As China’s growth sputters, the troubles at Standard Chartered Plc are another bad omen for what were once Asian economic darlings. The bank, which generates most of its income in the region, had gambled on success in emerging markets such as India, which instead saddled the lender with delinquent loans. As a result, the company which opened its offices in Mumbai under Queen Victoria is now axing 15,000 jobs and is asking investors for $5.1 billion (AED 18.73 billion). “Standard Chartered are Asian specialists and are in all the main markets in the region, so in looking at them you can get a good sense for credit direction and lending appetite,” said Mark Holman, chief executive officer at TwentyFour Asset Management in London, which oversees 5 billion pounds ($28 billion). For now, Asia still has fewer corporate debt defaults than other developing countries, but rising leverage from India to Indonesia point to the risk of further nonpayments. More stringent conditions from banks like Standard Chartered are slowing loan growth in the region, exposing more fissures in the corporate credit market. “The picture that emerges is that Asian credit cycles are far more advanced than those in Europe and loan losses and impairment charges are mounting,” Holman said. Tea leaves Like other developing nations, Asian companies took advantage of low interest rates overseas to go on a borrowing binge. The move is backfiring as slower economic growth makes it more difficult to pay back the obligations. Fitch Ratings warned on Nov. 2 that 11 percent of India’s loans will fall into the category of “stressed assets” in the fiscal year ending in March 2016 and only improve “marginally” the next year. In China, Sinosteel Co., a state-owned steelmaker, missed an interest payment last month, becoming the latest firm that teeters on the verge of default. While they are still posting positive returns, dollar-denominated bonds sold by Asian companies are trailing their emerging-market peers for the first time since 2012. The bonds returned 2.8 percent this year, compared with 3.2 percent for the average gain in emerging markets, according to data compiled by JPMorgan Chase & Co. Own Fault? To be fair, Standard Chartered created its own problems. Under former CEO Peter Sands, the bank relaxed lending standards to expand across emerging markets. Rival HSBC Holdings Plc, whose earnings are also mostly in Asia, made no such bet and beat analyst estimates to report third-quarter pretax profit rose 32 percent. Defaults in Asia are still far and between. Standard & Poor’s recorded Indonesian coal miner PT Berau Coal Energy as the sole defaulter from Asia this year, compared with seven in Latin America and nine in Eastern Europe and Middle East. Still, other Asian companies including Kaisa Group Holdings Ltd. and Winsway Enterprises Holdings Ltd. - which sold debt using offshore tax haven units - have also reneged on obligations this year. In China’s latest bond scare, coal miner Hidili Industry International Development Ltd. said on Oct. 30 it couldn’t pay $190.6 million of bond principal and interest due Wednesday. “The rapid credit growth in Asia raises some concern, and people are definitely mindful of the credit growth in China,” Steve Hooker, a money manager at Newfleet in Hartford, Connecticut, who helps oversee about $12.5 billion of debt, said by phone. “But generalization doesn’t really work here. Corporate credit risks are usually industry specific.” 1997 Again? With banks retreating, lending is drying up. Strip out Japan, loans in Asia plunged 25 percent this year to $259 billion, according to data compiled by Bloomberg. Fortress Investment Group LLC warned investors in September that the “contraction of credit” among developing countries would deepen a selloff that could rival the Asian financial crisis of 1997. “There’s been dramatic change in values from energy and mining related holdings and the general sentiment of moving away from emerging markets,” said David Tawil, a founder of Maglan Capital in New York, an $80 million hedge fund specializing in distressed debt. “It’s only the beginning of the new wave.” By Ye Xie and Alastair Marsh/Bloomberg