Standard Chartered Plc · LSE:STAN
Standard Chartered — Investor Presentation (May 2018)
59 slides from Standard Chartered's investor presentation, May 30, 2018
Slide 1: Retail Banking Investor seminar
Retail Banking Investor seminar 30 May 2018
Slide 2: Seminar summary
Seminar summary Webcast session Introduction Bill Winters Group Chief Executive Retail Banking Ben Hung CEO, Retail Banking and Wealth Management Focus on: • Digital Aalishaan Zaidi Global Head, Digital Banking • Wealth Management Didier von Daeniken Global Head, Private and Wealth Management • Grea
Slide 3: Introduction Bill Winters
Introduction Bill Winters Standard @&@° Chartered s
Slide 4: Retail Banking Ben Hung
Retail Banking Ben Hung Standard @&@° Chartered s
Slide 5: Retail Banking investment case
Retail Banking investment case Attractive footprint Clear market strategy • Over 99% of our income from Asia, Africa • Markets generating ~2/3 of income in aggregate and the Middle East already delivering a mid-teen RoE • Revenue pools across our markets forecast • Pivoting towards affluent and to d
Slide 6: What you will hear today
What you will hear today • Shape of our business today • Progress on our strategic priorities • Confidence in sustainably improving our returns • Our focus in Digital and Wealth Management • Future shape of our business and how to measure progress 5
Slide 7: We serve 4 client groups with 4 product areas across 30 markets
We serve 4 client groups with 4 product areas across 30 markets Our clients and products Our business 45% • >9m clients: ~2m in Priority, Premium and Business Priority • Less than 1,000 branches and around 30,000 staff Premium 10% Clients • Increasingly predictable, high returning earnings Personal
Slide 8: We have distinctive propositions in Priority and Wealth
We have distinctive propositions in Priority and Wealth Why clients choose Standard Chartered Net promoter score for Priority clients1 • Trusted international bank, aspirational brand Best-in-class YoY change Market international bank in NPS • Strong Priority CVPs and cross-border capabilities Hong
Slide 9: We are increasingly serving our clients digitally
We are increasingly serving our clients digitally Adapting to our clients’ changing behaviours… …early stage but encouraging results 2014 versus 2017 Increasingly how Digital Cost effectiveness and time efficiency +28% +2x clients are engaging Digitise client journey Banking made easier # of digit
Slide 10: We have progressed well on our priorities… more to do
We have progressed well on our priorities… more to do 2015 strategic priorities Progress Further action Priority client income share (%) Focus on affluent and 2014 27 • Continue to drive growth in Priority emerging affluent clients 2017 45 Branches (#) 2014 1,190 Deliver on cost efficiencies • Lever
Slide 11: We have repositioned for sustainable profitable growth
We have repositioned for sustainable profitable growth $bn 2014 2015 2016 2017 Q1 18 Income 5.7 5.1 4.7 4.8 1.3 • Driving higher quality income Expenses (3.9) (3.5) (3.4) (3.6) • Created capacity to invest Impairment (0.9) (0.7) (0.5) (0.4) • Significantly de-risked portfolio Underlying 0.9 0.9 0.8
Slide 12: We are confident we can sustainably improve RoE
We are confident we can sustainably improve RoE 1 We are in economies with structural growth drivers 6 2 We are self-funding We are focused on substantial, targeted areas of strongest investments differentiation Sustainable mid-teen RoE in the medium term 5 3 We have multiple Each market has a new g
Slide 13: We are in economies with structural growth drivers
1 We are in economies with structural growth drivers AAME Retail Banking revenue pools3 ($bn) ~1,500 Rise of urban middle class1 CAGR (%), 2010 – 2030 • By 2030, over 2bn will join the middle class in AAME Affluent and emerging ~750 affluent AAME 8 • Estimated ~$750bn of new Retail Banking wallet ~3
Slide 14: We are focused on areas of strongest differentiation (1/2)
2 We are focused on areas of strongest differentiation (1/2) Income mix by product Segment Income Wealth / (Definition)1 per client Deposits Mortgages2 CCPL Our approach • Invest to build differentiated propositions Priority >10x ~80% ~15% ~5% • Focused on Wealth, Deposit and Mortgage (>$100k) • Dee
Slide 15: We are focused on areas of strongest differentiation (2/2)
2 We are focused on areas of strongest differentiation (2/2) 27% 35% 39% 45% Priority Income by segment • 55% of income now from 10% Premium2 Priority and Premium clients 56% 52% 50% 34% Personal • Expect growth in Priority and 11% Premium to outpace Personal 6%1 10% 11% 11% Business 2014 2015 2016
Slide 16: Each market has a clear strategy and tailored priorities
3 Each market has a clear strategy and tailored priorities Focus Markets Income%1 WM%2 Relative RoE% Shift in our approach • Invest to further build market share Invest to Financial hubs • Further deepen Priority, Premium and Wealth gain share Hong Kong, Singapore 42 66 Highest • Capture cross-borde
Slide 17: Our network creates valuable opportunities
4 Our network creates valuable opportunities Global solutions designed centrally, and Servicing international clients’ needs customised for deployment in multiple markets and wealth flows Digital Côte d’Ivoire digital bank Model to be rolled out in Africa India real-time onboarding Planned launches
Slide 18: We have multiple new growth initiatives and have reinforced our approach to conduct and controls
We have multiple new growth initiatives and have reinforced our 5 approach to conduct and controls Investing in differentiated Protecting our clients by client propositions and products improving risk, conduct and controls • Targeted propositions for HNWI, Expats, Entrepreneurs and Silvers (aged 55+
Slide 19: We are self-funding substantial, targeted investments
6 We are self-funding substantial, targeted investments Cash investments (2015 – 2018) • Investing at pace and Digital capabilities scale since 2015 Wealth products and platforms • Targeted at E2E Digital, Wealth and infrastructure Risk, analytics and infrastructure 2015 2016 2017 2018 • Improving o
Slide 20: Focus: Digital
Focus: Digital Aalishaan Zaidi Global Head, Digital Banking
Slide 21: Going digital with a "human" touch
Going digital with a “human” touch Journeys Yesterday Today and the Future Measuring Impact Accelerating by 2014 Today partnering Corporate Digital NPS Paper based Automated Account real-time Partnership and n.m. 53 opening Alliances Traditional Digitally active clients (%) Self-serve Transacting ch
Slide 22: Catering to our differentiated market positions (Côte d'Ivoire)
Catering to our differentiated market positions CDD 1st Automated with direct link Digital only bank in to national ID Côte d'Ivoire 15 minutes Instant account opening < 70 Popular banking services digitised 90% 1yr Reduction in Rapid ~ cost per > development transaction and deployment Real Time Onb
Slide 23: Catering to our differentiated market positions
Catering to our differentiated market positions 50% 2x Increase in Increase in online monthly income acquisition 2.4x 23% Uplift in digital Increase in sales since monthly new 2015 accounts Asia Miles Online Equity Trading 22
Slide 24: Accelerating by partnering with FinTech and BigTech players
Accelerating by partnering with FinTech and BigTech players FinTech BigTech We select We connect Keyboard banking in Digital PayKey Korea – access to banking from any app Payments Live in 7 markets Access to cash Social SoCash at 400 retail locations in Singapore Channels Connected 2 markets in 23
Slide 25: Focus: Wealth Management
Focus: Wealth Management Didier von Daeniken Global Head, Private and Wealth Management
Slide 26: Diversified and resilient with a track record of growth
Diversified and resilient with a track record of growth Track record of growth over last decade Our Wealth Management proposition Retail Banking Wealth Management income ($bn) +10% CAGR • Differentiated wealth advisory capabilities 1.4 • Open architecture from investment strategy through to product
Slide 27: A clear set of strategic priorities with execution well underway
A clear set of strategic priorities with execution well underway Differentiating with a comprehensive Strategic priorities end-to-end digital investing experience For RMs Mobile self directed for clients 1 Differentiate with advisory Advisory capabilities Mutual Funds Personalised Investment Ideas B
Slide 28: Early success with digital wealth capabilities launched
Early success with digital wealth capabilities launched Mobile mutual funds Personalised Investment Ideas Differentiated offshore funds proposition A first-in-Asia advisory capability ✓ Live in China – more markets in pipeline ✓ Live in Singapore – more markets in pipeline ✓ 62%+ increase in volume
Slide 29: Retail Banking Ben Hung
Retail Banking Ben Hung Standard @&@° Chartered s
Slide 30: Summary – what you can expect from us
Summary – what you can expect from us Medium-term objectives How to measure progress ▪ Continue pivot to: ▪ Focus on areas of strongest 1 • Priority and Premium differentiation • Wealth Management and Deposits 2 ▪ Engage clients more digitally ▪ Further increase in digital adoption ▪ Generate more h
Slide 31: GCNA Retail Banking
GCNA Retail Banking Samir Subberwal Regional Head of Retail Banking, GCNA
Slide 32: Greater China & North Asia Retail Banking
Greater China & North Asia Retail Banking Overview: Core contributor with attractive returns and diversified portfolio FY17 YoY Strong position in Hong Kong $m Operating income $2.7bn 10% Optimising a highly profitable business in Taiwan Profit before tax $0.7bn 26% Turning Korea and China profitabl
Slide 33: Greater China & North Asia Retail Banking: Key messages
Greater China & North Asia Retail Banking Key messages Challenges • Competitive landscape dominated by large local players investing • Increasing regulatory compliance costs • Potential disruption from FinTechs and Platform players Progress • Three years into transformation with encouraging progress
Slide 34: Hong Kong: Accelerating growth
Hong Kong: Accelerating growth Strong position with room to grow further Hong Kong Income of $1.5bn (+11% YoY) Priority as % of total income Wealth and Deposit income as % of total Focus on +10pp +13pp Affluent and 61% Emerging 69% 51% 56% Affluent 2015 2017 2015 2017 # of Priority NTB from Employee
Slide 35: Taiwan, Korea and China
Taiwan, Korea and China Transformation in Taiwan, Turning Korea and China profitable Income Challenges Strategic priorities Taiwan WM%: 62 ▪ Universal bank outside Taipei ✓ Focus on 5 core cities Income: $343m ▪ Moderate scale in Taipei ✓ EB / Alliances to build scale in (+8% YoY) affluent segment i
Slide 36: Further strengthening our Wealth proposition in the region
GCNA Retail Banking Further strengthening our Wealth proposition in the region Wealth lending in HK FX income in GCNA Strategic priorities Build Wealth +64% +2.9x ▪ Personalised product and Investment Ideas platform capabilities 2015 2017 2015 2017 ▪ Build “Human + Digital” advisory model GCNA Wealt
Slide 37: ASA Retail Banking
ASA Retail Banking Sebastian Arcuri Regional Head of Retail Banking, ASA
Slide 38: ASEAN & South Asia Retail Banking
ASEAN & South Asia Retail Banking Overview: Transformation to sustainably improve return trajectory FY17 YoY1 Decisively addressing challenges $bn Operating income $1.3bn 4% Strong position in Singapore Profit before tax $0.1bn (30)% Investing in India, focusing on improving returns Customer loans $
Slide 39: ASEAN & South Asia Retail Banking: Key messages
ASEAN & South Asia Retail Banking Key messages Challenges • Margin compression due to interest rate reduction and regulatory changes • Legacy portfolio with over reliance on mass and high intensity RWA products • Dependency on non-automated processes, resulting in high operational cost Progress • Tw
Slide 40: Singapore
Singapore Leading the region with clear propositions Singapore reported 2017 income of $539m (+7% YoY) Enhancing our propositions in Priority and Wealth Priority income Wealth and Deposit as % of total income as % of total Focusing on Affluent and Emerging 57 32 40 39 Affluent MyWay Programme 2015 2
Slide 41: India, Malaysia and Indonesia
India, Malaysia and Indonesia Turning around performance by pivoting to Affluent Income Challenges Strategic priorities WM%: 48 ✓ Focus on Priority, Business India ▪ NIM compression, demonetisation Banking, Wealth and deposits Income: $269m ▪ Legacy skewed to mass / CCPL ✓ Leverage EB for NTB client
Slide 42: Encouraging leading indicators, good start to 2018
ASEAN & South Asia Retail Banking Encouraging leading indicators, good start to 2018 Accelerating pivot to Priority and Wealth ASA’s Focus NTB Priority clients Wealth AUM New to wealth (‘000) ($bn) Priority clients (‘000) +77% +34% Emerging Affluent / Affluent +46% Relationship-based products 2015 2
Slide 43: AME Retail Banking
AME Retail Banking Jaydeep Gupta Regional Head of Retail Banking, AME
Slide 44: Africa & Middle East Retail Banking
Africa & Middle East Retail Banking Overview: Secured foundations, digitising and pivoting to affluent FY17 YoY Multiple markets with significant local presence $bn Operating income $0.8bn 1% Significant actions taken to secure the foundations Profit before tax $0.1bn (1)% Return UAE to sustainable
Slide 45: Africa & Middle East Retail Banking: Key messages
Africa & Middle East Retail Banking Key messages Challenges • Significant actions had to be taken to secure the foundation • Margin compression due to interest rate reduction and regulatory changes • Legacy portfolio with over reliance on unsecured loans Progress • Two years into transformation and
Slide 46: Universal markets: Pakistan, Kenya and Nigeria
Universal markets: Pakistan, Kenya and Nigeria Enhancing business model to protect returns Income Challenges Strategic priorities ✓ Increase wealth contribution Pakistan WM%: 79 ▪ Regulatory rate impact in 2016 ✓ Develop asset opportunities Income: $128m ▪ Over reliance on Personal clients (+6% YoY)
Slide 47: Middle East: UAE, Bahrain
Middle East: UAE, Bahrain De-risked portfolio and reshaped business Income Challenges Strategic priorities ▪ De-risked portfolio ✓ Continue to accelerate Wealth UAE WM%: 33 ▪ Exited SME segment ✓ Develop sustainable funding base Income:$215m ▪ Wealth slowdown due to macro ✓ Focus on Priority and Pre
Slide 48: Reshaping Retail Participation Model
Reshaping Retail Participation Model First fully digital retail bank in Côte d'Ivoire Building relationships through technology • Major milestone reinforcing commitment to AME • Unique disruptive solution designed entirely on client inputs • Digitised over 70 of the most popular banking services • A
Slide 49: Products and Segments
Products and Segments Fernando Morillo Global Head, Retail Products and Segments
Slide 50: We are focused on areas of strongest differentiation (1/2)
2 We are focused on areas of strongest differentiation (1/2) Income mix by product Segment Income Wealth / (Definition)1 per client Deposits Mortgages2 CCPL Our approach • Invest to build differentiated propositions Priority >10x ~80% ~15% ~5% • Focused on Wealth, Deposit and Mortgage (>$100k) • Dee
Slide 51: Priority Banking: A leading affluent bank in our markets
Priority Banking: A leading affluent bank in our markets Key facts ✓ • Presence in 25 markets and 5 Global Banking centres • ~2,400 Relationship Managers • ~1 million clients • Key liquidity provider for the Group Differentiators • International franchise and Wealth capabilities • Consistent custome
Slide 52: Premium Banking: Delivering for emerging affluent clients
Premium Banking: Delivering for emerging affluent clients Key facts ✓ • Emerging affluent focus: Millennials, young professionals and couples and young parents • Typically younger demographic: <40 years of age • ~1 million clients, ~10% of Retail income • Highly digital clients Differentiators • Acc
Slide 53: Personal Banking: Growing from more secure foundations
Personal Banking: Growing from more secure foundations Key facts ✓ • >7 million active clients • ~35% of Retail income, CCPL main income source • ~5m credit cards in issue, ~1/2 of new clients from cards • Strong Risk Decision Framework in place Differentiators • “Best Consumer Digital Bank”: Global
Slide 54: Business Banking: Building on our clients' ecosystems
Business Banking: Building on our clients’ ecosystems ✓ Key facts Differentiators • Aimed at <$15m sales turnover businesses • International brand and sustained presence • ~10% of Retail income with good momentum • Efficient risk decisioning • Typically small market shares, headroom to grow • Attrac
Slide 55: Retail Banking Ben Hung
Retail Banking Ben Hung Standard @&@° Chartered s
Slide 56: Retail Banking investment case
Retail Banking investment case Attractive footprint Clear market strategy • Over 99% of our income from Asia, Africa • Markets generating ~2/3 of income in aggregate and the Middle East already delivering a mid-teen RoE • Revenue pools across our markets forecast • Pivoting towards affluent and to d
Slide 57: Q&A
Q&A Standard Chartered
Slide 58: Glossary
Glossary Acronym / term Explanation Acronym / term Explanation AAME Asia, Africa and the Middle East EA Europe & Americas AD ratio Asset-to-deposit ratio EB Employee Banking AME Africa & Middle East EuAm Europe and Americas API Application programming interface FX Foreign exchange GCNA Greater China
Slide 59: Important Notice
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 strategy, business
Standard Chartered — Investor Presentation (May 2018) on 6ix