Slide 1: Final Results 2003
Final Results 2003 18 February 2004 e w ay n d n g t h i c a a a d i Le Asi a, A f r t e E a s in i d d l t he M
Slide 2: Leading the way in Asia, Africa and the Middle East
Leading the way in Asia, Africa and the Middle East Bryan Sanderson Chairman 2
Slide 3: Performance highlights
Performance highlights Pre-tax profit $1,542m 22% Dividend 52.0c 10.6% (per share) 3
Slide 4: Positioned for growth
Positioned for growth GDP growth % 2003 2004F* 2005F* Hong Kong 3.0 6.0 4.0 Singapore 0.8 4.5 4.0 India 7.5 7.0 8.0 UAE 8.0 4.0 3.0 Malaysia 4.8 5.5 4.6 Kenya 2.0 4.2 4.9 Thailand 6.3 7.0 7.5 China 9.1 7.7 7.5 *Standard Chartered forecasts 4
Slide 5: Governance and corporate citizenship
Governance and corporate citizenship Meeting corporate governance guidelines Introducing changes to Board Strong culture of corporate social responsibility 5
Slide 6: The way ahead
The way ahead Build reputation for performance Strengthen brand and reputation Grow, invest and deliver 6
Slide 7: Leading the way
Leading the way in Asia, Africa and the Middle East Peter Sands Group Finance Director 7
Slide 8: Group results
Group results US$m 2002 2003 Revenue 4,539 4,753 Cost (inc goodwill) (2,557) (2,664) Profit before provisions 1,982 2,089 Debt charge (712) (536) Trading profit 1,262 1,542 8
Slide 9: Performance highlights
Performance highlights Normalised metrics 2002 2003 EPS 74.9c 89.6c Cost to income ratio 53.6% 53.9% ROE 13.4% 15.3% 9
Slide 10: Results by geography
Results by geography Trading profit US$m 2002 2003 Change (%) Hong Kong 366 427 17 Singapore 235 243 3 Malaysia 78 102 31 Other APR 105 153 46 India 166 186 12 UAE 141 141 0 Other MESA 151 175 16 Africa 101 151 50 Americas, UK & Group (81) (36) 56 Total 1,262 1,542 22 10
Slide 11: Consumer Banking results
Consumer Banking results US$m 2002 2003 Revenue 2,416 2,492 Cost (excl goodwill) (1,190) (1,274) Profit before provisions 1,226 1,218 Debt charge (603) (478) Trading profit 623 740 11
Slide 12: Consumer Banking revenue
Consumer Banking revenue Revenue US$m 2002 2003 Change (%) Hong Kong 1,013 955 (6) Singapore 313 329 5 Malaysia 156 162 4 Other APR 285 333 17 India 204 224 10 UAE 92 102 11 Other MESA countries 121 138 14 Africa 137 170 24 Americas, UK & Group 95 79 (17) Total 2,416 2,492 3 12
Slide 13: Consumer Banking Hong Kong
Consumer Banking Hong Kong US$m H1 2002 H2 2002 H1 2003 H2 2003 Revenue 533 480 465 490 Cost (excl goodwill) (200) (222) (192) (224) Profit before provisions 333 258 273 266 Debt charge (238) (196) (164) (118) Trading profit 95 62 109 148 13
Slide 14: Hong Kong bankruptcy
Hong Kong bankruptcy Petition rate October 2001 - December 2003 250 10 day moving average (market) 200 Indexed 150 100 Bankruptcy charge offs 50 Q1 02 Q2 Q3 Q4 Q1 03 Q2 Q3 Q4 $66m $83m $74m $64m $48m $55m $40m $29m 0 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 14
Slide 15: Consumer Banking debt charge
Consumer Banking debt charge US$m 2002 2003 Rest of the world 169 196 Hong Kong 434 282 Total 603 478 15
Slide 16: Wholesale Banking results
Wholesale Banking results US$m 2002 2003 Revenue 2,123 2,261 Cost (excl goodwill) (1,211) (1,256) Profit before provisions 912 1,005 Debt charge (109) (58) Trading profit 795 936 16
Slide 17: Wholesale Banking revenues
Wholesale Banking revenues US$m 2002 2003 Trade and lending 775 819 Global markets 973 1,059 Cash management 315 318 Custody 60 65 Revenues 2,123 2,261 17
Slide 18: Wholesale Banking debt charge
Wholesale Banking debt charge US$m 2002 2003 Gross charge 260 250 Recoveries (151) (192) Total 109 58 18
Slide 19: Wholesale Banking costs
Wholesale Banking costs US$m 2002 2003 H1 608 629 H2 603 627 Full year 1,211 1,256 +45 19
Slide 20: Consumer Banking costs
Consumer Banking costs US$m 2002 2003 H1 568 596 H2 622 678 Full year 1,190 1,274 +84 20
Slide 21: Risk management
Risk management Net NPL US$m Consumer Banking 1400 Wholesale Banking 1200 $1,147m $1,022m Net NPL % of $994m customer assets 1000 2.1% $860m 800 600 1.8% 400 1.7% 200 1.4% 0 H1 02 H2 02 H1 03 H2 03 Wholesale Banking 76% 78% 79% 81% Cover Ratio (%) 21
Slide 22: Capital management
Capital management Tier 2 Other Tier 1 16 Total 14.2% Total 14.6% Core Equity 14 12 10 % Tier 1 8 8.3% 8.8% 6 4 Core Equity 6.6% 2 6.1% 0 2002 2003 22
Slide 23: Strong performance
Strong performance Consistent delivery Progress on key metrics Investment for growth Firm management of costs, risks and capital 23
Slide 24: Leading the way
Leading the way in Asia, Africa and the Middle East Mervyn Davies Group Chief Executive 24
Slide 25: Leading the way
Leading the way Delivered against promises Ambition for the future Achieving our aspiration 25
Slide 26: Management agenda
Management agenda 2002 2003 Build Consumer Banking market share Drive returns in Wholesale Banking Improve Wholesale returns Accelerate India growth Capture profitable growth in India and China Leverage the China opportunity Transition Thailand and Taiwan to profitability Drive technology improvemen
Slide 27: Driving performance
Driving performance Earnings Per Share (EPS) 89.6c Return on Equity (RoE) 15.3% Cost / Income Ratio 53.9% Total Shareholder Return (TSR) 36.7% Seeing is Believing Q12 Staff Engagement Customer Satisfaction Eyesight restored Survey - participation Wholesale - Consumer - 56,000 95% GQI 571 Index 102
Slide 28: Leading the way
Leading the way Strategic intent The world’s best international bank Leading the way in Asia, Africa and the Middle East brand promise The Right Partner values Responsive Trustworthy Creative International Courageous approach Participation Competitive Positioning Management Discipline Focusi
Slide 29: 2004 priorities: Grow, invest and deliver
2004 priorities Accelerate consumer banking revenue growth Continue to drive returns in wholesale banking Step up growth in India Build China options Deliver technology benefits Begin out-serve journey “Grow, invest and deliver” 29
Slide 30: Consumer Banking
Consumer Banking Engine for future growth Strong risk and sales culture Driving up service levels e e dg men t l e ow g Kn Mana d se k t Ba Ris men g e na Ma Real momentum 30
Slide 31: Wholesale Banking
Wholesale Banking Grow customer revenues Deliver operating “jaws” Keep economic capital flat g on e r i n li v Manage risk proactively “D omises” e pr 31
Slide 32: Hong Kong and China
Hong Kong and China Leverage improved sentiment in Hong Kong Rebuild unsecured asset base Capture economic integration opportunities Build China options r eat er C h i n a opp ortu n it i e s” “Well posi ti oned for G 32
Slide 33: India
India a d i n g h e l e Robust asset growth i n g t ” c om d i a “ Be n k i n I n ba Growing customer base Short term margin challenges Building sustainable growth 33
Slide 34: Technology and operations
Technology and operations r oo m f o r e a t i n g “Cr Rigorous vendor s t me nt ” management i nv e Hub-spoke optimisation Focused investment in infrastructure and business growth 34
Slide 35: Outserve
Outserve Benchmarked against other service leaders Long term journey Building “outserve” culture 35
Slide 36: Outlook
Outlook Growth Investment Delivery 36