Mumbai : Asia-focused British bank Standard Chartered said it is looking to reduce exposure to India as it reported a loss of USD 139 million for September quarter on rising loan impairments in the country while the lender also announced plans to raise USD 5.1 billion and 15,000 jobs cuts globally.
However, whether the company’s job cut plan includes India, could not be confirmed. For the British baking major losses continue to be a problem in the country as it blamed poor asset quality one of major factors that dented its profits. “The group has taken a loan impairment charge of USD 1.2 billion in the third quarter, broadly in line with the second quarter, which reflects continued adverse trends in particular in India and commodities,” the bank management said in an interim earnings statement.
Shares in the bank plunged as much as 6.2 per cent on the Hong Kong stock exchange in the wake of the results — its stock value has fallen 32 per cent in the past year. “I know a lot of people losing their jobs is not good, (but) from a business point of view, that’s what they have to do,” Hong Kong-based financial analyst Jackson Wong told AFP.
Wong said loan losses were the main reason the bank swung to a pre-tax loss, adding that it needed to “control costs and try to remodel (its) business”.
The bank, which is undergoing a major restructuring had posted a net profit of USD 1.5 billion in the corresponding period last fiscal.
“The environment in our markets remains challenging and our recent performance is disappointing. Today we have announced a strategy that makes big changes to how we will manage ourselves going forward. We are positioning the group for improved return on equity on a strengthened capital base,” the lender’s new group Chief executive Bill Winters said. To transform into a “lean, focused and more profitable” lender, the British bank has decided to adopt a slew of strategies, including reducing its exposure to India, it said in a statement.
From being one of the top performing geographies for Standard Chartered globally, India has now slipped to the bottom on the basis of profitability among the seven regions it operates in.
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UK bank examines if IDR holders can buy into $5.1bn rights issue
Mumbai : British major Standard Chartered said it is examining the legal aspect as to whether Indian Depository Receipt holders of the lender can participate in the USD 5.1 billion rights issue programme. “The company is currently clarifying local legal and regulatory requirements in order to determine whether to extend the rights issue to holders of Indian Depository Receipts (IDRs) and will make a further announcement, as appropriate,” Standard Chartered said. The bank had issued IDR in 2010.
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