Standard Chartered PLC, headquartered in London, has announced a 30% decrease in its underlying net profit for the third quarter. The bank’s profit was recorded at $644 million, compared to $915 million during the same period last year.
One of the key factors contributing to the decline in profits was a credit impairment charge of $294 million, marking an increase of $62 million from the previous year. This charge was primarily associated with commercial real estate in China.
The bank also cited increased expenses as a contributing factor to the drop in profits. These expenses were driven by inflation, business growth, and targeted investments.
However, it was not all bad news for Standard Chartered. The bank reported an underlying operating income of $4.40 billion, representing a 6% increase from the same period in the previous year. This growth can be attributed to a rise in the net interest margin and a strong recovery in wealth-management income.
Furthermore, net interest income for StanChart increased by 18% to $2.4 billion. The normalized net interest margin stood at 1.67%, a decrease of 4 basis points from the second quarter.
Despite the challenges faced in the third quarter, Chief Executive Bill Winters expressed confidence in achieving the bank’s 2023 financial targets. This includes a targeted return on tangible equity of 10%.
Looking ahead, Standard Chartered anticipates a 12%-14% increase in income for 2023, when considering constant currencies.
