Exposure to struggling emerging economies is prompting Standard Chartered Plc’s Chief Executive Officer Bill Winters to seek a “fundamental shift” in the business to steer the company to faster growth.
In an effort to restore profits after soaring bad loans in emerging markets hurt earnings, Winters revealed plans to reduce positions in China and India, while expanding in large, fast-growing cities across developing nations. Standard Chartered, which generates almost all of its revenue in Asia, will restructure or exit $100 billion of assets after it reported an unexpected third-quarter loss of US$139 million ($194,600), compared with a profit of US$1.5 billion a year earlier.
“Do we believe that the opportunity in Asia has gone away as a result of the current period of adjustment in China, ASEAN, South Asia, Middle East, Africa, falling commodity prices, slower export growth, sluggish economies from the west? Absolutely not,” Winters said during a conference call on Tuesday. “Now with that said, we have to run our business between now and the time that these trends make themselves clear again.”
Winters is seeking to reverse damage caused by predecessor Peter Sands’s revenue-driven expansion across emerging markets, which left the bank saddled with bad loans when commodity prices slumped and China’s economy started to slow. Under Sands, total assets more than doubled to US$726 billion at the end of last year from 2006, with the bank using two previous rights issues to fund its growth in Asia.
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In an effort to restore profits after soaring bad loans in emerging markets hurt earnings, Winters revealed plans to reduce positions in China and India, while expanding in large, fast-growing cities across developing nations. Standard Chartered, which generates almost all of its revenue in Asia, will restructure or exit $100 billion of assets after it reported an unexpected third-quarter loss of US$139 million ($194,600), compared with a profit of US$1.5 billion a year earlier.
“Do we believe that the opportunity in Asia has gone away as a result of the current period of adjustment in China, ASEAN, South Asia, Middle East, Africa, falling commodity prices, slower export growth, sluggish economies from the west? Absolutely not,” Winters said during a conference call on Tuesday. “Now with that said, we have to run our business between now and the time that these trends make themselves clear again.”
Winters is seeking to reverse damage caused by predecessor Peter Sands’s revenue-driven expansion across emerging markets, which left the bank saddled with bad loans when commodity prices slumped and China’s economy started to slow. Under Sands, total assets more than doubled to US$726 billion at the end of last year from 2006, with the bank using two previous rights issues to fund its growth in Asia.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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