Standard Chartered Plc · LSE:STAN
Standard Chartered — Q3 2024 Earnings Presentation
32 slides from Standard Chartered's earnings presentation, Oct 30, 2024
Slide 1: Q3'24 Results presentation
CONFIDENTIAL Q3’24 Results presentation 30 October 2024
Slide 2: Opening remarks
CONFIDENTIAL Opening remarks ▶ Overview Income Expenses Upgraded guidance Impairment Q3’24 performance Balance sheet • Income up 12% YoY with record performance in Wealth Solutions • Income growth towards 10% in 2024 Capital Business update • Continued cost discipline with expenses up 2% YoY; Fit fo
Slide 3: Financial performance
CONFIDENTIAL Financial performance Diego De Giorgi Group Chief Financial Officer 3
Slide 4: Strong performance in Q3'24
CONFIDENTIAL Strong performance in Q3’24 ▶ Overview Q3’23 Q3’24 YoY YoY ccy Income • Operating income up 12% YoY at ccy Net interest income (NII) 2,388 2,606 9% 9% Expenses Impairment − Record performance in Wealth Solutions and strong Non NII1 2,015 2,298 14% 15% Balance sheet growth in Global Mark
Slide 5: Growth in NII in Q3'24
CONFIDENTIAL Growth in NII in Q3’24 Net Interest Income (NII) components Overview ▶ Income • Q3’24 NII of $2.6bn up 1% QoQ at ccy Expenses 2,560 2,606 Impairment − Benefits from mix improvement and extra day 2,388 2,392 2,419 Balance sheet count NII ($m) Capital Business update • Q3’24 NII up 9% YoY
Slide 6: Engines of Non NII continue to drive overall business growth
CONFIDENTIAL Engines of Non NII continue to drive overall business growth Wealth Solutions ($m) Overview ▶ Income • Record income in Wealth Solutions, up 32% YoY at ccy +32% ccy Expenses Impairment − Strong growth in Investment Products, up 40% 143 25 694 Balance sheet Capital − Bancassurance up 16%
Slide 7: Expenses well-controlled; Fit for Growth well underway
CONFIDENTIAL Expenses well-controlled; Fit for Growth well underway Operating expenses1 quarterly trend ($m) Overview Income • Q3’24 expenses up 2% YoY at ccy ▶ Expenses +2% ccy Impairment − Inflation and business growth largely offset by efficiency 2,887 Balance sheet saves 2,852 Capital 2,770 2,78
Slide 8: Low levels of credit impairment
CONFIDENTIAL Low levels of credit impairment Credit impairment ($m) / Loan-loss rate Overview Income • Q3’24 credit impairment down 39% YoY Expenses ($116m) ▶ Impairment • CIB benefitted from more recoveries, partly offset by $34m overlay 294 Balance sheet for clients who have exposures to Hong Kong
Slide 9: Underlying customer loans broadly stable; uptick in customer deposits
CONFIDENTIAL Underlying customer loans broadly stable; uptick in customer deposits Loans and advances to customers1 ($bn) Overview Income • Underlying L&A to customers down $1bn QoQ Expenses Impairment − Volume growth in Trade partly offset by reduction 3 287 287 8 ▶ Balance sheet in Global Markets
Slide 10: RWA up 3% QoQ; capital remains robust
CONFIDENTIAL RWA up 3% QoQ; capital remains robust Risk-weighted assets ($bn) Overview Income • Q3’24 RWA up $7bn QoQ Expenses +$7.0bn Impairment − Market risk up $3bn primarily from helping clients capture 3.6 248.9 Balance sheet market opportunities ▶ Capital 3.2 Business update − $3bn increase fr
Slide 11: CIB: Q3'24 performance
CONFIDENTIAL CIB: Q3’24 performance P&L ($m) Overview Income • CIB delivered record Q3 income of $2.9bn, up 2% YoY at ccy Q3’23 Q3’24 YoY ccy Expenses − Global Markets up 17%; up 16% at ccy, supported by product Impairment Transaction Services 1,654 1,572 (5%) Balance sheet expansion and capturing b
Slide 12: WRB: Q3'24 performance
CONFIDENTIAL WRB: Q3’24 performance P&L ($m) Q3’23 Q3’24 YoY ccy Overview • WRB income up 11% YoY at ccy Income Investment Products2 364 506 40% Expenses − Continued strong growth and record performance in Impairment Wealth Solutions, up 32% Bancassurance 162 187 16% Balance sheet Wealth Solutions 5
Slide 13: Ventures: Key highlights
CONFIDENTIAL Ventures: Key highlights Overview Income Expenses • Best-in-class digital bank NPS score • Recently launched a cashback credit • Signed a partnership agreement with BIM Impairment card, to further increase appeal to Ventures aimed at collaborating on fintech Balance sheet • Largest mark
Slide 14: Strategy update
CONFIDENTIAL Strategy update Bill Winters Group Chief Executive Officer 14
Slide 15: Focusing our model to deliver sustainably higher returns
CONFIDENTIAL Focusing our model to deliver sustainably higher returns Active management of products and markets since 2015 Overview Income Saudi Arabia Approaching 13% Expenses Mox Impairment Investments1 Egypt Balance sheet (Hong Kong) Capital 10.1% Business update Toss Bank Trust ▶ Strategy update
Slide 16: WRB: Invest in affluent and reshape mass retail business
CONFIDENTIAL WRB: Invest in affluent and reshape mass retail business RM and Affluent client upgrades Overview Income Double investment in wealth management for affluent clients RM growth Up-tiered clients1 (# per annum) Expenses • Invest $1.5bn over 5 years Impairment ~50% ~350k Balance sheet − Inv
Slide 17: CIB: Further sharpen focus on larger cross-border clients
CONFIDENTIAL CIB: Further sharpen focus on larger cross-border clients Client portfolio overview Overview Income Focus resources on top clients Expenses % of client groups ~31% ~23% • Increase investment in our top tier (~1k) clients Impairment Balance sheet − Invest in RMs across the network to ser
Slide 18: 2025 and 2026 guidance
CONFIDENTIAL 2025 and 2026 guidance Overview 2025 and 2026 revised guidance1 Income Expenses Impairment Balance sheet Capital Business update Operating income Strategy update Operating Return to increase Positive jaws CET1 ratio of ▶ Guidance expenses2,3 at least $8bn capital 5-7% CAGR in every year
Slide 19: Closing remarks
CONFIDENTIAL Closing remarks Overview Continue to drive sustainably higher returns Income Expenses Impairment • Strong performance in the third quarter, with income up 12% and profit before tax up 41% Balance sheet Capital Business update • Upgrading 2024 income guidance to increase towards 10% Stra
Slide 20: Appendices
CONFIDENTIAL Appendices 20
Slide 21: 2024–2026 guidance
CONFIDENTIAL 2024–2026 guidance 2024 guidance 2025 and 2026 guidance Income • Income to increase towards 10% in 20241,2, excluding the two notables3; 5-7% CAGR in 2023-20261, (2025 growth expected to be below the 5-7% range)1 • Net interest income of $10bn to $10.25bn1 in 2024 • Positive income-to-c
Slide 22: Q3'24 products performance
CONFIDENTIAL Q3’24 products performance Q3’24 YoY ccy Q3’24 YoY YoY ccy Payments & Liquidity 1,112 (84) (7%) Transaction Services 1,585 ▼5% Securities & Prime Services 156 18 15% Trade & Working Capital 317 (16) (6%) Lending & Financial Solutions 407 14 4% Global Banking 475 ▲7% Capital Markets & Ad
Slide 23: Interest rate assumptions
CONFIDENTIAL Interest rate assumptions Currency-weighted average1 (bps) USD SOFR O/N average (bps) 3M HIBOR average (bps) 535 532 532 532 528 523 527 500 453 454 453 497 446 530 473 440 520 465 466 450 429 505 419 447 495 440 428 449 464 461 459 391 412 468 442 436 428 419 382 2.1.24 Change 16.10.24
Slide 24: Tangible net asset value per share
CONFIDENTIAL Tangible net asset value per share Basic # of Tangible equity TNAV per share ordinary shares2 ($m) (cents) (m) As of 30.6.24 36,816 1,444 2,550 Profit attributable to ordinary shareholders 1,150 45 Dividends paid to: Ordinary shareholders (229) (9) Other equity holders (219) (9) Share b
Slide 25: China portfolio resilient and CRE risks limited
CONFIDENTIAL China portfolio resilient and CRE risks limited China ultimate parent company exposure6 ($bn) • China portfolio is resilient and undergoes regular reviews and stress testing − Top exposures only with blue chip state- and privately-owned enterprises 3% Corporates 10% 3% Sovereigns − No e
Slide 26: Hong Kong CRE portfolio remains resilient despite ongoing pressures
CONFIDENTIAL Hong Kong CRE portfolio remains resilient despite ongoing pressures Hong Kong CRE exposure4 ($bn) • Hong Kong CRE $2.3bn or < 0.5% of total Group exposures1 − $0.3bn QoQ reduction in exposures, of which most is unsecured and is expected to be temporary due to refinancing 0% CG 1-53 − Ex
Slide 27: Deposit mix within expectations
CONFIDENTIAL Deposit mix within expectations Transaction Services CASA% of CIB deposits4 ($bn) • Overall CASA% within expectations in Q3’24 64% 64% 64% 61% 62% − For both CIB and WRB, CASA has grown but CASA% has slightly reduced as CASA % Other clients lock in TD rates liquid 300 306 293 298 309 re
Slide 28: High levels of liquid resources and stable funding
CONFIDENTIAL High levels of liquid resources and stable funding Components of Liquidity coverage ratio (LCR)1 • LCR of 143%1 down 2%pts YTD: no TLTRO and TFSME benefit in LCR 145% 148% 143% • Beyond what is captured in LCR, the Group has total liquid resources of $236bn Other liquid − $177bn HQLA: 9
Slide 29: Capital & MREL: Well-positioned for future growth and requirements
CONFIDENTIAL Capital & MREL: Well-positioned for future growth and requirements Capital metrics • CET1 capacity to support growth and shareholder distributions CET1 minimum requirement1: 33.3% 35.4% 34.9% • MREL of 34.9% meets requirements with a buffer of ~660bps 10.6% PLC Senior 13.2% CCB 2.5% • L
Slide 30: Select technical and abbreviated terms
CONFIDENTIAL Select technical and abbreviated terms Term Definition Term Definition Adj. Adjustments EA (NPP) / A borrower’s account which exhibits risks or potential weaknesses of a AIEA Average interest-earning assets Early alerts material nature requiring closer monitoring, supervision, or attent
Slide 31: Select technical and abbreviated terms
CONFIDENTIAL Select technical and abbreviated terms Term Definition Term Definition MAS Monetary Authority of Singapore RMs Relationship Managers MDA Maximum distributable amount RoRWA Return on risk-weighted assets MiFID Markets in Financial Instruments Directive RWA Risk-weighted assets. A measure
Slide 32: Important notice
CONFIDENTIAL Important notice Forward-looking statements This document may contain ‘forward-looking statements’ that are based upon current expectations or beliefs, as well as statements formulated with assumptions about future events. These forward-looking statements can be identified by the fact t