StanChart 'to sell $5.9b of assets in Asia'

The Standard Chartered headquarters in London. In February, the bank posted its first annual loss since 1989 as revenue fell and loan impairments nearly doubled to the highest in its history. 
The Standard Chartered headquarters in London. In February, the bank posted its first annual loss since 1989 as revenue fell and loan impairments nearly doubled to the highest in its history. PHOTO: BLOOMBERG

MUMBAI • Standard Chartered is seeking to sell at least US$4.4 billion (S$5.9 billion) of assets in Asia, sources said, as the lender pares its balance sheet after booking record impairments. 

The London-based bank is speaking with potential buyers for about US$1.4 billion of stressed loans extended to Indian companies, including GMR Infrastructure. Standard Chartered has also started a sale of around US$3 billion of assets in the rest of Asia, the sources added.

Chief executive officer Bill Winters has pledged to review all of Standard Chartered's business lines and customer relationships, ranking their risk and returns, with the aim of restructuring or jettisoning about US$100 billion of assets.

In February, the bank posted its first annual loss since 1989 as revenue fell and loan impairments nearly doubled to the highest in its history. 

Special-situations funds including Hong Kong's SSG Capital Management have expressed interest in the stressed Indian loans being sold by Standard Chartered, the sources said. KKR & Co was previously in talks with Standard Chartered about buying some of the Indian assets and may consider returning to the process. 

The assets being sold in the rest of Asia include loans as well as proprietary bond and equity investments in China, Indonesia and Malaysia. The bank is also seeking to sell part of its portfolio in Africa and the Middle East, the sources said. 

"We said in November when we announced our strategic review that we would be aligning our risk profile to the new strategy, and confirmed then that the group had identified a number of exposures for liquidation that exceeded the new risk tolerance levels," said Standard Chartered in an e-mailed statement.

"We are making good progress on executing our strategy, and we will provide an update to our investors in due course."

KKR and SSG Capital declined to comment by e-mail, while a spokesman for GMR said that the company is "unaware of any such developments". 

The stressed Indian portfolio Standard Chartered is selling includes loans to more than 10 companies, primarily from the infrastructure and power industries, that the bank has already made provisions for, sources said. The lender may sell just part of the portfolio, depending on demand from buyers.

Standard Chartered sold off about US$1 billion of low-yielding assets in India last year as part of its balance sheet management, sources said. It recently decided not to proceed with a planned sale of at least US$1.5 billion in non-stressed loans made to mid-market Indian companies, after testing buyer interest in the portfolio earlier this year.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on April 12, 2016, with the headline 'StanChart 'to sell $5.9b of assets in Asia''. Print Edition | Subscribe