Standard Chartered Writedown Unrelated to Debt Fund, Korea SaysSeonjin Cha
Standard Chartered Plc’s $1 billion writedown of its Korean business is unrelated to a fund set up in March by the South Korean government to help low-income borrowers, the nation’s financial regulator said.
No actual loss was incurred at the London-based bank’s Standard Chartered Korea unit during the first half because of the so-called National Happiness Fund and impairment of goodwill charges at the lender aren’t related to the program, the Financial Services Commission said in an e-mailed statement today.
The bank is reviewing various options to improve operations including selling its savings bank unit and consumer finance unit, Choi Ki Hoon, a Seoul-based spokesman at the Korean subsidiary said in a phone interview in Seoul.
South Korea said in March it will start a 1.5 trillion-won fund over five years to help low-income borrowers restructure defaulted loans as part of President Park Geun Hye’s promise to ease consumer debt burdens. The bank said yesterday its first-half profit dropped 24 percent to $2.18 billion from a year earlier after writing down the value of its Korean businesses by $1 billion.
South Korea is the bank’s “most difficult market” and its Korean unit posted a 5 percent decline in income and a sharp rise in loan impairment, driven by the government-sponsored personal debt rehabilitation plan, the U.K. lender said yesterday.
The Seoul-based unit said in an e-mailed statement that the goodwill impairment isn’t related to the National Happiness Fund.