Standard Chartered share price: Bank flags improvement in South Asia operations

on May 11, 2016
Updated: Oct 21, 2019

Standard Chartered (LON:STAN) expects revenue and profit from its South Asia operations to start improving from next year, Bloomberg has reported. The Asia-focused lender is set to recover from its record $1.34 billion of provisions against loans to Indian borrowers last year.

Standard Chartered’s share price has slipped into the red in today’s session, having fallen 0.74 percent to 492.30p as of 13:42 BST, underperforming the benchmark FTSE 100 index which currently stands 0.16 percent lower at 6,147.08 points. StanChart’s shares have lost more than 50 percent of their value over the past year, and are down some 12 percent in the year-to-date.
Bloomberg quoted V Anantharaman, Standard Chartered’s head for international corporates in the Asean and South Asia regions, as saying yesterday that the Asia-focused lender had already made the bulk of charges on its loans to stressed companies in India, and was now focused on building up in other areas such as consumer lending and transaction banking.

“The big pain is over,” Anantharaman told the newswire in an interview. “Provisions and profit figures will be normalised from next year as improved fundamentals begin to be factored in.”
StanChart, which generates most of its income from Asia, saw a surge in bad loans as a result of its now-abandoned policy of rapidly expanding lending to emerging markets such as India. Anantharaman, however, cautioned that it will take a while for the turnaround in the lender’s fortunes in India to start showing through due to pressures on the economy.
The comments come after StanChart updated investors on its quarterly performance last month, posting a 43-percent slump in profits. The company, however, revealed that its Common Equity Tier 1 ratio, a measure of financial stability, had climbed to 13.1 percent from 12.6 percent as at December 31, 2015, benefitting partly from a reduction in risk-weighted assets.
As of 14:00 BST, Wednesday, 11 May, Standard Chartered PLC share price is 492.23p.