Standard Chartered has set aside $190mn to hedge against potential risks from the US-Israeli war on Iran, marking one of the most tangible signs of the conflict's impact on global financial institutions. The Asia-focused bank also raised its internal forecast of the probability of a "sustained Middle East conflict" to 70 per cent. The move represents precautionary management overlays relating to the bank's exposure to the region, including petrochemical companies and sovereign borrowers.

Despite the geopolitical headwinds, the UK lender reported record quarterly pre-tax profits of $2.5bn, up 17 per cent year-on-year. Shares jumped 3.6 per cent in Hong Kong trading, bringing the stock's 12-month gain to over 70 per cent and valuing the group at about £40bn. Record operating income of $5.9bn was boosted by wealth management, where income rose by a third to $1bn. The bank maintained its 2026 guidance of operating income growing at the bottom end of the 5-7 per cent range.

The bank warned that prolonged Middle East fighting could push crude oil prices to nearly $136 a barrel over the next three months, while constraining Chinese GDP growth to 4 per cent annually and US growth below 2 per cent. Citi analysts noted the Middle East represents 6 per cent of Standard Chartered's total loan exposure, with over 90 per cent in the corporate and investment bank. The lender is in the final year of its "Fit for Growth" strategy targeting $1.5bn of savings by year-end.