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Standard Chartered’s third-quarter net profit rose 10 per cent, as strong growth in cross-border trade loans and wealth management buffered one of Hong Kong’s three note-issuing banks from the city’s commercial property slump and helped it beat analysts’ estimates. Net profit increased to US$1.03 billion, or 44.5 US cents per share, in the quarter that ended in September, the London-based bank said in a filing to the Hong Kong stock exchange on Thursday. The result, based on global accounting rules, surpassed the US$984 million expected by analysts. Pre-tax profit rose 3 per cent to US$1.77 billion, beating the analysts’ consensus estimate, said the bank, which generates most of its business from Asia. “We now expect to deliver an underlying return on tangible equity of around 13 per cent in 2025, hitting our target a year earlier than planned,” Standard Chartered’s CEO Bill Winters said in the exchange filing. “Progress is broad-based, but our sharper strategic focus on servicing our clients’ cross-border and affluent banking needs is paying off, with strong double-digit growth in wealth solutions and global banking, alongside good momentum in our global markets flow business.” The bank’s earnings growth was partly offset by rising bad debt. The bank booked US$195 million in credit impairments in the third quarter, 10 per cent higher than a year earlier. This included a US$25 million provision made for the Hong Kong commercial real estate sector to “capture the increased pressure on liquidity, interest serviceability and repayment capacity,” the bank said. The bank has kept US$60 million in overlay for Hong Kong commercial real estate clients, the report said. Its provision made for mainland China’s commercial real estate fell US$9 million during the quarter due to repayments from clients, while the bank retained US$49 million for the mainland commercial real estate. The property slump in Hong Kong and the mainland had weighed on banks’ earnings. HSBC Holdings reported US$1 billion in bad debt provisions in the third quarter on Tuesday, including US$200 million that was related to Hong Kong’s commercial real estate sector. Standard Chartered’s shares rose 3.6 per cent to HK$158.5 at 1.30pm after the release of the bank’s earnings report. On a nine-month basis, the bank’s reported pre-tax profit reached US$6.15 billion, 20 per cent higher than a year earlier. Standard Chartered’s growth engine remained its wealth unit. The bank’s third-quarter fee and other non-interest income rose 7 per cent from a year earlier to US$3.7 billion, as the bank continued to roll out new products and opened more wealth centres in Hong Kong and mainland China to attract affluent clients. The lender booked more fee income than interest income in the third quarter, continuing the trend started in the second quarter, which is the goal of the bank to cut down reliance on interest income, which is more fluctuating than stable fee income. A lower interest rate, with the US Federal Reserve cutting the key rate by 25 basis points on Thursday after a previous cut at the same margin in September, has led net interest income down 5 per cent to US$1.4 billion in the quarter. Winters told the Post that Hong Kong would be the focus of Standard Chartered’s US$1.5 billion investment in its wealth -management business over the next five years.
