Weak India performance pulls down StanChart results

Standard Chartered's problems in India caused its growth to slow down in the latest quarter.

Analysts blamed the fall on income growth slowing to a "high single digit" percent in the first nine months of the year from more than 10 percent in the first half.

The bank said it expects full-year growth to return to over 10 percent, but the guidance implied growth was 5 percent or less in the third quarter, according to Alex Potter, analyst at Berenberg Bank.

StanChart's update came on the same day as lenders Westpac Banking Corp of Australia and DBS Group of Singapore posted strong earnings, signalling banks which are focused on Asia and which have refrained from overly risky bets were still able to post growth.

Income in India, which overtook Hong Kong as Standard Chartered's biggest profit contributor last year, fell by about 14 percent in the first nine months, compared with a 12 percent decline in the first half. Indian earnings fell almost 40 percent in the first half.

"The slowdown is now more of a medium-term issue," said Richard Meddings, finance director, saying it was due to government probes dampening investment appetite and interest rate rises.

"You've got politics inquiring into licensing in some big sectors that causes higher political risk in investment, and you've separately got an economy that is growing strongly but also has high inflation where the authorities are taking robust action," said Meddings.

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