Slide 1: 1Q'21 Results Presentation
CONFIDENTIAL 1Q’21 Results Presentation 29 April 2021
Slide 2: Economic recovery advanced in many of our markets in 1Q'21
CONFIDENTIAL Economic recovery advanced in many of our markets in 1Q’21 We are well positioned to support our clients, colleagues and communities • We delivered a strong performance in 1Q’21 → Introduction Income o Record quarter in Wealth Management1; Financial Markets ex-DVA up 7% Expenses Risk o
Slide 3: The Group delivered a strong performance in 1Q'21
CONFIDENTIAL The Group delivered a strong performance in 1Q’21 Positive business momentum and low impairment more than offset NII headwinds ($bn) 1Q’20 1Q’21 YoY1 Ccy1 Net interest income 1.8 1.7 (10)% (11)% • Income momentum offset by low interest rates → Introduction Income Other income (ex-DVA) 2
Slide 4: Record WM quarter and another good performance in FM
CONFIDENTIAL Record WM quarter and another good performance in FM Benefits of product diversity outweighed for now by NII headwinds Income 1Q’21 vs 1Q’20 ($m) Introduction → Income (3)% Expenses Risk Retail Products (113) Capital 128 Conclusion Transaction Banking (161) 72 26 107 17 39 4,061 (241) 4
Slide 5: NII significantly impacted by 30bps YoY reduction in NIM
CONFIDENTIAL NII significantly impacted by 30bps YoY reduction in NIM… …however in 1Q’21 the NIM broadly stabilised and assets continued to grow Gross yield 234 Introduction • AIEA up 3% QoQ and AIBL up 4%2 334 295 185 (bps) Rate paid → Income 192 112 157 69 (bps) Expenses • Adjusted NII down 14% Yo
Slide 6: Other income was up 4% from strong net fees and commissions
CONFIDENTIAL Other income was up 4% from strong net fees and commissions… … and is now 58% of total income up from 54% in 1Q’20 1 Income, statutory basis ($m) Introduction → Income Expenses Risk Capital 7,848 7,889 2,305 2,281 Conclusion 2,192 • Net fees and commissions up 18% YoY, 1,929 up 48% QoQ2
Slide 7: Expenses increased in 1Q'21 as we continue to invest
CONFIDENTIAL Expenses increased in 1Q’21 as we continue to invest FY’21 expenses likely to remain below $10bn at constant currency • Expenses 6% higher YoY; 4% ccy Introduction Income 80 o Performance-related pay accrual normalised → Expenses Cost-to- 67 70 o Down 5% QoQ Risk Capital income 65 63 ra
Slide 8: Exceptionally low impairment charge in the first quarter
CONFIDENTIAL Exceptionally low impairment charge in the first quarter Uncertainties remain particularly in some markets and sectors Credit impairment ($m) / Loan-loss rate (bps) Introduction Income Loan-loss Expenses rate1 (bps) 27bps 66bps 110bps Income Statement ($m) 6bps • Credit impairment down
Slide 9: RWA growth driven by client demand and seasonality
CONFIDENTIAL RWA growth driven by client demand and seasonality CET1 remains at the top of the 13-14% range Risk-weighted assets (RWA) ($bn) Introduction • RWA up $8bn (3%) from 31.12.20 Income Expenses +$7.8bn 10.1 0.6 1.2 o Mainly client demand led asset growth Risk → Capital 276.7 (2.1) (1.9) par
Slide 10: Concluding remarks
CONFIDENTIAL Concluding remarks • Some of our larger markets will drive the global economy out of recession… Introduction Income • … although the pace of recovery will be volatile and uneven Expenses Risk Conclusion Capital • Actions to improve client experience and RoTE are advancing nicely → Concl
Slide 11: CONFIDENTIAL
CONFIDENTIAL 11
Slide 12: Appendix
CONFIDENTIAL Appendix Summary of guidance, macroeconomic indicators, interest rate sensitivity, sustainability Notes, abbreviated terms and important notice 12
Slide 13: Summary of guidance
CONFIDENTIAL Summary of guidance 2021 guidance Medium-term guidance • FY’21 expected to be similar to FY’20 at ccy • We expect to return to 5-7% growth per annum from 2022 • With the NIM having broadly stabilised we expect income to return to growth • We assume minimal rate rises of ~30bps from 2021
Slide 14: Changes to baseline forecasts for key footprint markets
CONFIDENTIAL Stage 1 and 2 credit impairments Changes to baseline forecasts1 for key footprint markets: 4Q’20 to 1Q’21 4Q’20 1Q’21 Crude price China Hong Kong Korea Singapore India Brent, bbl GDP (YoY): 2021 Forecast 8.0% 8.0% 4.0% 3.5% 3.3% 2.9% 5.2% 5.2% 10.0% 11.5% $44 $51 GDP (YoY)
Slide 15: Formal IRRBB exercise does not capture full rate sensitivity
CONFIDENTIAL Formal IRRBB exercise does not capture full rate sensitivity Annualised benefit to NII from instantaneous parallel shifts • The disclosed IRRBB sensitivities excludes in interest rates across all currencies ($m)1,2 o Rate sensitivity on trading book assets +50bps +100bps funded by banki
Slide 16: We will lead with a differentiated sustainability offering
CONFIDENTIAL We will lead with a differentiated sustainability offering… … catalysing the UN SDGs where it matters most The opportunity Further progress in the quarter to accelerate to net-zero The challenge • Not enough financing to meet the UN SDGs • Launched Sustainable Trade Finance solution to
Slide 17: Appendix
CONFIDENTIAL Appendix Summary of guidance, macroeconomic indicators, interest rate sensitivity, sustainability Notes, abbreviated terms and important notice 17
Slide 18: Notes
CONFIDENTIAL Notes These notes refer to the metrics and defined terms on the following pages Page Explanatory note or definition 1. 1Q’21 Wealth Management income is the highest quarter since the Group started disclosing operating income by product on a quarterly basis in 2014 2 2. 1Q’21 year-on-yea
Slide 19: 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 8 2. Early Alerts (Non-Purely Precautionary) (EA(NPP)) are on a net nominal basis 3. Stage 1 & 2 judgmental managem
Slide 20: Selected technical and abbreviated terms
CONFIDENTIAL Selected technical and abbreviated terms Term Definition Term Definition Affluent Loan-loss rate Total credit impairment for loans and advances to customers over average loans and advances to Personal banking services offered to affluent and emerging affluent customers (LLR) customers a
Slide 21: 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