By Margot Patrick and Max Colchester 

LONDON-- Standard Chartered PLC said a sharp rise in the levy it pays to the British government on its global balance sheet could prompt it to leave the U.K., but that it hasn't started a formal review yet.

Finance Director Andy Halford said the "big change in the numbers" on the annual charge it pays, to around $540 million this year from $370 million in 2014, has put the issue into focus for shareholders.

"We've said that it's something that we keep under review and that continues to be the case," Mr. Halford said." The bank last took a formal review of its headquarters two or three years ago, he said.

The issue of where big banks base themselves has simmered in the U.K. since the Conservative-Liberal Democrat coalition government introduced an annual levy on bank balance sheets in 2011. The rate of the levy jumped this year, after Chancellor George Osborne in his March Budget speech said banks will pay an extra GBP900 million ($1.4 billion) this year to "make a bigger contribution to the repair of our public finances."

The Labour Party that is running neck and neck with the Conservatives to form a new government after the U.K.'s May 7 general election has said that it would raise the levy further.

Britain's largest bank, HSBC Holdings PLC, told shareholders last week that it has started work to see whether the bank should move its headquarters. HSBC has been widely tipped to choose Hong Kong if it does decide to move, while Standard Chartered could move to Singapore, analysts say. Mr. Halford declined to comment Tuesday on where the bank might end up.

Standard Chartered, while based in London, makes most of its revenue in Asia, the Middle East and Africa.

"The potential for HQ relocation [to Singapore] is gaining greater traction too given the material damage from a permanent and rising U.K. bank levy," Sanford C. Bernstein analyst Chirantan Barua wrote in a note Tuesday.

Mr. Halford's comments came as the bank reported a 22% fall in first-quarter pretax profit, to $1.47 billion from $1.88 billion. The bank didn't report net figures.

Bad loans rose 80%, to $476 million from $265 million in first-quarter 2014, underscoring the challenge for incoming Chief Executive Officer Bill Winters to restructure the bank and improve returns.

After strong growth for a decade in key markets such as Hong Kong, Singapore and India, Standard Chartered has faltered in the past two years as tougher regulation and a weakened global economy hit its earnings. Many of the bank's senior executives departed, and Mr. Winters was hired in February to replace long-serving CEO Peter Sands when he steps down in June.

Mr. Sands on Tuesday said the bank is on track to meet earlier pledges to raise its regulatory capital ratio, a key measure of financial strength, to between 11% and 12% this year, and to trim more than $400 million from its costs.

Write to Margot Patrick at margot.patrick@wsj.com

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