Standard Chartered Bank’s wealth management operations took a blow during the third quarter as investors adopted a more cautious stance, according to the UK-listed bank’s third quarter interim statement.

“Wealth Management income remains well diversified, but was below the run rate for the first half as a result of weaker investor sentiment,” said the bank in a statement published yesterday. Analysts believe second half revenues will be down compared to the first half of the year.

The bank also took a further hit from a slowdown in its India operations, which saw operating profit slump 39 per cent to $378 million during the first half of the year, for the first time in around six years.

"Whilst we have seen a further slowdown in India, and Korea remains muted, we continue to see strong performances in Hong Kong and Singapore," said the bank.

Mortgage income was slightly below the first half as margins remained under pressure, reflecting both competition but also the impact of increasing interest rates in a number of markets, said Standard Chartered.

Christopher Wheeler, an analyst at Mediobanca, said the quarter from July to September has been a mixed bag for Standard Chartered. “We predict revenues during the second half of the year will run 3 per cent ahead of the first half. Mortgage income suffered from pressure on margins but deposit income remained firm with deposit margins stable. The momentum came from SME activity, credit cards and personal loans, while wealth management suffered from investor's adoption of a more cautious stance in the third quarter. We predict revenues will be below the first half.”

Despite this, income for Standard Chartered in the first nine months of 2011 has grown by a high single-digit percentage over the first nine months of 2010, said the bank. "Over the same period, operating profit before tax grew at a double-digit rate," it added. Deposit income was up on the first half as margins remained resilient.

 Income in SME saw good growth, particularly in trade, foreign exchange and cash management products.

“The Group has continued to perform well in the third quarter of 2011 with income momentum across a broad spread of products and geographies. Despite recent macroeconomic events, our markets continue to exhibit strong growth and their growth credentials remain intact. We continue to be well positioned in these markets and remain open for business.
 We are differentiated by our liquidity and capital strength and continue to benefit from the disciplined execution of our strategy,” said Peter Sands, group chief executive.