Standard Chartered Plc is seeking to sell off its Asian Assets which worth at least $4.4 billion, according to Bloomberg. This move aims to trim its record high loan impairments.
The news comes from two people who are not willing to be named. One of the person said that the bank is selling about $1.4 billion of stressed loans made to 10 Indian companies including GMR Infrastructure. The other person said that the company was also considering selling $3 billion assets in other parts of Asia, including proprietary bond and equity investments in China, Indonesia and Malaysia
“The bank was earlier looking to sell the entire portfolio but after seeing that there isn’t much demand, they have decided to sell individual assets which includes both external commercial borrowings and local loans,” said one of the two people.
The move comes after the historic high loan impairments reported in February. The bank posted a loss of $981 million from the Indian operations as loan impairments nearly doubled to highest in tis history. This marked its first annual loss since 1989. The Indian portfolio of stressed assets surged eight times to $1.3 billion in 2015 from $171 million in 2014.
“This is a positive move to show investors that the bank and Bill Winters are doing something to improve their operations and capital position,” Ronald Wan, chief executive at Partners Capital International in Hong Kong, said by phone Monday. “Investors have been concerned about StanChart’s asset quality in India, and they are now showing efforts to resolve the problem loans there.”
The potential buyers including Hong Kong’s SSG Capital Management, KKR India and Canada Pension Plan Investment Board. None of the companies immediately respond to comment by e-mail.
Big banks’ selling Asian assets raises the concerns about the global economic slowdown, especially for the emerging market.