Standard Chartered Plc · LSE:STAN
Standard Chartered — Q1 2024 Earnings Presentation
25 slides from Standard Chartered's earnings presentation, May 2, 2024
Slide 1: Q1'24 results presentation
CONFIDENTIAL Q1’24 results presentation 2 May 2024
Slide 2: Opening remarks
CONFIDENTIAL Opening remarks ▶ Overview Income Expenses Risk Good start to the year Balance sheet Income Expenses Capital Segments Engines of Non NII performing Conclusion strongly with Wealth Solutions • Income growth of 20% YoY at ccy; up 14% • Actions taken to simplify organisational structure up
Slide 3: Strong performance in Q1'24
CONFIDENTIAL Strong performance in Q1’24 ▶ Overview Q1’24 performance ($m) Income • Income up 20% YoY at ccy Expenses Q1’23 Q1’24 YoY ccy Risk − NII up from higher rates and one Balance sheet month impact from the full short-term Net interest income (NII) 2,341 2,419 3% 5% Capital hedge roll-off Non
Slide 4: Higher NII supported by hedge roll-off and mix improvements
CONFIDENTIAL Higher NII supported by hedge roll-off and mix improvements Overview Net Interest Income (NII) components ▶ Income • NII up 1% QoQ to $2.4bn +1% Expenses Risk − One month benefit of the full short- 2,436 2,419 Balance sheet 2,388 2,392 term hedge roll-off 2,341 Capital NII ($m) Segments
Slide 5: Engines of Non NII performing strongly
CONFIDENTIAL Engines of Non NII performing strongly Overview Non NII components ($m) ▶ Income • Non NII up 33%, 37% YoY at ccy Expenses Risk − Wealth Solutions up 24% at ccy with broad- Balance sheet based growth across products +33% / +37% ccy Capital Q1’24 YoY Segments − Markets up 13% YoY at ccy
Slide 6: Expenses higher from inflation and business growth
CONFIDENTIAL Expenses higher from inflation and business growth Overview Operating expenses2 trend ($m) Income • Expenses up 6% YoY at ccy ▶ Expenses Risk − Inflation 3.5%1 +4% / +6% ccy Balance sheet 2,826 − Business growth initiatives include Affluent 2,770 2,754 2,786 Capital Segments RMs and CIB
Slide 7: Credit quality remains resilient
CONFIDENTIAL Credit quality remains resilient Overview Credit impairment ($m) / Loan-loss rate Income • Q1’24 credit impairment of $176m, up $150m YoY Expenses 294 ▶ Risk − CIB net nil charge; China CRE charge of $10m offset 20 Balance sheet by other releases 115 62 176 Capital 146 CIB 40 Segments −
Slide 8: Underlying growth in assets
CONFIDENTIAL Underlying growth in assets Overview Loans and advances to customers1 ($bn) Income • Underlying L&A to customers up $4bn or 2% since Expenses 31.12.23 Risk +2% ▶ Balance sheet − Growth in CIB from increases in Trade & Working 287 Capital Capital, Markets and Banking 4 283 Segments (4) 2
Slide 9: CET1 ratio remains robust post share buyback
CONFIDENTIAL CET1 ratio remains robust post share buyback Overview Risk-weighted assets ($bn) Income • Q1’24 RWA up $8bn QoQ Expenses Risk − Market risk RWA up $4bn; RWA deployed to help +$8bn Balance sheet clients capture opportunities in Markets 1.5 0.2 ▶ Capital 1.9 252.1 Segments − Mechanically
Slide 10: CIB: Momentum in high-returning businesses
CONFIDENTIAL CIB: Momentum in high-returning businesses Overview Profit & Loss items ($m) Income • Income up 10% YoY at ccy Expenses Q1’23 Q1’24 YoY ccy Risk − Markets up 17% Balance sheet Transaction Services 1,561 1,603 3% 4% o Flow up 5% from higher rates, foreign exchange and Capital ▶ Segments
Slide 11: WRB: Wealth Solutions driving significant growth
CONFIDENTIAL WRB: Wealth Solutions driving significant growth Overview Profit & Loss items ($m) Income • Income up 10% YoY at ccy Expenses Q1’23 Q1’24 YoY ccy Risk − Broad-based growth in Wealth Solutions products, up 23% Wealth Solutions 511 616 21% 23% Balance sheet − Deposits continued to benefit
Slide 12: Conclusion
CONFIDENTIAL Conclusion Overview Our strategy is driving success Income Expenses Risk • Good start to the year with double-digit income growth Balance sheet Capital • Strong performance across the two engines of Non NII Segments ▶ Conclusion − Wealth Solutions growth broad-based across products and
Slide 13: Appendices
CONFIDENTIAL Appendices 13
Slide 14: Broad-based performance in Q1'24
CONFIDENTIAL Broad-based performance in Q1’24 Q1’24 income by products ($m) ▶ Income Risk Balance sheet Q1’24 ccy1 Q1’24 YoY ccy Notable items TNAV Payments & Liquidity 1,161 67 7% Guidance Transaction Services 1,615 ▲ 4% Securities & Prime Services 141 0 1% Trade & Working Capital 313 (24) (2%) Len
Slide 15: Interest rate assumptions
CONFIDENTIAL Interest rate assumptions ▶ Income Currency-weighted average1 (bps) USD SOFR O/N average (bps) 3M HIBOR average (bps) Risk Balance sheet Notable items TNAV 453 450 532 532 530 535 Guidance 446 440 520 429 505 523 530 479 440 459 464 461 419 417 497 493 500 391 473 386 449 448 360 428 42
Slide 16: China CRE portfolio continues to reduce; asset quality broadly stable
CONFIDENTIAL China CRE portfolio continues to reduce; asset quality broadly stable Exposure by booking location ($bn)5,6 Income • Remain cautious as residential sales volumes continue to decline through 4.0 ▶ Risk 2024 YTD Balance sheet ~40% reduction Notable items • High coverage levels on defaulte
Slide 17: China portfolio resilient
CONFIDENTIAL China portfolio resilient Income China ultimate parent company exposure6 ($bn) ▶ Risk • CIB is 94% of China portfolio and is resilient Balance sheet Notable items − Exposures mostly to industry leaders with financial resilience TNAV 3% Corporates Guidance − Growing new economy sectors (
Slide 18: Deposit migration within expectations
CONFIDENTIAL Deposit migration within expectations Transaction Services CASA% of CIB deposits1 ($bn) Income Risk • Overall CASA% within expectations; broadly stable in Q1’24 64% 64% 61% ▶ Balance sheet 59% 59% Notable items − Expect to be broadly stable to slightly lower in FY’24 in a higher for CAS
Slide 19: High levels of liquid resources and stable funding
CONFIDENTIAL High levels of liquid resources and stable funding Components of Liquidity coverage ratio (LCR)1 Income Risk • LCR of 146%1 up 1%pts QoQ: no TLTRO and TFSME benefit in LCR 164% ▶ Balance sheet 145% 146% Notable items • Beyond what is captured in LCR the Group has total liquid resources
Slide 20: Capital & MREL: Well-positioned for future growth and requirements
CONFIDENTIAL Capital & MREL: Well-positioned for future growth and requirements Capital metrics Income Risk • CET1 capacity to support growth and shareholder 32.1% 33.3% 33.5% CET1 minimum requirement1: ▶ Balance sheet distributions 10.5% PLC Senior Notable items 12.6% TNAV • MREL of 33.5%, a ~610bp
Slide 21: Notable and Other items
CONFIDENTIAL Notable and Other items Notable items Other items Income Risk Balance sheet ▶ Notable items Egyptian pound revaluation Korea Equity Linked Securities (ELS) TNAV Guidance • SCB Egypt branch capital held in USD • SCB Korea sold $900m notional of ELS where redemption values are determined
Slide 22: Tangible net asset value per share details
CONFIDENTIAL Tangible net asset value per share details Tangible TNAV per Basic # of Income equity share ordinary shares Risk ($m) (cents) (m) Balance sheet Notable items As of 31.12.23 36,737 1,393 2,637 ▶ TNAV Guidance Profit attributable to: Ordinary shareholders 1,403 53 Dividends paid to: Ordin
Slide 23: Maintaining 2024–2026 guidance
CONFIDENTIAL Maintaining 2024–2026 guidance Income 2024 guidance at ccy 2025 and 2026 guidance at ccy Risk Balance sheet Notable items Income • Income to increase 5-7% for 2024-2026; around the top of 5-7% range in 2024 excluding impact from the two notable items in Q1’24 TNAV • Net interest income
Slide 24: Select technical and abbreviated terms
CONFIDENTIAL Select technical and abbreviated terms Term Definition Term Definition AIEA Average interest-earning assets L&A Loans and advances AT1 Additional Tier 1 LCR Liquidity coverage ratio AUM Assets under management LGFV Local government financing vehicle Bn Billion LTV Loan-to-value Bps Basi
Slide 25: Important notice
CONFIDENTIAL Important notice Forward-looking statements The information included in this document may contain ‘forward-looking statements’ based upon current expectations or beliefs as well as statements formulated with assumptions about future events. Forward-looking statements include, without li