Standard Chartered Bank Limited, a Nigerian subsidiary of Standard Chartered Plc, has fallen off the cliff as full year profit dipped significantly on the back of rising impairment loss on risk assets.
For the year ended December 2015, Standard Chartered net income fell by 46.60 percent to N13.43 billion as against N25.15 billion the same period of the corresponding year 2014.
The sharp drop in profit was due to a rising loan loss expense otherwise known as impairment on loans and advances. The lender’s impairment loss on risk assets surged by 786.67 percent to N15.07 billion in December 2015 from N1.70 billion in December 2014.
The exposure to oil and gas stoked by a sharp drop in oil price hit Standard Chartered as Non performing Loans (NPLs) spiked by 93.69 percent to N23.65 billion in December 2015 from N24.11 billion the previous year.
This is a sign of bad risk assets management strategy by the management and board of directors of Standard Chartered that led to bad assets quality.
We in Nairametrics questions the bank’s credit risk assessment strategy given its rising NPL and huge write offs of debt as being irrecoverable.
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