StanChart To Dispose Assets Worth $4.4 Billion in Asia Including $1.4 Billion in India

By Staff Writer

Apr 12, 2016 07:58 AM EDT

Standard Chartered PLC, the British banking and financial services company, has been considering for selling assets worth $4.4 billion in Asia. The move is going to take place since the lender pares its balance sheet after booking record impairments.

The assets to be disposed off, include $1.4 billion stressed loans disbursed to Indian firms. The London based bank has also started selling assets worth around $3 billion in rest of Asia. The assets include loans as well as proprietary bond and equity investments in China, Indonesia and Malaysia, reports Bloomberg citing persons familiar with the matter but seeking anonymity since the information is private, as the source.

Bill Winters, chief executive officer of c, has pledged for reviewing its business lines and customer relationships, comparing with their risks and returns. His moves are aimed to restructure or jettison assets worth around $100 billion. The recent plan has been made following a backdrop in stressed assets.

The bank has reported a net loss of $981 million from its India operations during last year. The loss, coupled with loan impairments including restructured loans has been witnessed to surge almost eightfold to $1.3 billion in 2015 compared to $171 million in 2014.

The London based lender's overall loan impairments have surged to $4 billion in 2015 compared to $2.14 billion in 2014. StanChart has gross non-performing assets of 9.07% as of June 2015, reports Business Standard citing a bank disclosure as the source.

Over-concentration is being considered as an issue for StanChart's India portfolio. However, the bank is trying to remove the concern, cites Ajay Kanwal, regional CEO for Asean and South Asia of the bank in an interview.

StanChart has reportedly internally classified $5 billion advances disbursed to the Indian firms with risk for default in November. The $2.5 billion loan awarded to Essar Group is one of the internally classified loans. The bank has also been considering for selling some loans in the engineering, procurement and construction segment, according to a report published in Livemint.

The lender has announced in November, restructuring or repositioning risk weighted assets worth around $30 billion in select countries to improve returns. The British bank has also decided liquidation of other $20 billion assets following its new risk tolerance policy. It has also planned for exit unless returns get improved from assets of further $50 billion related to less-profitable corporate and commercial banking customers.

Bill Winters, chief executive officer of Standard Chartered Bank has planned for restructure or jettison assets worth $100 billion globally. As part of the move, the British bank has been considering for selling certain risk weighted assets in some Asian countries. The assets with higher risks of getting default have been classified through internal review disclosed in November and are now under negotiations for selling.

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