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UPDATE 1-StanChart Q3 profit rises 16%; flags growth, interest rate headwinds

* Q3 profit $1.24 bln versus $1 billion analyst estimates

* Corporate, institutional banking income up 13% in quarter

* CEO says execution of turnaround strategy remains priority (Adds details of results, comments from StanChart)

HONG KONG/LONDON, Oct 30 (Reuters) - Standard Chartered reported on Wednesday that third quarter profit rose a better-than-expected 16%, as a surge in business from corporate clients helped the bank weather unrest in its core market of Hong Kong and global trade tensions.

StanChart's pretax profit for the three months ended Sept. 30 increased to $1.24 billion from $1.07 billion in the same period a year ago, above the $1 billion average of analysts' forecasts compiled by the lender.

StanChart is in the midst of a second three-year turnaround plan under Chief Executive Bill Winters, with plans to double returns and dividends in three years by cutting $700 million in costs and boosting income.

The first of those in 2015-2018 focused on repairing a balance sheet ravaged by ill-advised lending in Asia, improving the bank's internal controls, reducing costs, and shedding unwanted businesses.

"The continuing execution of that strategy remains our priority," Winters said in a statement.

The bank's corporate and institutional banking income grew 13% during the quarter, while private banking rose 14%, it said, adding its core capital ratio remained within the 13-14% target range at 13.5%.

StanChart, however, flagged that there were "growing headwinds from the combination of continuing geopolitical tensions and expectations of declining near-term global growth and interest rates."

StanChart's bigger rival HSBC abandoned on Monday its own return target of greater than 11% by 2020, blaming a worsening revenue outlook and tougher than expected market conditions.

The London-listed shares of StanChart are up 14% so far this year, compared to a 9% drop in rival HSBC's shares. (Reporting by Lawrence White in London and Sumeet Chatterjee in Hong Kong; Editing by Muralikumar Anantharaman)