HONG KONG/LONDON: Standard Chartered on Thursday posted a better-than-expected 17% profit gain, buoyed in part as Gulf countries rushed ‌to raise funds via bond issuance, although it logged a $190 million charge to cover expected losses from the Iran war.

The upbeat results, which ​nudged StanChart's London-listed shares 0.6% higher, highlight how European banks have so far been able to shrug off the direct impact of the ​war on their ​businesses.

Chief Executive Bill Winters said that Gulf countries are stepping up efforts to build cash reserves as oil-related income has been hit by the conflict.

"A number of the Gulf states raised over $10 billion over the ⁠past couple of weeks in private markets," he told reporters, adding that StanChart had acted as an advisor on many of those deals.

"We're quite optimistic about how that Middle East business shapes up over time," Winters added.

StanChart, which garners most of its revenue in Asia, Africa and the Middle East, reported pretax profit for the quarter of $2.45 billion, stronger than ​a consensus estimate ‌of $2.14 billion.

Bond issuance, including ⁠new debt from corporate ⁠customers, helped income for StanChart's global banking business climb 19%. Its wealth business also did well, with income surging 32% in January-March, thanks ​to heavy demand among customers for investment products.

IRAN WAR CHARGE REFLECTS CAUTIOUS STANCE

Total credit ‌costs for the quarter went up 32% to $290 million from a year ⁠ago.

The $190 million charge related to the Iran war compares with a similar $204 million provision announced by Lloyds Banking Group and $90 million by Deutsche Bank on Wednesday.

The charge is a reflection of the bank’s cautious position after scenario planning, "rather than any underlying significant deterioration in credit," Manus Costello, the bank's global head of investor relations, told Reuters.

StanChart and HSBC, which have both bet on the Middle East's increasing trade with Asia and other markets to fuel their growth, are two of the global banks most exposed to the war with Iran, according to company data and sector analysts.

StanChart's exposure to the Middle East is roughly 6% of its total exposure, the bank said.

Singapore-based DBS also reported on Thursday, saying ‌that stress tests showed its credit portfolio remained sound for now.

Some other banks have ⁠been more downbeat. National Australia Bank, the country's biggest business lender, said this month ​that it expects impairment charges to double to A$706 million ($503 million) in the first half due to the Iran war.

In China, StanChart had a weak quarter with profit plummeting 75% to $36 million from the same period a year ago, which Costello said ​was due to ‌weakness in its trading business and the bank's efforts to reduce its unsecured loan ⁠portfolios as it shifts further to serving wealthy ​clients. (Reporting by Selena Li in Hong Kong and Lawrence White in London; Editing by Edwina Gibbs)