STANDARD Chartered reported a fall in profits in the third quarter yesterday, as the bank’s focus on emerging markets left it exposed to poor growth in its core markets.
The UK-based bank said its profits fell “by a low single digit percentage” compared with the same period of 2012. For the first nine months of the year, profits are up by a small percentage compared with 2012.
The weak performance and rising regulatory costs has pushed the bank to start cutting expenditure, beginning with a reduction of 2,000 staff in the last year.
Despite moves to cut the bills, costs remained broadly flat on the quarter, the bank said, because of rising regulatory costs.
Korea and Singapore performed particularly poorly with single digit percentage falls in profits over the year to date.
Weak economic conditions has also increased the group’s loan impairments by tens of millions of dollars compared to last year, to a level approaching $300m (£187m).
However, some areas have seen sustained growth. Standard Chartered said profits increased at double-digit percentage rates in Africa and Hong Kong in the first nine months of the year, compared with the same period of 2012.
And analysts remained upbeat, expecting pressures in emerging markets to ease off through next year.
“Even in a challenging 2013 we expect the relentless top and bottom line growth to be maintained, with a jump in 2014 profit before tax reflecting the assumed non-recurrence of a $1bn Korean goodwill writedown taken in the first half of 2014,” said Ian Gordon from Investec.
Standard Chartered’s shares increased 0.62 per cent.