We are sticking with South Korea, says Stanchart's Bindra
Standard Chartered says it remains committed to South Korea, even as the Asia-focused bank took a $1 billion hit in its half-year earnings from writedowns in the country.
While the lender's Asia CEO concedes that the outlook in the near-to-medium term is "quite bleak," the prospects for the long term are encouraging, and Stanchart is currently taking steps to "restructure" its Korean business.
"We are committed to Korea," Standard Chartered's CEO for Asia Jaspal Bindra told CNBC Asia's "Squawk Box" on Wednesday.
"We are refocusing the core businesses, which might include sale of some non-core bits of it," he said. "But largely it is about positioning ourselves well for the turnaround, which however distant it might look, is not going to be forever in this situation," he added.
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The bank on Tuesday posted a $861 million pretax loss in Korea for the first half, on loan losses and provisions for souring debt, which dragged down its group pretax profit by 16 percent to $3.3 billion.
South Korea has been problematic for the London-based bank ever since it first acquired local bank First Bank in 2005 for $3.3 billion, its largest ever acquisition. A long-running dispute with staff there and a struggle dealing with tough regulations have hindered business, Reuters reported.
Standard Chartered's commitment to Asia comes even as rival HSBC is reported to be planning an exit of its retail banking and wealth management in South Korea, after a 14-year struggle to break into consumer finance in the country.
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Bindra shrugged off concerns that problems the bank's experiencing in South Korea will spread to the rest of emerging Asia.
"The big strength of Standard Chartered has always been and will continue (to be) the diversity of our markets. This whole notion that economists and Western commentators have been harping on (about) that emerging markets are all correlated and will all rise and fall simultaneously is a complete myth. It hasn't been true in the past, it's not likely," he said.
The same applies for fears over a hard landing scenario for China, which Bindra said were unfounded.
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In May, U.S. activist investor Carson Block and founder of short-seller Muddy Waters said he was shorting Standard Chartered debt due to concerns of the bank's exposure to a slowing China.
"Muddy Waters is not alone in saying that China is going to have once again a hard landing. It was a popular theme in 2011 and now in 2013. For the last 30 years people have been predicting a drop in China, and it hasn't happened," Bindra said.
"Clearly China continues to be good because even at 6, 7 or 8 percent growth it is still more than two times any developed market," he added.
—By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie