StanChart Q3 profit rises 16%; flags growth, interest rate headwinds

Credit: REUTERS/BOBBY YIP

Standard Chartered reported on Wednesday that third quarter profit rose a better-than-expected 16%, as a surge in business from corporate clients helped the bank weather unrest in its core market of Hong Kong and global trade tensions.

Q3 profit $1.24 bln versus $1 billion analyst estimates

Corporate, institutional banking income up 13% in quarter

CEO says execution of turnaround strategy remains priority

Adds details of results, comments from StanChart

HONG KONG/LONDON, Oct 30 (Reuters) - Standard Chartered STAN.L reported on Wednesday that third quarter profit rose a better-than-expected 16%, as a surge in business from corporate clients helped the bank weather unrest in its core market of Hong Kong and global trade tensions.

StanChart's pretax profit for the three months ended Sept. 30 increased to $1.24 billion from $1.07 billion in the same period a year ago, above the $1 billion average of analysts' forecasts compiled by the lender.

StanChart is in the midst of a second three-year turnaround plan under Chief Executive Bill Winters, with plans to double returns and dividends in three years by cutting $700 million in costs and boosting income.

The first of those in 2015-2018 focused on repairing a balance sheet ravaged by ill-advised lending in Asia, improving the bank's internal controls, reducing costs, and shedding unwanted businesses.

"The continuing execution of that strategy remains our priority," Winters said in a statement.

The bank's corporate and institutional banking income grew 13% during the quarter, while private banking rose 14%, it said, adding its core capital ratio remained within the 13-14% target range at 13.5%.

StanChart, however, flagged that there were "growing headwinds from the combination of continuing geopolitical tensions and expectations of declining near-term global growth and interest rates".

StanChart's bigger rival HSBC HSBA.L abandoned on Monday its own return target of greater than 11% by 2020, blaming a worsening revenue outlook and tougher than expected market conditions.

The London-listed shares of StanChart are up 14% so far this year, compared to a 9% drop in rival HSBC's shares.

(Reporting by Lawrence White in London and Sumeet Chatterjee in Hong Kong; Editing by Muralikumar Anantharaman)

((lawrence.white@thomsonreuters.com; +44 207 542 6137; Reuters Messaging: lawrence.white.thomsonreuters@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More