Standard Chartered said it would absorb a $46 million hit from its investment in a Structured Investment Vehicle and warned more could be on the way.

The Asia-focused bank has taken part of the Whistlejacket SIV's assets onto its balance sheet, after the SIV was forced to write down $7.4 billion of assets, and said it may take more on board in the future. The company has exchanged $140 million of capital notes in Whistlejacket for assets amounting to around $1.68 billion, which will now sit on its balance sheet, at a cost to income of $46 million.

Standard's announcement is a further blow to SIVs after HSBC said financing two of its SIVs would cost it £17 billion last month.

The company also revealed the $120 million sale of its Indian asset management company to UBS would be delayed, with UBS unlikely to receive the requisite approvals in 2007. The bank will also lose money because of new legislation relating to the treatment of dormant accounts in Korea, costing it $133 million.

On a more positive note for the bank it said it would meet full year expectations, despite volatile markets.

Banking and finance groups around the world have been reporting losses in the last few months due to the fallout of the global credit crisis sparked by US mortgage defaults, however, investments in Asia have on the whole remained sound.

In a statement to the London Stock Exchange the company said that, whilst markets remain volatile, it is broadly comfortable with the operating profit before tax consensus for the full year, sending shares up 2.7 per cent, or 49p, to £18.96.

Chief Executive Peter Sands said the group's performance over the year had been strong and that its markets remained full of opportunity. "We continue to accelerate investment to take advantage of the multitude of growth opportunities in our markets and continue to build a platform for sustainable future income growth, whilst remaining acutely vigilant for any signs of slowdown or deterioration impacting our markets," he said.

The company added that trading conditions in its main operating markets continue to benefit from strong economic conditions, good local currency liquidity and benign credit environments.

Standard said income had grown in both its consumer and wholesale lending operations, with strong demand from across Asia, and that there was only a limited impact from the turbulance in Europe and the US.

Keith Bowman, an equity analyst at Hargreaves Lansdown, said the statement was broadly positive in tone. "On balance, the bank is likely to remain the current UK darling of the banking sector, given its lack of exposure to credit crisis hit geographical regions, with a 44 per cent out-performance of the UK banking sector over the last year neatly summarising it current pre-eminent position," he said.

Shares in Standard Chartered have been boosted this year due to speculation that Chinese state owned banks are building stakes in the company.

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