Standard Chartered bad loans fall but costs rise sharply

Underlying pretax profit for the three months to the end of September jumped 78% to $814m (£612m), Standard Chartered said in a trading update. Analysts' consensus was for profit of $809m according to Reuters.

Income rose 4% to $3.6bn but expenses rose at the same rate to $2.5bn due to increased investment and spending on meeting regulatory requirements.

Standard Chartered shares were down 5.4% to 709.7p at 09:10 GMT.

Income growth improved in deposit-led businesses such as wealth management and transaction banking while income fell in corporate finance, credit cards and loans and financial markets.

The charge for impaired loans dropped 42% to $348m. The figure is closely watched by investors after ballooning bad debts caused heavy losses in 2015 and 2016 for Standard Chartered, which makes almost all its profit in Asia, Africa and the Middle East.

Bill Winters, who took over as chief executive in 2015 and has cut costs and cleared out unwanted business after a period of rapid expansion went wrong, said economic conditions are improving slowly in the bank's markets but competition is intense and geopolitical tensions are high.

Winters said: "We continue to make progress in realising the potential of the group. We are transitioning our businesses to deliver higher quality income to improve sustainable returns. This process and the continued investments to support it are reflected in the results and will deliver greater long-term value to our shareholders."

StanChart shares fell more than 5% to 710p in early trading on Wednesday.