Standard Chartered Plc · LSE:STAN
Standard Chartered — H1 2013 Earnings Presentation
43 slides from Standard Chartered's earnings presentation, 2013
Slide 1: Leading the way in Asia, Africa and the Middle East – Half Year Results 2013
Leading the way in Asia, Africa and the Middle East Half Year Results 2013
Slide 2: Forward looking statement
Forward looking statement 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 t
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
Slide 4: Performance highlights
Performance highlights H1 13 YoY% YoY% Normalised* Income US$10.0bn 7% 5% Jaws 3% Normalised earnings US$2.9bn 6% Normalised return on equity 13.3% Dividend per share 28.8c 6% * Normalised as per details on page 114 of the half year 2013 press release - Note: signage used throughout the presentation
Slide 5: Group performance
Group performance US$m H1 12* H2 12* H1 13 YoY% Income 9,371 9,412 9,988 7 Net interest income 5,374 5,407 5,598 4 Non interest income 3,997 4,005 4,153 4 Fair value gains on OCA† - - 237 nm Expenses (4,879) (5,843) (5,034) (3) Operating profit before impairment 4,492 3,569 4,954 10 Loan impairment
Slide 6: Geographic performance
Geographic performance Underlying performance excludes OCA and goodwill Income Profit before tax US$m H1 12* H1 13 YoY% H1 12* H1 13 YoY% Hong Kong 1,688 1,929 14 870 1,031 19 Singapore 1,162 1,123 (3) 546 480 (12) Korea 950 898 (5) 303 137** (55) Other APR 1,832 1,731 (6) 739 602 (19) India 790 927
Slide 7: Diversity a differentiator
Diversity a differentiator Income by geography Income by product Americas, UK and Principal Hong Kong Finance Europe Corporate 20% 2% CCPL* 12% Finance 14% Africa ALM 13% 9% 4% Credit and Wealth Other Management Singapore 2% 7% MESA 11% 11% Capital Markets Consumer 3% Banking Deposits 36% 7% Korea C
Slide 8: Risk diversification
Risk diversification Corporate exposures* Energy sector Other Other* Metals and mining 7% Technology 7% Coal mining 9% Auto 3% 5% Real estate Utilities 3% 8% Oil rig 4% Trade in fuels and operators Telecom lubricants~ Sovereign 6% 4% 33% Exposures Corporates Other material / 30% 33% capital goods 42
Slide 9: Risk diversification (cont’d)
Risk diversification (cont’d) 100% Top 20 corporate exposures 12% 90% 10% 80% 70% 8% 60% 50% 6% 40% 4% 30% 20% H2 10 H1 11 H2 11 H1 12 H2 12 H1 13 2% 10% Top 20 Corporate Exposure at Def ault (EAD) Top 20 Corporate Exposure at Default (EAD) as a % of GCR** Top 20 Corporate Exposure at Default (EAD)
Slide 10: Peer comparison
Peer comparison Banking system credit growth in our footprint markets* China Hong Kong 16% 20% UAE 2% S. Korea Asia 17% Middle East India Kenya Singapore 19% Africa 22% 20% Growth in Loans and Advances to Customers* International Banks Footprint Banks Footprint Average 13% 21% 24% 17% 15% 17% 15% 13
Slide 11: Group balance sheet – Liabilities
Group balance sheet – Liabilities Total deposits US$bn ■ Customer deposit funded franchise 404 423 426 8 7 7 ■ Liquid asset ratio of 28.3% and 8 6 8 197 201 203 US$184bn of liquid assets 199 215 216 ■ Minimal refinancing requirements H1 12 H2 12 H1 13 CASA**** Time deposits Other deposits ■ US$2.75b
Slide 12: Group balance sheet – Assets
Group balance sheet – Assets Customer loans and advances by geography ■ Well diversified by product, Americas, UK Hong Kong segment and geography & Europe 19% 18% Af rica 3% MESA ■ 81% of Consumer Banking 7% India Singapore 21% portfolio fully or partially 4% secured Other Asia Pacif ic Korea 17% 11
Slide 13: Capital generation
Capital generation Capital ratios % Risk weighted assets US$bn 16.9 17.4 16.9 324 302 286 27 3.5 4.0 24 33 3.9 22 31 31 1.8 1.7 1.6 Total Tier 1 13.0% 247 264 11.6 11.7 11.4 233 H1 12 H2 12 H1 13 H1 12 H2 12 H1 13 Core Tier 1 Other Tier 1 Tier 2 Credit Risk Operational Risk Market Risk Core Tier 1 c
Slide 14: Consumer Banking performance
Consumer Banking performance US$m H1 12* H2 12* H1 13 YoY % Income 3,429 3,592 3,683 7 Expenses (2,246) (2,350) (2,340) (4) Operating profit before 1,183 1,242 1,343 14 impairment Loan impairment (290) (384) (506) (74) Other impairment (9) (36) 0 100 Profit from associates 24 19 21 (13) Operating pr
Slide 15: Consumer Banking income
Consumer Banking income YoY% HoH% Mortgages 18% 6% (1%) (3%) 16bps 11bps Deposits (7%) (6%) 6% (2%) (12bps) (7bps) Wealth 8% 9% Management 9% (1%) Change in income Change in f ootings* Change in margin Note: For Mortgages, footings are loans to customers, for Deposits, deposits only, and for Wealth
Slide 16: Consumer Banking income (cont’d)
Consumer Banking income (cont’d) YoY% HoH% CCPL 10% 2% 7% (3%) (28bps) (9bps) SME 4% 2% 8% (1bps) 2bps 2bps Change in income Change in f ootings* Change in margin Note: For CCPL footings are loans to customers and for SME loans to customers and deposits combined
Slide 17: Consumer Banking – Impairment trend
Consumer Banking – Impairment trend H1 12* H2 12* H1 13 Mortgages LI/ANR** (0.02%) 0.02% 0.02% 30dpd/ENR*** 0.66% 0.68% 0.54% Loan book (US$bn) 71 73 70 LI (US$m) (9) 8 6 SME LI/ANR 0.51% 0.63% 0.45% 90dpd/ENR 0.53% 0.68% 0.77% Loan book (US$bn) 19 20 20 LI (US$m) 49 61 46 CCPL LI/ANR 2.52% 2.93% 4.
Slide 18: Wholesale Banking performance
Wholesale Banking performance US$m H1 12* H2 12* H1 13 YoY% Income 5,942 5,730 6,305 6 Income (ex. OCA) 5,942 5,730 6,068 2 Expenses (2,633) (3,319) (2,694) (2) Loan impairment (285) (237) (224) 21 Other impairment (65) (86) (11) 83 Profit from associates 69 70 91 30 Operating profit 3,028 2,158 3,4
Slide 19: Diversified income streams
Diversified income streams Total income – US$m H1 12* H2 12* H1 13 YoY% Lending & Portfolio Management 421 416 400 (5) Transaction Banking 1,825 1,811 1,746 (4) Trade 945 970 932 (1) Cash Mgt & Custody 880 841 814 (8) Global Markets 3,696 3,503 4,159 13 Financial Markets 1,989 1,668 2,107 6 ALM 484
Slide 20: Wholesale Banking – Financial Markets
Wholesale Banking – Financial Markets Total income – US$m H1 12* H2 12* H1 13 YoY% Foreign Exchange 739 538 835 13 Rates 539 426 552 2 Commodities and Equities 277 244 288 4 Capital Markets 290 301 283 (2) Credit and Other 144 159 149 3 Fair value gain on OCA - - 237 nm Total Financial Markets 1,989
Slide 21: Wholesale Banking – Impairment
Wholesale Banking – Impairment US$m H1 12* H2 12* H1 13 YoY% Loan impairment (285) (237) (224) 21 Other impairment (65) (86) (11) 83 Total impairment (350) (323) (235) 33 H1 12* H2 12* H1 13 HoH% Loans and advances to 154 155 164 7 customers (US$bn)** Gross non performing loans 4,021 4,272 4,457 4 C
Slide 22: Wholesale Banking – Risk management
Wholesale Banking – Risk management ■ 65% of Wholesale Banking loans less Loans and advances to customers than 1 year maturity by geography Hong Kong 15% ■ Low level of exposure to problem asset Americas, UK classes of ABS, leveraged Loans, CRE and Europe 29% Singapore and Level 3 assets 20% Africa
Slide 23: Outlook
Outlook We have good momentum and our clients remain highly active We remain focused on balance sheet foundations and supporting our customers and clients Our markets continue to grow and we continue to gain share in multiple products
Slide 24: 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
Slide 25: A resilient performance
A resilient performance Good underlying momentum Disciplined cost and risk management Balance sheet strength Increased quality and volume of lending to clients Growth continues across our diverse business
Slide 26: 2013 performance
2013 performance Underlying performance excludes OCA and goodwill Income Profit before tax US$m H1 12* H1 13 YoY% H1 12* H1 13 YoY% Hong Kong 1,688 1,929 14 870 1,031 19 Singapore 1,162 1,123 (3) 546 480 (12) Korea 950 898 (5) 303 137** (55) Other APR 1,832 1,731 (6) 739 602 (19) India 790 927 17 31
Slide 27: Historical performance
Historical performance Income growth (YoY%) Negative 0 > 5% 5% + 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Hong Kong Singapore Korea Other APR India MESA Africa Americas, UK and Europe Group
Slide 28: Historical performance
Historical performance Income growth (YoY%) Negative 0 > 10% 10% + 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Hong Kong Singapore Korea Other APR India MESA Africa Americas, UK and Europe Group
Slide 29: 2013 performance
2013 performance Underlying performance excludes OCA and goodwill Income Profit before tax US$m H1 12* H1 13 YoY% H1 12* H1 13 YoY% Hong Kong 1,688 1,929 14 870 1,031 19 Singapore 1,162 1,123 (3) 546 480 (12) Korea 950 898 (5) 303 137** (55) Other APR 1,832 1,731 (6) 739 602 (19) India 790 927 17 31
Slide 30: Korea
Korea US$m H1 13 YoY% Income 898 (5) Expenses (549) (4) Loan impairment (193) (65) Goodwill impairment (1,000) nm Other impairment (19) nm Profit before tax (863) (385) Profit before tax ex. goodwill 137 (55) Note: All numbers exclude OCA
Slide 31: Korea
Korea 6th largest exporter 12th largest economy
Slide 32: Singapore
Singapore US$m H1 13 YoY% Income 1,123 (3) Expenses (614) (4) Total impairment (29) (4) Profit before tax 480 (12) Note: All numbers exclude OCA
Slide 33: Other Asia Pacific: ASEAN
Other Asia Pacific: ASEAN Malaysia US$m H1 13 YoY% Income 350 (5) Expenses (173) (7) Total impairment (57) (73) Profit before tax 128 (27) Indonesia H1 13 YoY% Income 221 (21) Expenses (118) (8) Total impairment (26) 13 Profit from associates 37 28 Profit before tax 114 (36) Note: All numbers exclud
Slide 34: Other Asia Pacific: Greater China
Other Asia Pacific: Greater China Taiwan US$m H1 13 YoY% Income 282 0 Expenses (175) 1 Total impairment (28) nm Profit before tax 79 (25) China H1 13 YoY% Income 448 (9) Expenses (383) (5) Total impairment (21) 100 Profit before tax 117 (8) Note: All numbers exclude OCA
Slide 35: Hong Kong
Hong Kong US$m H1 13 YoY% Income 1,929 14 Expenses (826) (8) Total impairment (72) (38) Profit before tax 1,031 19 Note: All numbers exclude OCA
Slide 36: India
India US$m H1 13 YoY% Income 927 17 Expenses (364) 5 Impairment (113) (18) Profit before tax 450 45 Note: All numbers exclude OCA
Slide 37: Africa
Africa US$m H1 13 YoY% Income 853 16 Expenses (421) (6) Impairment (75) nm Profit before tax 357 10 Note: All numbers exclude OCA
Slide 38: Macro environment
Macro environment Long-term real GDP growth (%) MENA Asia 2014 2015 2014 2015 4.1 4.2 6.4 6.6 Advanced economies* 2014 2015 1.9 1.7 Africa 2014 2015 5.3 5.6 * Advances economies: US, Euro area, Japan, UK, Canada, Switzerland, Australia, New Zealand Source: Standard Chartered Research
Slide 39: Enabling trade – Our unique footprint
Enabling trade – Our unique footprint
Slide 40: Improving operations productivity
Improving operations productivity 96% 94% Client payments Security initiated transactions online* initiated online <10% Cost income ratio** 92% 71% E-payments Technology processed staff using STP*** hubbed * Payments exclude clearing and cheques ** Operations costs / group income *** Straight throug
Slide 41: Technology driven innovation
Technology driven innovation
Slide 42: Here for good
Standard Chartered Here for good
Slide 43: What we stand for
What we stand for Chartered SS Our Strategic Intent The world’s best international’bank Leading the way in Asia, Africa and the Middle East Our Brand Promise Here for good Courageous Responsive International Creative Trustworthy We take measured We deliver relevant, We value diversity We innovate an