Standard Chartered pre-tax Q3 profit drops 16%

Standard Chartered reported Tuesday a sharp fall in pre-tax profits in the third quarter and issued a profit warning, while saying it would "remain watchful in India, in China".
The Asia-focused British bank said pre-tax profit fell 16 percent to $1.53 billion from $1.83 billion a year earlier in a report to the Hong Kong stock exchange.
Pre-tax profit for January-September came in at $4.8 billion, compared with $5.9 billion at the same point last year.
The news hit the bank's shares, which tumbled 5.5 percent to HK$131.30, against a broader market rally.
The bank is struggling to overcome structural issues including a bloated investment arm, increased competition in Asia and troubles turning around its South Korean unit.
In a statement attached to the earnings report, chief executive Peter Sands said the bank would target $400 million in "productivity improvements" next year.
"Whilst some of these actions will impact near term performance, they are crucial to getting us back to a trajectory of sustainable, profitable growth," he said.
The bank's report said: "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."
Chirantan Barua, UK banks analyst at Bernstein Research, told Dow Jones Newswires, that the bank's mention of China, which is struggling to overcome an economic slowdown, was telling.
"It's the first time they've said they're watchful of China," Barua said. "That's big for me."
In August the bank was hit by US regulators with a $300 million fine and restrictions on its dollar-clearing business for failing to detect possible money-laundering.
The New York Department of Financial Services (DFS) said the bank's internal compliance systems had failed to detect or act on a large number of "potentially high-risk transactions" mostly originating from Hong Kong and the United Arab Emirates.
The new punishment came two years after the bank paid $667 million to settle charges it violated US sanctions by handling thousands of money transactions involving Iran, Myanmar, Libya and Sudan.