Slide 1: 3Q'22 Results Presentation
CONFIDENTIAL 3Q’22 Results Presentation 26 October 2022
Slide 2: Opening remarks
CONFIDENTIAL Opening remarks • A strong performance in 3Q’22 → Introduction o Total income up 22% at constant currency (ccy) on a normalised basis1… Income Markets Expenses o … the fifth consecutive quarter of year-on-year growth Risk Capital o 10% positive income-to-cost jaws (ccy) Conclusion o Pro
Slide 3: Strong income growth, positive jaws, PBT up 35% and robust capital position
CONFIDENTIAL Strong income growth, positive jaws, PBT up 35% and robust capital position ($bn) 3Q’21 3Q’22 YoY1 ccy1 • 3Q’22 income up 22% normalised3 Introduction → Income Net interest income 1.7 1.9 11% 19% Markets Other income (ex-DVA) 2.0 2.3 15% 20% Operating Income (ex-DVA) 3.8 4.3 13% 19% • 3
Slide 4: 3Q'22 income up 22% normalised, continuing the trend of strong quarterly growth
CONFIDENTIAL 3Q’22 income up 22% normalised, continuing the trend of strong quarterly growth % variance at constant currency (ccy) x% and excluding DVA Income 3Q’22 vs 3Q’211 – Product view ($m) % variance at ccy, ex-DVA and normalising for Introduction x% the IFRS9 interest income adjustment in 3Q’
Slide 5: Strong NII growth up 25% ccy, driven by progressive margin expansion
CONFIDENTIAL Strong NII2 growth up 25% ccy, driven by progressive margin expansion Statutory adjusted basis Introduction Gross yield → Income (bps) 185 234 184 178 192 221 288 • 3Q’22 NII2 up 17% YoY, up 25% at ccy Markets Rate paid 68 106 (bps) 66 65 68 92 157 Expenses 1.36 o AIEA up $5bn / 1%; AIB
Slide 6: Balance sheet continues to show positive underlying growth
CONFIDENTIAL Balance sheet continues to show positive underlying growth Loans and advances to customers ($bn) 30.06.22 to 30.09.22 Introduction +1% → Income 2 298 Markets 294 12 296 Expenses (7) (2) • 3Q’22 L&A to customers up 1% QoQ Risk Capital on an underlying basis, excluding Conclusion 30.06.22
Slide 7: Strong performance across our larger markets
CONFIDENTIAL Strong performance across our larger markets UAE China Income growth YTD RoTE1 Income growth 10.5% 10.4% YTD RoTE1 Introduction 16.9% 21.8% 9.9% Income ’22 GDP2 10.8% → Markets ’22 GDP2 Expenses 6.9% YTD’22 YoY 3Q’22 YoY YTD’22 YoY 3Q’22 YoY 3.3% Risk Capital Conclusion India Income gro
Slide 8: Strong positive jaws year-to-date and 3Q'22; $330m cost savings delivered
CONFIDENTIAL Strong positive jaws year-to-date and 3Q’22; $330m cost savings delivered Total operating expenses1 3Q’21 to 3Q’22 ($m) • 5% YTD positive jaws3, 10% in 3Q’22 Introduction 2,594 2,595 2,636 2,636 2,659 Income Investment P&L • 3Q’22 expenses1 up 3%, up 9% ccy on Markets charge ($m) → Expe
Slide 9: 3Q'22 charge primarily China CRE and Sovereigns, loan-loss rate remains low
CONFIDENTIAL 3Q’22 charge primarily China CRE and Sovereigns, loan-loss rate remains low Credit impairment ($m) / Loan-loss rate (bps) Loan-loss rate1 3bps 18bps • Credit impairment $227m vs $107m 3Q’21 Introduction 494 Income Ventures + C&O (segment) 50 227 o China CRE $130m (see p18) Markets 203 E
Slide 10: Currency impacts and efficiency actions drive RWA lower again in 3Q'22
CONFIDENTIAL Currency impacts and efficiency actions drive RWA lower again in 3Q’22 Risk-weighted assets (RWA) ($bn) Introduction • RWA down $3bn (1%) from 30.06.22 Income Markets 2.9 $(2.8)bn o $4bn asset growth & mix Expenses Risk 4.0 o $3bn negative credit migration, mainly from → Capital 255.1 (
Slide 11: In summary
CONFIDENTIAL In summary • The Group delivered a strong performance in 3Q’22… • … and continues to make significant progress on the 5 strategic actions outlined in February Introduction Income Conclusion • The pace of economic recovery in many of our footprint markets is encouraging… Markets Expenses
Slide 12: Appendix
CONFIDENTIAL Appendix Sustainability Strategic actions progress, macroeconomic indicators, NIM drivers, China CRE exposure, Sovereign exposure, Commodity related sectors, Other income breakdown, Summary of guidance Notes, abbreviated terms and important notice 12
Slide 13: Sustainability and Sustainable Finance central to our growth ambitions
CONFIDENTIAL Sustainability and Sustainable Finance central to our growth ambitions Our aims 3Q’22 Achievements (unless otherwise stated) Mobilise capital • Sustainable Finance (SF) income up 33% and Assets up 1% YoY1 • $1bn SF income in the medium-term • Published Sustainable Banking Report 2022: M
Slide 14: Appendix
CONFIDENTIAL Appendix Sustainability Strategic actions progress, macroeconomic indicators, NIM drivers, China CRE exposure, Sovereign exposure, Commodity related sectors, Other income breakdown, Summary of guidance Notes, abbreviated terms and important notice 14
Slide 15: Continued significant progress on five strategic actions
CONFIDENTIAL Continued significant progress on five strategic actions Description 2024 targets YTD’22 result • CCIB Income RoRWA: 160bps improvement from 4.9% in 2021 to 6.5% 6.5% 6.3% • RWA reduction of $22bn by 2024 $22bn (2022 to 2024) $10.5bn • Hold RWA flat to $163bn $163bn $150bn • Financial I
Slide 16: Changes to baseline forecasts for key footprint markets
CONFIDENTIAL Stage 1 and 2 credit impairments Changes to baseline forecasts1 for key footprint markets 2Q’22 3Q’221 Crude price China Hong Kong Korea Singapore India Brent, bbl GDP (YoY): 2022 Forecast 4.1% 3.3% 0.2% 0.2% 2.7% 2.7% 3.8% 3.4% 7.7% 7.0% $104.6 $105.5 GDP (YoY): 2023 Fore
Slide 17: Group hedging strategies
CONFIDENTIAL Group hedging strategies USD SOFR O/N 4.35 Average rates as at 28-02-22 3.72 Average rates as at 21-09-22 • Total hedge positions of $44bn or <10% of AIEA • $28bn of short-term hedges executed in Feb ’22: 2.20 1.86 1.78 1.78 o For income certainty underpinning 10% RoTE given uncertain r
Slide 18: China CRE: sector remains under pressure, actively managing portfolio
CONFIDENTIAL China CRE: sector remains under pressure, actively managing portfolio… 30.09.22 Exposure by booking location1,2 • $3.5bn exposure down $0.2bn QoQ / $0.5bn YTD mainly in sub-IG4 clients 3.5 o portfolio 50% secured, secured assets average LTV5 <50%, o >60% secured assets income producing,
Slide 19: Sovereign exposures: closely monitoring certain footprint markets
CONFIDENTIAL Sovereign exposures: closely monitoring certain footprint markets Net nominal1,2 ($bn) • Stagflation, tighter liquidity and USD strength are 6.2 31.12.21 challenging for some EM sovereigns 30.09.22 4.3 • Three markets with total net nominal of $7.0bn, <1% of total CCIB and CPBB net nomi
Slide 20: Commodity related sectors now higher quality and resilient
CONFIDENTIAL Commodity related sectors now higher quality and resilient Net nominal1 ($bn) • Expect portfolios to be resilient to higher, more volatile commodity prices o Portfolios de-risked since 2015, now focused on larger clients… 25.0 30.06.15 23.9 o …with stronger balance sheets, better able t
Slide 21: 3Q'22 Other income ex-DVA up 20% ccy; up 11% YTD
CONFIDENTIAL 3Q’22 Other income ex-DVA up 20% ccy; up 11% YTD Other income ($m) 6,768 2,399 2,330 6,275 • 3Q’22 net fees and commissions down 7% 2,031 2,039 2,529 913 YoY at ccy Net fees and 810 commissions ($m) o Wealth Management income 26% lower 2,852 1,615 910 806 YoY at ccy o Financial Markets
Slide 22: Summary of guidance
CONFIDENTIAL Summary of guidance 2022 Guidance 2021 - 2024 Guidance (unless otherwise stated) • Income (ex-DVA at ccy) expected to grow around 13%, in-line with the year- Income • Income is expected to grow 8-10% CAGR over the next three years, 5-7% to-date growth rate from underlying growth and a f
Slide 23: Appendix
CONFIDENTIAL Appendix Sustainability Strategic actions progress, macroeconomic indicators, NIM drivers, China CRE exposure, Sovereign exposure, Commodity related sectors, Other income breakdown, Summary of guidance Notes, abbreviated terms and important notice 23
Slide 24: Notes
CONFIDENTIAL Notes These notes refer to the metrics and defined terms on the following pages Page Explanatory note or definition 1. Normalised basis which excludes debit valuation adjustment (DVA) and non-repeat of the 2021 IFRS9 interest income catch-up adjustment in relation to interest 2 earned o
Slide 25: Notes
CONFIDENTIAL Notes These notes refer to the metrics and defined terms on the following pages Page Explanatory note or definition 1. Loan-loss rate is on a year-to-date annualised basis 9 2. Early Alerts (Non-Purely Precautionary) (EA(NPP)) are on a net nominal basis 3. High-risk assets in this conte
Slide 26: Notes
CONFIDENTIAL Notes These notes refer to the metrics and defined terms on the following pages Page Explanatory note or definition 1. Net Nominal basis (see selected technical and abbreviated terms page 27): based on where the ultimate parent entities and credit responsibility is 19 2. Booking locatio
Slide 27: Selected technical and abbreviated terms
CONFIDENTIAL Selected technical and abbreviated terms Term Definition Term Definition ADR Advances-to-Deposits ratio Loan-loss rate Total credit impairment for loans and advances to customers over average loans and advances to (LLR) customers AIBL Average interest-bearing liabilities MREL Minimum re
Slide 28: Important Notice
CONFIDENTIAL 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 strat