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Hong Kong/ Singapore: Standard Chartered Plc is over the worst of its challenges in India that led to loan writedowns and dragged on profit, according to the lender’s South Asia head.

The London-based bank is now focusing on expanding its consumer and corporate businesses in the country, where it has operated since 1858, Ajay Kanwal, the company’s chief executive officer for South Asia and Asean, said in an interview with Bloomberg Television’s Haslinda Amin from Singapore. The lender has hired about 800 people for its Indian retail business this year, he said.

“We’ve had a few tough years, I completely agree, but those are behind us," Kanwal said. “We want to make sure we get the most" out of the bank’s presence in India, he said.

Since taking his position last year, Standard Chartered CEO Bill Winters has been shrinking the bank’s balance sheet and tightening lending standards, especially in India and other emerging markets, in an effort to boost profitability.

The lender said Tuesday losses on bad loans and other investments more than halved to $660 million in the third quarter. While it didn’t break out specifics for India, it’s poised for some relief there: The bank is set to get a $2.1 billion repayment from Essar Global, the steel-to-power conglomerate that’s been struggling to repay its debt, people with knowledge of the matter said last month.

Risky lending

Standard Chartered’s nonperforming-loan portfolio may be reduced by about 20% if the Essar debt is repaid, according to an October note from Citigroup Inc.

Kanwal declined to confirm the repayment in a separate interview with Bloomberg News, citing client confidentiality. Standard Chartered’s woes in India are partly the result of loans that failed to fully factor in the risk of extending credit to companies like Essar, current and former bank employees said in November last year, speaking on condition of anonymity.

“If you look at our recent results announcement, the impairment number, you can see a drop on quarter, as well as a drop year on year," Kanwal said. “While the environment remains challenging, loan impairments, which shows the quality of loans, are OK."

Still, Standard Chartered’s third-quarter profit missed analyst estimates on a drop in revenue at all four of the bank’s divisions. Last year, record impairments contributed to the bank booking its first annual loss in more than a quarter century.

The bank’s shares sank 5.4% in London following the quarterly results. Its Hong Kong stock slumped 6.5 percent, the most since June, as of the city’s noon trading break. Bloomberg

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