Standard Chartered , one of Hong Kong’s three currency-issuing banks, reported a better-than-expected profit for the third quarter as it benefited from a strong performance in its financial markets business and rising interest rates. The emerging markets-focused lender’s net profit rose by 50 per cent to US$964 million from US$644 million in the same quarter of 2021. The London-based bank, which generates much of its revenue in Asia, reported US$1.4 billion in pre-tax profit, beating the US$1.1 billion expected by analysts. “We’re well aware of the many challenges we face across our markets, but feel well-prepared for these adverse turns if the may come. We’re assured by the evidence of the strong risk management we’ve demonstrated over the last several years,” Standard Chartered chief executive Bill Winters said on a call with analysts. “Our strategy is working and our momentum should see us through the challenges we face.” The bank’s results came a day after larger crosstown rival HSBC beat analyst expectations despite economic challenges in Hong Kong and in Britain, its two biggest markets. Standard Chartered took credit impairment charges of US$227 million during the quarter, including US$130 million related to its China commercial real estate business. The bank took US$237 million in charges related to its China commercial property book in the first half of the year. “I can’t rule out there may be some further charges, but I think in the overall scheme for the bank they are likely to be entirely manageable,” Andy Halford, Standard Chartered’s chief financial officer, said on a call with journalists. “It’s just over 1 per cent of our total book. I think we just need to be seeing in that overall context. It is one area that is a little bit tricky at the moment, but not massively so.” Standard Chartered’s overall exposure to the China commercial real estate sector is about US$3.5 billion. Some exemptions offered to overseas bankers attending Hong Kong summit On Tuesday, HSBC’s CEO Noel Quinn said there remained challenges for the real estate sector, but he was encouraged by recent policy measures taken by Beijing. HSBC took US$400 million in provisions for potential soured loans related to its commercial real estate portfolio in China in the third quarter. The additional provisions for the Chinese commercial real estate book came as China’s economy grew at a greater-than-expected pace of 3.9 per cent in the third quarter, but remained below government growth targets for the year. Standard Chartered’s Asia business made an underlying pre-tax profit of US$1.06 billion, 15 per cent higher than the US$927 million it reported a year earlier. Underlying pre-tax profit in Hong Kong its largest market, dropped by 3 per cent to US$324 million in the quarter. Shares of Standard Chartered rose 2.7 per cent to close at HK$50.20 in Hong Kong on Wednesday following the announcement. The bank’s operating income, similar to revenue in US accounting terms, rose 15 per cent to US$4.3 billion in the third quarter. Net interest income increased by 11 per cent to US$1.9 billion. The net interest margin, an important measure of lending profitability, rose to 1.43 per cent in the quarter, up from 1.23 per cent a year earlier. It increased eight basis points from 1.35 per cent in the second quarter. Operating income rose by 55 per cent to US$1.08 billion in its transaction banking business and increased by 22 per cent to US$1.54 billion in its financial markets business. Wealth management reported a 15 per cent decline in operating income to US$455 million, which partially offset gains from its financial markets and cash management operations. The bank’s corporate, commercial and institutional banking segment reported a 48 per cent gain in underlying pre-tax profit to US$1.29 billion, while its consumer, private and business banking segment saw its underlying pre-tax profit jump by 63 per cent to US$478 million. Its SC Ventures business reported an underlying pre-tax loss of US$85 million, compared with US$62 million in the prior-year period. The ventures segment includes its majority-owned virtual banks, Mox in Hong Kong and Trust in Singapore.