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Standard Chartered abandons 'inward' focus in bid to reclaim lost market share

Standard Chartered Plc is moving away from the "inward focus" that has characterized its recent period of restructuring and caused it to lose out on opportunities in markets such as India and Singapore, CEO Bill Winters told analysts Aug. 2.

Clients had noticed a shift from "an outward focused, proactive bank" to an "inward focused organization," he said after StanChart reported first-half earnings, adding that "cultural change" was needed to get the bank more focused on growth.

"There's no doubt that the inward focus, and cultural maladaptation of the bank has had an impact on income," he said.

StanChart announced a new strategy in November 2015 that involved tough targets for cost reduction, organizational simplification and restructuring or exiting assets. It was hit by heavy loan impairments as a result of over-extension in the 2000s, and also fined heavily by U.S. regulators in 2012 for breaches of sanctions.

Winters said, however, that the bank is now making up for lost time by investing heavily in markets where it believes that it has lost market share in recent years.

"We've lost market share in Singapore and in India for much of the past decade, and we're making very deliberate investments with new product launches," he said. These include a new product especially for retail customers over 55 and a push on improving the digital offering, he noted.

Income for ASEAN and South Asia was down 10% year over year and 6% over the half at $635 million, which Standard Chartered attributed to the decision to exit its Thai and Philippine retail banking businesses.

Standard Chartered's business in Qatar has not been affected by the "ongoing disputes" that the country is involved in, although the bank continues to monitor the situation carefully, he said. In Africa, the bank has been affected by an interest rate cap in Kenya, but has maintained its profitability in Nigeria despite a "long process" of economic recovery in the country.

Income in Africa and the Middle East for the half was $410 million, stable year over year, but up 3% compared with the previous half.

Although the bank as a whole is "largely through" the process of de-risking, it still has a "relatively elevated" level of nonperforming loans that it needs to work through, Winters said.

"We know that things will be bumpy in that regard. But nevertheless we feel that we've gotten through that initial repositioning phase in good shape," he said.

Total NPLs stood at $9.92 billion at the end of the first half, compared with $12.81 billion a year earlier.

Standard Chartered made a profit of $1.20 billion during the first half, up from $580 million in the first half of 2016. It did not, however, restart dividend payments, and its shares were down more than 5% as of just after 2:30 p.m. London time.