Global bank Standard Chartered has revealed a slight drop in profits and hiked its cover for loan losses amid growing fears over China’s flailing property market.

Shares in the London-listed company plunged by more than a 10th on Thursday morning after updating shareholders on its third-quarter performance, knocking over £1 billion off its market value.

The bank reported a pre-tax profit of 1.3 billion dollars (£1.1 billion) for the three months to September, down by 2% on the previous year and below analysts’ expectations.

It came as the firm revealed a 294 million dollar (£243 million) credit impairment charge, more than a quarter higher than this time last year.

The bank said this included “further charges relating to the China commercial real estate sector”.

China’s property market has faced a sharp downturn over the past year, causing the Government to launch recent stimulus measures.

Standard Chartered said on Thursday that it reported a separate 700 million dollar (£580 million) impairment charge related to its investment in China Bohai Bank, in which it has a 16% stake.

Wealth management has continued its recovery with double-digit income growth and the financial markets performance has been resilient against a strong comparator period

The group said its balance sheet remains “strong” but flagged that customer loans and advances dipped by 3% to 281 billion dollars (£233 billion).

Deposits from customers also dropped by around 3% from the start of the previous quarter.

Nevertheless, Bill Winters, group chief executive of the firm, was positive about the results.

“We have continued to make strong progress in the third quarter against the five strategic actions outlined last year, delivering a solid set of results,” he said.

“Wealth management has continued its recovery with double-digit income growth and the financial markets performance has been resilient against a strong comparator period.”

Victoria Scholar, head of investment at Interactive Investor, said: “In a busy week for bank earnings, Standard Chartered has plunged to the bottom of the FTSE 100, logging its biggest one-day drop so far in the session since 1988, after earnings missed expectations with particular weakness in China.”