British bank Standard Chartered on Wednesday said its pre-tax surplus for the three months ended September grew by 16%, but warned of growing headwinds including falling global growth rates.
Profit before tax was $ 1.24 billion versus $ 1.07 billion reported last year. Net profit for the quarter was $ 772 million, up 3% from $ 752 million that Standard Chartered reported a year ago.
Here are some of the key highlights for the third quarter:
- Net interest income: $ 2.39 billion versus $ 2.19 billion one year ago
- Net interest margin, a target of lending profitability: 1
- Operating expenses: $ 2.50 billion compared to $ 2.51 billion a year ago
- Common Equity Tier 1 ratio, a measure of a bank's financial strength: 13.5% versus 14.5% a year ago
Basic earnings per share were 26.6 cents, up 4.4% from 22.2 cents a year ago.
Standard Chartred's Hong Kong listed stock rose 2.81%.
On Monday, competing HSBC, which is Europe's largest lender, reported third-quarter earnings down 18% from a year ago, despite strength in Asia operations.
Standard Chartered earlier this year announced plans to increase returns and dividends over the next three years by cutting $ 700 million in costs and targeting revenue growth between 5% to 7%.
Commenting on the bank's quarterly results on Wednesday, CEO Bill Winters said: "Our strategy over the past few years has gradually created a stronger and more resilient business, evidenced by a 16% increase in underlying profits in the third quarter. The continued implementation of this Strategy remains our priority, enabling us to meet the more challenging external environment with certainty. "
Standard Chartered is headquartered in London, but it focuses on Asia, Africa and the Middle East – Greater China and North Asia. contributes most of the bank's revenues by region.
For the third quarter, Greater China and North Asia raised $ 1.58 billion, up 2% year-over-year. The bank said revenues grew in Hong Kong, Korea and China.
Several factors have recently affected the business outlook in the region. They include a slowdown in China's economy, the impact of an ongoing Beijing-Washington trade war, as well as widespread and increasingly violent demonstrations in Hong Kong since June. The protests have affected many of the city's small and medium-sized businesses.
Standard Chartered said the company's operating revenues for businesses and institutions grew 13% to $ 1.87 billion, tail banking increased by 4% from a year ago to $ 1.32 billion. Private banking revenues increased by 14%.
For its outlook, the bank said it continues "to focus on executing our strategy with the goal of delivering a 10% return on tangible equity by 2021", but the "growing headwind" flag such as geopolitical tensions and expectations of "falling global growth and interest rates in the near term."
On Monday, HSBC said it no longer expects to reach its return target of more than 11% by 2020, due to a challenging revenue environment.