Standard Chartered’s Q3 Profits Take a Hit from China Real Estate and Banking Woes

Standard Chartered, also known as StanChart, reported a significant drop in pre-tax profit for the third quarter, much worse than expected. The bank suffered a nearly $1 billion blow from its exposure to China’s real estate and banking sectors. This news caused a 5% drop in the bank’s Hong Kong shares. Credit impairment charges also increased by $62 million compared to the same period last year, with a $186 million charge related to China’s troubled commercial real estate market. StanChart also faced a $700 million hit from its stake in China Bohai Bank, reflecting the lender’s subdued earnings and the challenging economic backdrop. The bank’s total China real estate exposure decreased to $2.7 billion. Despite government easing measures, the Chinese economy remains fragile, with a deepening crisis in the property market. StanChart’s investment in China Bohai Bank suffered due to lower forecasted interest rates and decreased lending margins. The bank, however, remains confident in achieving its returns on tangible equity targets. Income in the bank’s Financial Markets trading division fell 8% in the third quarter, attributed to reduced market volatility. Overall, StanChart faces challenges in improving returns in China’s slowing economy and rising loan losses.