# StanChart surprises with 40% profit jump, ups income goal on rising rates Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-26 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Standard Chartered Q3 Profit Surges 40% Meta Description: Standard Chartered's third-quarter profit surged 40% on higher interest rates, beating expectations. CEO confident about future financial targets. Learn URL: https://financedigest.com/stanchart-surprises-with-40-profit-jump-ups-income-goal-on-rising-rateshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-10-26t050244z3lynxmpei9p03drtroptp4stanchart-results-1736814971653-compressed.jpg) By Anshuman Daga and Lawrence White SINGAPORE (Reuters) -Standard Chartered’s third-quarter profit surged 40% as higher interest rates boosted the emerging markets-focused bank’s income, giving it ammunition to upgrade its revenue outlook despite a weakening global economy. StanChart, which earns most of its revenue in Asia, raised its income growth forecast for this year to 13% from 10% previously and CEO Bill Winters said the bank was confident of delivering its 2024 financial targets. Its Hong-Kong listed [shares rose 2.7% while its London-listed shares were flat in early trade](https://www.financedigest.com/social-trading-is-the-new-way-that-gen-z-are-getting-their-share-of-the-pie.html "Social Trading is The New Way That Gen Z Are Getting Their Share of The Pie"). Our performance this year has been strong, and the [pace of economic recovery](https://www.financedigest.com/euro-zone-recovery-gathers-pace-allays-fears-of-recession-pmi.html "Euro zone recovery gathers pace, allays fears of recession-PMI") in many of our footprint markets is encouraging, notwithstanding increasing recessionary pressures in certain Western markets,” Winters said. The results came a day after larger peer HSBC reported a 42% drop in quarterly [profit on Tuesday — due to loan losses and charges from the sale of its French business](https://www.financedigest.com/pizza-firm-dp-eurasia-delivers-profit-rise-evaluating-russian-business.html "Pizza firm DP Eurasia delivers profit rise, evaluating Russian business") — and surprisingly named a new CFO, souring investor confidence. StanChart’s performance also contrasted with those of U.S. banks, which earlier this month reported weaker [profits as they raised provisions against expected loan losses and saw market volatility](https://www.financedigest.com/crop-merchant-louis-dreyfus-gets-profit-boost-in-volatile-year.html "Crop merchant Louis Dreyfus gets profit boost in volatile year") choke off dealmaking. The profit growth and improved guidance from the London-headquartered lender showed how [rising interest rates are lifting some banks’](https://www.financedigest.com/the-rise-of-biometric-technology-in-banking.html "The rise of biometric technology in banking") profits, even as the global economy struggles amid volatile energy costs and the impact of the Russia-Ukraine war. The bank said statutory pre-tax [profit rose](https://www.financedigest.com/zur-rose-delays-profitability-break-even-to-2024.html "Zur Rose delays profitability break-even to 2024") to $1.39 billion in the three months to Sept. 30 from $996 million a year earlier and versus the $1.05 billion [average estimate](https://www.financedigest.com/fine-chemicals-market-is-estimated-to-witness-an-average-pace-with-a-cagr-of-5-4-during-the-forecast-period-2022-2032.html "Fine Chemicals Market is estimated to witness an average pace with a CAGR of 5.4% during the forecast period 2022-2032") of 14 analysts, as compiled by the bank. Analysts said the [profit increase](https://www.financedigest.com/4-tips-for-landlords-to-increase-rental-property-profits.html "4 Tips for Landlords to Increase Rental Property Profits") was helped by a strong performance from the lender’s transaction banking unit, which manages cash for corporate clients and saw income up 47%. The bank’s underperforming [wealth management](https://www.financedigest.com/wealth-management-consultant.html "Wealth management consultant") business had another weak quarter however, with income down 19% as weak stock markets left rich clients with little appetite to invest. RESTORING GROWTH Winters, who took charge seven years ago, has tried to restore growth while [building a portfolio](https://www.financedigest.com/building-a-portfolio-for-retirement.html "Building A Portfolio For Retirement") of digital assets in recent years, after repairing the bank’s balance sheet and slashing thousands of jobs early in his tenure. StanChart, present in 59 markets with 85,000 staff, mainly relies on capturing trade flows between its key markets of Asia, Africa and the [Middle East](https://www.financedigest.com/stanchart-sees-asia-middle-east-as-bright-spots-in-weak-global-economy.html "StanChart sees Asia, Middle East as bright spots in weak global economy") but it lacks the heft of larger rivals in commercial banking and investment banking. Still, the [company’s London-listed shares](https://www.financedigest.com/exit-from-taiwan-lifts-shares-of-french-company-carrefour.html "Exit from Taiwan lifts shares of French company Carrefour") have shed about 45% during his reign, though they have risen about 24% so far this year and outperformed peers. In July, StanChart [cheered investors](https://www.financedigest.com/despite-the-headwinds-investors-have-important-reasons-to-be-cheerful.html "DESPITE THE HEADWINDS, INVESTORS HAVE IMPORTANT REASONS TO BE CHEERFUL") with improved payouts to shareholders and a $500 million share buyback. Central banks around the world have been tightening monetary policy this year to contain [mounting inflation](https://www.financedigest.com/shares-rise-but-concern-mounts-over-inflation-flare-up.html "Shares rise, but concern mounts over inflation flare-up"). [Rising rates traditionally buoy bank](https://www.financedigest.com/the-rise-of-virtual-agents-the-future-banking-experience.html "The rise of virtual agents: the future banking experience") profits as they can make more from lending than the sums they pay to savers, but the current picture is clouded by the threat of an economic downturn that could cause hefty losses for lenders. StanChart said the outlook for China’s [real estate](https://www.financedigest.com/gold-london-real-estate-and-the-theresa-may-effect.html "GOLD, LONDON REAL ESTATE AND THE THERESA MAY EFFECT") sector remains “challenging” and it expected a “protracted recovery.” It said it had minimal exposure to mortgages on buildings under construction. The [bank has a $3.5 billion exposure to China’s real estate sector](https://www.financedigest.com/sterling-rises-as-receding-bank-sector-worries-lift-sentiment.html "Sterling rises as receding bank sector worries lift sentiment"), which has been beset by multiple headwinds after regulators clamped down on excessive borrowing since mid-2020. StanChart’s statutory credit impairment charges more than [doubled to $227 million in the latest quarter from a year](https://www.financedigest.com/cepsa-to-nearly-double-investments-over-next-3-years-as-profit-soars.html "Cepsa to nearly double investments over next 3 years as profit soars") earlier. The charges includes $130 [million for exposure](https://www.financedigest.com/frasers-hugo-boss-exposure-falls-to-691-million.html "Frasers’ Hugo Boss exposure falls to 1 million") to China real estate, among others. [(Reporting by Anshuman Daga and Lawrence White; Editing by Ana Nicolaci da Costa)](https://www.financedigest.com/white-bullet-releases-ad-funded-piracy-report-for-world-intellectual-property-organisation-wipo.html "White Bullet releases Ad Funded Piracy Report for World Intellectual Property Organisation (WIPO)") --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---