Slide 1: Interim Results 2006
Interim Results 2006 8 August 2006 Leading the way in Asia, Africa and the Middle East
Slide 2: Forward looking statements
Forward looking statements It is possible that this presentation could or may contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only
Slide 3: Leading the way – Bryan Sanderson, Chairman
Leading the way in Asia, Africa and the Middle East Bryan Sanderson Chairman
Slide 4: Performance highlights
Performance highlights Income US$4.11bn 27% Operating profit before tax US$1.53bn 15% Normalised EPS 84.1c 12% Dividend per share 20.83c 10%
Slide 5: Economic growth
Economic growth GDP growth % 2005 2006 F* 2007 F* China 9.9 9.8 8.9 Hong Kong 7.3 6.0 4.5 India 8.4 7.0 6.5 Indonesia 5.6 5.5 6.0 South Korea 4.0 4.9 3.7 Malaysia 5.3 5.5 6.0 Pakistan 8.4 6.8 6.0 Singapore 6.6 6.5 5.5 UAE 12.0 10.2 5.2 EU 1.6 2.3 2.0 USA 3.5 3.3 2.8 * Standard Chartered forecasts
Slide 6: Economic trends
Economic trends Economies diversify and grow domestic demand Financial markets deepen and expand New trade corridors emerging Shifting economic, social and political ties
Slide 7: Governance
Governance Board further strengthened Lord Turner — Non-Executive Director Rudy Markham — Senior Independent Director Governance processes in good shape
Slide 8: Summary
Summary Good progress Appropriate governance in place Well positioned to continue to deliver good performance
Slide 9: Leading the way – Peter Sands, Group Finance Director
Leading the way in Asia, Africa and the Middle East Peter Sands Group Finance Director
Slide 10: Group performance
Group performance US$m H1 2005 H2 2005 H1 2006 YOY % Income 3,236 3,625 4,112 27 Expenses (1,708) (2,103) (2,225) 30 Operating profit before provisions 1,528 1,522 1,887 23 Loan impairment (194) (125) (349) 80 Other impairment (1) (49) (8) Loss from associates 0 0 (3) Profit before tax 1,333 1,348 1
Slide 11: Performance highlights
Performance highlights Normalised metrics H1 2005 H2 2005 H1 2006 Earnings per share 75.2c 78.7c 84.1c Return on ordinary shareholders equity 18.3% 18.1% 17.9% Cost income ratio 52.6% 57.3% 53.6%
Slide 12: Sources of income growth
Sources of income growth US$m 451 4,112 472 4,112 292* 133 404 3,236 3,236 H1 Acquired Organic Organic H1 H1 Wholesale Consumer H1 2005 growth growth growth 2006 2005 Banking Banking 2006 Korea Korea Rest of world * Acquired growth is the difference between KFB H1 2005 proforma income US$ 550m and K
Slide 13: Performance by geography
Performance by geography Profit before tax US$m H1 2005* H2 2005* H1 2006 YOY % Hong Kong 363 354 458 26 Singapore 104 121 134 29 Malaysia 69 86 97 41 Korea 108 156 234 117 Other APR 239 159 (34) (114) India 137 101 213 55 MESA 214 268 243 14 Africa 30 34 91 203 Americas, UK & Group 69 69 91 32 Tota
Slide 14: Group performance (excluding Korea)
Group performance (excluding Korea) US$m H1 2005 H2 2005 H1 2006 YOY % Income 2,927 2,977 3,378 15 Expenses (1,541) (1,638) (1,765) 15 Operating profit before provisions 1,386 1,339 1,613 16 Loan impairment (160) (98) (309) 93 Other impairment and losses (1) (49) (11) Operating profit before tax 1,2
Slide 15: Consumer Banking performance
Consumer Banking performance (excluding Korea) US$m H1 2005 H2 2005 H1 2006 YOY % Income 1,514 1,591 1,665 10 Expenses (765) (831) (832) 9 Operating profit before provisions 749 760 833 11 Loan impairment (159) (210) (372) 134 Other impairment 0 (3) 0 Operating profit before tax 590 547 461 (22)
Slide 16: Consumer Banking income
Consumer Banking income (excluding Korea) US$m H1 2005 H2 2005 H1 2006 YOY % Hong Kong 485 491 505 4 Singapore 163 161 170 4 Malaysia 101 109 112 11 Other APR 292 319 317 9 India 143 143 158 10 MESA 177 202 238 34 Africa 124 134 128 3 Americas, UK & Group 29 32 37 28 Total 1,514 1,591 1,665 10
Slide 17: Consumer Banking expenses
Consumer Banking expenses (excluding Korea) US$m Distribution capabilities 831 832 Up 9% New products 765 Infrastructure and systems Components of expense growth (%) 4 Investment for future growth 3 Regulatory/Control 2 BAU/Volume 9 H1 2005 H2 2005 H1 2006
Slide 18: Consumer Banking loan impairment
Consumer Banking loan impairment (excluding Korea) US$m H1 2005 H2 2005 H1 2006 Total loan impairment (159) (210) (372) Individual impairment provision (19) (40) (133) Portfolio impairment provision (4) (35) (70) Taiwan (23) (75) (203) Individual impairment provision (126) (124) (162) Portfolio impa
Slide 19: Wholesale Banking performance
Wholesale Banking performance (excluding Korea) US$m H1 2005 H2 2005 H1 2006 YOY % Income 1,413 1,386 1,713 21 Expenses (776) (807) (933) 20 Operating profit before provisions 637 579 780 22 Loan impairment (1) 112 63 Other impairment (1) (10) (8) Operating profit before tax 635 681 835 31 Risk weig
Slide 20: Wholesale Banking income
Wholesale Banking income (excluding Korea) Client income growth Income growth by segment (%) by products (%) Global 20 Trade & Lending 7 Corporates Financial Cash Management 25 42 Institutions & Custody Local 26 Global Markets 20 Corporates
Slide 21: Wholesale Banking expenses
Wholesale Banking expenses (excluding Korea) US$m Expanding sales force 933 Up 20% New product launches 807 Infrastructure and systems 776 Components of expense growth (%) 5 Investment for future growth 2 Regulatory/Control 13 BAU/Volume 20 H1 2005 H2 2005 H1 2006
Slide 22: Wholesale Banking loan impairment
Wholesale Banking loan impairment (excluding Korea) US$m H1 2005 H2 2005 H1 2006 Individual impairment provision (102) (66) (31) Recoveries 112 174 94 Net impairments 10 108 63 Portfolio impairment provision (11) 4 0 Total (1) 112 63 Loans and advances to customers (US$bn) 38.1 39.5 45.5
Slide 23: Korea performance
Korea performance H1 06 v H2 05 US$m H1 2005 H2 2005 H1 2006 % Income 309 648 734 13 Expenses (167) (465) (460) (1) Loan impairment (34) (27) (40) 48 Operating profit before tax 108 156 234 50
Slide 24: Korea Consumer Banking performance
Korea Consumer Banking performance H1 06 v H2 05 US$m H1 2005 H2 2005 H1 2006 % Income 209 488 530 9 Expenses (123) (382) (378) (1) Loan impairment (34) (22) (33) 50 Operating profit before tax 52 84 119 42
Slide 25: Korea Wholesale Banking performance
Korea Wholesale Banking performance H1 06 v H2 05 US$m H1 2005 H2 2005 H1 2006 % Income 100 160 204 28 Expenses (44) (83) (82) (1) Loan impairment 0 (5) (7) 40 Operating profit before tax 56 72 115 60
Slide 26: Group balance sheet – liabilities
Group balance sheet – liabilities Deposits US$bn H1 2005 H2 2005 H1 2006 YOY % Current & demand accounts 46.2 53.3 60.4 31 Deposits 84.2 87.9 95.2 13 Total 130.4 141.2 155.6 19
Slide 27: Group balance sheet – assets
Group balance sheet – assets Loans to customers US$bn H1 2005 H2 2005 H1 2006 YOY % Consumer Banking Mortgages 41.0 44.0 44.0 7 Other 14.2 14.6 15.5 9 SME 8.3 9.5 9.6 16 Total Consumer Banking 63.5 68.1 69.1 9 Wholesale Banking 44.2 44.4 51.5 17 Total Loans to customers 107.7 112.5 120.6 12
Slide 28: Risk management
Risk management NPL US$m Consumer Banking Wholesale Banking 3.5 1000 2.7 3.0 800 2.2 2.5 600 1.8 2.0 1.5 1.4 1.5 400 1.1 1.0 200 0.9 0.9 0.8 0.5 0.5 0 0 H1 2004* H2 2004* H1 2005 H2 2005 H1 2006 Net NPL as % of Impairment provision as % of Loans to customers Loans to customers * Excludes balances th
Slide 29: Group expenses
Group expenses US$m Up 30% Business and Support 2,225 2,103 Technology production and operations 1,708 Expense growth by type % 1,333 1,675 1,802 YOY HOH 35 8 13 (1) 375 428 423 H1 2005 H2 2005 H1 2006
Slide 30: Capital management
Capital management % 15 14.2 13.6 12.9 10 5.6 5.9 5.8 5 7.3 7.7 8.4 H1 2005 H2 2005 H1 2006 Tier 1 Tier 2
Slide 31: Summary
Summary Good income momentum Disciplined expenses management Tight management of risk
Slide 32: Leading the way – Mervyn Davies, Group Chief Executive
Leading the way in Asia, Africa and the Middle East Mervyn Davies Group Chief Executive
Slide 33: Five year performance
Five year performance H1 2001 H1 2006 CAGR Income (US$m) 2,164 4,112 14% Operating profit before tax (US$m) 628 1,527 19% Normalised EPS (US$) 40.2c 84.1c 16% Dividend per share (US$) 12.82c 20.83c 10%
Slide 34: Delivering 2006 management agenda
Delivering 2006 management agenda Accelerate growth in both businesses, focusing on priority markets Deepen client relationships in Wholesale Banking Enter new customer segments in Consumer Banking Drive growth and performance in Korea Excel in service and innovation Lead by example in c
Slide 35: Wholesale Banking client income
Wholesale Banking client income Ï 31% H1 2004 H2 2004 H1 2005 H2 2005 H1 2006
Slide 36: Wholesale Banking transformation
Wholesale Banking transformation 2,000 Wholesale Banking Income (US$m) 1,500 1,000 500 0 H1-01 H2-01 H1-02 H2-02 H1-03 H2-03 H1-04 H2-04 H1-05 H2-05 H1-06 Note: 2005 and 2006 reported on IFRS basis and include SC First Bank. 2004 reported on IFRS basis excluding IAS 32/39.
Slide 37: Wholesale Banking business awards
Wholesale Banking business awards Euromoney Global Custodian The Asset Emerging Markets Best Debt House Best Agent Bank Best Structured Best Project Finance Loan in Thailand in Asia Trade Finance Bank Best Corporate Loan Awards for Excellence 2006 Global Custodian Agent The Asset Triple A Asian Emer
Slide 38: Consumer Banking growth
Consumer Banking growth 2,500 Consumer Banking Income (US$m) 2,000 1,500 1,000 500 0 H1-01 H2-01 H1-02 H2-02 H1-03 H2-03 H1-04 H2-04 H1-05 H2-05 H1-06 Note: 2005 and 2006 reported on IFRS basis and include SC First Bank. 2004 reported on IFRS basis excluding IAS 32/39.
Slide 39: Consumer Banking product portfolio
Consumer Banking product portfolio
Slide 40: Consumer Banking service guarantee
Consumer Banking service guarantee
Slide 41: Consumer Banking investment
Consumer Banking investment
Slide 42: Korea product launches
Korea product launches Consumer Banking Wealth Management - e-Click Account, My Dream Account, 30 new funds Mortgages - Credit linked retail mortgages Credit Cards - PB Platinum, Rotary Personal Loans - Drim, Select Loan SME - Express Trade Services, Business Plus accounts Wholesale Bankin
Slide 43: Key Outserve elements
Key Outserve elements Voice of customer Process improvement Metrics and measurement Change management and communication
Slide 44: Sustainable economic development
Sustainable economic development Social contribution Environmental protection Strong governance
Slide 45: Delivering growth
Delivering growth Focused strategy delivering results Disciplined investments paying off Investments drive future growth
Slide 46: Growth in India
wotlk © Growth in India Chartered SS High Performance Banking ‘jour sr
Slide 47: Growth in Africa
Growth in Africa Chartered RQ e
Slide 48: Africa business awards
Africa business awards Euromoney Market Intelligence Trade Finance Banker FT Best Bank in Sub Best Bank Corporate Best Trade Finance Best Bank 2005 Saharan Africa Banking & Most Bank in Sub-Saharan Country Award for 6 2005 & 2006 Efficient Bank, Kenya Africa 2005 & 2006 African Countries Global Fina
Slide 49: Growth in MESA
Growth in MESA
Slide 50: Strategic focus
Strategic focus
Slide 51: Power of the brand
Standard Chartered SCAILLS & wuyovaAr IUIHUISVOvVIS) Your spirit our courage
Slide 52: Investment strategy
Investment strategy Extending market penetration Bohai Bank Project Extending product reach Finance India Delivering shareholder value
Slide 53: Diversity
Diversity
Slide 54: Summary
Summary Well positioned in dynamic markets Strategic progress Disciplined approach Investing for future growth