Standard Chartered Plc said operating profit for the third quarter fell 16 percent, hurt by rising costs from the restructuring of its South Korean business and a doubling of impaired loans.
The Asia-focused bank also said it will target a further USD 400 million in cost reductions for 2015, as it reshapes itself to combat a downturn in emerging markets which had previously been a tremendous engine of growth - driving it to ten straight years of record profits before 2013.
"Whilst some of these actions will impact near term performance, they are crucial to getting us back to a trajectory of sustainable, profitable growth," Chief Executive Peter Sands said in a statement.
Operating profit for the July-September quarter fell to USD 1.5 billion from USD 1.8 billion in the same period a year ago.
StanChart has said it expects profits to fall in 2014 for a second straight year, as the lender faces a number of challenges including a slowdown in growth in many of its core emerging markets and weak trading activity.
The bank is also under heavy regulatory scrutiny, having warned on Aug. 6 that it faced its second fine in two years from New York's financial regulator for problems in its anti-money laundering controls.
StanChart said impairments for the third quarter rose to USD 539 million from USD 250 million in the same period last year, as a small number of corporate and institutional clients were hammered by weak commodity markets.
"We remain watchful in India, in China and of commodity exposures more broadly, where we have continued to tighten our underwriting criteria and reduce our exposures," the statement said.
In Asia, StanChart's results in the last two years have been weighed down by big losses in South Korea, where it took a USD 1 billion hit in 2013 amid rising bad debts, a long-running dispute with staff and tough domestic competition.
StanChart began to restructure its Korean business in 2011. Since then it has reduced its number of branches by 69 to 313, cut staff and sold two consumer finance units.
The bank also said in August this year it made a USD 175 million provision to cover its exposure to suspected commodities fraud in China.
StanChart's shares have fallen 20 percent in the year to date in London, against a 5 percent decline in the benchmark FTSE 100 index.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
