Slide 1: Half Year Results 2011
Half Year Results 2011 Leading the way in Asia, Africa and the Middle East
Slide 2: Forward looking statements
Forward looking statements This presentation contains or incorporates by reference ‘forward-looking statements’ regarding the belief or current expectations of Standard Chartered, the Directors and other members of its senior management about the Group’s businesses and the transactions described in
Slide 3: Leading the way in Asia, Africa and the Middle East
Leading the way in Asia, Africa and the Middle East Richard Meddings Group Finance Director 3
Slide 4: Key highlights
Key highlights Double digit income, pre-impairment profit and profit before tax growth Income over US$8.7 billion and profit over US$3.6 billion Strong cost control Balance sheet remains in excellent shape 4
Slide 5: Group performance
Group performance H1 11 vs H1 11 vs US$m H1 10 H2 10 H1 11 H1 10 % H2 10 % Income 7,924 8,138 8,764 11 8 Net interest income 4,155 4,315 4,941 19 15 Non interest income 3,769 3,823 3,823 1 0 Expenses (4,344) (4,679) (4,677) 8 (0) Operating profit before impairment 3,580 3,459 4,087 14 18 Loan impair
Slide 6: Performance metrics
Performance metrics Excluding Including UK bank levy UK bank levy H1 11 vs H1 11 vs H1 10 H1 11 H1 10 % H1 11 H1 10 % Profit before tax (US$m) 3,116 3,636 17 3,541 14 Normalised EPS (cents)* 101.1 105.2 4 101.2 0 DPS (cents)* 22.50 24.75 10 24.75 10 Normalised ROE (%) 14.7 13.0 12.5 Jaws (%) 3 1 * R
Slide 7: Group balance sheet
Group balance sheet Total liabilities H1 2011 H1 11 vs H1 11 vs US$ 568bn H1 10 % H2 10 % CASA* 19 8 Other Time deposits 18 11 Total deposits** 19 10 Total deposits 100 100 80 80 78.4 78.6 76.2 77.9 78.1 60 60 Liquid asset A/D ratio % ratio % 40 40 24.1 26.2 27.2 26.6 26.5 20 20 0 0 H1 09 H2 09 H1 1
Slide 8: Group balance sheet - assets
Group balance sheet - assets Other Cash at Well diversified central banks Consumer Banking loans LTV of mortgage book 49% Investment securities 67% of Wholesale Banking loans less than 1 year maturity Assets held at fair value Limited exposure to Wholesale Loans and Banking loans problem ass
Slide 9: Capital
Capital % 20 18.4 17.9 15.1 15.5 4.4 4.0 16 4.3 2.2 2.0 12 6.6 2.2 8 Tier 1 Tier 1 2.4 Tier 1 14.0 13.9 11.8 11.9 Tier 1 11.2 4 9.0 8.5 6.1 0 H1 08 H1 10 H2 10 H1 11 Core Tier 1 Tier 2 and Tier 3 9
Slide 10: Consumer Banking performance
Consumer Banking performance H1 11 vs H1 11 vs US$m H1 10 H2 10 H1 11 H1 10 % H2 10 % Income 2,912 3,167 3,337 15 5 Expenses (1,966) (2,210) (2,109) 7 (5) Operating profit before impairment 946 957 1,228 30 28 Loan impairment (299) (279) (211) (29) (24) Other impairment (4) (8) (4) 0 (50) Operating
Slide 11: Consumer Banking income
Consumer Banking income H1 11 vs H1 10 H1 11 vs H2 10 Mortgages 2% -4% 19% 3% -36 bps -16 bps Deposits 21% 10% 16% 5% 6 bps 4 bps Wealth Management 23% 9% 38% 10% Change in income Increase in footings* Change in margin * For Mortgages footings are loans to customers, for Deposits, deposits only, and
Slide 12: Consumer Banking income continued
Consumer Banking income continued H1 11 vs H1 10 H1 11 vs H2 10 CCPL 16% 9% 28% 11% -39 bps -4 bps SME 13% 7% 23% 6% -22 bps -1 bp Change in income Increase in footings* Change in margin * For CCPL footings are loans to customers and for SME loans to customers and deposits combined 12
Slide 13: Consumer Banking loan impairment trend
Consumer Banking loan impairment trend H1 10 H2 10 FY 10 H1 11 Mortgages LI/ANR 0.05% 0.09% 0.07% 0.04% 30dpd/ENR 0.70% 0.61% 0.61% 0.60% Loan book (US$bn) 61 71 71 73 LI (US$m) 17 32 49 13 SME LI/ANR 0.60% 0.71% 0.66% 0.40% 90dpd/ENR 1.10% 0.72% 0.72% 0.58% Loan book (US$bn) 14 17 17 20 LI (US$m) 4
Slide 14: Wholesale Banking performance
Wholesale Banking performance H1 11 vs H1 11 vs US$m H1 10 H2 10 H1 11 H1 10 % H2 10 % Income 5,012 4,967 5,427 8 9 Expenses (2,357) (2,483) (2,568) 9 3 Operating profit before impairment 2,655 2,484 2,859 8 15 Loan impairment (138) (167) (201) 46 20 Other impairment (46) (18) (68) 48 nm Operating p
Slide 15: Diversified income streams
Diversified income streams Total income by product H1 11 vs H1 11 vs US$m H1 10 H2 10 H1 11 H1 10 % H2 10 % Lending & Portfolio Mgt 465 403 435 (6) 8 Transaction Banking 1,282 1,488 1,552 21 4 Trade 691 776 767 11 (1) Cash Mgt & Custody 591 712 785 33 10 Global Markets 3,265 3,076 3,440 5 12 Financi
Slide 16: Wholesale Banking Financial Markets
Wholesale Banking Financial Markets Total income by product H1 11 vs H1 11 vs US$m H1 10 H2 10 H1 11 H1 10 % H2 10 % FX 646 554 769 19 39 Rates 512 325 450 (12) 38 Commodities and Equities 165 246 319 93 30 Capital Markets 233 308 271 16 (12) Credit and Other 155 159 142 (8) (11) Total Financial Mar
Slide 17: Wholesale Banking impairment
Wholesale Banking impairment H1 11 vs H1 11 vs US$m H1 10 H2 10 H1 11 H1 10 % H2 10 % Loan impairment (138) (167) (201) 46 20 Other impairment (46) (18) (68) 48 nm Total impairment (184) (185) (269) 46 45 Loans and advances to customers (US$bn)* 117.2 130.0 142.7 22 10 % IIP** on new accounts 52 74
Slide 18: Performance by geography
Performance by geography Income Profit H1 11 vs H1 11 vs US$m H1 10 H1 11 H1 10 % H1 10 H1 11 H1 10 % Hong Kong 1,191 1,531 29 511 790 55 Singapore 913 1,094 20 419 465 11 Korea 796 840 6 149 193 30 Other APR 1,541 1,748 13 579 846 46 India 1,011 893 (12) 624 378 (39) MESA 1,056 1,118 6 400 429 7 Af
Slide 19: Outlook
Outlook Second half has started well; momentum continuing in both businesses On track to deliver double digit income growth and flat jaws, excluding UK bank levy, for full year Remain focused on balance sheet foundations Well positioned in growth markets and continuing to take market share 1
Slide 20: Leading the way in Asia, Africa and the Middle East
Leading the way in Asia, Africa and the Middle East Peter Sands Group Chief Executive 20
Slide 21: Consistent delivery
Consistent delivery US$bn 9 8 7 Income CAGR 15% Profit 6 CAGR 18% 5 4 3 2 1 0 H1 01 H1 02 H1 03 H1 04 H1 05 H1 06 H1 07 H1 08 H1 09 H1 10 H1 11 Income OPBT 21
Slide 22: Income diversity by product
Income diversity by product Private SME Commodities Corporate Banking and Equities Finance CAGR 27% 17% 16% 22% H1 09 H1 11 22
Slide 23: Macro uncertainty
Macro uncertainty GDP growth (%) 2010 2011F 2012F Eurozone 1.7 2.0 2.2 US 2.8 2.5 3.4 China 10.3 9.3 10.0 Hong Kong 6.8 6.0 5.0 India* 8.5 7.7 8.3 Indonesia 6.1 6.5 7.0 Malaysia 7.2 5.1 6.0 Philippines 7.2 5.7 6.0 Singapore 14.5 5.5 6.0 South Korea 6.2 3.9 4.8 Taiwan 10.5 5.6 6.0 Thailand 7.8 4.4 5.
Slide 24: Growth of middle classes
Growth of middle classes Europe North America Asia Pacific Middle East and North Africa Central and South America Sub Saharan 100mn Africa 500mn 2030 1bn 2009 3bn Sources: Mckinsey, World Economic Forum 24
Slide 25: India
India H1 11 vs US$m H1 10 H1 11 H1 10 % Income 1,011 893 (12) Expenses (344) (390) 13 Operating profit before impairment 667 503 (25) Loan impairment (43) (72) 67 Other impairment 0 (53) nm Operating profit 624 378 (39) 25
Slide 26: Korea
Korea H1 11 vs US$m H1 10 H1 11 H1 10 % Income 796 840 6 Expenses (518) (564) 9 Operating profit before impairment 278 276 (1) Loan impairment (129) (81) (37) Other impairment 0 (2) nm Operating profit 149 193 30 26
Slide 27: Hong Kong
Hong Kong H1 11 vs US$m H1 10 H1 11 H1 10 % Income 1,191 1,531 29 Expenses (656) (684) 4 Operating profit before impairment 535 847 58 Loan impairment (25) (57) 128 Other impairment 1 0 nm Operating profit 511 790 55 27
Slide 28: China
China H1 11 vs US$m H1 10 H1 11 H1 10 % Income 347 404 16 Expenses (274) (310) 13 Operating profit before impairment 73 94 29 Loan impairment (9) (5) (44) Other impairment 0 27 nm Gain from associates 14 21 50 Operating profit 78 137 76 28
Slide 29: Strong income growth in smaller markets
Strong income growth in smaller markets Bangladesh Thailand 22% 24% YOY Indonesia Nigeria 20% 13% 29
Slide 30: Costs
Costs Reported headline Cumulative headline* Comparison jaws (%) Years reported jaws (%) H1 11 vs H1 10 2.9 1 2.9 H1 10 vs H1 09 -8.3 2 -2.8 H1 09 vs H1 08 10.7 3 1.6 H1 08 vs H1 07 -0.9 4 1.1 H1 07 vs H1 06 -3.2 5 0.3 H1 06 vs H1 05 -3.2 6 -0.2 H1 05 vs H1 04 -2.4 7 -0.5 H1 04 vs H1 03 7.7 8 0.5 H1
Slide 31: Investments
Standard Chartered &Q goene My Accounts Other Banks and Billers FRRIE My Cards Pay Any Card See Your Transfer History Add Payee Lom rn
Slide 32: Risk management
Risk management LTVs on Wholesale Banking Average mortgage portfolio probability of default trading VaR (%) (basis points) (US$m) 51 49 49 13.7 12.0 82 91 85 10.2 H1 09 H1 10 H1 11 H1 09 H1 10 H1 11 H1 09 H1 10 H1 11 Consumer Banking Consumer Banking LI/ANR Loan book concentration 90 days past due (
Slide 33: Conclusion
Conclusion Double digit income growth in 2011 and beyond We will pace our investments to ensure costs grow broadly in line with income Double digit growth in earnings per share Mid-teens ROE 33
Slide 34: Summary
Standard Summary Chartered &