Standard Chartered STAN.LN -0.93 percent PLC Tuesday said it faces growing headwinds as some key Asian markets slow down and the strong US dollar tempers revenue growth.
Shares in the UK-based bank slipped following the announcement. Those of HSBC Holdings HSBA.LN +0.11 percent PLC, which is also active in Asia, were also underperforming the sector.
Standard Chartered said revenue increased at a high-single-digit percentage rate in the nine months ended September 30, consistent with the first half and driven by strong momentum in Hong Kong, China and Indonesia. The rate would have been in the double digits if the dollar hadn’t strengthened so much against Asian currencies, it said, which shaved off about three percentage points from the growth rate.
The bank said operating profit grew at a mid-single-digit percentage rate in the first nine months. It doesn’t provide exact numbers for its quarterly performance.
Standard Chartered gets more than 90 percent of its profit from Asia, Africa and the Middle East but reports its results in US dollars.
Finance director Richard Meddings said there is still “very good momentum” across Standard Chartered’s wholesale and consumer operations, but that “we are seeing for the first time signs of Asia beginning to slow.”
He said that was most evident in the trade and cash units within wholesale banking, where Standard Chartered responded to customers pulling back on business by lowering its margins to maintain volume growth.
The World Bank earlier this month cut its economic growth forecasts for the East Asia and Pacific Region and warned that a slowdown in China could deepen because of weaker global demand for its exports.
Analysts said the outlook given by the bank was gloomier than when it reported its first-half results in August, though Standard Chartered is still considered to be in a much stronger position than its US and European peers because of its focus on emerging markets. Nomura analysts, who have a “buy” rating on the stock, said they see the potential for a lower rate of revenue growth next year but added that the dollar could weaken and create tailwinds for the bank.
Standard Chartered said its costs are well controlled, with balanced cost and income growth, despite paying the largest fine ever collected by a single US regulator in a money-laundering case.
New York’s Department of Financial Services fined Standard Chartered $340 million in the summer for allegedly breaking US money-laundering laws in handling transactions for Iranian customers.
Meddings on Tuesday said he hopes that probes by four other US agencies on the alleged breaches will be wrapped up by the end of the year.