Aug. 5 (Bloomberg) -- Standard Chartered Plc, the U.K. bank that earns most of its money in Asia, said first-half profit rose 31 percent, helped by corporate lending in India and Hong Kong.

Standard Chartered gained 8.4 percent after the bank said today in a statement that net income increased to $1.79 billion, or $1.25 a share, in the six months ended June 30. That beat the $1.68 billion average estimate of eight analysts surveyed by Bloomberg.

Chief Executive Officer Peter Sands said Standard Chartered, the first London-based bank to report higher first-half earnings, expects moderation ``rather than an interruption'' of growth in Asia. The results come a day after HSBC Holdings Plc, which makes two-thirds of its money in Asia, posted lower profit on U.S. subprime mortgage losses and ``less momentum'' in emerging markets.

``With its international expertise versus local competitors and a nimbler profile than HSBC, Standard Chartered is arguably better-positioned than many of its rivals to continue to exploit growth opportunities,'' said Sandy Chen, an analyst at Panmure Gordon & Co. in London, who raised his rating on Standard Chartered today to ``hold'' from ``sell.''

Standard Chartered rose 119 pence to 1,542 pence in London, valuing the bank at 21.9 billion pounds ($42.8 billion). The stock has declined 16 percent this year, outperforming the eight-member FTSE 350 Banks Index, which dropped 21 percent.

`Challenging Market'

The bank forecast ``double-digit'' growth in per-share earnings this year despite ``challenging market conditions.'' Standard Chartered is ahead of schedule on plans to reduce costs by $100 million by 2009 at American Express Co.'s banking unit, which it bought in March for $860 million to get banking licenses in India and Taiwan and add wealthy customers.

Corporate-banking profit rose 35 percent, exceeding the 7 percent gain in consumer-banking division, which cited ``challenging market conditions. Standard got 25 percent of pretax profit in Hong Kong, it biggest market.

Operating profit in the consumer unit was $843 million, Standard Chartered said. Falling interest rates eroded margins and declining stock markets hurt investment product sales, the company said. The bank also has been investing in new products in China and a private bank for wealthy customers, said Sands.

Consumer banking profit in Korea declined 26 percent to $87 million. The bank will restructure its main office in Korea and branch network and will create a new securities unit with an initial focus on fixed income, Standard Chartered said.

Corporate-banking profit in the first half was $1.62 billion, with Hong Kong gaining 48 percent to $343 million and India jumping 47 percent to $411 million.

Unpredictable

Even after slowing as much as 2 percent this year, Asian economies will still grow at 5 percent to 7 percent this year, Sands said in an interview with Bloomberg TV. ``We cannot predict precisely how events will unfold and to what extent our markets and the bank itself will be affected.''

Standard Chartered, like HSBC, gets more than half its funding from customer deposits and doesn't rely on capital markets to fuel lending. Banks and financial-services companies worldwide have raised $353 billion in capital since the collapse of the U.S. subprime market triggered a global credit crunch.

Standard Chartered took a $130 million charge against first- half earnings on asset-backed securities. It marked down $186 million against reserves.

The bank's Tier 1 capital ratio, a measure of financial strength, declined to 8.5 percent from 9.7 percent a year ago, the statement said.

To contact the reporter on this story: Jon Menon in London at jmenon1@bloomberg.net

Last Updated: August 5, 2008 11:58 EDT