Slide 1: 3Q'20 Results Presentation
3Q’20 Results Presentation 29 October 2020 Please see page 26 for an explanation of some of the technical and abbreviated terms used in this document
Slide 2: Our ongoing transformation is enabling us to weather the macroeconomic storm
PUBLIC Our ongoing transformation is enabling us to weather the macroeconomic storm We are pursuing exciting initiatives in dynamic markets, with a higher quality and lower risk business • We are creating a single pan-Asia region to more effectively deliver our Network there • We will combine our op
Slide 3: Financial performance
PUBLIC 3Q’20 Results Financial performance 2
Slide 4: Our capital remains very strong, despite profitability impacted by the external environment
PUBLIC Our capital remains very strong, despite profitability impacted as expected by the external environment ($bn) 3Q’19 3Q’20 YoY1 Ccy1 Operating income ex-DVA 4.0 3.5 (11)% (10)% • Income down due to interest rates, as previously guided DVA 0.0 (0.0) Nm3 Nm3 Operating income 4.0 3.5 (12)% (11)%
Slide 5: 3Q'20 income was down 10% at constant currency and ex-DVA
PUBLIC 3Q’20 income was down 10% at constant currency and ex-DVA, despite diversity benefits Income Costs Risk Capital/Liquidity Recovery in Wealth Management and strength in Financial Markets outweighed by the impact of interest rate cuts Income 3Q’20 vs 3Q’19 ($m) -10% 23 9 79 80 3,964 (108) 3,942
Slide 6: The net interest margin should stabilise slightly below the 3Q'20 level
PUBLIC The net interest margin should stabilise slightly below the 3Q’20 level Income Costs Risk Capital/Liquidity The 1Q’20 rate cuts should be fully reflected in the NIM over the next two quarters Gross yield (bps) 340 246 330 207 Rate paid (bps) 195 123 186 92 • 3Q’20 adjusted NII down 20% YoY /
Slide 7: Strong growth in fees and commissions was more than offset by lower trading income
PUBLIC Strong growth in fees and commissions was more than offset by lower trading income: Other income1 down 6% Income Costs Risk Capital/Liquidity Net fees and commissions and net trading and other income is now 56% of total income, and is up 8% YTD Income, statutory basis ($m) 6,508 2,497 6,028 2
Slide 8: Robust cost control continued in 3Q'20 and will be maintained through 2021
PUBLIC Robust cost control continued in 3Q’20 and will be maintained through 2021 Income Costs Risk Capital/Liquidity We are on track for expenses to be below $10bn (FY’19: $10.1bn) in both FY’20 and FY’212 71 70 64 Cost-to-income ratio1 (%) 63 63 60 59 • Expenses improved 1% YoY; flat ccy 7,470 2,5
Slide 9: The outlook for credit quality remains uncertain, but we expect a lower charge HoH in 2H'20
PUBLIC The outlook for credit quality remains uncertain, but we still expect a lower charge HoH in 2H’20 Income Costs Risk Capital/Liquidity Asset quality was broadly stable, with high risk assets remaining at elevated levels Credit impairment ($m) / Loan loss rate (bps) • Credit impairment up $74m
Slide 10: We have ample capital headroom to fund both growth and dividends in 2021
PUBLIC We have ample capital headroom to fund both growth and dividends1 in 2021 Income Costs Risk Capital/Liquidity Risk-weighted assets ($bn) +$4.1bn • RWA up 2% or $4.1bn from 30.06.20 1.8 266.7 5.2 ▪ Credit migration and FX impact 262.6 0.2 (0.5) • 4Q’20 RWA expected to increase slightly QoQ (0.
Slide 11: Strategic progress and concluding remarks
PUBLIC 3Q’20 Results Strategic progress and concluding remarks 10
Slide 12: We are streamlining our organisation to sharpen focus on our competitive advantages
PUBLIC We are streamlining our organisation to sharpen focus on our competitive advantages and improve productivity These changes will create a leaner organisation … … that will drive incremental strategic benefits Our existing strategic priorities3 Deliver Grow Improve Transform Optimise Network Af
Slide 13: Our virtual bank Mox is now live in Hong Kong
PUBLIC Our virtual bank Mox is now live in Hong Kong, and is just one of several exciting and differentiated digital initiatives • Mox is a key differentiator in our digital strategy: 1st Virtual Bank in Hong Kong to ▪ Our first standalone digital retail bank; it will not be the last launch Apple Pa
Slide 14: Our purpose is driving our business decisions, bold actions and ambitious commitments
PUBLIC Our purpose is driving our business decisions, bold actions and ambitious commitments Our purpose: Driving commerce and prosperity through our unique diversity We understand our We will lead sustainable We will continue to We support the responsibilities financing across invest in our communi
Slide 15: Concluding remarks
PUBLIC Concluding remarks Positive signs of economic recovery are emerging but risks persist • Some large economies in our footprint to recover from COVID sooner and faster … • … which would support client demand and continued asset quality improvement in 2021 • Income: ▪ Similar 4Q QoQ seasonality
Slide 16: Standard Chartered
Standard Chartered &Q 15
Slide 17: Appendix
PUBLIC Appendix Vulnerable sectors, macroeconomic indicators and COVID relief measures Information for fixed income investors Abbreviated terms and important notice 16
Slide 18: Vulnerable sectors, macroeconomic indicators and COVID relief measures
PUBLIC Vulnerable sectors, macroeconomic indicators and COVID relief measures 17
Slide 19: We continue to monitor exposures to sectors most at risk from COVID and lower oil prices
PUBLIC We continue to monitor exposures to sectors most at risk from COVID and lower oil prices particularly carefully Loans and advances in “Vulnerable sectors” decreased by $1.3bn during 3Q’20 and are now 8% of Group total 1 IFRS 9 Commodity Metals & Oil and Gas Aviation (as at 30 September 2020)
Slide 20: Stage 1 and 2 credit impairments: changes to baseline forecast in key footprint markets
PUBLIC Stage 1 and 2 credit impairments: Changes to baseline forecast in key footprint markets Changes to macroeconomic forecasts for key footprint markets: 2Q’20 to 3Q’20 Baseline: change in macroeconomic forecasts 1 2Q’20 3Q’20 Crude price China Hong Kong Korea Singapore India Brent, bbl GDP (Yo
Slide 21: We are providing relief from the impact of COVID for customers and corporate clients
PUBLIC We are providing relief from the impact of COVID for individual customers, small business owners and corporate clients Loans subject to relief down $4.7bn since June to $9.8bn: 3% of total Group L&A4 Approved Retail Banking COVID relief applications by region1,5 ($m) • RB3 relief applications
Slide 22: Information for fixed income investors
PUBLIC Information for fixed income investors 21
Slide 23: Balance sheet strength through volatile times
PUBLIC Balance sheet strength through volatile times CET1% 13.8% 14.3% 14.4% Min req • CET1 remains above target range: Board will consider 10.0% resuming shareholder returns at the time of FY’20 results, subject to consultation with regulators 31.12.19 30.06.20 30.09.20 MREL% 30.7% 30.4% 28.6% Min
Slide 24: The Group's liquidity position remained resilient in 3Q'20
PUBLIC The Group’s liquidity position remained resilient in 3Q’20 Total customer deposits1,2 ($bn) • LCR has remained above 140% during 2020: well above minimum 58% 64% 65% requirements 54% 66% 56% • Market liquidity conditions continued to improve in 3Q’20: liquidity is 155 149 46% being managed dy
Slide 25: CET1 position strong: absolutely and relative to requirements
PUBLIC CET1 position strong: absolutely1 and relative to requirements Material headroom to minimum CET1 requirements 14.4% • CET1 of 14.4%: over $11bn of headroom to MDA2 threshold • Capacity to continue to support clients through, and absorb $11.8bn 4.5% 10.0% further impacts of, the COVID pandemic
Slide 26: Abbreviated terms and important notice
PUBLIC Abbreviated terms and important notice 25
Slide 27: Selected technical and abbreviated terms used in this document
PUBLIC Selected technical and abbreviated terms used in this document Term Definition Term Definition Affluent activities Personal banking services offered to affluent and emerging affluent customers GBA Greater Bay Area consisting of nine cities and two special administrative regions in south China
Slide 28: Important notice
PUBLIC 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, b