Standard Chartered (STAN.L) reported a stronger-than-expected quarterly pre-tax profit thanks to lower credit impairment charges but forecast flat income for the full year amid an "uneven" recovery from the pandemic.
Statutory pretax profit for the bank jumped to $996m (£730m) in the third quarter of the year, from $435m a year earlier.
It managed to beat the $942m estimate of analysts, according to data compiled by the bank.
Standard Chartered reported credit impairment charges of $107m, down from $353m a year earlier. Excluding the impact of any unforeseeable events, it expects credit impairment to remain at low levels in the fourth quarter.
"We delivered a return to top-line growth in the third quarter and achieved further progress against our strategic priorities, with strong performance in our Financial Markets and Trade businesses and ongoing positive momentum in Wealth Management,” said group CEO Bill Winters.
“We continue to transform how we serve our customers in the world's most dynamic markets through innovation, partnerships and new ventures.”
Winters has been praised by investors for repairing the balance sheet and slashing thousands of jobs since he took over in 2015, but he has recently come under pressure to boost growth.
The bank’s stock fell about 8% on Tuesday morning.
"There had been some expectation that the reduction in provisions set aside for bad loan defaults would be even greater," senior investment and markets analyst at Hargreaves Lansdown Susannah Streeter told Yahoo Finance UK.
"The bank also said it has $4.2bn exposure to the real estate sector in China and so the precarious situation of the highly indebted Evergrande (3333.HK) group also appears to be a lingering concern," she said, adding "the company said it’s continuing to monitor developments in the sector but that may have also caused some nervousness among investors."
Bloomberg reported Standard Chartered's growth expectations are slower than some of its rivals such as HSBC (HSBA.L) which "has recently taken a more bullish stance on how quickly the global recovery is taking hold, likely leading to higher lending and interest rates."
The bank said the economic recovery from the COVID-19 pandemic “has continued to be uneven and punctuated by supply-chain disruption" even as it is encouraged by robust levels of export growth across many of its markets in Asia.
Overall quarterly income for the lender rose 7% to $3.8bn from a year earlier. It reiterated its target to return to a 5% to 7% income growth from next year.
It expects operating expenses, including the impact of currency translation and performance-related pay, for the 2021 financial year to be at or below $10.4bn