The shares of Standard Chartered (LSE: STAN) (NASDAQOTH: SCBFF.US) dropped by 1% to 1,517p this morning after the emerging market bank revealed tough trading had continued in South Korea, one of Standard’s most important markets.
Standard Chartered, which generates the majority of its profits in Asia, Africa and the Middle East, recorded almost $300m in impairment charges on loans in its consumer and wholesale divisions.
The bank’s South Korean division suffered from “multiple factors”, including currency weakness, poor loan performance and the general economic slowdown in Asia. However, operating profits for the group on a whole grew at a single-digit rate, despite margins being weighed down by the performance in South Korea.
Standard Chartered chief executive Peter Sands added:
“In the third quarter, we delivered a resilient performance despite an uncertain macro environment, with continued strong levels of client activity and good volumes across many of our markets. Our diversity by market, product and industry has underpinned our performance in the quarter, as has our ongoing tight control of costs and risk.”
With a market cap of £37bn, Standard’s shares trade at 11 times their expected earnings, and offer a prospective dividend yield of 4%.
Of course, whether that valuation, today’s update and the future prospects for the defence industry all combine to make shares of Standard Chartered a ‘buy’ remains your decision.
