Slide 1: 1Q'22 Results Presentation
CONFIDENTIAL 1Q’22 Results Presentation 28 April 2022
Slide 2: A strong performance in a volatile and unpredictable environment
CONFIDENTIAL A strong performance in a volatile and unpredictable environment • Total income up 9% on a constant currency basis (ccy) and excluding DVA → Introduction o Record1 quarter in Financial Markets, up $0.4bn or 27% (ccy, ex-DVA) Income 1Q’22 o Wealth Management down $0.1bn or 17% (ccy) in c
Slide 3: Strong top line growth, positive jaws driving a 5% increase in PBT
CONFIDENTIAL Strong top line growth, positive jaws driving a 5% increase in PBT • 1Q’22 income up 9% ex-DVA at ccy ($bn) 1Q’21 1Q’22 YoY1 ccy1 • Expenses 6% higher, 8% at ccy, 1% positive jaws → Introduction Net interest income 1.7 1.8 8% 10% Income Other income (ex-DVA) 2.3 2.4 6% 8% o Higher perfo
Slide 4: 1Q'22 income up 9% as record FM income offsets weaker WM
CONFIDENTIAL 1Q’22 income up 9% (ex-DVA at ccy) as record FM income offsets weaker WM Income 1Q’22 vs 1Q’211 – Product view ($m) Introduction → Income 9% Expenses Risk Capital Conclusion 55 24 21 19 353 4,189 (2) (24) 3,852 (109) 14.7 27% 24% 9% 6% 5% (0)% (14)% (17)% 1Q’21 ccy ex-DVA Financial Trea
Slide 5: Strong NII growth driven by hedging, volumes and improving margins
CONFIDENTIAL Strong NII growth driven by hedging, volumes and improving margins Introduction Gross yield (bps) 185 186 184 178 192 • 1Q’22 NII $1.8bn up 8% YoY, 10% at ccy → Income Expenses Rate paid (bps) 69 69 66 65 68 o AIEA up $13bn / 2%; AIBL up $20bn / 4% Risk o NIM up 7bps / 6% Capital Conclu
Slide 6: 1Q'22 Other income ex-DVA up 8% ccy on strong FM performance
CONFIDENTIAL 1Q’22 Other income1 ex-DVA up 8% ccy on strong FM performance Introduction Other income1, statutory basis ($m) → Income Expenses • Net fees and commissions down 8% YoY at Risk Capital ccy Conclusion 2,419 o CPBB down 17% YoY due to lower 2,281 Wealth Management income 2,032 1,979 913 o
Slide 7: Expenses up 8% ccy; 4% adjusting for ccy and PRP movements
CONFIDENTIAL Expenses up 8% ccy; 4% adjusting for ccy and PRP movements • Expenses 6% higher YoY; 8% ccy Total operating expenses 1Q’22 vs 1Q’21 ($m) • 4% ex ccy, 1Q’21 and 1Q’22 PRP adjustments Introduction Income o Inflation ~4% broadly in-line with economic → Expenses Risk 4% forecast for Asia1 o
Slide 8: Underlying credit impairment remains low but uncertainties remain
CONFIDENTIAL Underlying credit impairment remains low but uncertainties remain Introduction Credit impairment ($m) Income Expenses 203 200 → Risk Ventures + C&O 19 34 19 • Credit impairment $200m Capital (segment) Conclusion 107 9 116 o $160m related to China CRE exposures CPBB 20 1 74 147 o $107m S
Slide 9: CCIB optimisation initiatives push RWA down; CET1 top of range
CONFIDENTIAL CCIB optimisation initiatives push RWA down; CET1 top of range Risk-weighted assets (RWA) ($bn) • RWA down $10bn (4%) from 31.12.21 Introduction Income $(10.4)bn o $6bn adverse impact of regulatory changes & Expenses 5.8 Risk 6.9 277.1 adjustments and cessation of software relief → Capi
Slide 10: Conclusion – looking ahead
CONFIDENTIAL Conclusion – looking ahead • The Group delivered a strong 1Q’22 performance in turbulent conditions… Introduction Income • … making encouraging early progress on our 5 strategic actions outlined in February Expenses Risk • Whilst recent geopolitical events have strengthened the outlook
Slide 11: Appendix
CONFIDENTIAL Appendix Sustainability Strategic actions progress, Macroeconomic indicators, Interest rate outlook, Commodity related sectors, China exposure, AME Overview, Summary of guidance Ventures Notes, abbreviated terms and important notice 11
Slide 12: Strong progress against our net zero and Sustainable Finance commitments
CONFIDENTIAL Strong progress against our net zero and Sustainable Finance commitments Net zero pathway enhanced1 in March 2022 following engagement with our stakeholders Our aims 1Q’22 Achievements (unless otherwise stated) • Named eight further sectors for target setting 2022-24, with eventual cove
Slide 13: Appendix
CONFIDENTIAL Appendix Sustainability Strategic actions progress, Macroeconomic indicators, Interest rate outlook, Commodity related sectors, China exposure, AME Overview, Summary of guidance Ventures Notes, abbreviated terms and important notice 13
Slide 14: Strategic actions: Progress against 2024 targets
CONFIDENTIAL Strategic actions: Progress against 2024 targets Description 2024 targets 1Q’22 result • CCIB Income RoRWA: 160bps improvement from 4.9% in 2021 to 6.5% 6.5% 6.4% CCIB: • RWA reduction of $22bn by 2024 $22bn (2022 to 2024) $6bn Drive improved returns • Hold RWA flat to $163bn $163bn $15
Slide 15: Changes to baseline forecasts for key footprint markets
CONFIDENTIAL Stage 1 and 2 credit impairments Changes to baseline forecasts1 for key footprint markets 4Q’21 1Q’221 Crude price China Hong Kong Korea Singapore India Brent, bbl GDP (YoY): 2022 Forecast 5.6% 5.3% 3.0% 1.2% 2.7% 2.9% 3.6% 4.1% 6.9% 8.0% $66.6 $94.2 GDP (YoY): 2023 Foreca
Slide 16: The interest rate increase outlook has strengthened since FY'21 results
CONFIDENTIAL The interest rate increase outlook has strengthened since we reported our FY’21 results on the 17th February, 2022 3-month USD rate (LIBOR)1 (bps) 354 329 231 233 229 226 192 184 153 128 68 65 16 2018 2019 2020 2021 2022 2023 2024 Market implied rate 22.04.22 Market implied rate at 14.0
Slide 17: Commodity related sectors: resilient & well-positioned
CONFIDENTIAL Commodity related sectors: resilient & well-positioned Net nominal1 ($bn) • Portfolios expected to be resilient to higher, more volatile commodity prices 25.0 HY'15 23.9 ▪ Portfolios significantly de-risked since 2015: now focused on larger clients… Q1'20 19.8 Q1'22 17.6 17.9 ▪ …with st
Slide 18: China Exposure
CONFIDENTIAL China Exposure China ultimate parent company Resilient China book exposure1 ($bn) • 76% of CCIB exposure is investment grade 3% Corporates • 76% of corporate exposure is <1 year tenor 4% 18% Banks • 88% of bank exposures to top 5 banks3; 84% <1 year tenor NBFIs • 89% of bank and non-ban
Slide 19: Update on Africa and the Middle East (AME) Region
CONFIDENTIAL Update on Africa and the Middle East (AME) Region Refocusing and simplifying our presence in AME AME Highlights • Redirecting resources within AME to those areas that can have the • AME performance continued to be strong in 1Q’22 greatest scale and growth potential, including the new ma
Slide 20: Summary of guidance
CONFIDENTIAL Summary of guidance 2022 Guidance 2021 - 2024 Guidance (unless otherwise stated) • FY’22 income growth is expected to slightly exceed the previously guided Income 5-7% range • Income is expected to grow 8-10% CAGR over the next three years, 5-7% • Further NIM progression with the outloo
Slide 21: Appendix
CONFIDENTIAL Appendix Sustainability Strategic actions progress, Macroeconomic indicators, Interest rate outlook, Commodity related sectors, China exposure, AME Overview, Summary of guidance Ventures Notes, abbreviated terms and important notice 21
Slide 22: Ventures: Progress Update
CONFIDENTIAL Ventures: Progress Update Launched ventures gaining traction as reflected in client adoption and flows Venture Description Progress / Update KPI ~260 Customers (‘000s) Mox is a cloud-native, mobile only, • Customers now over 300k (Q1 2022 ~260k), up 100k from digital bank ~100 115 2021
Slide 23: Ventures: Progress Update continued
CONFIDENTIAL Ventures: Progress Update continued Expanding portfolio with a number of newly announced ventures Venture Description Progress / Update Expected launch A bank agnostic supply chain finance platform that unlocks significant • Launch February 2022 with Lenovo as a partner and first anchor
Slide 24: Summary of portfolio of ventures and investments across six themes
CONFIDENTIAL Summary of portfolio of ventures and investments across six high conviction themes Theme Ventures Minority Investments Individual consumers need to integrate finance into their digital lifestyles for finance to be effective at helping them Digital banking address their needs and lifesty
Slide 25: Appendix
CONFIDENTIAL Appendix Sustainability Strategic actions progress, Macroeconomic indicators, Interest rate outlook, Commodity related sectors, China exposure, AME Overview, Summary of guidance Ventures Notes, abbreviated terms and important notice 25
Slide 26: Notes
CONFIDENTIAL Notes These notes refer to the metrics and defined terms on the following pages Page Explanatory note or definition 1. Record quarterly Financial Markets income 2017-2021 2 1. YoY = year-on-year variance is better/(worse) other than for RWA, CET1 ratio and LCR, which is increase/(decrea
Slide 27: Notes
CONFIDENTIAL Notes These notes refer to the metrics and defined terms on the following pages Page Explanatory note or definition 1. RWA FX & Others includes FX of $(2.3)bn, Operational RWA of +$0.1bn, MRWA model changes $(0.4)bn 9 2. AT1/Dividend includes a foreseeable dividend accrual in respect of
Slide 28: 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 29: 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