
“We remain highly liquid, and well capitalised, with a CET1 ratio towards the top of our target range and confident in the delivery of our 2023 financial targets, including a return on tangible equity of 10%,” Chief Executive Officer Bill Winters said in a statement.
Standard Chartered has benefited from rising rates, though the impact has been dented by hedges put in place by the bank that mean it has yet to see the full gains come through. Winters said at a recent financial services conference that this would start to happen next March.
Standard Chartered is planning to hand back more than $5 billion to investors and in July announced a $1 billion buyback alongside increased guidance for income growth for the year.
It kept all guidance for 2024 unchanged, with income growth expected at 8-10%.
Financial markets income slid 8% in the quarter. A downturn in the bank’s trading division was highlighted last month by Saleem Razvi, its chief financial officer of the Asian business, who warned that after last year’s “exceptionally strong” performance it would be a struggle to turn in a similar result.
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