The worst may be behind Standard Chartered Bank when it comes to loan impairments in India, according to its Group Chief Financial Officer Andy Halford. Recently in India to get up to speed with local operations and understand what the Group can do to help the local management team to move faster, Halford observed that over the last several years his bank, which is India’s largest foreign bank with 100 branches, did not hold its market share in a growing market. The bank, which has been operating in India for nearly 160 years, wants to change this now. Halford, in an interview to BusinessLine , said his bank wants more of its businesses to be growing at or above the market rate. Excerpts from the interview:

Has your bank turned the corner on bad loans?

We took quite a lot of hits on bad loans, particularly in 2015 ($439 million) and we, basically at that stage, looked at the capital level after we had taken those hits.…And hence we did make the adjustments (capital infusion of ₹3,600 crore in 2015) there.…

Our bigger focus, hopefully now, is to get the business to continue to return to profitability and actually, therefore, be building capital through being more profitable as a business.

So, we will always be operating with more (capital) than what is required in the local country, just to make sure we are ticking all of the required (regulatory) boxes, and I hope that we have got the worst behind us in terms of some of the loan impairments.

I understand that other banks are still picking up charges there. But I think we acted fairly early and fairly aggressively on the provisioning of those accounts.

Are you expecting any surprises on the bad loans front?

Our intention is to try to avoid surprises wherever possible. Last year, we almost got back into profitability (underlying loss before taxation came down substantially to $24 million in 2016 from $551 million in 2015).

But after 2015 that was a big improvement. The challenge now is we want to get back into profitability and to really get the business moving forward again. So, that is where the focus and the energy are now.

What are your expectations from your bank’s India operations?

I think the challenge here is we have had a more difficult period in the recent past. We absolutely have drawn a line in the sand….We have, over the last several years, not held our market share in a growing market. And we do want more of our businesses to be growing at or above the market rate.

So, we have put a lot of people into our retail business in India over the last year with a strong view that there is more market potential here. We have got many of our biggest corporate accounts with a base in India, and actually group-wide we have now extended the breadth of clients that we are looking to work with and a number of those newer clients are also India based.

So, I think, there is a lot of confidence in the combination of the growth of the economy, the increased focus we have got on a broader base of corporate clients, putting more of our people into the retail business. Hence, there is every reason to believe that we should start to grow the business at a progressively faster pace.

How optimistic are you about growth opportunities in India?

Well, I think, to start with, a country whose economy is growing at quite a nice rate (there are many parts of the world that would love to have the rate of growth that is happening here), a market where the consumption or the buying power of people is progressively rising over time, a market where things digital are very, very prevalent in society, a market where our market share is quite low and, therefore, there is a lot of market share to be going for.

You put all of those things together and it is for us a very logical area to be focused on.

Are you looking at the subsidiary structure for your Indian operations?

It is something that we have been looking at. We operate in 70 or so countries and we operate via subsidiary entities, branches, and things like that. And I think it is very much sort of case-by-case basis — if being a subsidiary economically does make sense then that is fine.

So, we have not made any decision on it. It is something we will look at. But I think in parallel getting the business back into growth is high priority.

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