Slide 1: 1Q'20 Results Presentation
1Q’20 Results Presentation 29 April 2020 Please see page 18 for an explanation of some of the technical and abbreviated terms used in this document
Slide 2: Robust financial performance overall, with COVID-related slowdown in March and significantly higher credit impairment
Robust financial performance overall, with COVID-related slowdown in March and significantly higher credit impairment Encouraging growth and good cost control in 1Q’20; our main priority is supporting employees and clients • Huge effort to support employees, who continue to serve clients across 59 m
Slide 3: We are Here for good: Supporting our clients, colleagues and communities through COVID
We are Here for good: Supporting our clients, colleagues and communities through COVID Supporting our colleagues Supporting our retail Supporting our business Supporting our banking customers clients communities • No redundancies imposed as a • Relationship Managers supporting • Providing $1bn of fi
Slide 4: Encouraging underlying progress, with the external environment changing dramatically through the quarter
Encouraging underlying progress, with the external environment changing dramatically through the quarter ($bn) 1Q’19 1Q’20 YoY1 Ccy1 Operating income ex DVA 3.9 4.0 4% 6% • Solid broad-based start to the year, income up 6%2 DVA (0.1) 0.3 Nm • Costs reduced 1% ccy: 6% positive jaws2 Operating income
Slide 5: 1Q'20 income was up 6% at constant currency and ex-DVA
1Q’20 income was up 6% at constant currency and ex-DVA Income Costs Risk Capital/Liquidity Broad-based growth, with particularly strong momentum in Jan-Feb Income ($m) +6% 11 13 21 64 4,022 (63) 67 99 3,866 3,810 (56) 13% 14% 27% 8% 1% 6% (7)% 1Q’19 Currency 1Q’19 Financial Wealth Treasury Corporate
Slide 6: The net interest margin was impacted by extremely low rates
The net interest margin was impacted by extremely low rates Income Costs Risk Capital/Liquidity The rate of decline slowed in 1Q’20 but we expect further NIM pressure through the remainder of 2020 Gross yield (bps) 318 334 345 295 Rate paid (bps) 165 192 199 157 1.69 1.66 1.67 1.61 1.62 Adjusted NIM
Slide 7: Strong growth in networked FM business and affluent customer WM income reflect strategic priorities
Strong growth in networked FM business and affluent customer WM income reflect strategic priorities Income Costs Risk Capital/Liquidity Other significant sources of income include those that consume less capital and are less sensitive to interest rates Net fees and commissions1 ($m) 3,492 3,523 910
Slide 8: A firm grip on costs was maintained through 1Q'20, and will be tightened further through 2020
A firm grip on costs was maintained through 1Q’20, and will be tightened further through 2020 Income Costs Risk Capital/Liquidity We are taking action to mitigate the impact of the most recent interest rate cuts on pre-provision operating profit 68 71 Cost-to-income 66 66 • Operating expenses down 2
Slide 9: The risk environment deteriorated considerably in 1Q'20 due to COVID and oil price volatility
The risk environment deteriorated considerably in 1Q’20 due to COVID and oil price volatility Income Costs Risk Capital/Liquidity Securing our foundations in 2015-18 means we are better prepared to navigate extremely challenging conditions Credit impairment ($m) / Loan loss rate (bps) Loan loss rate
Slide 10: We significantly increased our provisions given heavily downgraded macroeconomic variables (MEVs)
We significantly increased our provisions given heavily downgraded macroeconomic variables (MEVs) Income Costs Risk Capital/Liquidity Increased impairment driven by modelled outcomes due to deteriorating MEVs plus management overlay Stage 1 and 2 credit impairment ($m) • Stage 1 and 2 impairment $45
Slide 11: We are managing exposures to more vulnerable sectors particularly carefully
We are managing exposures to more vulnerable sectors particularly carefully Income Costs Risk Capital/Liquidity The size and quality of our exposure to vulnerable sectors has improved significantly since 2015 Sector overview (2Q’15% 1Q’20%) Oil & Gas • Overall exposure down 18% since 1H’15 % Inves
Slide 12: We are extending credit carefully to support our clients' liquidity requirements
We are extending credit carefully to support our clients’ liquidity requirements Income Costs Risk Capital/Liquidity Corporate and institutional clients reacted rationally and proportionately to the evolving crisis Total undrawn commitments1 ($bn) 31.12.19 ∆ 1Q’20 Retail Banking facilities2 51.7 1.5
Slide 13: We remain strongly capitalised, enabling us to maximise support for clients and communities
We remain strongly capitalised, enabling us to maximise support for clients and communities Income Costs Risk Capital/Liquidity Risk-weighted assets ($bn) +$8.6bn 1.0 2.0 • RWA up 3% / $9bn from 4Q’19 2.2 272.7 5.2 (3.6) ▪ Mostly attributable to economic disruption 1.8 related to COVID 264.1 • Earli
Slide 14: Concluding remarks
Concluding remarks The outlook is uncertain: but we will control costs, and continue to support employees, clients and communities • 2Q’20 will see major contraction in economic growth rates across most of the world • Thereafter we believe there will be a gradual recovery, led by markets in our foot
Slide 15: Additional information, summary of abbreviated terms and important notice
Appendix Additional information, summary of abbreviated terms and important notice 14
Slide 16: Stage 1 and 2 credit impairments: Baseline forecast GDP trends at 31 March 2020
Stage 1 and 2 credit impairments: Baseline forecast GDP trends at 31 March 2020 Shape of GDP base forecasts in relation to prior period actuals and long-term growth rates China GDP Forecast Hong Kong GDP Forecast Korea GDP Forecast Singapore Forecast India Forecast 1. Forecast from Standard Chartere
Slide 17: Liquidity position resilient, despite stresses related to COVID
Liquidity position resilient, despite stresses related to COVID Total customer deposits1 ($bn) • 1Q’20 LCR of 142% and ADR of 62% demonstrate our resilient liquidity position underpinned by the strength and diversity of our 398 408 412 430 client franchise 175 • We are funded largely by customer dep
Slide 18: CET1 and MREL are well positioned relative to requirements
CET1 and MREL are well positioned relative to requirements CET1: within target range, with material headroom to minimum requirements1 Combined Buffer • 1Q’20 CET1 ratio of 13.4% within 13-14% target Pillar 1 and 2A medium-term range: no change to CET1 target requirement • Reduction of countercyclica
Slide 19: Selected technical and abbreviated terms used in this document
Selected technical and abbreviated terms used in this document Term Definition Term Definition Affluent activities Personal banking services offered to affluent and emerging affluent customers FM The Group’s Financial Markets business AME The Group’s business in the Africa & Middle East region FTE F
Slide 20: Important notice
Important notice This document contains or incorporates by reference “forward-looking statements” regarding the belief or current expectations of Standard Chartered PLC (the “Company”), the board of the Company (the “Directors”) and other members of its senior management about the strategy, business