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A
sharp spike in non-performing loans in China and India had
weighed on the Asia-focused bank's balance sheet in the last few
years, as a slowdown in the two countries' economic growth hit
clients in the infrastructure and commodities sectors.
But the British lender on Wednesday reported that loan
impairment levels in China and India more than halved in the
first six months of 2016 compared to the year-ago period; to $42
million in the case of China and $224 million in India.
"That's a direction we are driving," Benjamin Hung, who is also
part of the bank's top global management team, told Reuters in
an interview.
Standard Chartered's income from Greater China and North Asia,
which includes Hong Kong, China, South Korea, and ASEAN and
South Asia, within which Singapore and India are most important,
accounts for nearly 70 percent of its total revenue.
"What we have been doing is establishing a new risk tolerance
framework and appetite, ensuring that the bank doesn't get
overly concentrated in any particular single borrower or single
market or single industry," Hung said.
"The market remains highly uncertain, but at least we believe
that this is a step in the right direction in terms of making us
control our loan impairment."
The bank, which swung back into profit in the first half of the
year, is also looking to reduce its exposure to "old economy"
companies in the region and focus more on sectors including
technology and pharmaceuticals, he said.
"What you are seeing is a bit of reshuffling of our industry
focus, so that those then become engines for future growth."
(Reporting by Sumeet Chatterjee and Denny Thomas; Editing by
Mike Collett-White)
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