By Selena Li and Lawrence White

HONG KONG/LONDON (Reuters) – Standard Chartered upgraded key performance targets as its quarterly profit topped market estimates, and said it will double down on its wealth business while slashing back retail banking in a bid to further boost returns.

StanChart said its third-quarter pretax profit reached $1.72 billion, above an average analyst forecast of $1.49 billion and more than double the year-earlier number of $633 million when it took a nearly $1 billion hit from its exposure to China.

Income this year will now grow by around 10%, the bank said on Wednesday, up from a previous estimate of towards 7%. The lender also said it plans to return at least $8 billion to shareholders over 2024-2026, up from $5 billion.

The improved performance came as StanChart, like rival HSBC, continues a sweeping restructuring of its business to focus more on affluent individual customers and big cross-border businesses that are likely to yield more in fees for the bank.

StanChart said it will double investment in its wealth business, investing $1.5 billion over five years in relationship managers and investment advisers.

That will be funded by cutting more of its mass retail business, following HSBC which in recent years has slashed its retail banking operations in Western markets such as the U.S., Canada and France to focus on more lucrative areas.

StanChart said it is exploring the opportunity to sell “all or part of a small number of businesses” which no longer make strategic sense.

The London-headquartered bank did not announce a fresh share buyback for the quarter, unlike HSBC.

StanChart’s shares rose 3.3% in Hong Kong after the results, as it joined European peers in making robust progress on sustaining profits even as rates fall.

The lender’s shares in London have soared 31% this year, outpacing HSBC which has risen 15%. HSBC, on Tuesday, reported quarterly profits up 10% year-on-year.

DOUBLING DOWN ON WEALTH BUSINESS

Income from StanChart’s wealth solutions unit jumped 32% to $694 million, logging the highest growth rate among its main businesses and justifying the bank’s heavy investment in targeting affluent customers.

The lender has been selectively exiting wealth markets that do not fall within its strategy. In India, it is offloading its personal loan business to local peer Kotak Mahindra Bank.

StanChart will continue to “reshape” its mass retail business to focus on future affluent and international clients, Group CEO Bill Winters said in a statement.

Its global markets business reported 16% growth – the second largest growth across main businesses – in the July-September period from a year ago, to $840 million.

The London-headquartered bank, which has not been competing with its Wall Street and European investment banking rivals on large deals, has in recent months launched a reorganisation in corporate and investment banking (CIB) to boost competitiveness.

“In our CIB business, we are taking actions to focus on larger global clients who rely on our unique cross-border capabilities,” Winters said.

StanChart created a new banking team within its CIB division last month aimed at boosting cross-border business, Reuters has reported. The bank also folded its industries coverage team into its dedicated mergers and acquisitions advisory team in August.

(Reporting by Selena Li in Hong Kong and Lawrence White in London; Editing by Himani Sarkar)