December 17, 2018 / 10:29 AM / 5 months ago

StanChart to take $160 million charge from private equity sale

People walk inside the main branch of Standard Chartered in Hong Kong, China August 1, 2017. REUTERS/Bobby Yip

(Reuters) - Standard Chartered PLC (STAN.L) has agreed terms for the sale of its private equity division, ending a more than two-year effort to shed a business the bank no longer deemed central to its strategy.

StanChart will sell a majority of the private equity arm’s investment portfolio to funds managed by Intermediate Capital Group Plc (ICP.L), the bank said on Monday, a deal first reported by Reuters in August.

The bank said it expected to take a restructuring charge of about $160 million from the sale, but did not disclose the terms of the deal.

Reuters previously reported that the main real estate assets in the portfolio were worth around $700 million.

The assets ICG is buying from StanChart will be directly managed by Affirma Capital, a newly-formed company consisting of the former Standard Chartered private equity team.

The disposal follows StanChart’s decision in late 2016 to exit the principal finance business, which invests the bank’s and its clients’ money, as part of a broader strategic shift by Chief Executive Bill Winters to focus more on corporate and individual customers.

The business had been a drag on StanChart’s performance, reporting an operating loss of $217 million in 2016. From 2017, the gains and losses from the business were excluded from the bank’s financial results.

Additional reporting by Arathy S Nair in Bengaluru; Editing by Saumyadeb Chakrabarty and Jane Merriman

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