Slide 1: Half Year 2014 Results Presentation
Half Year 2014 Results Presentation 06 August 2014
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: Sir John Peace, Chairman
Sir John Peace Chairman Standard S Chartered &Q
Slide 4: The core of our strategy
The core of our strategy “We bank the people and companies driving investment, trade and the creation of wealth across Asia, Africa and the Middle East.”
Slide 5: Andy Halford, Group Finance Director
Andy Halford Group Finance Director
Slide 6: Performance summary
Performance summary US$m YoY $1 Income (482) H1 14 YoY%1 HoH%1 Financial Markets (432) Income US$ 9.3bn (5) 4 Korea (ex. Financial Markets) (170) Profit before tax US$ 3.3bn (20) 14 Profit before tax (820) Normalised earnings US$ 2.4bn (20) 18 Income drag from FM & Korea (602) Normalised return on e
Slide 7: Group performance
Group performance US$m H1 13 H2 13 H1 14 YoY% Income 9,751 8,920 9,269 (5) Client income 8,648 8,224 8,373 (3) Own account income 1,103 696 896 (19) Expenses (5,034) (5,159) (5,083) (1) Working profit 4,717 3,761 4,186 (11) Loan impairment (730) (887) (846) (16) Other impairment (11) (118) (185) nm
Slide 8: Client segments income
Client segments income US$m H1 13 H2 13 H1 14 YoY% Corporate and Institutional clients 5,577 5,079 5,334 (4) Commercial clients 812 699 616 (24) Private Banking clients 301 285 314 4 Retail clients 3,061 2,857 3,005 (2) Total Operating Income 9,751 8,920 9,269 (5) US$m Financial Markets (381) Princi
Slide 9: Product income
Product income US$m H1 13 H2 13 H1 14 YoY% Transaction Banking 1,964 1,947 1,918 (2) Financial Markets 2,212 1,644 1,780 (20) Corporate Finance 1,238 1,281 1,241 0 Wealth Management 755 694 817 8 Retail Products 2,588 2,458 2,435 (6) Others* 994 896 1,078 8 Total Operating Income 9,751 8,920 9,269 (
Slide 10: Expenses
Expenses Disciplined cost management, up 1% YoY Expense growth US$m or US$ 49m, despite +2% (1)% Inflationary pressures across our markets 5,159 5,083 Continued investments 5,034 Increase in regulatory and compliance H1 13 H2 13 H1 14 costs Expense split Depreciation and Continued tight co
Slide 11: Impairment
Impairment US$m H1 13 H2 13 H1 14 YoY % Small number of impaired accounts Corporate and Institutional (197) (291) (266) (35) Portfolio highly diversified Commercial clients (43) (114) (100) (133) Well collateralised and short tenor Private Banking clients (8) - - nm Broadly stable loss rates
Slide 12: Geographic performance
Geographic performance China Hong Kong Korea 65% 3% (26)% 15% (16)% (193)% Income Profit before tax Income Profit before tax Income Profit before tax MENAP (0)% (2)% Income Profit before tax Africa India Singapore 3% (11)% (10)% (5)% (8)% (16)% Income Profit before tax Income Profit before tax Incom
Slide 13: Group balance sheet – Liabilities
Group balance sheet – Liabilities Total deposits US$bn Customer deposit funded franchise 423 426 435 441 201 203 200 192 CASA up 4% since year end (54% of total) 215 216 227 237 A/D ratio of 78.1% FY 12 HY 13 FY 13 HY 14 CASA Time deposits Other deposits Liquidity ratios % Liquid asset ratio
Slide 14: Group balance sheet – Assets
Group balance sheet – Assets Total customer loans and advances Customer loans up 3% since year end Europe 14% Americas Greater China 4% 30% Africa 3% Supported client growth and financing needs MENAP 6% North East Asia 10% ASEAN 28% South Asia Continued to de-risk Retail unsecured 5% Total cus
Slide 15: Capital - Basel III
Capital - Basel III Common Equity Tier 1 (CET1) % 0.3% 0.3% 0.2% 0.4% 0.7% 0.2% 0.1% 0.2% 0.2% 10.9% 10.7% 10.5% 10.3% CET1 B3 Model Foreseeable CET1 30 Jun Profit RWA Asset Credit Dividend Other CET1 B3 Net AFS CET1 B3 31 Dec 13 changes dividend B3 post Efficiencies Growth* migration (transitional)
Slide 16: Summary
Summary External environment remains challenging Momentum ahead of the second half last year Financial Markets remains uncertain Managing costs and risks tightly Continue to be: Well capitalised Highly liquid Diverse
Slide 17: Peter Sands, Group Chief Executive
Peter Sands Group Chief Executive
Slide 18: Historical income performance
Historical income performance Income growth (YoY%) 2006 2007 2008 2009 2010 2011 2012 2013 2014 Greater China North East Asia ASEAN South Asia MENAP Africa Americas Europe Group ≤ 0% < 5% ≥ 5%
Slide 19: Making the strategy happen
Making the strategy happen Execution in H1 2014 - Examples Set out 5 strategic aspirations – relationships, investment, trade, “We bank the people and wealth and relevant scale Implemented far-reaching reorganisation companies driving investment, Aligned the group to the strategic priorities
Slide 20: Financial Markets
Financial Markets US$m H1 13 H2 13 H1 14 YoY% Notional volume increase % YoY Foreign Exchange 835 578 636 (24) Cash FX FX Options Rates 552 365 371 (33) Commodities and Equities 288 219 262 (9) 45 24 37 Capital Markets 283 275 284 0 21 Credit and Other 254 207 227 (11) FY 13 HY 14 FY 13 HY 14 Total
Slide 21: Korea
Korea US$m H1 13 H1 14 YoY% Strengthening offshore client support Income 898 669 (26) 2013 year end – 18 desks in 11 markets Expenses (549) (587) (7) H1 14 - added 3 desks in Hong Kong, Thailand & Vietnam H2 14 – to add 3 desks in US, UK and South Africa Working profit 349 82 (76) Total impairment (
Slide 22: Growth in our markets
Growth in our markets Global Financial Crisis Policy Driven Recovery 5 year forecast (2008-2010) (2010-2013) (2013-2018) 14.3% 14.2% 11.2% 10.8% 10.4% 10.1% 8.9% 8.0% 8.1% 8.3% 8.7% 8.3% 8.3% 6.9% 4.6% 8.5% 4.3% 3.5% 1.2% 5.3% 4.8% 4.8% 4.8% 4.9% 3.7% 4.2% 4.5% (0.3)% (4.5)% 2008 2009 2010 2011 2012
Slide 23: Our aspirations
Our aspirations Relationships ► Build trusted relationships with the people, companies and institutions shaping our markets’ future Investment ► Play a leading role in facilitating investment and deepening financial markets in our economies Trade ► Become the undisputed leader in commercial payment
Slide 24: Organisation structure
Organisation structure Peter Sands Group Chief Executive Geographies Clients and Products Functions Jaspal Bindra V. Shankar Mike Rees Andy Halford People, Compliance Greater China, ASEAN, MENAP, Africa, Europe, Deputy Group Chief Executive Group Finance Director and Communication North East Asia, S
Slide 25: Corporate and Institutional Clients
Corporate and Institutional Clients •US$m H1 13 H1 14 YoY% Redeploying RWA to improve profitability Income 5,577 5,334 (4) US$bn RWA redeployed Expenses (2,500) (2,546) (2) Working profit 3,077 2,788 (9) 8.8 Total impairment (225) (435) (93) 3.9 5.2 Profit from associates 79 90 14 3.5 Profit before
Slide 26: Market position
Market position Global market position #1 Top 5 Transaction Syndicated Lead Banker across Asia Arranger – Asia #2 and Africa #7 #1 in Corporate Derivatives in #2 Asia #2 Project Finance #2 House In Asia for FICC Source: Coalition Trade US$ Clearing Offshore RMB Source: Market research, CHIPS data; E
Slide 27: Organisation structure
Organisation structure Peter Sands Group Chief Executive Geographies Clients and Products Functions Jaspal Bindra V. Shankar Mike Rees Andy Halford People, Compliance Greater China, ASEAN, MENAP, Africa, Europe, Deputy Group Chief Executive Group Finance Director and Communication North East Asia, S
Slide 28: Commercial Clients
Commercial Clients US$m H1 13 H1 14 YoY% Income 812 616 (24) Expenses (374) (362) 3 YoY $ Working profit 438 254 (42) Profit change (261) Total impairment (29) (100) (245) Principal Finance (107) Profit from associates 17 11 (35) Financial Markets (51) Profit before tax 426 165 (61) Loan impairment
Slide 29: Private Banking Clients
Private Banking Clients US$m H1 13 H1 14 YoY% Private Banking Income 301 314 4 Consumer AUM - US$bn Net new money - US$bn Expenses (213) (227) (7) Working profit 88 87 (1) +13% +15% 61 1.5 Total impairment (8) (16) (100) 54 1.3 Profit from associates 1 - nm Profit before tax 81 71 (12) H1 13 H1 14 H
Slide 30: Organisation structure
Organisation structure Peter Sands Group Chief Executive Geographies Clients and Products Functions Jaspal Bindra V. Shankar Mike Rees Andy Halford People, Compliance Greater China, ASEAN, MENAP, Africa, Europe, Deputy Group Chief Executive Group Finance Director and Communication North East Asia, S
Slide 31: Retail Clients
Retail Clients US$m H1 13 H1 14 YoY% Retail clients profit before tax ex. Korea (US$m) Income 3,061 3,005 (2) +12% Expenses (1,947) (1,948) 0 737 657 Working profit 1,114 1,057 (5) Total impairment (479) (480) 0 Profit from associates 15 12 (20) Profit before tax 650 589 (9) H1 2013 H1 2014 Strong
Slide 32: Linking clients / products / infrastructure
Linking clients / products / infrastructure Peter Sands Group Chief Executive #1 Top 5 Geographies Clients and Products Functions Transaction Syndicated Lead Banker across Arranger – Asia Jaspal Bindra V. Shankar Mike Rees Asia MENAP, Africa, Europe, Greater China, ASEAN, Deputy Group Chief Executiv
Slide 33: Linking clients / products / infrastructure
Linking clients / products / infrastructure
Slide 34: Improving efficiency
Improving efficiency Trade Finance Indexed operations costs vs volumes Technology driven innovation 152 154 135 125 Investing in systems and driving productivity 100 105 107 100 98 101 Greater straight through processing 2010 2011 2012 2013 2014* Business volumes Operations cost Costs saves
Slide 35: Raising the bar on conduct
We've told the world that we're Here for good we need to prove it in every interaction we have and every decision we make. Raising the bar on conduct aaol allel} Lis aa aed Latls Lia” He cyai le yd ga 3 LS) ol) Aateay 088 18 US dy WUL Here for good imuanfuynautin Here for good faawmtanan NuaasiunAat
Slide 36: RMB internationalisation
RMB Standard Chartered Renminbi Globalisation Index (RGI) RMB internationalisation 9th most actively traded currency globally Best The Best Renminbi Trade Renminbi Daily trading volume nearly quadrupled to US$ Bank Hong Settlement Kong 2014 120bn (between 2010-2013) Bank 2012- 2014 First 17% o
Slide 37: Outlook
Outlook External environment remains challenging Momentum ahead of the second half last year Financial Markets remains uncertain Managing costs and risks tightly Continue to be: Well capitalised Highly liquid Diverse
Slide 38: Q&A
Standard @& Chartered &Q Q&A Here for good