Standard Chartered (02888) fell nearly 5% in Hong Kong trading, declining 4.89% to HK$188.8 by the time of writing, with a turnover of HK$158 million. A JPMorgan research report indicated that escalating military conflict in the Middle East has heightened risk aversion in the market, and the bank expects Standard Chartered, which has significant regional exposure, to face a larger correction. The report noted that Standard Chartered's revenue from the UAE accounted for 5.6% in 2025, but given that approximately 73% of its loan exposure in the UAE as of the second quarter of 2025 is to governments, public institutions, or banks, JPMorgan views its credit risk as largely manageable. On the performance front, UBS pointed out that Standard Chartered's pre-provision operating profit for the fourth quarter of 2025 fell 11%, or US$182 million, short of expectations, despite net interest income surpassing forecasts by 8%. However, the bank has cautioned investors not to consider this outperformance as sustainable. About two-thirds of the shortfall in pre-provision profit stemmed from one-off operational expenses, while the remaining third came from inventory losses in trading activities—neither of which are expected to impact future earnings per share forecasts.