HONG KONG, Aug 4 (Reuters) - Standard Chartered expects to further cut provisions for bad loans in its keymarkets of China and India, and is also looking to lowerexposure to the heavy industry sector, the bank's Greater Chinaand North Asia chief said on Thursday.
A sharp spike in non-performing loans in China and India hadweighed on the Asia-focused bank's balance sheet in the last fewyears, as a slowdown in the two countries' economic growth hitclients in the infrastructure and commodities sectors.
But the British lender on Wednesday reported that loanimpairment levels in China and India more than halved in thefirst six months of 2016 compared to the year-ago period; to $42million in the case of China and $224 million in India.
"That's a direction we are driving," Benjamin Hung, who isalso part of the bank's top global management team, told Reutersin an interview.
Standard Chartered's income from Greater China and NorthAsia, which includes Hong Kong, China, South Korea, and ASEANand South Asia, within which Singapore and India are mostimportant, accounts for nearly 70 percent of its total revenue.
"What we have been doing is establishing a new risktolerance framework and appetite, ensuring that the bank doesn'tget overly concentrated in any particular single borrower orsingle market or single industry," Hung said.
"The market remains highly uncertain, but at least webelieve that this is a step in the right direction in terms ofmaking us control our loan impairment."
The bank, which swung back into profit in the first half ofthe year, is also looking to reduce its exposure to "oldeconomy" companies in the region and focus more on sectorsincluding technology and pharmaceuticals, he said.
"What you are seeing is a bit of reshuffling of our industryfocus, so that those then become engines for future growth." (Reporting by Sumeet Chatterjee and Denny Thomas; Editing byMike Collett-White)
HSBC Holdings (HSBA)
Standard Chartered (STAN)