Standard Chartered hit by profits slide
Asia-focused bank Standard Chartered saw its quarterly profit tumble 16% as trading conditions in the world’s emerging markets continue to ease.
The London-listed lender, which makes three-quarters of its profits in Asia, said it was “watchful” over conditions in the once booming markets of India and China.
It also warned that its underlying profits in the second half of the year would be lower than last year due to higher regulatory charges, subdued trading and other costs.
The bank said third-quarter operating profits fell to $1.5bn after corporate and institutional bad loans increased as a result of weak commodity markets.
Its shares slumped more than 9% in the FTSE 100 Index and have now lost around a quarter of their value since the start of the year.
With the pace of growth slowing among emerging Asian markets, the lender has been impacted by many of the fears that have hit global markets in recent months such as eurozone stagnation and demonstrations in Hong Kong.
The firm said it is exiting non-core businesses and will cut more than $400m of costs for 2015.
Chief executive Peter Sands said: “Whilst some of these actions will impact near term performance, they are crucial to getting us back to a trajectory of sustainable, profitable growth.”
In August, the lender reached an agreement to pay $300m for failing to flag suspicious transactions as required under a settlement with New York’s banking regulator.
An independent monitor oversees the bank to ensure it complies with sanctions and anti-money laundering rules. The monitor was installed in 2012 after Standard Chartered breached a US ban on transactions in Iran.
Analysts at Investec said: “We believe that the primary source of investor disappointment over the past 18 months has come on the revenue line, reflecting a combination of weaker financial markets, de-risking initiatives, margin pressures and lower own account income.”
