By Yifan Wang
Standard Chartered PLC's third-quarter pretax underlying profit slumped 40%, as credit impairments continued to rise sharply due to the pandemic, albeit at a slower pace than in previous quarters.
Underlying profit before tax fell to $745 million from $1.24 billion a year earlier, the Asia-focused lender said Thursday.
The decline was primarily due to a surge in credit impairments, which jumped to $353 million from $279 million. The increase followed an even sharper rise in impairments in the first half of the year.
Operating income fell 12% to $3.52 billion.
Net interest income declined 16% to $1.62 billion, mainly dragged by margin compression. Net interest margin was 1.23%, down 0.38 percentage point.
The bank said it expects its net interest margin to stabilize at slightly below the current level over the next two quarters, as the impact of recent global central bank rate cuts becomes fully reflected.
Standard Chartered expects its fourth-quarter seasonality to be similar to last year, and it anticipates better client demand in 2021.
As the low interest-rate environment is expected to be protracted, the bank said it is increasingly shifting its focus to generating more fee-based income, particularly from its financial markets and wealth management businesses that have good momentum.
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(END) Dow Jones Newswires