"We're looking" at HQ issues, Standard Chartered says

* StanChart (HKSE: 2888-OL.HK - news) says home under constant review

* Bank tax to cost $540mln this yr vs $366mln in 2014 -CFO

* Q1 pretax profit down 22 pct to $1.5 bln as bad debts jump

* Says on track to deliver core capital of 11 pct this year

* Shares (Berlin: DI6.BE - news) fall 3 pct (Adds analyst comments, details, updates shares)

By Steve Slater

LONDON, April 28 (Reuters) - Asia-focused bank Standard Chartered said the location of its headquarters is under constant review and a big increase in a tax on banks in Britain meant it was watching the situation closely.

"At the moment it's something we're watching, we're looking at, we're thinking about, but at this point in time there's no change in our position," Andy Halford, Standard Chartered (Other OTC: SCBFF - news) 's finance director, said.

"Clearly the increase in the (bank levy) number this time is pretty significant," Halford told reporters on Tuesday.

Halford was speaking after the bank reported a 22 percent drop in profits in the first quarter as losses from bad loans jumped 80 percent from a year ago and trading conditions remained challenging.

Some shareholders have told Reuters they want Standard Chartered to follow its rival HSBC and formally review its home base after a jump in the bank tax this year.

"The potential for HQ (Stockholm: HQ.ST - news) relocation (to Singapore) is gaining greater traction too given the material damage from a permanent and rising UK bank levy," Chirantan Barua, analyst at Bernstein, said.

The UK tax has increased eight times since being introduced in 2010 to ensure banks make a "fair contribution" after the financial crisis.

HSBC's review of its domicile sparked a political row ahead of a national election in Britain on May 7, putting the spotlight on party policies on whether Britain will stay in Europe and how much banks should be taxed.

Halford estimated Standard Chartered would pay about $540 million under the bank levy this year, which would represent about 11 percent of expected pretax profits and be up from $366 million in 2014.

"The general reaction of shareholders is we're happy that you as a management team are giving this thought and we expect that with full detailed knowledge you will come to the best conclusions for the business," Halford said.

He said there were a range of factors to consider as well as the bank levy, including the skill and availability of labour, other tax issues, regulatory issues and London's strength as a financial centre and its "neutrality" as a headquarters for a bank that operates across dozens of Asian countries.

Singapore, the hub for most of Standard Chartered's businesses, would be the most likely destination if it chose to move, industry sources have said.

TURNAROUND

The bank is trying to turn around its performance after two bad years and will get former JP Morgan investment bank boss Bill Winters as its new chief executive in June.

Standard Chartered's loan impairments rose to $476 million from $265 million a year ago, but slightly down from the fourth quarter. Pretax profit fell to $1.5 billion in the quarter, down from $1.9 billion.

Standard Chartered shares were down 3 percent by 1100 GMT, underperforming a 1 percent drop in Europe's banking index as revenues fell short of expectations, analysts said. The shares had risen 20 percent since Winters was appointed two months ago.

Low commodity prices were a drag on trade finance revenues, which dropped 9 percent in the first quarter and helped pull total revenues down 4 percent from a year ago.

In the face of lower growth, the bank is trying to cut costs and shrink its loan book to improve its profitability and deal with the market's concerns about its capital.

It said it was on schedule to get its core capital ratio, a measure of financial strength, above 11 percent this year and would deliver cost savings of more than $400 million in 2015. Its core capital was 10.7 percent at the end of 2014, but it did not say what it was at the end of March.

Halford said the bank had cut its exposure to commodities loans by a further $5 billion this year to $50 billion. The bank said it was well advanced with a plan to reduce its risk weighted assets by between $25 billion and $30 billion in the next two years. (Editing by Kirstin Ridley and Jane Merriman)