Struggling StanChart plans to dump two South Korean units

This after taking a US$1 billion writedown.

Standard Chartered yesterday said it might sell two South Korean consumer finance units after being hit with a US$1 billion goodwill writedown on its business there. The writedown helped cut the bank’s first-half profits by 16%.

The two units that could be sold are SC Savings Bank and SC Capital. Both constitute less than 3% of StanChart’s business in South Korea and were mainly used to fund mortgages that have since been sharply reduced.

SC Capital has some US$1.3 billion in assets while SC Savings Bank has US$494 million in assets.

The potential sale emphasizes the diminished potential of South Korea, a market it describes as its most difficult. StanChart has been plagued by regulatory changes that have forced the sector to forgive loans by highly indebted individual amid a slowing economy and high labor costs.

StanChart has 380 outlets in Korea.