SINGAPORE - Standard Chartered expects Asia and the Middle East to outperform other regions even as spiralling inflation and a spike in borrowing costs risk tipping major global economies into a recession next year, a senior executive at the bank said.

The London-headquartered lender has been beefing up its transaction banking and financial markets businesses, betting the two regions will still see economic growth while many Western countries face contraction, said Simon Cooper, StanChart's CEO of corporate, commercial and institutional banking business.

"I don't see recession as a big risk in this part of the world. In Asia and the Middle East, I see economies doing well," said Cooper, 55, who is widely seen by the investment community as a potential successor to CEO Bill Winters.

StanChart, which operates in 59 countries with a focus on Asia, Middle East and Africa, is seeing its European and U.S. clients move more business to low-cost Asia.

"In the aftermath of COVID, we've seen the shift to Southeast Asia and neighbouring countries from a manufacturing perspective. That's continued and if anything, accelerated," Singapore-based Cooper told Reuters in an interview.

He said markets are looking to see the timeline for China moving out of its zero-COVID policy.

StanChart, which earns most of its revenue in Asia, reported a 40% rise in pretax profit in the third quarter and raised its income growth forecast for the year as rising rates boost its mainstay lending business.

Cooper also highlighted India as a big beneficiary of supply chain shifts and strong economic growth. "India is probably at the sweetest spot it has been in quite a while. People are starting to see it as a real opportunity," he said.

Cooper, who previously spent more than two decades at HSBC , heads the division that contributed about three-fourths of StanChart's pretax profit in the nine months to September.

StanChart's focus on growth markets and its ability to better withstand the economic downtown come at a time when some global banks have flagged plans to cut jobs as they hunker down for a recession and are impacted by their weak investment banking business.

Income at StanChart's financial markets business surged 17% to a record in the latest quarter. "We've now got a much more balanced financial markets business than we had before, from macro trading to foreign exchange to global credit markets," said Cooper.

"We've seen net client income grow double digits this year," said Cooper, who is also the CEO of StanChart's Europe & Americas business.

(Reporting by Anshuman Daga; Editing by Muralikumar Anantharaman)