TIDMSTAN

RNS Number : 0027R

Standard Chartered PLC

02 November 2021

Standard Chartered PLC - third quarter 2021 results

Table of contents

 
Performance highlights                                   1 
----------------------------------------------------  ---- 
Statement of results                                     2 
----------------------------------------------------  ---- 
Group Chief Financial Officer's review                   3 
----------------------------------------------------  ---- 
Supplementary financial information                     11 
----------------------------------------------------  ---- 
Underlying versus statutory results reconciliations     25 
----------------------------------------------------  ---- 
Risk review                                             31 
----------------------------------------------------  ---- 
Capital review                                          36 
----------------------------------------------------  ---- 
Financial statements                                    41 
----------------------------------------------------  ---- 
Other supplementary financial information               46 
----------------------------------------------------  ---- 
 

Forward-looking statements

This document may contain 'forward-looking statements' that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as 'may', 'could', 'will', 'expect', 'intend', 'estimate', 'anticipate', 'believe', 'plan', 'seek', 'continue' or other words of similar meaning.

By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. Recipients should not place reliance on, and are cautioned about relying on, any forward-looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. The factors that could cause actual results to differ materially from those described in the forward-looking statements include (but are not limited to) changes in global, political, economic, business, competitive, market and regulatory forces or conditions, future exchange and interest rates, changes in tax rates, future business combinations or dispositions and other factors specific to the Group. Any forward- looking statement contained in this document is based on past or current trends and/or activities of the Group and should not be taken as a representation that such trends or activities will continue in the future.

No statement in this document is intended to be a profit forecast or to imply that the earnings of the Group for the current year or future years will necessarily match or exceed the historical or published earnings of the Group. Each forward-looking statement speaks only as of the date of the particular statement. Except as required by any applicable laws or regulations, the Group expressly disclaims any obligation to revise or update any forward-looking statement contained within this document, regardless of whether those statements are affected as a result of new information, future events or otherwise.

Please refer to the Group's 2020 Annual Report and the 2021 Half-Year Report for a discussion of certain risks and factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

Nothing in this document shall constitute, in any jurisdiction, an offer or solicitation to sell or purchase any securities or other financial instruments, nor shall it constitute a recommendation or advice in respect of any securities or other financial instruments or any other matter.

Unless another currency is specified, the word 'dollar' or symbol '$' in this document means US dollar and the word 'cent' or symbol 'c' means one-hundredth of one US dollar.

The information within this report is unaudited.

Unless the context requires, within this document, 'China' refers to the People's Republic of China and, for the purposes of this document only, excludes Hong Kong Special Administrative Region (Hong Kong), Macau Special Administrative Region (Macau) and Taiwan. 'Korea' or 'South Korea' refers to the Republic of Korea. Asia includes Australia, Bangladesh, Brunei, Cambodia, Mainland China, Hong Kong, India, Indonesia, Japan, Korea, Laos, Macau, Malaysia, Myanmar, Nepal, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam; Africa & Middle East (AME) includes Angola, Bahrain, Botswana, Cameroon, Cote d'Ivoire, Egypt, The Gambia, Ghana, Iraq, Jordan, Kenya, Lebanon, Mauritius, Nigeria, Oman, Pakistan, Qatar, Saudi Arabia, Sierra Leone, South Africa, Tanzania, the United Arab Emirates (UAE), Uganda, Zambia and Zimbabwe; and Europe & Americas (EA) includes Argentina, Brazil, Colombia, Falkland Islands, France, Germany, Ireland, Jersey, Poland, Sweden, Turkey, the UK and the US.

Within the tables in this report, blank spaces indicate that the number is not disclosed, dashes indicate that the number is zero and 'nm' stands for 'not meaningful'.

Standard Chartered PLC is incorporated in England and Wales with limited liability. Standard Chartered PLC is headquartered in London. The Group's head office provides guidance on governance and regulatory standards. Standard Chartered PLC stock codes are: HKSE 02888 and LSE STAN.LN.

Standard Chartered PLC - third quarter 2021 performance highlights

All figures are presented on an underlying basis and comparisons are made to the third quarter 2020 on a reported currency basis, unless otherwise stated. A reconciliation of restructuring and other items excluded from underlying results is set out on pages 25-30.

Bill Winters, Group Chief Executive, said:

"We delivered a return to top-line growth in the third quarter and achieved further progress against our strategic priorities, with strong performance in our Financial Markets and Trade businesses and ongoing positive momentum in Wealth Management. We continue to transform how we serve our customers in the world's most dynamic markets through innovation, partnerships and new ventures. Last week, we were also pleased to deliver on our sustainability commitment to set out a clear path to achieve net zero by 2050."

Update on strategic priorities

-- Primary performance measure return on tangible equity improved 270bps to 7.1%

-- Continued good progress on strategic priorities

- Network: The proportion of digital transactions in our Corporate, Commercial & Institutional business is up 9%pts in 2021 to 50%

- Sustainability: Year-to-date Sustainable Finance income has more than doubled YoY

- Affluent: Net New Money of $11bn for the first nine months of the year, more than 70% higher YoY,

- Mass retail: Continued growth in sales executed digitally by our clients, up 7%pts in 2021 to 76%

Selected information concerning financial performance (3Q'21 unless otherwise stated)

-- Income 7% higher at $3.8bn, up 5% at constant currency (ccy) and excluding normalisation adjustments

- Trade income up 13% at ccy and excluding normalising adjustments, the strongest quarter since 1Q'18

- Strong performance in Financial Markets, up 4% at ccy and excluding normalising adjustments

- Wealth Management ex-Bancassurance up 3% and up 18% YoY for the nine months to September

- Net interest margin (NIM) in 3Q'21 of 1.23%, up 1bp on 2Q'21, benefiting from a 7bps or $96m IFRS9 interest income adjustment

-- Expenses increased 5% to $2.6bn, up 3% at ccy, and flat compared to 2Q'21

- Positive income-to-cost jaws of 3% at ccy excluding DVA

-- Credit impairment of $107m, down $246m YoY; up $174m QoQ

- CCIB $24m, with no significant new exposures in 3Q'21 and a small reduction in management overlay from $170m to $166m

- CPBB $74m, with no change in management overlay remaining stable at $140m

- High-risk assets: reduced for the fifth consecutive quarter in 3Q'21, down $1.5bn in the quarter and down $6.1bn YoY

-- Underlying profit before tax up 44% to $1.1bn; statutory profit before tax up 129% to $1.0bn

-- Tax charge of $229m: underlying year-to-date effective tax rate of 23.5% down 7.8%pts due to change in geographic mix and higher profits diluting the impact of non-deductible costs

-- Earnings per share increased 9.5 cents or 70% to 23.1 cents

-- The Group's balance sheet continues to grow and remains strong, liquid and well diversified

- Customer loans and advances up 2% or $4bn since 30.06.21 and up 7% since 31.12.20

- Advances-to-deposit ratio 61.9% (30.06.21: 64.0%); liquidity coverage ratio 145% (30.06.21: 146%)

-- Risk-weighted assets (RWA) of $268bn down 5% or $13bn since 30.06.21 and broadly flat to 31.12.20

- Credit RWA down $10bn in 3Q'21: asset growth offset by model changes, improvement in asset quality, asset mix changes and FX

- Market risk RWA down $3bn in 3Q'21: reduced charges for Internal Models Approach (IMA) risks not in Value at Risk (VaR)

-- The Group remains strongly capitalised

- Common equity tier 1 (CET 1) ratio 14.6% (30.06.21: 14.1%), above the 13-14% target range; includes 34 bps software relief which will cease from 01.01.2022

- An update on capital management actions will be provided at FY'21 results

Outlook

The economic recovery from the COVID-19 pandemic has continued to be uneven and punctuated by supply-chain disruption. However, we are encouraged by robust levels of export growth across many of our markets in Asia. Against this backdrop:

-- We continue to expect FY'21 income to be similar to that achieved in FY'20 on a constant currency basis, with 4Q'21 being sequentially lower, reflecting seasonality comparable to prior years, and normalising for the IFRS9 interest income adjustment. Strong underlying business momentum throughout 2021 should enable income growth to return to our 5-7% guidance range from FY'22

-- We continue to expect FY'21 operating expenses, including the impact of currency translation and performance-related pay, to be at or below $10.4bn

-- Excluding the impact of any unforeseeable events, we expect credit impairment to remain at low levels in 4Q'21

-- We expect FY'21 CET1 to be around the top of the 13-14% target range on a pro-forma basis, excluding software relief

Page 1

Statement of results

 
                                                                                      3 months 
                                                                                         ended 
                                                                          3 months 
                                                                    ended 30.09.21    30.09.20  Change(1) 
                                                                          $million    $million          % 
-----------------------------------------------------------------  ---------------  ----------  --------- 
Underlying performance 
Operating income                                                             3,765       3,519          7 
Operating expenses                                                         (2,594)     (2,480)        (5) 
Credit impairment                                                            (107)       (353)         70 
Other impairment                                                              (35)        (15)      (133) 
Profit from associates and joint ventures                                       46          74       (38) 
Profit before taxation                                                       1,075         745         44 
Profit attributable to ordinary shareholders(2)                                716         428         67 
Return on ordinary shareholders' tangible equity (%)                           7.1         4.4     270bps 
Cost-to-income ratio (%)                                                      68.9        70.5     160bps 
-----------------------------------------------------------------  ---------------  ----------  --------- 
Statutory performance 
Operating income                                                             3,764       3,506          7 
Operating expenses                                                         (2,647)     (2,515)        (5) 
Credit impairment                                                            (108)       (358)         70 
Goodwill impairment                                                              -       (231)        100 
Other impairment                                                              (59)        (33)    (78.79) 
Profit from associates and joint ventures                                       46          66       (30) 
Profit before taxation                                                         996         435        129 
Taxation                                                                     (229)       (274)         16 
Profit for the period                                                          767         161        376 
Profit attributable to parent company shareholders                             763         154        395 
Profit attributable to ordinary shareholders(2)                                644         123        424 
Return on ordinary shareholders' tangible equity (%)                           6.4         1.3     510bps 
Cost-to-income ratio (%)                                                      70.3        71.7     140bps 
Net Interest Margin (%) (adjusted)                                            1.23        1.23     (0)bps 
-----------------------------------------------------------------  ---------------  ----------  --------- 
 
                                                                          30.09.21    30.09.20  Change(1) 
Balance sheet and capital                                                 $million    $million          % 
-----------------------------------------------------------------  ---------------  ----------  --------- 
Total assets                                                               817,102     754,429          8 
Total equity                                                                53,335      50,570          5 
Average tangible equity attributable to ordinary shareholders(2)            39,948      38,934          3 
Loans and advances to customers                                            302,493     281,380          8 
Customer accounts                                                          453,260     417,517          9 
Risk-weighted assets                                                       267,555     266,664          - 
Total capital                                                               58,871      57,051          3 
Total capital (%)                                                             22.0        21.4      60bps 
Common Equity Tier 1                                                        39,167      38,449          2 
Common Equity Tier 1 ratio (%)                                                14.6        14.4      20bps 
Advances-to-deposits ratio (%)(3)                                             61.9        63.8      (1.9) 
Liquidity coverage ratio (%)                                                   145         142          3 
UK leverage ratio (%)                                                          5.1         5.2    (10)bps 
-----------------------------------------------------------------  ---------------  ----------  --------- 
Information per ordinary share                                               Cents       Cents      Cents 
Earnings per share - underlying(4)                                            23.1        13.6        9.5 
                             - statutory(4)                                   20.7         3.9       16.8 
Net asset value per share(5)                                                 1,468       1,405         63 
Tangible net asset value per share(5)                                        1,294       1,249         45 
Number of ordinary shares at period end (millions)                           3,078       3,149        (2) 
-----------------------------------------------------------------  ---------------  ----------  --------- 
 

1 Variance is better/(worse) other than assets, liabilities and risk-weighted assets. Change is percentage points difference between two points rather than percentage change for total capital ratio (%), common equity tier 1 ratio (%), net interest margin (%), advances-to-deposits ratio (%), liquidity coverage ratio (%), UK leverage ratio (%). Change is cents difference between two points rather than percentage change for earnings per share, net asset value per share and tangible net asset value per share

2 Profit/(loss) attributable to ordinary shareholders is after the deduction of dividends payable to the holders of non-cumulative redeemable preference shares and Additional Tier 1 securities classified as equity

3 When calculating this ratio, total loans and advances to customers excludes reverse repurchase agreements and other similar secured lending, excludes approved balances held with central banks, confirmed as repayable at the point of stress and includes loans and advances to customers held at fair value through profit and loss. Total customer accounts include customer accounts held at fair value through profit or loss

4 Represents the underlying or statutory earnings divided by the basic weighted average number of shares. Result represents three months ended the reporting period.

5 Calculated on period end net asset value, tangible net asset value and number of shares

Page 2

Group Chief Financial Officer's review

The Group delivered a strong performance in 3Q'21

Summary of financial performance

 
                                                 Constant                       Constant                                   Constant 
                                                 currency                       currency                                   currency 
                     3Q'21       3Q'20  Change  change(1)       2Q'21  Change  change(1)      YTD'21      YTD'20  Change  change(1) 
                  $million    $million       %          %    $million       %          %    $million    $million       %          % 
--------------  ----------  ----------  ------             ----------  ------             ----------  ----------  ------ 
  Net interest 
   income            1,735       1,620       7          6       1,713       1          2       5,110       5,122       -        (2) 
  Other income       2,030       1,899       7          7       1,976       3          4       6,273       6,444     (3)        (4) 
--------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Underlying 
 operating 
 income              3,765       3,519       7          7       3,689       2          3      11,383      11,566     (2)        (3) 
  Other 
   operating 
   expenses        (2,594)     (2,480)     (5)        (3)     (2,592)       -        (1)     (7,680)     (7,193)     (7)        (4) 
  UK bank levy           -           -   nm(3)      nm(3)         (6)     100        100         (6)           -   nm(3)      nm(3) 
Underlying 
 operating 
 expenses          (2,594)     (2,480)     (5)        (3)     (2,598)       -        (1)     (7,686)     (7,193)     (7)        (4) 
--------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Underlying 
 operating 
 profit before 
 impairment 
 and taxation        1,171       1,039      13         16       1,091       7          8       3,697       4,373    (15)       (14) 
Credit 
 impairment          (107)       (353)      70         71          67   nm(3)      nm(3)        (60)     (1,920)      97         97 
Other 
 impairment           (35)        (15)   (133)      (150)         (9)   nm(3)      nm(3)        (60)          97   (162)      (162) 
Profit from 
 associates 
 and joint 
 ventures               46          74    (38)       (38)          87    (47)       (47)         180         150      20         21 
--------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Underlying 
 profit before 
 taxation            1,075         745      44         50       1,236    (13)       (13)       3,757       2,700      39         43 
Restructuring         (99)        (44)   (125)      (122)        (90)    (10)       (11)       (222)       (134)    (66)       (65) 
Goodwill 
 impairment              -       (231)     100        100           -   nm(3)      nm(3)           -       (489)     100        100 
Other items             20        (35)   nm(3)        157           -   nm(3)      nm(3)          20        (15)   nm(3)      nm(3) 
--------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Statutory 
 profit before 
 taxation              996         435     129        146       1,146    (13)       (13)       3,555       2,062      72         79 
Taxation             (229)       (274)      16         17       (317)      28         27       (860)       (835)     (3)        (2) 
--------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Profit for the 
 period                767         161   nm(3)      nm(3)         829     (8)        (7)       2,695       1,227     120        137 
--------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Net interest 
 margin (%)(2)        1.23        1.23       -                   1.22       1                   1.23        1.34    (11) 
Underlying 
 return on 
 tangible 
 equity (%)(2)         7.1         4.4     270                    7.8    (70)                    8.6         5.5     310 
Underlying 
 earnings per 
 share (cents)        23.1        13.6      70                   24.8     (7)                   81.4        49.5      64 
Statutory 
 return on 
 tangible 
 equity (%)(2)         6.4         1.3     510                    7.0    (60)                    7.9         3.3     460 
Statutory 
 earnings per 
 share (cents)        20.7         3.9   nm(3)                   22.1     (6)                   75.6        29.7     155 
--------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
 

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

2 Change is the basis points (bps) difference between the two periods rather than the percentage change

3 Not meaningful

The Group delivered a strong performance in the third quarter of 2021, in what remained challenging conditions, with underlying profit before tax improving 44 per cent. Income returned to growth, increasing 5 per cent, on a constant currency basis and excluding normalisation adjustments, with continued strong underlying business momentum more than offsetting the impact of a 7 basis point decline in net interest margin on a normalised basis. Expenses grew 3 per cent at constant currency, mainly from increased investment in strategic initiatives. Credit impairment charges remain at low levels reflecting the improving economic backdrop. The Group remains well capitalised and highly liquid with a common equity tier 1 (CET1) ratio of 14.6 per cent, above the 13 to 14 per cent target range, with an advances-to-deposits ratio of 61.9 per cent and a liquidity coverage ratio of 145 per cent.

All commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2020 on a reported currency basis, unless otherwise stated.

-- Operating income increased 7 per cent and was up 5 per cent on a constant currency basis and excluding normalisation adjustments. The impact of the lower underlying net interest margin was more than offset by balance sheet growth and strong performances in Financial Markets and Trade

-- Net interest income increased 7 per cent, benefiting from a positive $96 million IFRS9 interest income catch-up adjustment in respect of interest earned on historically impaired assets. Excluding this adjustment, net interest income increased 1 per cent with a 6 per cent increase in average interest-earning assets, partly offset by a 7 basis points decline in the normalised net interest margin. Excluding the impact of IFRS9 adjustments in both the second and third quarter, net interest income was flat quarter-on-quarter while the net interest margin declined 1 basis point to 116 basis points on a normalised basis

-- Other income increased 7 per cent and 9 per cent excluding the positive impact of a $21 million increase in DVA and the non-repeat of a $53 million accelerated recognition of an annual Bancassurance bonus in 3Q'20, with broad-based growth across multiple products

Page 3

Group Chief Financial Officer's review continued

-- Operating expenses were up 5 per cent, and up 3 per cent on a constant currency basis, reflecting an increase in performance-related pay accruals and sustained increased investment into transformational digital initiatives. The cost-to-income ratio excluding DVA decreased 1 percentage point to 69 per cent

-- Credit impairment declined by $246 million to $107 million. There was a $30 million charge in stage 1 and 2 impairment including a $25 million release of the judgemental management overlay relating to stage 1 and 2 loans. Impairment of stage 3 assets of $77 million were down $167 million, with no significant new exposures in the quarter, and included a $12 million charge in relation to the IFRS9 interest income catch-up adjustment and a $21 million increase in the management overlay relating to stage 3. The management overlay was broadly stable in the quarter and now totals $306 million

-- Other impairment increased by $20 million with a $35 million charge in the quarter, mainly relating to the aviation lease portfolio

-- Profit from associates and joint ventures was down 38 per cent to $46 million, reflecting the reduction in the Group's shareholding in China Bohai Bank from 19.99 per cent to 16.26 per cent

-- Charges relating to restructuring, goodwill impairment and other items decreased $231 million to $79 million, with higher restructuring costs more than offsetting a non-repeat of $231 million goodwill impairment primarily relating to UAE booked in 3Q'20

-- Taxation was $229 million on a statutory basis, with an underlying year-to-date effective tax rate of 23.5 per cent, down from the prior year rate of 31.3 per cent, reflecting a change in the geographic mix of profits and higher profits diluting the impact of non-deductible costs

-- Underlying return on tangible equity increased by 270 basis points to 7.1 per cent due to higher profits partly offset by increased tangible equity, reflecting the net impact of profit accretion partly offset by shareholder distributions

Operating income by product

 
                                                  Constant                       Constant                                   Constant 
                                                  currency                       currency                                   currency 
                      3Q'21       3Q'20  Change  change(1)       2Q'21  Change  change(1)      YTD'21      YTD'20  Change  change(1) 
                   $million    $million       %          %    $million       %          %    $million    $million       %          % 
---------------  ----------  ----------  ------             ----------  ------             ----------  ----------  ------ 
Transaction 
 Banking                645         665     (3)        (4)         637       1          2       1,925       2,186    (12)       (13) 
                 ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
  Trade                 300         255      18         17         291       3          3         868         745      17         16 
  Cash 
   Management           345         410    (16)       (16)         346       -          1       1,057       1,441    (27)       (27) 
                 ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Financial 
 Markets              1,315       1,185      11         10       1,270       4          4       3,905       3,955     (1)        (2) 
                 ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
  Macro Trading         540         518       4          4         571     (5)        (5)       1,783       2,097    (15)       (16) 
  Credit 
   Markets              522         464      13         12         495       5          6       1,458       1,207      21         20 
     Credit 
      Trading           144         129      12         11         102      41         41         377         285      32         31 
     Financing 
      Solutions 
      & 
      Issuance          378         335      13         13         393     (4)        (3)       1,081         922      17         16 
  Structured 
   Finance              156         101      54         53         120      30         30         375         281      33         32 
  Financing & 
   Securities 
   Services              98         124    (21)       (22)          85      15          9         291         288       1        (1) 
  DVA                   (1)        (22)      95         95         (1)       -         50         (2)          82   (102)      (102) 
                 ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Lending & 
 Portfolio 
 Management             278         226      23         22         253      10         11         764         666      15         13 
Wealth 
 Management             559         572     (2)        (3)         554       1          1       1,759       1,548      14         12 
Retail Products         828         859     (4)        (5)         846     (2)        (1)       2,523       2,718     (7)        (9) 
                 ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
  Credit Cards 
   & Personal 
   Loans (CCPL) 
   & other 
   unsecured 
   lending              316         309       2          1         320     (1)          -         956         908       5          3 
  Deposits              205         301    (32)       (32)         209     (2)        (1)         647       1,186    (45)       (46) 
  Mortgage & 
   Auto                 260         211      23         21         268     (3)        (1)         775         516      50         45 
  Other Retail 
   Products              47          38      24         21          49     (4)        (6)         145         108      34         33 
                 ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Treasury                149          40   nm(2)      nm(2)         137       9          9         543         543       -        (1) 
Other                   (9)        (28)      68         89         (8)    (13)         69        (36)        (50)      28         27 
---------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Total 
 underlying 
 operating 
 income               3,765       3,519       7          7       3,689       2          3      11,383      11,566     (2)        (3) 
---------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
 

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

2 Not meaningful

Following an organisational restructure that came into effect on 1 January 2021, the Group's Financial Markets business has been expanded and reorganised, with the Group integrating the majority of its Corporate Finance business within Financial Markets. The remaining elements of the Group's Corporate Finance business - primarily M&A Advisory - have been transferred into Lending & Portfolio Management.

Transaction Banking income was down 3 per cent. Cash Management declined 16 per cent as double-digit volume growth and increased fee income was more than offset by margin compression due to the lower interest rate environment despite repricing initiatives. Trade increased 18 per cent primarily due to double-digit growth in balances.

Page 4

Group Chief Financial Officer's review continued

Financial Markets income increased 11 per cent or 4 per cent excluding DVA and the impact of the IFRS9 interest income catch-up adjustment. Macro Trading increased 4 per cent with higher Foreign Exchange (FX) and Commodities income partly offset by lower Rates income. Credit Markets income increased 13 per cent with Financing Solutions & Issuance benefiting from growth in origination and distribution activities along with the IFRS9 income adjustments. Structured Finance was up 54 per cent due to trading and other gains within Aviation Finance, while negative movements in XVA resulted in Financing & Security Services income reducing by 21 per cent.

Lending and Portfolio Management income was up 23 per cent with half of the growth due to the impact of the IFRS9 interest income catch-up adjustment. Underlying growth of 11 per cent reflected a doubling of fee income, primarily from M&A Advisory and higher margins.

Wealth Management was down 2 per cent, primarily due to a $53 million accelerated recognition of an annual Bancassurance bonus in 3Q'20 which was not repeated in 3Q'21. This resulted in a 15 per cent decline in Bancassurance income, which is currently around a quarter of total Wealth Management income. Excluding Bancassurance, Wealth Management underlying growth was 3 per cent, with double-digit growth in Funds, Structured Notes and Wealth Lending.

Retail Products income reduced 4 per cent on a reported basis and was down 5 per cent on a constant currency basis. Deposits income declined 32 per cent as margin compression more than offset increased volumes and improved balance sheet mix. Balance sheet growth and increased margins led to 23 per cent growth across Mortgages & Auto and a 24 per cent increase in Other Retail Products. Credit Cards & Personal Loans income increased 2 per cent with improved personal loan margins and increased fees.

Treasury income more than tripled to $149 million, with two-thirds of the increase from higher net interest income. The remaining increase is primarily due to a non-repeat of prior period negative movements in hedge ineffectiveness.

Underlying profit before tax by client segment and geographic region

 
                                                 Constant                       Constant                                   Constant 
                                                 currency                       currency                                   currency 
                     3Q'21       3Q'20  Change  change(1)       2Q'21  Change  change(1)      YTD'21      YTD'20  Change  change(1) 
                  $million    $million       %          %    $million       %          %    $million    $million       %          % 
--------------  ----------  ----------  ------             ----------  ------             ----------  ----------  ------ 
Corporate, 
 Commercial & 
 Institutional 
 Banking               868         521      67         70         936     (7)        (7)       2,689       1,800      49         51 
Consumer, 
 Private & 
 Business 
 Banking               259         297    (13)       (13)         299    (13)       (12)       1,037         714      45         46 
Central & 
 other items 
 (segment)            (52)        (73)      29         44           1   nm(2)      nm(2)          31         186    (83)       (78) 
--------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Underlying 
 profit before 
 taxation            1,075         745      44         50       1,236    (13)       (13)       3,757       2,700      39         43 
--------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
 
Asia                   927         821      13         13       1,005     (8)        (7)       3,166       2,411      31         30 
Africa & 
 Middle East           222          11   nm(2)      nm(2)         285    (22)       (21)         697         101   nm(2)      nm(2) 
Europe & 
 Americas              161          37   nm(2)      nm(2)         104      55         54         498         393      27         29 
Central & 
 other items 
 (region)            (235)       (124)    (90)       (66)       (158)    (49)       (52)       (604)       (205)   (195)      (121) 
--------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
Underlying 
 profit before 
 taxation            1,075         745      44         50       1,236    (13)       (13)       3,757       2,700      39         43 
--------------  ----------  ----------  ------  ---------  ----------  ------  ---------  ----------  ----------  ------  --------- 
 

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

2 Not meaningful

Following an organisational restructure that came into effect on 1 January 2021, the new structure results in the creation of two new client segments: Corporate, Commercial & Institutional Banking, serving larger companies and institutions, and Consumer, Private & Business Banking, serving individual and business banking clients. From a regional perspective, Greater China & North Asia and ASEAN & South Asia have been combined to form a single Asia region.

Corporate, Commercial & Institutional Banking profit increased 67 per cent, due to lower credit impairment and income growth. Income increased 9 per cent, or 3 per cent excluding the impact of IFRS9 interest income catch-up adjustment and movements in DVA.

Consumer, Private & Business Banking profit decreased 13 per cent reflecting lower income and increased expenses driven by investment in digital initiatives offset by lower impairment. Adjusting for the $53 million accelerated recognition of an annual Bancassurance bonus in 3Q'20, income increased 1 per cent and profits increased 6 per cent.

Central & other items (segment) losses reduced by approximately a quarter to $52 million with income up $96 million on the back of stronger Treasury performance, partly offset by lower Associates profit share as well as increased expenses and impairment.

Asia profits increased 13 per cent with a 5 per cent increase in income and $73 million lower credit impairment more than offset by a 4 per cent increase in expenses. The benefit from the IFRS9 interest income catch-up was broadly offset by the non-repeat of the accelerated recognition of an annual Bancassurance bonus in 3Q'20. There was double-digit income growth in India, China, South Korea and Singapore while Hong Kong income was flat.

Africa & Middle East profits increased from $11 million to $222 million primarily due to a $119 million reduction in impairment. Income was up 11 per cent and increased 4 per cent excluding the benefit of the IFRS9 income adjustment while costs increased 6 per cent.

Europe & Americas income increased 22 per cent, with strong double-digit growth in Financial Markets, which along with $23 million lower impairment, resulted in profits increasing more than four-fold.

Page 5

Group Chief Financial Officer's review continued

Central & other items (region) recorded a loss of $235 million with increased expenses reflecting an increase in performance-related pay accruals and an increase in investment spend in digital ventures while income declined $36 million due to lower returns paid to Treasury on the equity provided to the regions in a lower interest rate environment.

Adjusted net interest income and margin

 
                                3Q'21       3Q'20  Change(1)       2Q'21  Change(1)      YTD'21      YTD'20  Change(1) 
                             $million    $million          %    $million          %    $million    $million          % 
-------------------------  ----------  ----------             ----------             ----------  ---------- 
Adjusted net interest 
 income(2)                      1,732       1,626          7       1,705          2       5,107       5,245        (3) 
Average interest-earning 
 assets                       557,416     524,921          6     558,089          -     557,283     522,251          7 
Average interest-bearing 
 liabilities                  512,406     477,688          7     517,939        (1)     513,333     473,778          8 
-------------------------  ----------  ----------  ---------  ----------  ---------  ----------  ----------  --------- 
 
Gross yield (%)(3)               1.84        2.07       (23)        1.86        (2)        1.85        2.46       (61) 
Rate paid (%)(3)                 0.66        0.92       (26)        0.69        (3)        0.68        1.23       (55) 
Net yield (%)(3)                 1.18        1.15          3        1.17          1        1.17        1.23        (6) 
-------------------------  ----------  ----------  ---------  ----------  ---------  ----------  ----------  --------- 
Net interest margin 
 (%)(3,4)                        1.23        1.23          -        1.22          1        1.23        1.34       (11) 
-------------------------  ----------  ----------  ---------  ----------  ---------  ----------  ----------  --------- 
 

1 Variance is better/(worse) other than assets and liabilities which is increase/(decrease)

2 Adjusted net interest income is statutory net interest income less funding costs for the trading book and financial guarantee fees on interest-earning assets

3 Change is the basis points (bps) difference between the two periods rather than the percentage change

4 Adjusted net interest income divided by average interest-earning assets, annualised

Adjusted net interest income increased 7 per cent and 1 per cent excluding the benefit of a $96 million IFRS9 interest income catch-up adjustment. On a headline basis, adjusted net interest income was up 2 per cent quarter-on-quarter but was flat excluding the IFRS9 income adjustment (2Q'21: $73 million). The net interest margin on a headline basis was flat year-on-year and up 1 basis point quarter-on-quarter. Excluding the IFRS9 income adjustment, net interest margin on a normalised basis was 116 basis points in the third quarter, down 7 basis points year-on-year and down 1 basis point quarter-on-quarter:

-- Average interest-earning assets were flat in the quarter, with reduced balances in Treasury Markets offsetting growth in Mortgages, Wealth Management and Trade. Gross yields declined 2 basis points compared with the average in the prior quarter, and were down 4 basis points excluding the impact of the IFRS9 income adjustment, reflecting the impact of further falls in HIBOR and a shift from credit cards to lower yielding personal loans

-- Average interest-bearing liabilities declined 1 per cent in the quarter. The deposit mix continued to improve with a reduction in Retail Products time deposits and growth in corporate operating accounts. The rate paid on liabilities decreased 3 basis points compared with the average in the prior quarter, reflecting interest rate movements, repricing initiatives and improvement in the liability mix

Credit risk summary

Income statement

 
                                3Q'21       3Q'20  Change(1)       2Q'21  Change(1)      YTD'21      YTD'20  Change(1) 
                             $million    $million          %    $million          %    $million    $million          % 
-------------------------  ----------  ----------  ---------  ----------  ---------  ----------  ----------  --------- 
Total credit impairment 
 charge/(release)                 107         353       (70)        (67)      (260)          60       1,920       (97) 
                           ----------  ----------  ---------  ----------  ---------  ----------  ----------  --------- 
  Of which stage 1 and 2           30         109       (72)        (70)      (143)        (75)         777      (110) 
  Of which stage 3                 77         244       (68)           3      2,467         135       1,143       (88) 
-------------------------  ----------  ----------  ---------  ----------  ---------  ----------  ----------  --------- 
 

1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods

Page 6

Group Chief Financial Officer's review continued

Balance sheet

 
                                         30.09.21    30.06.21  Change(1)    31.12.20  Change(1)    30.09.20  Change(1) 
                                         $million    $million          %    $million          %    $million          % 
-------------------------------------  ----------  ----------  ---------  ----------  ---------  ----------  --------- 
Gross loans and advances to 
 customers(2)                             308,083     303,982          1     288,312          7     288,046          7 
                                       ----------  ----------  ---------  ----------  ---------  ----------  --------- 
  Of which stage 1                        284,140     277,290          2     256,437         11     251,113         13 
  Of which stage 2                         15,759      17,634       (11)      22,661       (30)      27,597       (43) 
  Of which stage 3                          8,184       9,058       (10)       9,214       (11)       9,336       (12) 
                                       ----------  ----------  ---------  ----------  ---------  ----------  --------- 
 
Expected credit loss provisions           (5,590)     (5,979)        (7)     (6,613)       (15)     (6,666)       (16) 
                                       ----------  ----------  ---------  ----------  ---------  ----------  --------- 
  Of which stage 1                          (411)       (447)        (8)       (534)       (23)       (571)       (28) 
  Of which stage 2                          (535)       (544)        (2)       (738)       (28)       (706)       (24) 
  Of which stage 3                        (4,644)     (4,988)        (7)     (5,341)       (13)     (5,389)       (14) 
                                       ----------  ----------  ---------  ----------  ---------  ----------  --------- 
 
Net loans and advances to customers       302,493     298,003          2     281,699          7     281,380          8 
                                       ----------  ----------  ---------  ----------  ---------  ----------  --------- 
  Of which stage 1                        283,729     276,843          2     255,903         11     250,542         13 
  Of which stage 2                         15,224      17,090       (11)      21,923       (31)      26,891       (43) 
  Of which stage 3                          3,540       4,070       (13)       3,873        (9)       3,947       (10) 
                                       ----------  ----------  ---------  ----------  ---------  ----------  --------- 
 
Cover ratio of stage 3 before/after          57 /        55 /                   58 /      (1) /        58 /      (1) / 
 collateral (%)(3)                             77          75      2 / 2          76          1          76          1 
Credit grade 12 accounts ($million)         2,175       1,623         34       2,164          1       1,954         11 
Early alerts ($million)                     7,478       8,970       (17)      10,692       (30)      13,407       (44) 
Investment grade corporate exposures 
 (%)(3)                                        68          63          5          62          6          59          9 
-------------------------------------  ----------  ----------  ---------  ----------  ---------  ----------  --------- 
 

1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods

2 Includes reverse repurchase agreements and other similar secured lending held at amortised cost of $8,836 million at 30 September 2021, $4,584 million at 30 June 2021, $2,919 million at 31 December 2020 and $4,330 million at 30 September 2020

3 Change is the percentage points difference between the two points rather than the percentage change

While credit risk remains elevated, we have seen improvements in a number of metrics with high-risk assets lower for the fifth successive quarter, and the overall portfolio remains stable and resilient. The Group is well-positioned to support our clients as economies recover but continues to remain vigilant to the continued impact of COVID-19 including vaccination progress and the likelihood of uneven economic recovery across markets and industries.

Credit impairment was a $107 million charge in the quarter, with a $30 million charge relating to stage 1 and 2 impairment and a $77 million charge relating to stage 3 impairment.

The $30 million charge in stage 1 and 2 impairment reflects the impact of a sovereign ratings downgrade in one of our smaller markets and changes in the macroeconomic variables used in the expected credit loss (ECL) models partly offset by a $25 million release of the judgemental stage 1 and 2 management overlay. The management overlay relating to stage 1 and 2 assets totals $277 million as at 30 September 2021.

Stage 3 impairment of $77 million primarily relate to charge-offs within Consumer, Private & Business Banking (CPBB) with no significant new exposures within Corporate, Commercial & Institutional Banking (CCIB) in the quarter. There was a $12 million charge relating to the catch-up of interest earned on historically impaired assets and a $21 million increase in the management overlay of stage 3 assets in CPBB, to a total overlay of $29 million.

Gross stage 3 loans and advances to customers of $8.2 billion were 10 per cent lower compared to 30 June 2021, primarily due to repayments and write-offs more than offsetting new inflows, which were 87 per cent lower in CCIB, compared to the previous quarter. Credit-impaired loans represented 2.7 per cent of gross loans and advances, a decrease of 32 basis points compared

to 30 June 2021.

The stage 3 cover ratio of 57 per cent was up 2 percentage points compared with the position as at 30 June 2021, and the cover ratio post collateral at 77 per cent also increased by 2 percentage points, both benefiting from significant repayments on stage 3 assets with low levels of provisions.

Credit grade 12 balances have increased by $0.5 billion since 30 June 2021, mainly due to the sovereign ratings downgrade partly offset by client upgrades and repayments.

Early Alert accounts of $7.5 billion have reduced by $1.5 billion since 30 June 2021, reflecting the net impact of downgrades into credit grade 12 including the sovereign ratings downgrade, exposure reductions and regularisations of accounts back into non-high-risk categories. Excluding the Aviation sector, Early Alert accounts are now broadly in-line with pre-COVID-19 levels. The Group is continuing to monitor its exposures in the Aviation, Metals & Mining and Oil & Gas sectors particularly carefully, given the unusual stresses caused by the effects of COVID-19, as well as its exposure to Commercial Real Estate, which, with a total exposure of $18.5 billion is just 6 per cent of the Group's total loans and advances to customers. The recent rises in commodity prices have eased credit pressure for certain sectors.

The proportion of investment grade corporate exposures has increased by 5 percentage points since 30 June 2021 to 68 per cent.

Page 7

Group Chief Financial Officer's review continued

Restructuring, goodwill impairment and other items

 
                               3Q'21                                3Q'20                                2Q'21 
                -----------------------------------  -----------------------------------  ----------------------------------- 
                                 Goodwill     Other                   Goodwill     Other                   Goodwill     Other 
                Restructuring  Impairment     items  Restructuring  Impairment     items  Restructuring  Impairment     items 
                     $million    $million  $million       $million    $million  $million       $million    $million  $million 
--------------  -------------  ----------  --------  -------------  ----------  --------  -------------  ----------  -------- 
Operating 
 income                  (21)           -        20             22           -      (35)              -           -         - 
Operating 
 expenses                (53)           -         -           (35)           -         -           (95)           -         - 
Credit 
 impairment               (1)           -         -            (5)           -         -              1           -         - 
Other 
 impairment              (24)           -         -           (18)       (231)         -            (3)           -         - 
Profit from 
 associates 
 and joint 
 ventures                   -           -         -            (8)           -         -              7           -         - 
--------------  -------------  ----------  --------  -------------  ----------  --------  -------------  ----------  -------- 
Profit/(loss) 
 before 
 taxation                (99)           -        20           (44)       (231)      (35)           (90)           -         - 
--------------  -------------  ----------  --------  -------------  ----------  --------  -------------  ----------  -------- 
 

The Group's statutory performance is adjusted for profits or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent, other infrequent and/or exceptional transactions that are significant or material in the context of the Group's normal business earnings for the period and items which management and investors would ordinarily identify separately when assessing underlying performance period by period.

Restructuring charges of $99 million primarily relate to the discontinued Principal Finance business, redundancies, and impairment on property as the Group adapts to new ways of working post-pandemic. Other items include a $20 million fair-value gain relating to a SC Ventures investment.

Balance sheet and liquidity

 
                                      30.09.21    30.06.21  Change    31.12.20  Change(1)    30.09.20  Change(1) 
                                      $million    $million       %    $million          %    $million          % 
----------------------------------  ----------  ----------  ------  ----------  ---------  ----------  --------- 
Assets 
Loans and advances to banks             45,754      45,188       1      44,347          3      49,040        (7) 
Loans and advances to customers        302,493     298,003       2     281,699          7     281,380          8 
Other assets                           468,855     452,719       4     463,004          1     424,009         11 
----------------------------------  ----------  ----------  ------  ----------  ---------  ----------  --------- 
Total assets                           817,102     795,910       3     789,050          4     754,429          8 
----------------------------------  ----------  ----------  ------  ----------  ---------  ----------  --------- 
Liabilities 
Deposits by banks                       34,480      30,567      13      30,255         14      28,138         23 
Customer accounts                      453,260     441,147       3     439,339          3     417,517          9 
Other liabilities                      276,027     271,339       2     268,727          3     258,204          7 
----------------------------------  ----------  ----------  ------  ----------  ---------  ----------  --------- 
Total liabilities                      763,767     743,053       3     738,321          3     703,859          9 
----------------------------------  ----------  ----------  ------  ----------  ---------  ----------  --------- 
Equity                                  53,335      52,857       1      50,729          5      50,570          5 
----------------------------------  ----------  ----------  ------  ----------  ---------  ----------  --------- 
Total equity and liabilities           817,102     795,910       3     789,050          4     754,429          8 
----------------------------------  ----------  ----------  ------  ----------  ---------  ----------  --------- 
 
Advances-to-deposits ratio (%)(2)        61.9%       64.0%               61.1%                  63.8% 
Liquidity coverage ratio (%)              145%        146%                143%                   142% 
----------------------------------  ----------  ----------  ------  ----------  ---------  ----------  --------- 
 

1 Variance is increase/(decrease)comparing current reporting period to prior reporting periods

2 The Group now excludes $16,986 million held with central banks (30.06.21: $16,213 million, 31.12.20: $14,296 million, 30.09.20: $14,363 million) that has been confirmed as repayable at the point of stress

The Group's balance sheet remains strong, liquid and well diversified:

-- Loans and advances to customers increased 2 per cent since 30 June 2021 to $302 billion despite the impact of adverse FX movements. The majority of the growth was due to growth in Financial Markets. Underlying growth in Retail Mortgage balances was predominately offset by negative FX movements, while the completion of loan syndications in progress at 30 June 2021 led to a reduction in the corporate lending book

-- Customer accounts of $453 billion increased 3 per cent since 30 June 2021, primarily driven by an increase in corporate operating account balances while retail deposits remained broadly stable despite being negatively impacted by FX movements

-- Other assets increased 4 per cent since 30 June 2021 with increased unsettled trade balances, balances at central banks and investment securities. Other liabilities increased 2 per cent from increased repurchase agreements, partly offset by a reduction in issued debt securities

The advances-to-deposits ratio reduced to 61.9 per cent from 64.0 per cent at 30 June 2021, reflecting the strong growth in customer accounts in the quarter. The point-in-time liquidity coverage ratio (LCR) decreased 1 percentage point to 145 per cent and remains well above the minimum regulatory requirement of 100 per cent.

Page 8

Group Chief Financial Officer's review continued

Risk-weighted assets

 
                                     30.09.21    30.06.21  Change(1)    31.12.20  Change(1)    30.09.20  Change(1) 
                                     $million    $million          %    $million          %    $million          % 
---------------------------------  ----------  ----------  ---------  ----------  ---------  ----------  --------- 
By risk type 
Credit risk                           219,628     229,348        (4)     220,441          -     217,720          1 
Operational risk                       27,116      27,116          -      26,800          1      26,800          1 
Market risk                            20,811      23,763       (12)      21,593        (4)      22,144        (6) 
---------------------------------  ----------  ----------  ---------  ----------  ---------  ----------  --------- 
Total risk-weighted assets (RWA)      267,555     280,227        (5)     268,834          -     266,664          - 
---------------------------------  ----------  ----------  ---------  ----------  ---------  ----------  --------- 
 

1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods

Total risk-weighted assets (RWA) decreased 5 per cent or $12.7 billion since 30 June 2021 to $267.6 billion:

-- Credit risk RWA decreased by $9.7 billion in the third quarter to $219.6 billion, with asset growth more than offset by the benefit of model upgrades relating to Korea personal loans, improvements in asset quality including actions concerning specific stage 3 exposures, the impact of lower RWA density and FX

-- Operational risk RWA remained unchanged at $27.1 billion

-- Market risk RWA decreased by $3.0 billion to $20.8 billion due to reduced internal models approach (IMA) positions and charges for IMA risks not in value at risk (VaR)

Capital base and ratios

 
                                    30.09.21    30.06.21  Change(1)    31.12.20  Change(1)    30.09.20  Change(1) 
                                    $million    $million          %    $million          %    $million          % 
--------------------------------  ----------  ----------  ---------  ----------  ---------  ----------  --------- 
CET1 capital                          39,167      39,589        (1)      38,779          1      38,449          2 
Additional Tier 1 capital (AT1)        6,791       6,293          8       5,612         21       5,611         21 
--------------------------------  ----------  ----------  ---------  ----------  ---------  ----------  --------- 
Tier 1 capital                        45,958      45,882          -      44,391          4      44,060          4 
Tier 2 capital                        12,913      13,279        (3)      12,657          2      12,991        (1) 
--------------------------------  ----------  ----------  ---------  ----------  ---------  ----------  --------- 
Total capital                         58,871      59,161          -      57,048          3      57,051          3 
--------------------------------  ----------  ----------  ---------  ----------  ---------  ----------  --------- 
CET1 capital ratio (%)(2)               14.6        14.1        0.5        14.4        0.2        14.4        0.2 
Total capital ratio (%)(2)              22.0        21.1        0.9        21.2        0.8        21.4        0.6 
UK leverage ratio (%)(2)                 5.1         5.2      (0.1)         5.2      (0.1)         5.2      (0.1) 
--------------------------------  ----------  ----------  ---------  ----------  ---------  ----------  --------- 
 

1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods

2 Change is percentage points difference between two points rather than percentage change

The Group's CET1 ratio of 14.6 per cent was 51 basis points higher than at 30 June 2021, 4.6 percentage points above the Group's current regulatory minimum of 10.0 per cent and above the 13-14 per cent medium-term target range.

The primary driver of the increase in the CET1 ratio was the decrease in RWA, principally from favourable model changes, asset quality improvements, a reduction in RWA density and lower market risk RWA, which in aggregate resulted in an increase in the CET1 ratio of approximately 60 basis points. Profits in the quarter contributed approximately 30 basis points of CET1 accretion in the quarter.

There was a 3 basis points increase in the value of the revised treatment of software assets in CET1, reflecting an increase in capitalised software assets. The total benefit to CET1 from the revised treatment of software assets is now 34 basis points. The Prudential Regulatory Authority (PRA) has confirmed that qualifying software assets will be deducted from CET1 from 1 January 2022.

The Group spent $251 million purchasing 40 million ordinary shares of $0.50 each, representing a volume-weighted average price per share of GBP4.54. These shares were subsequently cancelled, reducing the total issued share capital by 1.3 per cent and the CET1 ratio by 9 basis points.

The Group is accruing a foreseeable dividend in respect of the final 2021 ordinary share dividend in the third quarter. This is not an indication of the Group's final 2021 ordinary share dividend, which will be proposed by the Board at the presentation of the 2021 full-year results.

The Group's Pillar 2A requirement is expected to increase in the fourth quarter by a total of 38 basis points, of which 22 basis points must be held in CET1. Accordingly, the Group's minimum CET1 requirement is expected to increase to 10.2 per cent from 10.0 per cent.

The Group will also be subject to a regulatory change in the treatment of structural FX risk in the fourth quarter. Structural FX risk is currently assessed through the Group's Pillar 2A requirement. The PRA has clarified that this should be a Pillar 1 requirement and therefore requires the Group to risk-weight its unhedged structural FX positions. The Group currently expects this change to result in between $3 billion to $4 billion of additional market risk RWA in the fourth quarter post hedging which would reduce the CET1 ratio by between 15 and 20 basis points on a pro-forma basis. The Group may benefit from a subsequent reduction in its Pillar 2A requirement reflecting the move of structural FX risk from Pillar 2A to Pillar 1.

The Group's UK leverage ratio of 5.1 per cent is slightly lower than the 5.2 per cent ratio as at 30 June 2021. The Group's leverage ratio remains significantly above its minimum requirement of 3.7 per cent.

Page 9

Group Chief Financial Officer's review continued

Outlook

The economic recovery from the COVID-19 pandemic has continued to be uneven and punctuated by supply-chain disruption. However, we are encouraged by robust levels of export growth across many of our markets in Asia. Against this backdrop:

-- We continue to expect FY'21 income to be similar to that achieved in FY'20 on a constant currency basis, with 4Q'21 being sequentially lower, reflecting seasonality comparable to prior years, and normalising for the IFRS9 interest income adjustment. Strong underlying business momentum throughout 2021 should enable income growth to return to our 5-7% guidance range from FY'22

-- We continue to expect FY'21 operating expenses, including the impact of currency translation and performance-related pay, to be at or below $10.4 billion

-- Excluding the impact of any unforeseeable events, we expect credit impairment to remain at low levels in 4Q'21

-- We expect FY'21 CET1 to be around the top of the 13-14 per cent target range on a pro-forma basis, excluding software relief

Andy Halford

Group Chief Financial Officer

2 November 2021

Page 10

Supplementary financial information

Underlying performance by client segment

 
                                                                                      3Q'21 
                                                                ------------------------------------------------- 
                                                                                  Consumer, 
                                                                      Corporate,    Private    Central 
                                                                      Commercial          &          & 
                                                                 & Institutional   Business      other 
                                                                         Banking    Banking      items      Total 
                                                                        $million   $million   $million   $million 
--------------------------------------------------------------  ----------------  ---------  ---------  --------- 
Operating income                                                           2,226      1,430        109      3,765 
                                                                ----------------  ---------  ---------  --------- 
  External                                                                 2,115      1,348        302      3,765 
  Inter-segment                                                              111         82      (193)          - 
                                                                ----------------  ---------  ---------  --------- 
Operating expenses                                                       (1,304)    (1,097)      (193)    (2,594) 
--------------------------------------------------------------  ----------------  ---------  ---------  --------- 
Operating profit/(loss) before impairment losses and taxation                922        333       (84)      1,171 
Credit impairment                                                           (24)       (74)        (9)      (107) 
Other impairment                                                            (30)          -        (5)       (35) 
Profit from associates and joint ventures                                      -          -         46         46 
--------------------------------------------------------------  ----------------  ---------  ---------  --------- 
Underlying profit/(loss) before taxation                                     868        259       (52)      1,075 
Restructuring                                                               (32)       (10)       (57)       (99) 
Goodwill impairment                                                            -          -          -          - 
Other Items                                                                    -          -         20         20 
--------------------------------------------------------------  ----------------  ---------  ---------  --------- 
Statutory profit/(loss) before taxation                                      836        249       (89)        996 
--------------------------------------------------------------  ----------------  ---------  ---------  --------- 
Total assets                                                             390,837    138,546    287,719    817,102 
  Of which: loans and advances to customers                              197,121    135,375     31,272    363,768 
                                                                ----------------  ---------  ---------  --------- 
     loans and advances to customers                                     137,936    135,293     29,264    302,493 
     loans held at fair value through profit or loss (FVTPL)              59,185         82      2,008     61,275 
                                                                ----------------  ---------  ---------  --------- 
Total liabilities                                                        468,431    180,188    115,148    763,767 
  Of which: customer accounts(2)                                         320,516    175,999     16,477    512,992 
Risk-weighted assets                                                     162,016     52,587     52,952    267,555 
Underlying return on tangible equity (%)                                    10.6        9.9      (6.7)        7.1 
Cost-to-income ratio (%)                                                    58.6       76.7      177.1       68.9 
--------------------------------------------------------------  ----------------  ---------  ---------  --------- 
 
 
                                                                                       3Q'20 
                                                                --------------------------------------------------- 
                                                                                    Consumer, 
                                                                      Corporate,      Private    Central 
                                                                      Commercial            &          & 
                                                                 & Institutional     Business      other 
                                                                      Banking(1)   Banking(1)      items      Total 
                                                                        $million     $million   $million   $million 
--------------------------------------------------------------  ----------------  -----------  ---------  --------- 
Operating income                                                           2,044        1,462         13      3,519 
                                                                ----------------  -----------  ---------  --------- 
  External                                                                 1,975        1,266        278      3,519 
  Inter-segment                                                               69          196      (265)          - 
                                                                ----------------  -----------  ---------  --------- 
Operating expenses                                                       (1,281)      (1,039)      (160)    (2,480) 
--------------------------------------------------------------  ----------------  -----------  ---------  --------- 
Operating profit/(loss) before impairment losses and taxation                763          423      (147)      1,039 
Credit impairment                                                          (230)        (126)          3      (353) 
Other impairment                                                            (12)            -        (3)       (15) 
Profit from associates and joint ventures                                      -            -         74         74 
--------------------------------------------------------------  ----------------  -----------  ---------  --------- 
Underlying profit/(loss) before taxation                                     521          297       (73)        745 
Restructuring                                                               (18)         (12)       (14)       (44) 
Goodwill impairment                                                            -            -      (231)      (231) 
Other Items                                                                    -            -       (35)       (35) 
--------------------------------------------------------------  ----------------  -----------  ---------  --------- 
Statutory profit/(loss) before taxation                                      503          285      (353)        435 
--------------------------------------------------------------  ----------------  -----------  ---------  --------- 
Total assets                                                             371,535      124,901    257,993    754,429 
  Of which: loans and advances to customers                              194,368      122,356     19,087    335,811 
                                                                ----------------  -----------  ---------  --------- 
     loans and advances to customers                                     140,109      122,196     19,075    281,380 
     loans held at fair value through profit or loss (FVTPL)              54,259          160         12     54,431 
                                                                ----------------  -----------  ---------  --------- 
Total liabilities                                                        447,304      171,919     84,636    703,859 
  Of which: customer accounts(2)                                         297,051      168,300      6,694    472,045 
Risk-weighted assets                                                     168,907       51,096     46,661    266,664 
Underlying return on tangible equity (%)                                     6.1         11.5      (9.3)        4.4 
Cost-to-income ratio (%)                                                    62.7         71.1      nm(3)       70.5 
--------------------------------------------------------------  ----------------  -----------  ---------  --------- 
 

1 Following the Group's change in organisational structure, there has been an integration of Corporate & Institutional Banking and Commercial Banking to Corporate, Commercial & Institutional Banking; Private Banking and Retail Banking to Consumer, Private & Business Banking. Further, certain clients have been moved between the two new client segments. Prior period has been restated

2 Customer accounts includes FVTPL and repurchase agreements

3 Not meaningful

Page 11

Supplementary financial information continued

Corporate, Commercial & Institutional Banking(1)

 
                                                       Constant                            Constant                                        Constant 
                                                       currency                            currency                                        currency 
                      3Q'21       3Q'20  Change(3)  change(2,3)       2Q'21  Change(3)  change(2,3)      YTD'21      YTD'20  Change(3)  change(2,3) 
                   $million    $million          %            %    $million          %            %    $million    $million          %            % 
---------------  ----------  ----------  ---------               ----------  ---------               ----------  ----------  --------- 
Operating 
 income               2,226       2,044          9            8       2,131          4            5       6,518       6,699        (3)          (4) 
  Transaction 
   Banking              625         642        (3)          (3)         615          2            2       1,862       2,115       (12)         (13) 
                 ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
     Trade              288         244         18           17         278          4            4         831         714         16           16 
Cash Management         337         398       (15)         (16)         337          -            -       1,031       1,401       (26)         (27) 
                 ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Financial 
 Markets              1,315       1,185         11           10       1,270          4            4       3,905       3,955        (1)          (2) 
                 ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
  Macro Trading         540         518          4            4         571        (5)          (5)       1,783       2,097       (15)         (16) 
  Credit 
   Markets              522         464         13           12         495          5            6       1,458       1,207         21           20 
     Credit 
      Trading           144         129         12           11         102         41           41         377         285         32           31 
     Financing 
      Solutions 
      & 
      Issuance          378         335         13           13         393        (4)          (3)       1,081         922         17           16 
  Structured 
   Finance              156         101         54           53         120         30           30         375         281         33           32 
  Financing & 
   Securities 
   Services              98         124       (21)         (22)          85         15            9         291         288          1          (1) 
  DVA                   (1)        (22)         95           95         (1)          -           50         (2)          82      (102)        (102) 
                 ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Lending & 
 Portfolio 
 Management             268         217         24           23         243         10           12         734         638         15           13 
Wealth 
 Management               1           -         nm           nm           -         nm           nm           1           -         nm           nm 
Retail Products           -           -         nm           nm           -         nm           nm           -           1      (100)        (100) 
                 ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
  Deposits                1           -         nm           nm           -         nm           nm           1           1          -        (100) 
                 ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Other                    17           -         nm           nm           3         nm           nm          16        (10)         nm           nm 
Operating 
 expenses           (1,304)     (1,281)        (2)            -     (1,294)        (1)          (1)     (3,886)     (3,665)        (6)          (4) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Operating 
 profit before 
 impairment 
 losses and 
 taxation               922         763         21           22         837         10           10       2,632       3,034       (13)         (13) 
Credit 
 impairment            (24)       (230)         90           90         108      (122)        (121)         112     (1,337)        108          108 
Other 
 impairment            (30)        (12)      (150)        (164)         (9)         nm        (190)        (55)         103      (153)        (153) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Underlying 
 profit before 
 taxation               868         521         67           70         936        (7)          (7)       2,689       1,800         49           51 
Restructuring          (32)        (18)       (78)         (68)        (39)         18           20        (70)        (92)         24           24 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Statutory 
 profit before 
 taxation               836         503         66           70         897        (7)          (6)       2,619       1,708         53           56 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Total assets        390,837     371,535          5            5     387,689          1            1     390,837     371,535          5            5 
  Of which: 
   loans and 
   advances to 
   customers(4)     197,121     194,368          1            1     197,732          -            -     197,121     194,368          1            1 
Total 
 liabilities        468,431     447,304          5            5     452,449          4            4     468,431     447,304          5            5 
  Of which: 
   customer 
   accounts(4)      320,516     297,051          8            8     307,619          4            5     320,516     297,051          8            8 
Risk-weighted 
 assets             162,016     168,907        (4)           nm     174,613        (7)           nm     162,016     168,907        (4)           nm 
Underlying 
 return on risk 
 weighted 
 assets (%)(5)          2.0         1.2      80bps           nm         2.2    (20)bps           nm         2.1         1.4      70bps           nm 
Underlying 
 return on 
 tangible 
 equity (%)(5)         10.6         6.1     450bps           nm        11.2    (60)bps           nm        11.0         7.1     390bps           nm 
Cost-to-income 
 ratio (%)(6)          58.6        62.7        4.1          4.7        60.7        2.1          2.1        59.6        54.7      (4.9)        (4.2) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
 

1 Following the Group's change in organisational structure, there has been an integration of Corporate & Institutional Banking and Commercial Banking to Corporate, Commercial & Institutional Banking; Private Banking and Retail Banking to Consumer, Private & Business Banking. Further, certain clients have been moved between the two new client segments. Prior periods have been restated

2 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

3 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

4 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

5 Change is the basis points (bps) difference between the two periods rather than the percentage change

6 Change is the percentage points difference between the two periods rather than the percentage change

7 Not meaningful

Page 12

Supplementary financial information continued

Performance highlights

-- Underlying profit before tax of $868 million was up 67 per cent driven by lower credit impairment and an improvement in income, which included a $94 million benefit in the quarter relating to a IFRS9 interest income catch-up adjustment, partially offset by higher expenses

-- Underlying operating income of $2,226 million increased 9 per cent and was up 3 per cent excluding both DVA and the IFRS9 interest income catch-up adjustment, both primarily in Financial Markets, mainly due to an increase in Lending and Trade income as global demand continues to recover from COVID-19 related impacts

-- Loans and advances to customers were flat since 30 June 2021

-- Risk-weighted assets down $13 billion since 30 June 2021 mainly as a result of decreased credit risk RWA, with asset growth more than offset by reductions from lower RWA density, improvements in asset quality including actions concerning specific stage 3 exposures and FX

-- Return on tangible equity (RoTE) increased to 10.6 per cent from 6.1 per cent

Page 13

Supplementary financial information continued

Consumer, Private & Business Banking(1)

 
                                                        Constant                            Constant                                        Constant 
                                                        currency                            currency                                        currency 
                       3Q'21       3Q'20  Change(3)  change(2,3)       2Q'21  Change(3)  change(2,3)      YTD'21      YTD'20  Change(3)  change(2,3) 
                    $million    $million          %            %    $million          %            %    $million    $million          %            % 
----------------  ----------  ----------  ---------               ----------  ---------               ----------  ----------  --------- 
Operating income       1,430       1,462        (2)          (3)       1,438        (1)            -       4,399       4,371          1          (1) 
  Transaction 
   Banking                20          23       (13)          (9)          22        (9)            -          63          71       (11)         (13) 
                  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
     Trade                12          11          9            9          13        (8)          (8)          37          31         19           16 
                  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
     Cash 
      Management           8          12       (33)         (25)           9       (11)           13          26          40       (35)         (35) 
Lending & 
 Portfolio 
 Management               10           9         11            -          10          -            -          30          28          7            3 
Wealth 
 Management              558         572        (2)          (3)         554          1            1       1,758       1,548         14           12 
Retail Products          828         859        (4)          (5)         846        (2)          (1)       2,523       2,717        (7)          (9) 
  CCPL & other 
   unsecured 
   lending               316         309          2            1         320        (1)            -         956         908          5            3 
  Deposits               204         301       (32)         (32)         209        (2)          (1)         646       1,185       (45)         (46) 
  Mortgage & 
   Auto                  260         211         23           21         268        (3)          (1)         775         516         50           45 
  Other Retail 
   Products               48          38         26           21          49        (2)          (6)         146         108         35           33 
                  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Other                     14         (1)         nm           nm           6        133          133          25           7         nm           nm 
Operating 
 expenses            (1,097)     (1,039)        (6)          (4)     (1,093)          -          (1)     (3,195)     (3,080)        (4)          (1) 
----------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Operating profit 
 before 
 impairment 
 losses and 
 taxation                333         423       (21)         (21)         345        (3)          (2)       1,204       1,291        (7)          (7) 
Credit 
 impairment             (74)       (126)         41           41        (46)       (61)         (57)       (167)       (576)         71           72 
Other impairment           -           -         nm           nm           -         nm           nm           -         (1)        100          100 
----------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Underlying 
 profit before 
 taxation                259         297       (13)         (13)         299       (13)         (12)       1,037         714         45           46 
Restructuring           (10)        (12)         17            -        (13)         23            8        (32)        (18)       (78)         (94) 
----------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Statutory profit 
 before taxation         249         285       (13)         (13)         286       (13)         (12)       1,005         696         44           45 
----------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Total assets         138,546     124,901         11           11     137,452          1            2     138,546     124,901         11           11 
  Of which: 
   loans and 
   advances to 
   customers(4)      135,375     122,356         11           11     134,291          1            2     135,375     122,356         11           11 
Total 
 liabilities         180,188     171,919          5            5     179,967          -            1     180,188     171,919          5            5 
  Of which: 
   customer 
   accounts(4)       175,999     168,300          5            4     175,556          -            1     175,999     168,300          5            4 
Risk-weighted 
 assets               52,587      51,096          3           nm      56,164        (6)           nm      52,587      51,096          3           nm 
Underlying 
 return on risk 
 weighted assets 
 (%)(5)                  1.9         2.3    (40)bps           nm         2.1    (20)bps           nm         2.5         1.9      60bps           nm 
Underlying 
 return on 
 tangible equity 
 (%)(5)                  9.9        11.5   (160)bps           nm        11.0   (110)bps           nm        13.0         9.3     370bps           nm 
Cost-to-income 
 ratio (%)(6)           76.7        71.1      (5.6)        (5.4)        76.0      (0.7)        (0.7)        72.6        70.5      (2.1)        (1.8) 
----------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
 

1 Following the Group's change in organisational structure, there has been an integration of Corporate & Institutional Banking and Commercial Banking to Corporate, Commercial & Institutional Banking; Private Banking and Retail Banking to Consumer, Private & Business Banking. Further, certain clients have been moved between the two new client segments. Prior periods have been restated

2 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

3 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

4 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

5 Change is the basis points (bps) difference between the two periods rather than the percentage change

6 Change is the percentage points difference between the two periods rather than the percentage change

7 Not meaningful

Performance highlights

-- Underlying profit before tax of $259 million was down 13 per cent driven by lower income and higher expenses, partially offset by lower credit impairment, but was up 6 per cent excluding a $53 million accelerated recognition of an annual Bancassurance bonus in 3Q'20

-- Underlying operating income of $1,430 million was down 2 per cent, mainly due to the impact of lower interest rates on Retail Deposits, offset by the continued strong performance in Mortgage & Auto income in Asia, but was up 1 per cent excluding a $53 million accelerated recognition of an annual Bancassurance bonus in 3Q'20

-- Loans and advances to customers increased 1 per cent (up 2 per cent on a constant currency basis) since 30 June 2021

-- Return on tangible equity (RoTE) decreased from 11.5 per cent to 9.9 per cent

Page 14

Supplementary financial information continued

Central & other items (segment)

 
                                                       Constant                            Constant                                        Constant 
                                                       currency                            currency                                        currency 
                      3Q'21       3Q'20  Change(2)  change(1,2)       2Q'21  Change(2)  change(1,2)      YTD'21      YTD'20  Change(2)  change(1,2) 
                   $million    $million          %            %    $million          %            %    $million    $million          %            % 
---------------  ----------  ----------  ---------               ----------  ---------               ----------  ----------  --------- 
Operating 
 income                 109          13         nm           nm         120        (9)          (3)         466         496        (6)          (7) 
Treasury                149          40         nm           nm         137          9            9         543         543          -          (1) 
Other                  (40)        (27)       (48)          (6)        (17)      (135)         (71)        (77)        (47)       (64)         (69) 
Operating 
 expenses             (193)       (160)       (21)         (15)       (211)          9            4       (605)       (448)       (35)         (20) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Operating 
 profit/(loss) 
 before 
 impairment 
 losses and 
 taxation              (84)       (147)         43           49        (91)          8            5       (139)          48         nm           nm 
Credit 
 impairment             (9)           3         nm           nm           5         nm           nm         (5)         (7)         29            - 
Other 
 impairment             (5)         (3)       (67)        (100)           -         nm           nm         (5)         (5)          -            - 
Profit from 
 associates and 
 joint ventures          46          74       (38)         (38)          87       (47)         (47)         180         150         20           21 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Underlying 
 profit/(loss) 
 before 
 taxation              (52)        (73)         29           43           1         nm           nm          31         186       (83)         (78) 
Restructuring          (57)        (14)         nm           nm        (38)       (50)         (50)       (120)        (24)         nm           nm 
Goodwill 
 impairment               -       (231)        100          100           -         nm           nm           -       (489)        100          100 
Other items              20        (35)        157          157           -         nm           nm          20        (15)         nm           nm 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Statutory 
 profit/(loss) 
 before 
 taxation              (89)       (353)         75           76        (37)      (141)        (156)        (69)       (342)         80           82 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Total assets        287,719     257,993         12           12     270,769          6            7     287,719     257,993         12           12 
  Of which: 
   loans and 
   advances 
   to 
   customers(3)      31,272      19,087         64           63      23,153         35           37      31,272      19,087         64           63 
Total 
 liabilities        115,148      84,636         36           36     110,637          4            4     115,148      84,636         36           36 
  Of which: 
   customer 
   accounts(3)       16,477       6,694        146          146       8,417         96           97      16,477       6,694        146          146 
Risk-weighted 
 assets              52,952      46,661         13           nm      49,450          7           nm      52,952      46,661         13           nm 
Underlying 
 return on risk 
 weighted 
 assets (%)(4)        (0.4)       (0.6)      20bps           nm           -    (40)bps           nm         0.1         0.5    (40)bps           nm 
Underlying 
 return on 
 tangible 
 equity (%)(4)        (6.7)       (9.3)     260bps           nm       (9.3)     260bps           nm       (4.7)       (5.0)      30bps           nm 
Cost-to-income 
 ratio (%) 
 (excluding UK 
 bank levy)(5)        177.1          nm         nm           nm       170.8      (6.3)        (2.8)       128.5        90.3     (38.2)       (29.2) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
 

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

4 Change is the basis points (bps) difference between the two periods rather than the percentage change

5 Change is the percentage points difference between the two periods rather than the percentage change

6 Not meaningful

Performance highlights

-- Underlying loss before tax of $52 million compared to 3Q'20 loss of $73 million primarily due to increased Treasury income partly offset by lower Associates profit share as well as increased expenses and impairment

-- Expenses increased 21 per cent with an increase in performance-related pay accruals

-- Profit from associates and joint ventures, was down 38 per cent to $46 million primarily reflecting the reduction in the Group's reduced shareholding in China Bohai Bank from 19.99 per cent to 16.26 per cent

Page 15

Supplementary financial information continued

Underlying performance by region

 
                                                                                        3Q'21 
                                                                              Africa               Central 
                                                                                   &     Europe          & 
                                                                              Middle          &      other 
                                                                     Asia       East   Americas      items      Total 
                                                                 $million   $million   $million   $million   $million 
--------------------------------------------------------------  ---------  ---------  ---------  ---------  --------- 
Operating income                                                    2,629        657        514       (35)      3,765 
Operating expenses                                                (1,661)      (401)      (350)      (182)    (2,594) 
--------------------------------------------------------------  ---------  ---------  ---------  ---------  --------- 
Operating profit/(loss) before impairment losses and taxation         968        256        164      (217)      1,171 
Credit impairment                                                    (84)       (33)         11        (1)      (107) 
Other impairment                                                      (2)        (1)       (14)       (18)       (35) 
Profit from associates and joint ventures                              45          -          -          1         46 
--------------------------------------------------------------  ---------  ---------  ---------  ---------  --------- 
Underlying profit/(loss) before taxation                              927        222        161      (235)      1,075 
Restructuring                                                        (36)        (7)       (27)       (29)       (99) 
Goodwill impairment                                                     -          -          -          -          - 
Other items                                                             -          -          -         20         20 
--------------------------------------------------------------  ---------  ---------  ---------  ---------  --------- 
Statutory profit/(loss) before taxation                               891        215        134      (244)        996 
--------------------------------------------------------------  ---------  ---------  ---------  ---------  --------- 
Total assets                                                      475,407     56,609    275,427      9,659    817,102 
  Of which: loans and advances to customers                       263,296     28,415     72,057          -    363,768 
                                                                ---------  ---------  ---------  ---------  --------- 
     loans and advances to customers                              246,226     25,914     30,353          -    302,493 
     loans held at fair value through profit or loss (FVTPL)       17,070      2,501     41,704          -     61,275 
                                                                ---------  ---------  ---------  ---------  --------- 
Total liabilities                                                 428,911     40,276    228,363     66,217    763,767 
  Of which: customer accounts(2)                                  343,425     33,307    136,260          -    512,992 
Risk-weighted assets                                              172,205     49,040     48,476    (2,166)    267,555 
Cost-to-income ratio (%)                                             63.2       61.0       68.1      nm(3)       68.9 
--------------------------------------------------------------  ---------  ---------  ---------  ---------  --------- 
 
 
                                                                                      3Q'20 
                                                            ---------------------------------------------------------- 
                                                                            Africa      Europe     Central 
                                                                                 &           &           & 
                                                                            Middle                   other 
                                                               Asia(1)        East    Americas       items       Total 
                                                              $million    $million    $million    $million    $million 
----------------------------------------------------------  ----------  ----------  ----------  ----------  ---------- 
Operating income                                                 2,505         590         423           1       3,519 
Operating expenses                                             (1,601)       (426)       (360)        (93)     (2,480) 
----------------------------------------------------------  ----------  ----------  ----------  ----------  ---------- 
Operating profit/(loss) before impairment losses and 
 taxation                                                          904         164          63        (92)       1,039 
Credit impairment                                                (157)       (154)        (37)         (5)       (353) 
Other impairment                                                     -           1          11        (27)        (15) 
Profit from associates and joint ventures                           74           -           -           -          74 
----------------------------------------------------------  ----------  ----------  ----------  ----------  ---------- 
Underlying profit/(loss) before taxation                           821          11          37       (124)         745 
Restructuring                                                     (22)        (11)         (8)         (3)        (44) 
Goodwill impairment                                                  -           -           -       (231)       (231) 
Other items                                                       (35)           -           -           -        (35) 
----------------------------------------------------------  ----------  ----------  ----------  ----------  ---------- 
Statutory profit/(loss) before taxation                            764           -          29       (358)         435 
----------------------------------------------------------  ----------  ----------  ----------  ----------  ---------- 
Total assets                                                   449,081      61,472     233,772      10,104     754,429 
  Of which: loans and advances to customers                    237,138      31,408      67,265           -     335,811 
                                                            ----------  ----------  ----------  ----------  ---------- 
     loans and advances to customers                           224,338      29,567      27,475           -     281,380 
     loans held at fair value through profit or loss 
      (FVTPL)                                                   12,800       1,841      39,790           -      54,431 
                                                            ----------  ----------  ----------  ----------  ---------- 
Total liabilities                                              397,411      40,275     225,332      40,841     703,859 
  Of which: customer accounts(2)                               316,667      32,630     122,748           -     472,045 
Risk-weighted assets                                           172,986      52,524      43,818     (2,664)     266,664 
Cost-to-income ratio (%)                                          63.9        72.2        85.1       nm(3)        70.5 
----------------------------------------------------------  ----------  ----------  ----------  ----------  ---------- 
 

1 Following the Group's change in organisational structure, there has been an integration of Greater China & North Asia and ASEAN & South Asia to Asia. Prior period has been restated

2 Customer accounts includes FVTPL and repurchase agreements

3 Not meaningful

Page 16

Supplementary financial information continued

Asia(1)

 
                                                       Constant                            Constant                                        Constant 
                                                       currency                            currency                                        currency 
                      3Q'21       3Q'20  Change(3)  change(2,3)       2Q'21  Change(3)  change(2,3)      YTD'21      YTD'20  Change(3)  change(2,3) 
                   $million    $million          %            %    $million          %            %    $million    $million          %            % 
---------------  ----------  ----------  ---------               ----------  ---------               ----------  ----------  --------- 
Operating 
 income               2,629       2,505          5            4       2,646        (1)            -       8,092       8,025          1          (1) 
Operating 
 expenses           (1,661)     (1,601)        (4)          (2)     (1,726)          4            3     (4,959)     (4,628)        (7)          (4) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Operating 
 profit before 
 impairment 
 losses and 
 taxation               968         904          7            7         920          5            6       3,133       3,397        (8)          (9) 
Credit 
 impairment            (84)       (157)         46           46          11         nm           nm       (131)     (1,284)         90           90 
Other 
 impairment             (2)           -         nm           nm        (15)         87           88        (17)         150      (111)        (111) 
Profit from 
 associates and 
 joint ventures          45          74       (39)         (39)          89       (49)         (48)         181         148         22           22 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Underlying 
 profit before 
 taxation               927         821         13           13       1,005        (8)          (7)       3,166       2,411         31           30 
Restructuring          (36)        (22)       (64)         (48)        (22)       (64)         (48)        (63)        (72)         13           15 
Other items               -        (35)        100          100           -         nm           nm           -        (35)        100          100 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Statutory 
 profit before 
 taxation               891         764         17           17         983        (9)          (8)       3,103       2,304         35           34 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Total assets        475,407     449,081          6            6     467,933          2            3     475,407     449,081          6            6 
  Of which: 
   loans and 
   advances to 
   customers(4)     263,296     237,138         11           11     255,630          3            4     263,296     237,138         11           11 
Total 
 liabilities        428,911     397,411          8            8     418,583          2            3     428,911     397,411          8            8 
  Of which: 
   customer 
   accounts(4)      343,425     316,667          8            8     334,639          3            4     343,425     316,667          8            8 
Risk-weighted 
 assets             172,205     172,986          -           nm     182,172        (5)           nm     172,205     172,986          -           nm 
Cost-to-income 
 ratio (%)(5)          63.2        63.9        0.7          1.1        65.2        2.0          2.1        61.3        57.7      (3.6)        (3.3) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
 

1 Following the Group's change in organisational structure, there has been an integration of Greater China & North Asia and ASEAN & South Asia to Asia. Prior periods have been restated

2 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

3 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

4 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

5 Change is the percentage points difference between the two periods rather than the percentage change

6 Not meaningful

Performance highlights

-- Underlying profit before tax of $927 million was up 13 per cent as significantly lower credit impairment and higher income more than offset the higher expenses

-- Underlying operating income of $2,629 million was up 5 per cent, with the benefit from the IFRS9 interest income catch-up broadly offset by the non-repeat of the accelerated recognition of an annual Bancassurance bonus in 3Q'20.

-- Loans and advances to customers were up 3 per cent since 30 June 2021, driven by growth in Trade in Hong Kong and Korea, Lending in Hong Kong and Mortgages in Korea, Hong Kong, and Singapore

-- Risk-weighted assets were down $10 billion since 30 June 2021, mainly from Korea and India driven by model changes and improvements in asset quality following client repayments

Page 17

Supplementary financial information continued

Africa & Middle East

 
                                                       Constant                            Constant                                        Constant 
                                                       currency                            currency                                        currency 
                      3Q'21       3Q'20  Change(2)  change(1,2)       2Q'21  Change(2)  change(1,2)      YTD'21      YTD'20  Change(2)  change(1,2) 
                   $million    $million          %            %    $million          %            %    $million    $million          %            % 
---------------  ----------  ----------  ---------               ----------  ---------               ----------  ----------  --------- 
Operating 
 income                 657         590         11           12         660          -            -       1,907       1,845          3            4 
Operating 
 expenses             (401)       (426)          6            7       (422)          5            4     (1,216)     (1,219)          -            1 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Operating 
 profit before 
 impairment 
 losses and 
 taxation               256         164         56           65         238          8            7         691         626         10           15 
Credit 
 impairment            (33)       (154)         79           81          47      (170)        (167)           7       (524)        101          102 
Other 
 impairment             (1)           1      (200)        (200)           -         nm           nm         (1)         (1)          -            - 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Underlying 
 profit before 
 taxation               222          11         nm           nm         285     (22.1)         (21)         697         101         nm           nm 
Restructuring           (7)        (11)         36           11         (2)         nm        (167)        (10)        (20)         50           44 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Statutory 
 profit before 
 taxation               215           -         nm           nm         283      (2.1)        (0.9)         687          81         nm           nm 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Total assets         56,609      61,472        (8)          (8)      57,797        (2)          (1)      56,609      61,472        (8)          (8) 
  Of which: 
   loans and 
   advances to 
   customers(3)      28,415      31,408       (10)         (10)      29,825        (5)          (4)      28,415      31,408       (10)         (10) 
Total 
 liabilities         40,276      40,275          -            -      39,464          2            3      40,276      40,275          -            - 
  Of which: 
   customer 
   accounts(3)       33,307      32,630          2            2      32,847          1            3      33,307      32,630          2            2 
Risk-weighted 
 assets              49,040      52,524        (7)        nm(5)      52,596        (7)        nm(5)      49,040      52,524        (7)        nm(5) 
Cost-to-income 
 ratio (%)(4)          61.0        72.2       11.2         12.5        63.9        2.9          2.6        63.8        66.1        2.3          3.3 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
 

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

4 Change is the percentage points difference between the two periods rather than the percentage change

5 Not meaningful

Performance highlights

-- Underlying profit before tax of $222 million was significantly higher driven by reduced credit impairment, higher income, and lower expenses

-- Underlying operating income of $657 million was 11 per cent higher and was up 5 per cent on a constant currency basis excluding the $41 million benefit in the quarter relating to the IFRS9 interest income catch-up adjustment, mainly due to growth in Financial Markets and Wealth Management

-- Loans and advances to customers were down 5 per cent, while customer accounts were up 1 per cent since 30 June 2021

-- Risk-weighted assets were down $4 billion since 30 June 2021

Page 18

Supplementary financial information continued

Europe & Americas

 
                                                       Constant                            Constant                                        Constant 
                                                       currency                            currency                                        currency 
                      3Q'21       3Q'20  Change(2)  change(1,2)       2Q'21  Change(2)  change(1,2)      YTD'21      YTD'20  Change(2)  change(1,2) 
                   $million    $million          %            %    $million          %            %    $million    $million          %            % 
---------------  ----------  ----------  ---------               ----------  ---------               ----------  ----------  --------- 
Operating 
 income                 514         423         22           21         443         16           17       1,507       1,518        (1)          (2) 
Operating 
 expenses             (350)       (360)          3            4       (359)          3            2     (1,075)     (1,021)        (5)          (3) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Operating 
 profit before 
 impairment 
 losses and 
 taxation               164          63        160          165          84         95           95         432         497       (13)         (12) 
Credit 
 impairment              11        (37)        130          126          15       (27)         (29)          73       (117)        162          161 
Other 
 impairment            (14)          11         nm           nm           5         nm           nm         (7)          13      (154)        (154) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Underlying 
 profit before 
 taxation               161          37         nm           nm         104         55           54         498         393         27           29 
Restructuring          (27)         (8)         nm           nm         (1)         nm           nm        (47)        (18)      (161)        (161) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Statutory 
 profit before 
 taxation               134          29         nm           nm         103         30           27         451         375         20           23 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Total assets        275,427     233,772         18           18     261,041          6            6     275,427     233,772         18           18 
  Of which: 
   loans and 
   advances to 
   customers(3)      72,057      67,265          7            7      69,721          3            4      72,057      67,265          7            7 
Total 
 liabilities        228,363     225,332          1            1     213,713          7            7     228,363     225,332          1            1 
  Of which: 
   customer 
   accounts(3)      136,260     122,748         11           11     124,106         10           10     136,260     122,748         11           11 
Risk-weighted 
 assets              48,476      43,818         11        nm(5)      48,556          -        nm(5)      48,476      43,818         11        nm(5) 
Cost-to-income 
 ratio (%)(4)          68.1        85.1       17.0         17.3        81.0       12.9         12.8        71.3        67.3      (4.0)        (3.3) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
 

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

4 Change is the percentage points difference between the two periods rather than the percentage change

5 Not meaningful

Performance highlights

-- Underlying profit before tax quadrupled to $161 million, driven by higher income, lower expenses, and lower impairment

-- Underlying operating income of $514 million was up 22 per cent driven by increased Financial Markets income and Trade as global trade activity continues to improve from the peak of the pandemic

-- Loans and advances to customers grew 3 per cent since 30 June 2021, while customer accounts grew 10 per cent

Page 19

Supplementary financial information continued

Central & other items (region)

 
                                                       Constant                            Constant                                        Constant 
                                                       currency                            currency                                        currency 
                      3Q'21       3Q'20  Change(2)  change(1,2)       2Q'21  Change(2)  change(1,2)      YTD'21      YTD'20  Change(2)  change(1,2) 
                   $million    $million          %            %    $million          %            %    $million    $million          %            % 
---------------  ----------  ----------  ---------               ----------  ---------               ----------  ----------  --------- 
Operating 
 income                (35)           1         nm           nm        (60)         42           46       (123)         178      (169)        (169) 
Operating 
 expenses             (182)        (93)       (96)         (71)        (91)      (100)        (111)       (436)       (325)       (34)         (12) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Operating loss 
 before 
 impairment 
 losses and 
 taxation             (217)        (92)      (136)        (103)       (151)       (44)         (47)       (559)       (147)         nm        (162) 
Credit 
 impairment             (1)         (5)         80          100         (6)         83          100         (9)           5         nm           nm 
Other 
 impairment            (18)        (27)         33           36           1         nm           nm        (35)        (65)         46           46 
Profit from 
 associates 
 and joint 
 ventures                 1           -         nm          200         (2)        150          200         (1)           2      (150)        (200) 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Underlying loss 
 before 
 taxation             (235)       (124)       (90)         (66)       (158)       (49)         (52)       (604)       (205)      (195)        (121) 
Restructuring          (29)         (3)         nm           nm        (65)         55           53       (102)        (24)         nm           nm 
Goodwill 
 impairment               -       (231)        100          100           -         nm           nm           -       (489)        100          100 
Other items              20           -         nm           nm           -         nm           nm          20          20          -            - 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Statutory loss 
 before 
 taxation             (244)       (358)         32           35       (223)        (9)         (12)       (686)       (698)          2           10 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
Total assets          9,659      10,104        (4)          (4)       9,139          6            6       9,659      10,104        (4)          (4) 
Total 
 liabilities         66,217      40,841         62           62      71,293        (7)          (7)      66,217      40,841         62           62 
Risk-weighted 
 assets             (2,166)     (2,664)         19           nm     (3,097)         30           nm     (2,166)     (2,664)         19           nm 
Cost-to-income 
 ratio (%) 
 (excluding UK 
 bank levy)(3)           nm          nm         nm           nm       nm(4)         nm           nm          nm          nm         nm           nm 
---------------  ----------  ----------  ---------  -----------  ----------  ---------  -----------  ----------  ----------  ---------  ----------- 
 

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

3 Change is the percentage points difference between the two periods rather than the percentage change

4 Not meaningful

Performance highlights

-- Underlying loss before tax of $235 million compared to 3Q'20 loss of $124 million, with income declining $36 million due to lower returns paid to Treasury on the equity provided to the regions in a lower interest rate environment and increased expenses reflecting an increase in performance-related pay accruals and an increase in investment spend in digital ventures

Page 20

Supplementary financial information continued

Underlying performance by key market

 
                                                                   3Q'21 
                     ------------------------------------------------------------------------------------------------- 
                          Hong 
                          Kong      Korea      China  Singapore      India  Indonesia        UAE         UK         US 
                      $million   $million   $million   $million   $million   $million   $million   $million   $million 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Operating income           846        270        271        435        392         51        144        190        214 
Operating expenses       (507)      (173)      (184)      (264)      (186)       (44)       (90)      (163)      (126) 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Operating profit 
 before 
 impairment losses 
 and taxation              339         97         87        171        206          7         54         27         88 
Credit impairment          (4)       (15)        (4)         21       (20)        (1)          1         11          3 
Other impairment             -          -          -        (1)          -          -          -         22          - 
Profit from 
 associates 
 and joint ventures          -          -         46          -          -          -          -        (1)          - 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Underlying profit 
 before taxation           335         82        129        191        186          6         55         59         91 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Total assets 
 employed              177,271     65,976     36,182     92,456     29,200      4,947     18,896    185,498     75,029 
  Of which: loans 
   and 
   advances to 
   customers(1)         88,452     45,993     17,698     57,575     16,234      2,038      9,373     49,901     17,478 
Total liabilities 
 employed              167,434     57,062     33,501     90,726     21,144      3,794     14,462    138,547     76,600 
  Of which: 
   customer 
   accounts(1)         138,644     44,687     25,566     69,508     15,597      2,583     11,542     84,562     43,502 
Cost-to-income 
 ratio (%)                59.9       64.1       67.9       60.7       47.4       86.3       62.5       85.8       58.9 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 

1 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

 
                                                                   2Q'21 
                     ------------------------------------------------------------------------------------------------- 
                          Hong 
                          Kong      Korea      China  Singapore      India  Indonesia        UAE         UK         US 
                      $million   $million   $million   $million   $million   $million   $million   $million   $million 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Operating income           895        296        268        361        301         47        139        187        197 
Operating expenses       (495)      (202)      (192)      (285)      (181)       (48)       (87)      (166)      (140) 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Operating 
 profit/(loss) 
 before impairment 
 losses and 
 taxation                  400         94         76         76        120        (1)         52         21         57 
Credit impairment         (16)        (5)       (23)         34         53          5         30        (8)        (1) 
Other impairment          (16)          -          -          -          -          -          -         28          - 
Profit from 
 associates 
 and joint ventures          -          -         88          -          -          -          -          -          - 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Underlying profit 
 before taxation           368         89        141        110        173          4         82         41         56 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Total assets 
 employed              172,431     66,476     39,738     88,779     28,882      4,877     18,961    180,913     64,471 
  Of which: loans 
   and 
   advances to 
   customers(1)         86,230     43,537     18,499     56,440     14,611      2,058      9,998     48,283     16,733 
Total liabilities 
 employed              162,983     57,206     34,658     86,302     20,674      3,567     13,856    130,551     69,891 
  Of which: 
   customer 
   accounts(1)         133,956     45,637     25,635     66,750     14,819      2,523     11,012     76,725     39,189 
Cost-to-income 
 ratio (%)                55.3       68.2       71.6       78.9       60.1      102.1       62.6       88.8       71.1 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 

1 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

Page 21

Supplementary financial information continued

 
                                                                   3Q'20 
                     ------------------------------------------------------------------------------------------------- 
                          Hong 
                          Kong      Korea      China  Singapore      India  Indonesia        UAE         UK         US 
                      $million   $million   $million   $million   $million   $million   $million   $million   $million 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Operating income           842        243        231        380        287         59        137        203        174 
Operating expenses       (483)      (183)      (163)      (241)      (174)       (39)      (103)      (184)      (135) 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Operating profit 
 before 
 impairment losses 
 and taxation              359         60         68        139        113         20         34         19         39 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Credit impairment         (27)        (8)          1       (12)       (18)       (11)       (73)       (46)         11 
Other impairment             -          -          -          -          -          -          -         12          - 
Profit from 
 associates 
 and joint ventures          -          -         74          -          -          -          -          -          - 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Underlying 
 profit/(loss) 
 before taxation           332         52        143        127         95          9       (39)       (15)         50 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
Total assets 
 employed              167,971     60,223     36,614     84,548     28,139      5,081     21,940    157,167     62,079 
  Of which: loans 
   and 
   advances to 
   customers(1)         81,175     38,908     16,562     51,674     15,348      2,394     11,074     43,804     19,699 
Total liabilities 
 employed              157,611     52,560     30,394     81,822     19,629      3,449     14,224    150,049     64,411 
  Of which: 
   customer 
   accounts(1)         128,328     40,715     23,727     62,976     14,860      2,513     11,488     79,203     37,350 
Cost-to-income 
 ratio (%)                57.4       75.3       70.6       63.4       60.6       66.1       75.2       90.6       77.6 
-------------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 

1 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

Quarterly underlying operating income by product

 
                             3Q'21       2Q'21       1Q'21       4Q'20       3Q'20       2Q'20       1Q'20       4Q'19 
                          $million    $million    $million    $million    $million    $million    $million    $million 
----------------------  ----------  ----------  ----------  ----------  ----------  ----------  ----------  ---------- 
Transaction Banking            645         637         643         652         665         721         800         834 
                        ----------  ----------  ----------  ----------  ----------  ----------  ----------  ---------- 
  Trade                        300         291         277         249         255         230         260         259 
  Cash Management              345         346         366         403         410         491         540         575 
                        ----------  ----------  ----------  ----------  ----------  ----------  ----------  ---------- 
Financial Markets            1,315       1,270       1,320         957       1,185       1,230       1,540       1,038 
                        ----------  ----------  ----------  ----------  ----------  ----------  ----------  ---------- 
  Macro Trading                540         571         672         435         518         754         825         458 
  Credit Markets               522         495         441         414         464         476         267         376 
     Credit Trading            144         102         131         119         129         181        (25)          83 
     Financing 
      Solutions & 
      Issuance                 378         393         310         295         335         295         292         293 
  Structured Finance           156         120          99         101         101          88          92         160 
  Financing & 
   Securities Services          98          85         108          76         124         113          51         116 
  DVA                          (1)         (1)           -        (69)        (22)       (201)         305        (72) 
                        ----------  ----------  ----------  ----------  ----------  ----------  ----------  ---------- 
Lending & Portfolio 
 Management                    278         253         233         218         226         235         205         207 
Wealth Management              559         554         646         442         572         440         536         415 
Retail Products                828         846         849         848         859         913         946         960 
                        ----------  ----------  ----------  ----------  ----------  ----------  ----------  ---------- 
  CCPL & other 
   unsecured lending           316         320         320         303         309         295         304         311 
  Deposits                     205         209         233         271         301         413         472         484 
  Mortgage & Auto              260         268         247         234         211         169         136         130 
  Other Retail 
   Products                     47          49          49          40          38          36          34          35 
                        ----------  ----------  ----------  ----------  ----------  ----------  ----------  ---------- 
Treasury                       149         137         257          92          40         178         325         196 
Other                          (9)         (8)        (19)        (10)        (28)           3        (25)        (53) 
----------------------  ----------  ----------  ----------  ----------  ----------  ----------  ----------  ---------- 
Total underlying 
 operating income            3,765       3,689       3,929       3,199       3,519       3,720       4,327       3,597 
----------------------  ----------  ----------  ----------  ----------  ----------  ----------  ----------  ---------- 
 

Page 22

Supplementary financial information continued

Earnings per ordinary share

 
                                         3Q'21       3Q'20  Change       2Q'21  Change      YTD'21      YTD'20  Change 
                                      $million    $million       %    $million       %    $million    $million       % 
----------------------------------  ----------  ----------          ----------          ----------  ---------- 
Profit/(loss) for the period 
 attributable 
 to equity holders                         767         161   nm(1)         829     (7)       2,695       1,227     120 
----------------------------------  ----------  ----------  ------  ----------  ------  ----------  ----------  ------ 
Non-controlling interest                   (4)         (7)      43         (6)      33        (18)        (25)      28 
Dividend payable on preference 
 shares 
 and AT1 classified as equity            (119)        (31)   nm(1)       (132)      10       (315)       (263)    (20) 
----------------------------------  ----------  ----------  ------  ----------  ------  ----------  ----------  ------ 
Profit/(loss) for the period 
 attributable to ordinary 
 shareholders                              644         123   nm(1)         691     (7)       2,362         939     152 
----------------------------------  ----------  ----------  ------  ----------  ------  ----------  ----------  ------ 
 
Items normalised: 
Provision for regulatory matters             -           -   nm(1)           -   nm(1)           -        (14)   nm(1) 
Restructuring                               99          44     125          90      10         222         134      66 
Goodwill impairment                          -         231   nm(1)           -   nm(1)           -         489   nm(1) 
Net (gain)/loss on sale of 
 businesses                               (20)          35   nm(1)           -   nm(1)        (20)          29   nm(1) 
Tax on normalised items                    (7)         (5)    (40)         (8)      13        (22)        (11)   (100) 
----------------------------------  ----------  ----------  ------  ----------  ------  ----------  ----------  ------ 
Underlying profit/(loss)                   716         428      67         773     (7)       2,542       1,566      62 
----------------------------------  ----------  ----------  ------  ----------  ------  ----------  ----------  ------ 
 
Basic - Weighted average number of 
 shares (millions)                       3,105       3,151   nm(1)       3,121   nm(1)       3,124       3,162     nm1 
Diluted - Weighted average number 
 of shares (millions)                    3,152       3,192   nm(1)       3,169   nm(1)       3,174       3,200     nm1 
 
Basic earnings per ordinary share 
 (cents)(2)                               20.7         3.9    16.8        22.1   (1.4)        75.6        29.7    45.9 
----------------------------------  ----------  ----------  ------  ----------  ------  ----------  ----------  ------ 
Diluted earnings per ordinary 
 share (cents)(2)                         20.4         3.9    16.5        21.8   (1.4)        74.4        29.3    45.1 
----------------------------------  ----------  ----------  ------  ----------  ------  ----------  ----------  ------ 
Underlying basic earnings per 
 ordinary 
 share (cents)(2)                         23.1        13.6     9.5        24.8   (1.7)        81.4        49.5    31.9 
----------------------------------  ----------  ----------  ------  ----------  ------  ----------  ----------  ------ 
Underlying diluted earnings per 
 ordinary 
 share (cents)(2)                         22.7        13.4     9.3        24.4   (1.7)        80.1        48.9    31.2 
----------------------------------  ----------  ----------  ------  ----------  ------  ----------  ----------  ------ 
 

1 Not meaningful

2 Change is the percentage points difference between the two periods rather than the percentage change

Page 23

Supplementary financial information continued

Return on tangible equity (RoTE)

 
                                        3Q'21       3Q'20  Change       2Q'21   Change      YTD'21      YTD'20  Change 
                                     $million    $million       %    $million        %    $million    $million       % 
---------------------------------  ----------  ----------          ----------           ----------  ---------- 
Average parent company 
 Shareholders' Equity                  46,709      45,400       3      46,460        -      46,399      44,845       3 
Less Preference share premium         (1,494)     (1,494)       -     (1,494)        -     (1,494)     (1,494)       - 
Less Average intangible assets        (5,267)     (4,972)       -     (5,129)      (3)     (5,155)     (5,008)     (3) 
---------------------------------  ----------  ----------  ------  ----------  -------  ----------  ----------  ------ 
Average Ordinary Shareholders' 
 Tangible Equity                       39,948      38,934       3      39,837        -      39,750      38,343       4 
---------------------------------  ----------  ----------  ------  ----------  -------  ----------  ----------  ------ 
 
Profit/(loss) for the period 
 attributable 
 to equity holders                        767         161   nm(1)         829      (7)       2,695       1,227     120 
---------------------------------  ----------  ----------  ------  ----------  -------  ----------  ----------  ------ 
Non-controlling interests                 (4)         (7)      43         (6)       33        (18)        (25)      28 
Dividend payable on preference 
 shares 
 and AT1 classified as equity           (119)        (31)   nm(1)       (132)       10       (315)       (263)    (20) 
---------------------------------  ----------  ----------  ------  ----------  -------  ----------  ----------  ------ 
Profit/(loss) for the period 
 attributable to ordinary 
 shareholders                             644         123   nm(1)         691      (7)       2,362         939     152 
---------------------------------  ----------  ----------  ------  ----------  -------  ----------  ----------  ------ 
 
Items normalised: 
Provision for regulatory matters            -           -   nm(1)           -    nm(1)           -        (14)   nm(1) 
Restructuring                              99          44     125          90       10         222         134      66 
Goodwill Impairment                         -         231   nm(1)           -    nm(1)           -         489   nm(1) 
Net (gain)/loss on sale of 
 businesses                              (20)          35   nm(1)           -    nm(1)        (20)          29   nm(1) 
Tax on normalised items                   (7)         (5)    (40)         (8)       13        (22)        (11)   (100) 
---------------------------------  ----------  ----------  ------  ----------  -------  ----------  ----------  ------ 
Underlying profit for the period 
 attributable 
 to ordinary shareholders                 716         428      67         773      (7)       2,542       1,566      62 
---------------------------------  ----------  ----------  ------  ----------  -------  ----------  ----------  ------ 
 
Underlying Return on Tangible 
 Equity                                  7.1%        4.4%  270bps        7.8%  (70)bps        8.6%        5.5%  310bps 
---------------------------------  ----------  ----------  ------  ----------  -------  ----------  ----------  ------ 
Statutory Return on Tangible 
 Equity                                  6.4%        1.3%  510bps        7.0%  (60)bps        7.9%        3.3%  460bps 
---------------------------------  ----------  ----------  ------  ----------  -------  ----------  ----------  ------ 
 

1 Not meaningful

Net tangible asset value per share

 
                                                  30.09.21    30.09.20  Change    30.06.21  Change    31.12.20  Change 
                                                  $million    $million       %    $million       %    $million       % 
----------------------------------------------  ----------  ----------          ----------  ------  ----------  ------ 
Parent company shareholders equity                  46,666      45,743       2      46,752       -      45,886       2 
Less Preference share premium                      (1,494)     (1,494)       -     (1,494)       -     (1,494)       - 
Less Intangible assets                             (5,347)     (4,916)     (9)     (5,187)     (3)     (5,063)     (6) 
----------------------------------------------  ----------  ----------  ------  ----------  ------  ----------  ------ 
Net shareholders tangible equity                    39,825      39,333       1      40,071     (1)      39,329       1 
----------------------------------------------  ----------  ----------  ------  ----------  ------  ----------  ------ 
 
Ordinary shares in issue, excluding own shares 
 (millions)                                          3,078       3,149     (2)       3,119     (1)       3,150     (2) 
----------------------------------------------  ----------  ----------  ------  ----------  ------  ----------  ------ 
Net Tangible Asset Value per share (cents)(1)        1,294       1,249      45       1,285       9       1,249      45 
----------------------------------------------  ----------  ----------  ------  ----------  ------  ----------  ------ 
 

1 Change is cents difference between the two periods rather than percentage change

Page 24

Underlying versus statutory results reconciliations

Reconciliations between underlying and statutory results are set out in the tables below:

Operating income by client segment

 
                                                    3Q'21 
                              ------------------------------------------------- 
                                                Consumer, 
                                    Corporate,    Private    Central 
                                    Commercial          &          & 
                               & Institutional   Business      other 
                                       Banking    Banking      items      Total 
                                      $million   $million   $million   $million 
----------------------------  ----------------  ---------  ---------  --------- 
Underlying operating income              2,226      1,430        109      3,765 
Restructuring                             (12)          -        (9)       (21) 
Other items                                  -          -         20         20 
----------------------------  ----------------  ---------  ---------  --------- 
Statutory operating income               2,214      1,430        120      3,764 
----------------------------  ----------------  ---------  ---------  --------- 
 
 
                                                     3Q'20 
                              --------------------------------------------------- 
                                                  Consumer, 
                                    Corporate,      Private    Central 
                                    Commercial            &          & 
                               & Institutional     Business      other 
                                    Banking(1)   Banking(1)      items      Total 
                                      $million     $million   $million   $million 
----------------------------  ----------------  -----------  ---------  --------- 
Underlying operating income              2,044        1,462         13      3,519 
Restructuring                               21            -          1         22 
Other items                                  -            -       (35)       (35) 
----------------------------  ----------------  -----------  ---------  --------- 
Statutory operating income               2,065        1,462       (21)      3,506 
----------------------------  ----------------  -----------  ---------  --------- 
 

1 Following the Group's change in organisational structure, there has been an integration of Corporate & Institutional Banking and Commercial Banking to Corporate, Commercial & Institutional Banking; Private Banking and Retail Banking to Consumer, Private & Business Banking. Further, certain clients have been moved between the two new client segments. Prior period has been restated

Operating income by region

 
                                                      3Q'21 
                              ----------------------------------------------------- 
                                            Africa               Central 
                                                 &     Europe          & 
                                            Middle          &      other 
                                   Asia       East   Americas      items      Total 
                               $million   $million   $million   $million   $million 
----------------------------  ---------  ---------  ---------  ---------  --------- 
Underlying operating income       2,629        657        514       (35)      3,765 
Restructuring                         -          -          -       (21)       (21) 
Other items                           -          -          -         20         20 
----------------------------  ---------  ---------  ---------  ---------  --------- 
Statutory operating income        2,629        657        514       (36)      3,764 
----------------------------  ---------  ---------  ---------  ---------  --------- 
 
 
                                                        3Q'20 
                              ---------------------------------------------------------- 
                                              Africa      Europe     Central 
                                                   &           &           & 
                                              Middle                   other 
                                 Asia(1)        East    Americas       items       Total 
                                $million    $million    $million    $million    $million 
----------------------------  ----------  ----------  ----------  ----------  ---------- 
Underlying operating income        2,505         590         423           1       3,519 
Restructuring                         19           3           -           -          22 
Other items                         (35)           -           -           -        (35) 
----------------------------  ----------  ----------  ----------  ----------  ---------- 
Statutory operating income         2,489         593         423           1       3,506 
----------------------------  ----------  ----------  ----------  ----------  ---------- 
 

1 Following the Group's change in organisational structure, there has been an integration of Greater China & North Asia and ASEAN & South Asia to Asia. Prior period has been restated

Page 25

Underlying versus statutory results reconciliations continued

Profit before taxation

 
                                                                          3Q'21 
                                    ---------------------------------------------------------------------------------- 
                                                                                                   Net gain 
                                                                                              on businesses 
                                                      Provision                                   disposed/ 
                                                 for regulatory                    Goodwill            held 
                                    Underlying          matters  Restructuring   impairment        for sale  Statutory 
                                      $million         $million       $million     $million        $million   $million 
----------------------------------  ----------  ---------------  -------------  -----------  --------------  --------- 
Operating income                         3,765                -           (21)            -              20      3,764 
Operating expenses                     (2,594)                -           (53)            -               -    (2,647) 
----------------------------------  ----------  ---------------  -------------  -----------  --------------  --------- 
Operating profit/(loss) before 
 impairment losses and taxation          1,171                -           (74)            -              20      1,117 
Credit impairment                        (107)                -            (1)            -               -      (108) 
Other impairment                          (35)                -           (24)            -               -       (59) 
Profit from associates and joint 
 ventures                                   46                -              -            -               -         46 
----------------------------------  ----------  ---------------  -------------  -----------  --------------  --------- 
Profit/(loss) before taxation            1,075                -           (99)            -              20        996 
----------------------------------  ----------  ---------------  -------------  -----------  --------------  --------- 
 
 
                                                                          3Q'20 
                                    ---------------------------------------------------------------------------------- 
                                                                                                   Net loss 
                                                                                              on businesses 
                                                      Provision                                   disposed/ 
                                                 for regulatory                    Goodwill            held 
                                    Underlying          matters  Restructuring   impairment        for sale  Statutory 
                                      $million         $million       $million     $million        $million   $million 
----------------------------------  ----------  ---------------  -------------  -----------  --------------  --------- 
Operating income                         3,519                -             22            -            (35)      3,506 
Operating expenses                     (2,480)                -           (35)            -               -    (2,515) 
----------------------------------  ----------  ---------------  -------------  -----------  --------------  --------- 
Operating profit/(loss) before 
 impairment losses and taxation          1,039                -           (13)            -            (35)        991 
Credit impairment                        (353)                -            (5)            -               -      (358) 
Other impairment                          (15)                -           (18)        (231)               -      (264) 
Profit from associates and joint 
 ventures                                   74                -            (8)            -               -         66 
----------------------------------  ----------  ---------------  -------------  -----------  --------------  --------- 
Profit/(loss) before taxation              745                -           (44)        (231)            (35)        435 
----------------------------------  ----------  ---------------  -------------  -----------  --------------  --------- 
 

Page 26

Underlying versus statutory results reconciliations continued

Profit before taxation by client segment

 
                                                                                      3Q'21 
                                                                ------------------------------------------------- 
                                                                                  Consumer, 
                                                                      Corporate,    Private    Central 
                                                                      Commercial          &          & 
                                                                 & Institutional   Business      other 
                                                                         Banking    Banking      items      Total 
                                                                        $million   $million   $million   $million 
--------------------------------------------------------------  ----------------  ---------  ---------  --------- 
Operating income                                                           2,226      1,430        109      3,765 
                                                                ----------------  ---------  ---------  --------- 
  External                                                                 2,115      1,348        302      3,765 
  Inter-segment                                                              111         82      (193)          - 
                                                                ----------------  ---------  ---------  --------- 
Operating expenses                                                       (1,304)    (1,097)      (193)    (2,594) 
--------------------------------------------------------------  ----------------  ---------  ---------  --------- 
Operating profit/(loss) before impairment losses and taxation                922        333       (84)      1,171 
Credit impairment                                                           (24)       (74)        (9)      (107) 
Other impairment                                                            (30)          -        (5)       (35) 
Profit from associates and joint ventures                                      -          -         46         46 
--------------------------------------------------------------  ----------------  ---------  ---------  --------- 
Underlying profit/(loss) before taxation                                     868        259       (52)      1,075 
Restructuring                                                               (32)       (10)       (57)       (99) 
Goodwill impairment                                                            -          -          -          - 
Other items                                                                    -          -         20         20 
--------------------------------------------------------------  ----------------  ---------  ---------  --------- 
Statutory profit/(loss) before taxation                                      836        249       (89)        996 
--------------------------------------------------------------  ----------------  ---------  ---------  --------- 
 
 
                                                                                       3Q'20 
                                                                --------------------------------------------------- 
                                                                                    Consumer, 
                                                                      Corporate,      Private    Central 
                                                                      Commercial            &          & 
                                                                 & Institutional     Business      other 
                                                                      Banking(1)   Banking(1)      items      Total 
                                                                        $million     $million   $million   $million 
--------------------------------------------------------------  ----------------  -----------  ---------  --------- 
Operating income                                                           2,044        1,462         13      3,519 
                                                                ----------------  -----------  ---------  --------- 
  External                                                                 1,975        1,266        278      3,519 
  Inter-segment                                                               69          196      (265)          - 
                                                                ----------------  -----------  ---------  --------- 
Operating expenses                                                       (1,281)      (1,039)      (160)    (2,480) 
--------------------------------------------------------------  ----------------  -----------  ---------  --------- 
Operating profit/(loss) before impairment losses and taxation                763          423      (147)      1,039 
Credit impairment                                                          (230)        (126)          3      (353) 
Other impairment                                                            (12)            -        (3)       (15) 
Profit from associates and joint ventures                                      -            -         74         74 
--------------------------------------------------------------  ----------------  -----------  ---------  --------- 
Underlying profit/(loss) before taxation                                     521          297       (73)        745 
Restructuring                                                               (18)         (12)       (14)       (44) 
Goodwill impairment                                                            -            -      (231)      (231) 
Other items                                                                    -            -       (35)       (35) 
--------------------------------------------------------------  ----------------  -----------  ---------  --------- 
Statutory profit/(loss) before taxation                                      503          285      (353)        435 
--------------------------------------------------------------  ----------------  -----------  ---------  --------- 
 

1 Following the Group's change in organisational structure, there has been an integration of Corporate & Institutional Banking and Commercial Banking to Corporate, Commercial & Institutional Banking; Private Banking and Retail Banking to Consumer, Private & Business Banking. Further, certain clients have been moved between the two new client segments. Prior period has been restated

Page 27

Underlying versus statutory results reconciliations continued

Profit before taxation by region

 
                                                                                        3Q'21 
                                                                ----------------------------------------------------- 
                                                                              Africa               Central 
                                                                                   &     Europe          & 
                                                                              Middle          &      other 
                                                                     Asia       East   Americas      items      Total 
                                                                 $million   $million   $million   $million   $million 
--------------------------------------------------------------  ---------  ---------  ---------  ---------  --------- 
Operating income                                                    2,629        657        514       (35)      3,765 
Operating expenses                                                (1,661)      (401)      (350)      (182)    (2,594) 
--------------------------------------------------------------  ---------  ---------  ---------  ---------  --------- 
Operating profit/(loss) before impairment losses and taxation         968        256        164      (217)      1,171 
Credit impairment                                                    (84)       (33)         11        (1)      (107) 
Other impairment                                                      (2)        (1)       (14)       (18)       (35) 
Profit from associates and joint ventures                              45          -          -          1         46 
--------------------------------------------------------------  ---------  ---------  ---------  ---------  --------- 
Underlying profit/(loss) before taxation                              927        222        161      (235)      1,075 
Restructuring                                                        (36)        (7)       (27)       (29)       (99) 
Goodwill impairment                                                     -          -          -          -          - 
Other items                                                             -          -          -         20         20 
--------------------------------------------------------------  ---------  ---------  ---------  ---------  --------- 
Statutory profit/(loss) before taxation                               891        215        134      (244)        996 
--------------------------------------------------------------  ---------  ---------  ---------  ---------  --------- 
 
 
                                                                                      3Q'20 
                                                            ---------------------------------------------------------- 
                                                                            Africa      Europe     Central 
                                                                                 &           &           & 
                                                                            Middle                   other 
                                                               Asia(1)        East    Americas       items       Total 
                                                              $million    $million    $million    $million    $million 
----------------------------------------------------------  ----------  ----------  ----------  ----------  ---------- 
Operating income                                                 2,505         590         423           1       3,519 
Operating expenses                                             (1,601)       (426)       (360)        (93)     (2,480) 
----------------------------------------------------------  ----------  ----------  ----------  ----------  ---------- 
Operating profit/(loss) before impairment losses and 
 taxation                                                          904         164          63        (92)       1,039 
Credit impairment                                                (157)       (154)        (37)         (5)       (353) 
Other impairment                                                     -           1          11        (27)        (15) 
Profit from associates and joint ventures                           74           -           -           -          74 
----------------------------------------------------------  ----------  ----------  ----------  ----------  ---------- 
Underlying profit/(loss) before taxation                           821          11          37       (124)         745 
Restructuring                                                     (22)        (11)         (8)         (3)        (44) 
Goodwill impairment                                                  -           -           -       (231)       (231) 
Other items                                                       (35)           -           -           -        (35) 
----------------------------------------------------------  ----------  ----------  ----------  ----------  ---------- 
Statutory profit/(loss) before taxation                            764           -          29       (358)         435 
----------------------------------------------------------  ----------  ----------  ----------  ----------  ---------- 
 

1 Following the Group's change in organisational structure, there has been an integration of Greater China & North Asia and ASEAN & South Asia to Asia. Prior period has been restated

Page 28

Underlying versus statutory results reconciliations continued

Return on tangible equity (RoTE)

 
                                                                              3Q'21 
                                                           ------------------------------------------- 
                                                                             Consumer, 
                                                                 Corporate,    Private  Central 
                                                                 Commercial          &        & 
                                                            & Institutional   Business    other 
                                                                    Banking    Banking    Items  Total 
                                                                          %          %        %      % 
---------------------------------------------------------  ----------------  ---------  -------  ----- 
Underlying RoTE                                                        10.6        9.9    (6.7)    7.1 
  Provision for regulatory matters                                        -          -        -      - 
  Restructuring 
     Of which: Income                                                 (0.2)          -    (0.5)  (0.2) 
     Of which: Expenses                                               (0.4)      (0.5)    (1.1)  (0.5) 
     Of which: Credit impairment                                          -          -        -      - 
     Of which: Other impairment                                           -          -    (1.4)  (0.2) 
     Of which: Profit from associates and joint ventures                  -          -        -      - 
  Goodwill impairment                                                     -          -        -      - 
  Net gain on businesses disposed/held for sale                           -          -      1.0    0.2 
  Tax on normalised items                                               0.2        0.1        -      - 
---------------------------------------------------------  ----------------  ---------  -------  ----- 
Statutory RoTE                                                         10.2        9.5    (8.7)    6.4 
---------------------------------------------------------  ----------------  ---------  -------  ----- 
 
 
                                                                               3Q'20 
                                                           ---------------------------------------------- 
                                                                                Consumer, 
                                                                                  Private 
                                                                                        & 
                                                                                           Central 
                                                                                 Business        & 
                                                                 Corporate, 
                                                                 Commercial 
                                                            & Institutional                  other 
                                                                 Banking(1)    Banking(1)    Items  Total 
                                                                          %             %        %      % 
---------------------------------------------------------  ----------------  ------------  -------  ----- 
Underlying RoTE                                                         6.1          11.5    (9.3)    4.4 
  Provision for regulatory matters                                        -             -        -      - 
  Restructuring 
     Of which: Income                                                   0.3             -        -    0.2 
     Of which: Expenses                                               (0.3)         (0.6)    (0.4)  (0.4) 
     Of which: Credit impairment                                      (0.1)             -        -  (0.1) 
     Of which: Other impairment                                       (0.3)             -        -  (0.2) 
     Of which: Profit from associates and joint ventures                  -             -    (0.5)  (0.1) 
  Goodwill impairment                                                     -             -   (13.4)  (2.4) 
  Net loss on businesses disposed/held for sale                           -             -    (2.0)  (0.4) 
  Tax on normalised items                                               0.1           0.2    (0.1)    0.3 
---------------------------------------------------------  ----------------  ------------  -------  ----- 
Statutory RoTE                                                          5.8          11.1   (25.7)    1.3 
---------------------------------------------------------  ----------------  ------------  -------  ----- 
 

1 Following the Group's change in organisational structure, there has been an integration of Corporate & Institutional Banking and Commercial Banking to Corporate, Commercial & Institutional Banking; Private Banking and Retail Banking to Consumer, Private & Business Banking. Further, certain clients have been moved between the two new client segments. Prior period has been restated

Page 29

Underlying versus statutory results reconciliations continued

Earnings per ordinary share (EPS)

 
                                                                   3Q'21 
               ------------------------------------------------------------------------------------------------------------- 
                                                                        Gains 
                                                                      arising 
                                                                           on 
                                                                   repurchase 
                            Provision                    Profit     of senior    Net gain 
                                  for                      from           and     on Sale                  Tax on 
                           regulatory                     joint  subordinated          of    Goodwill  normalised 
               Underlying     matters  Restructuring    venture   liabilities  Businesses  impairment       items  Statutory 
                $ million   $ million      $ million  $ million     $ million   $ million   $ million   $ million  $ million 
-------------  ----------  ----------  -------------  ---------  ------------  ----------  ----------  ----------  --------- 
Profit for 
 the year 
 attributable 
 to ordinary 
 shareholders         716           -           (99)          -             -          20           -           7        644 
Basic - 
 Weighted 
 average 
 number of 
 shares 
 (millions)         3,105                                                                                              3,105 
Basic 
 earnings per 
 ordinary 
 share 
 (cents)             23.1                                                                                               20.7 
-------------  ----------  ----------  -------------  ---------  ------------  ----------  ----------  ----------  --------- 
 
 
                                                                   3Q'20 
               ------------------------------------------------------------------------------------------------------------- 
                                                                        Gains 
                                                                      arising 
                                                                           on 
                                                                   repurchase 
                            Provision                    Profit     of senior    Net loss 
                                  for                      from           and     on Sale                  Tax on 
                           regulatory                     joint  subordinated          of    Goodwill  normalised 
               Underlying     matters  Restructuring    venture   liabilities  Businesses  impairment       items  Statutory 
                $ million   $ million      $ million  $ million     $ million   $ million   $ million   $ million  $ million 
-------------  ----------  ----------  -------------  ---------  ------------  ----------  ----------  ----------  --------- 
Profit for 
 the year 
 attributable 
 to ordinary 
 shareholders         428           -           (44)          -             -        (35)       (231)           5        123 
Basic - 
 Weighted 
 average 
 number of 
 shares 
 (millions)         3,151                                                                                              3,151 
Basic 
 earnings per 
 ordinary 
 share 
 (cents)             13.6                                                                                                3.9 
-------------  ----------  ----------  -------------  ---------  ------------  ----------  ----------  ----------  --------- 
 

Page 30

Risk review

Credit quality by client segment

 
                                                                      30.09.21 
                               --------------------------------------------------------------------------------------- 
                                                              Customers 
                                          ------------------------------------------------- 
                                                            Consumer, 
                                                Corporate,    Private    Central 
                                                Commercial          &          & 
                                           & Institutional   Business      other   Customer       Undrawn    Financial 
                                   Banks           Banking    Banking      items      Total   commitments   guarantees 
Amortised cost                  $million          $million   $million   $million   $million      $million     $million 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Stage 1                           45,042           123,108    132,872     28,160    284,140       145,383       53,517 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
  - Strong                        34,102            73,563    127,499     28,010    229,072       128,243       35,812 
  - Satisfactory                  10,940            49,545      5,373        150     55,068        17,140       17,705 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Stage 2                              730            13,513      2,080        166     15,759         9,979        2,616 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
  - Strong                           115             2,133      1,432          -      3,565         3,180          367 
  - Satisfactory                      42             9,944        295          -     10,239         5,742        1,680 
  - Higher risk                      573             1,436        353        166      1,955         1,057          569 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Of which (stage 2): 
  - Less than 30 days past 
   due                                 2               142        291          -        433             -            - 
  - More than 30 days past 
   due                                23                18        357          -        375             -            - 
Stage 3, credit-impaired 
 financial assets                      -             6,503      1,681          -      8,184            14          939 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Gross balance(1)                  45,772           143,124    136,633     28,326    308,083       155,376       57,072 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Stage 1                             (11)              (51)      (358)        (2)      (411)          (33)          (8) 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
  - Strong                           (3)              (12)      (287)        (2)      (301)          (20)          (2) 
  - Satisfactory                     (8)              (39)       (71)          -      (110)          (13)          (6) 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Stage 2                              (7)             (367)      (168)          -      (535)          (63)         (30) 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
  - Strong                             -              (34)       (89)          -      (123)           (4)          (7) 
  - Satisfactory                     (3)             (234)       (30)          -      (264)          (47)         (13) 
  - Higher risk                      (4)              (99)       (49)          -      (148)          (12)         (10) 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Of which (stage 2): 
  - Less than 30 days past 
   due                                 -               (3)       (30)          -       (33)             -            - 
  - More than 30 days past 
   due                                 -               (3)       (49)          -       (52)             -            - 
Stage 3, credit-impaired 
 financial assets                      -           (3,837)      (807)          -    (4,644)             -        (211) 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Total credit impairment             (18)           (4,255)    (1,333)        (2)    (5,590)          (96)        (249) 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Net carrying value                45,754           138,869    135,300     28,324    302,493 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Stage 1                             0.0%              0.0%       0.3%       0.0%       0.1%          0.0%         0.0% 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
  - Strong                          0.0%              0.0%       0.2%       0.0%       0.1%          0.0%         0.0% 
  - Satisfactory                    0.1%              0.1%       1.3%       0.0%       0.2%          0.1%         0.0% 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Stage 2                             1.0%              2.7%       8.1%       0.0%       3.4%          0.6%         1.1% 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
  - Strong                          0.0%              1.6%       6.2%       0.0%       3.5%          0.1%         1.9% 
  - Satisfactory                    7.1%              2.4%      10.2%       0.0%       2.6%          0.8%         0.8% 
  - Higher risk                     0.7%              6.9%      13.9%       0.0%       7.6%          1.1%         1.8% 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Of which (stage 2): 
  - Less than 30 days past 
   due                              0.0%              2.1%      10.3%       0.0%       7.6%          0.0%         0.0% 
  - More than 30 days past 
   due                              0.0%             16.7%      13.7%       0.0%      13.9%          0.0%         0.0% 
Stage 3, credit-impaired 
 financial assets (S3)              0.0%             59.0%      48.0%       0.0%      56.7%          0.0%        22.5% 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Cover ratio                         0.0%              3.0%       1.0%       0.0%       1.8%          0.1%         0.4% 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
 
Fair value through profit or 
loss (FVTPL) 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Performing                        21,832            59,115         82      2,008     61,205             -            - 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
  - Strong                        18,092            40,077         82      2,005     42,164             -            - 
  - Satisfactory                   3,740            19,038          -          3     19,041             -            - 
  - Higher risk                        -                 -          -          -          -             -            - 
                               ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Defaulted (CG13-14)                    -                70          -          -         70             -            - 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Gross balance (FVTPL)(2)          21,832            59,185         82      2,008     61,275             -            - 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
Net carrying value (incl 
 FVTPL)                           67,586           198,054    135,382     30,332    363,768             -            - 
-----------------------------  ---------  ----------------  ---------  ---------  ---------  ------------  ----------- 
 

1 Loans and advances includes reverse repurchase agreements and other similar secured lending of $8,836 million under Customers and of $501 million under Banks, held at amortised cost

2 Loans and advances includes reverse repurchase agreements and other similar secured lending of $51,687 million under Customers and of $17,723 million under Banks, held at fair value through profit or loss

Page 31

Risk review continued

 
                                                                     30.06.21 
                             ----------------------------------------------------------------------------------------- 
                                                             Customers 
                                        --------------------------------------------------- 
                                              Corporate,    Consumer,    Central 
                                              Commercial      Private          & 
                                         & Institutional   & Business      other   Customer       Undrawn    Financial 
                                 Banks           Banking      Banking      items      Total   commitments   Guarantees 
Amortised cost                $million          $million     $million   $million   $million      $million     $million 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Stage 1                         44,989           124,382      131,690     21,218    277,290       139,795       51,171 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
  - Strong                      33,591            74,198      126,179     21,019    221,396       120,626       34,374 
  - Satisfactory                11,398            50,184        5,511        199     55,894        19,169       16,797 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Stage 2                            212            15,440        2,194          -     17,634        10,620        2,585 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
  - Strong                         120             2,138        1,491          -      3,629         4,181          485 
  - Satisfactory                    62            11,709          323          -     12,032         5,369        1,602 
  - Higher risk                     30             1,593          380          -      1,973         1,070          498 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Of which (stage 2): 
  - Less than 30 days past 
   due                               -               175          319          -        494             -            - 
  - More than 30 days past 
   due                               -               170          384          -        554             -            - 
Stage 3, credit-impaired 
 financial assets                    -             7,430        1,628          -      9,058             6          920 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Gross balance(1)                45,201           147,252      135,512     21,218    303,982       150,421       54,676 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Stage 1                           (11)              (74)        (371)        (2)      (447)          (31)         (20) 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
  - Strong                         (3)              (24)        (310)        (2)      (336)          (18)         (13) 
  - Satisfactory                   (8)              (50)         (61)          -      (111)          (13)          (7) 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Stage 2                            (2)             (357)        (187)          -      (544)          (48)         (27) 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
  - Strong                           -              (44)         (90)          -      (134)           (6)          (1) 
  - Satisfactory                   (2)             (217)         (35)          -      (252)          (31)         (14) 
  - Higher risk                      -              (96)         (62)          -      (158)          (11)         (12) 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Of which (stage 2): 
  - Less than 30 days past 
   due                               -                 -         (35)          -       (35)             -            - 
  - More than 30 days past 
   due                               -               (8)         (62)          -       (70)             -            - 
Stage 3, credit-impaired 
 financial assets                    -           (4,230)        (758)          -    (4,988)           (1)        (191) 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Total credit impairment           (13)           (4,661)      (1,316)        (2)    (5,979)          (80)        (238) 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Net carrying value              45,188           142,591      134,196     21,216    298,003 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Stage 1                           0.0%              0.1%         0.3%       0.0%       0.2%          0.0%         0.0% 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
  - Strong                        0.0%              0.0%         0.2%       0.0%       0.2%          0.0%         0.0% 
  - Satisfactory                  0.1%              0.1%         1.1%       0.0%       0.2%          0.1%         0.0% 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Stage 2                           0.9%              2.3%         8.5%       0.0%       3.1%          0.5%         1.0% 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
  - Strong                        0.0%              2.1%         6.0%       0.0%       3.7%          0.1%         0.2% 
  - Satisfactory                  3.2%              1.9%        10.8%       0.0%       2.1%          0.6%         0.9% 
  - Higher risk                   0.0%              6.0%        16.3%       0.0%       8.0%          1.0%         2.4% 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Of which (stage 2): 
  - Less than 30 days past 
   due                            0.0%              0.0%        11.0%       0.0%       7.1%          0.0%         0.0% 
  - More than 30 days past 
   due                            0.0%              4.7%        16.1%       0.0%      12.6%          0.0%         0.0% 
Stage 3, credit-impaired 
 financial assets (S3)            0.0%             56.9%        46.6%       0.0%      55.1%         16.7%        20.8% 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Cover ratio                       0.0%              3.2%         1.0%       0.0%       2.0%          0.1%         0.4% 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
 
Fair value through profit 
or loss (FVTPL) 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Performing                      22,388            56,448           99        547     57,094             -            - 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
  - Strong                      18,919            37,076           98        544     37,718             -            - 
  - Satisfactory                 3,469            19,357            1          3     19,361             -            - 
  - Higher risk                      -                15            -          -         15             -            - 
                             ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Defaulted (CG13-14)                  -                79            -          -         79             -            - 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Gross balance (FVTPL)(2)        22,388            56,527           99        547     57,173             -            - 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
Net carrying value (incl 
 FVTPL)                         67,576           199,118      134,295     21,763    355,176             -            - 
---------------------------  ---------  ----------------  -----------  ---------  ---------  ------------  ----------- 
 

1 Loans and advances includes reverse repurchase agreements and other similar secured lending of $4,584 million under Customers and of $620 million under Banks, held at amortised cost

2 Loans and advances includes reverse repurchase agreements and other similar secured lending of $46,788 million under Customers and of $17,563 million under Banks, held at fair value through profit or loss

Page 32

Risk review continued

Credit impairment charge (restated)(1)

 
                                                     9 months ended 30.09.21             9 months ended 30.09.20 
                                                ----------------------------------  ---------------------------------- 
                                                   Stage 1                             Stage 1 
                                                       & 2     Stage 3       Total         & 2     Stage 3       Total 
                                                  $million    $million    $million    $million    $million    $million 
----------------------------------------------  ----------  ----------  ----------  ----------  ----------  ---------- 
Ongoing business portfolio 
Corporate, Commercial & Institutional 
 Banking(1)                                           (51)        (61)       (112)         446         891       1,337 
Consumer, Private & Business Banking(1)               (30)         197         167         322         254         576 
Central & others                                         6         (1)           5           9         (2)           7 
----------------------------------------------  ----------  ----------  ----------  ----------  ----------  ---------- 
Credit impairment charge                              (75)         135          60         777       1,143       1,920 
 
Restructuring business portfolio 
Others                                                 (3)           -         (3)           -          14          14 
----------------------------------------------  ----------  ----------  ----------  ----------  ----------  ---------- 
Credit impairment charge                               (3)           -         (3)           -          14          14 
 
Total credit impairment charge                        (78)         135          57         777       1,157       1,934 
----------------------------------------------  ----------  ----------  ----------  ----------  ----------  ---------- 
 

1 Following the Group's change in organisational structure, there has been an integration of Corporate & Institutional Banking and Commercial Banking to Corporate, Commercial & Institutional Banking; Private Banking and Retail Banking to Consumer, Private & Business Banking. Further, certain clients have been moved between the two new client segments. Prior period has been restated

COVID-19 relief measures

 
                                                                           Africa & Middle 
                                                     Asia                        East                Europe & Americas 
                Outstanding          % of  Outstanding          % of  Outstanding          % of  Outstanding          % of 
Segment            $million  portfolio(1)     $million  portfolio(1)     $million  portfolio(1)     $million  portfolio(1) 
--------------  -----------  ------------  -----------                -----------  ------------  -----------  ------------ 
Credit card & 
 Personal 
 loans                  235            2%           69            1%          166            8% 
Mortgages & 
 Auto                   672            1%          660            1%           12            1% 
Business 
 Banking                371            4%          371            4% 
--------------  -----------  ------------  -----------  ------------  -----------  ------------  -----------  ------------ 
Total 
 Consumer, 
 Private & 
 Business 
 Banking              1,278            1%        1,100            1%          178            6% 
--------------  -----------  ------------  -----------  ------------  -----------  ------------  -----------  ------------ 
Corporate, 
 Commercial & 
 Institutional 
 Banking                675                        457                        208                         10 
--------------  -----------  ------------  -----------  ------------  -----------  ------------  -----------  ------------ 
Total at 30 
 September 
 2021                 1,953            1%        1,557                        386                         10 
--------------  -----------  ------------  -----------  ------------  -----------  ------------  -----------  ------------ 
 

1 Percentage of portfolio represents the outstanding amount as a percentage of the gross loans and advances to banks and customers by product and segment and total loans and advances to banks and customers

Page 33

Risk review continued

Vulnerable sectors

Maximum Exposure

 
                                                               30.09.21 
                 ----------------------------------------------------------------------------------------------------- 
                        Maximum                                                                               Total on 
                     on-balance                                   Undrawn     Financial                              & 
                 sheet exposure                               commitments    guarantees                    off-balance 
                        (net of                                   (net of       (net of                          sheet 
                         credit              Net on-balance        credit        credit  Net off-balance           net 
                    impairment)  Collateral  sheet exposure   impairment)   impairment)   sheet exposure      exposure 
Amortised Cost         $million    $million        $million      $million      $million         $million      $million 
---------------  --------------  ----------  --------------  ------------  ------------  ---------------  ------------ 
Industry: 
Aviation(1)               3,798       2,164           1,634         1,233           456            1,689         3,323 
Commodity 
 Traders                  9,708         350           9,358         2,365         6,418            8,783        18,141 
Metals & Mining           3,811         558           3,253         2,822           687            3,509         6,762 
Commercial Real 
 Estate                  18,506       6,395          12,111         6,403           279            6,682        18,793 
Hotels & 
 Tourism                  2,435         981           1,454         1,258           112            1,370         2,824 
Oil & Gas                 7,350       1,146           6,204         8,132         5,625           13,757        19,961 
---------------  --------------  ----------  --------------  ------------  ------------  ---------------  ------------ 
Total                    45,608      11,594          34,014        22,213        13,577           35,790        69,804 
---------------  --------------  ----------  --------------  ------------  ------------  ---------------  ------------ 
Total 
 Corporate, 
 Commercial 
 & 
 Institutional 
 Banking                138,869      26,268         112,601        93,435        49,344          142,779       255,380 
---------------  --------------  ----------  --------------  ------------  ------------  ---------------  ------------ 
Total Group             348,247     136,005         212,242       155,280        56,823          212,103       424,345 
---------------  --------------  ----------  --------------  ------------  ------------  ---------------  ------------ 
 
 
                                                               30.06.21 
                 ----------------------------------------------------------------------------------------------------- 
                        Maximum                                                                               Total on 
                     on-balance                                   Undrawn     Financial                              & 
                 sheet exposure                               commitments    guarantees                    off-balance 
                        (net of                                   (net of       (net of                          sheet 
                         credit              Net on-balance        credit        credit  Net off-balance           net 
                    impairment)  Collateral  sheet exposure   impairment)   impairment)   sheet exposure      exposure 
Amortised Cost         $million    $million        $million      $million      $million         $million      $million 
---------------  --------------  ----------  --------------  ------------  ------------  ---------------  ------------ 
Industry: 
Aviation(1)               4,033       2,068           1,965         1,422           455            1,877         3,842 
Commodity 
 Traders                  9,732         594           9,138         1,800         5,554            7,354        16,492 
Metals & Mining           4,138         415           3,723         2,774           708            3,482         7,205 
Commercial Real 
 Estate                  18,904       7,985          10,919         5,197           298            5,495        16,414 
Hotels & 
 Tourism                  2,585       1,150           1,435         1,262            98            1,360         2,795 
Oil & Gas                 8,590         981           7,609         7,236         4,925           12,161        19,770 
---------------  --------------  ----------  --------------  ------------  ------------  ---------------  ------------ 
Total                    47,982      13,193          34,789        19,691        12,038           31,729        66,518 
---------------  --------------  ----------  --------------  ------------  ------------  ---------------  ------------ 
Total 
 Corporate, 
 Commercial 
 & 
 Institutional 
 Banking                142,591      27,730         114,861        86,568        47,471          134,039       248,900 
---------------  --------------  ----------  --------------  ------------  ------------  ---------------  ------------ 
Total Group             343,191     134,731         208,460       150,341        54,438          204,779       413,239 
---------------  --------------  ----------  --------------  ------------  ------------  ---------------  ------------ 
 

1 In addition to the aviation sector loan exposures, the Group owns $3.3 billion (30 June 2021: $3.4 billion) of aircraft under operating leases.

Page 34

Risk review continued

Loans and advances by stage

 
                                                                           30.09.21 
                ------------------------------------------------------------------------------------------------------------------------------ 
                           Stage 1                         Stage 2                         Stage 3                          Total 
                ------------------------------  ------------------------------  ------------------------------  ------------------------------ 
                               Total       Net                 Total       Net                 Total       Net                 Total       Net 
                   Gross      Credit  Carrying     Gross      Credit  Carrying     Gross      Credit  Carrying     Gross      Credit  Carrying 
                 Balance  Impairment    Amount   Balance  Impairment    Amount   Balance  Impairment    Amount   Balance  Impairment    Amount 
Amortised Cost  $million    $million  $million  $million    $million  $million  $million    $million  $million  $million    $million  $million 
--------------  --------  ----------  --------  --------  ----------  --------  --------  ----------  --------  --------  ----------  -------- 
Industry: 
Aviation           1,636           -     1,636     1,979        (16)     1,963       256        (57)       199     3,871        (73)     3,798 
Commodity 
 Traders           9,186         (2)     9,184       208         (5)       203       977       (656)       321    10,371       (663)     9,708 
Metals & 
 Mining            3,279           -     3,279       447        (24)       423       225       (116)       109     3,951       (140)     3,811 
Commercial 
 Real Estate      16,898        (10)    16,888     1,384        (16)     1,368       442       (192)       250    18,724       (218)    18,506 
Hotels & 
 Tourism           1,199           -     1,199     1,124        (27)     1,097       189        (50)       139     2,512        (77)     2,435 
Oil & Gas          5,592         (6)     5,586     1,528        (53)     1,475       505       (216)       289     7,625       (275)     7,350 
--------------  --------  ----------  --------  --------  ----------  --------  --------  ----------  --------  --------  ----------  -------- 
Total             37,790        (18)    37,772     6,670       (141)     6,529     2,594     (1,287)     1,307    47,054     (1,446)    45,608 
--------------  --------  ----------  --------  --------  ----------  --------  --------  ----------  --------  --------  ----------  -------- 
Total 
 Corporate, 
 Commercial & 
 Institutional 
 Banking         123,108        (51)   123,057    13,513       (367)    13,146     6,503     (3,837)     2,666   143,124     (4,255)   138,869 
--------------  --------  ----------  --------  --------  ----------  --------  --------  ----------  --------  --------  ----------  -------- 
Total Group      329,182       (422)   328,760    16,489       (542)    15,947     8,184     (4,644)     3,540   353,855     (5,608)   348,247 
--------------  --------  ----------  --------  --------  ----------  --------  --------  ----------  --------  --------  ----------  -------- 
 
 
                                                                           30.06.21 
                ------------------------------------------------------------------------------------------------------------------------------ 
                           Stage 1                         Stage 2                         Stage 3                          Total 
                ------------------------------  ------------------------------  ------------------------------  ------------------------------ 
                               Total       Net                 Total       Net                 Total       Net                 Total       Net 
                   Gross      Credit  Carrying     Gross      Credit  Carrying     Gross      Credit  Carrying     Gross      Credit  Carrying 
                 Balance  Impairment    Amount   Balance  Impairment    Amount   Balance  Impairment    Amount   Balance  Impairment    Amount 
Amortised Cost  $million    $million  $million  $million    $million  $million  $million    $million  $million  $million    $million  $million 
--------------  --------  ----------  --------  --------  ----------  --------  --------  ----------  --------  --------  ----------  -------- 
Industry: 
Aviation           1,992           -     1,992     1,887        (11)     1,876       225        (60)       165     4,104        (71)     4,033 
Commodity 
 Traders           9,346         (3)     9,343       240         (2)       238       842       (691)       151    10,428       (696)     9,732 
Metals & 
 Mining            3,337         (3)     3,334       714        (25)       689       210        (95)       115     4,261       (123)     4,138 
Commercial 
 Real Estate      16,995        (17)    16,978     1,720        (20)     1,700       434       (208)       226    19,149       (245)    18,904 
Hotels & 
 Tourism           1,188         (1)     1,187     1,336        (40)     1,296       136        (34)       102     2,660        (75)     2,585 
Oil & Gas          6,821         (4)     6,817     1,587        (58)     1,529       469       (225)       244     8,877       (287)     8,590 
--------------  --------  ----------  --------  --------  ----------  --------  --------  ----------  --------  --------  ----------  -------- 
Total             39,679        (28)    39,651     7,484       (156)     7,328     2,316     (1,313)     1,003    49,479     (1,497)    47,982 
--------------  --------  ----------  --------  --------  ----------  --------  --------  ----------  --------  --------  ----------  -------- 
Total 
 Corporate, 
 Commercial & 
 Institutional 
 Banking         124,382        (74)   124,308    15,440       (357)    15,083     7,430     (4,230)     3,200   147,252     (4,661)   142,591 
--------------  --------  ----------  --------  --------  ----------  --------  --------  ----------  --------  --------  ----------  -------- 
Total Group      322,279       (458)   321,821    17,846       (546)    17,300     9,058     (4,988)     4,070   349,183     (5,992)   343,191 
--------------  --------  ----------  --------  --------  ----------  --------  --------  ----------  --------  --------  ----------  -------- 
 

Page 35

Capital review

Capital ratios

 
                 30.09.21  30.06.21  Change(4)  31.12.20  Change(4) 
---------------  --------  --------  ---------  --------  --------- 
CET1                14.6%     14.1%        0.5     14.4%        0.2 
Tier 1 capital      17.2%     16.4%        0.8     16.5%        0.7 
Total capital       22.0%     21.1%        0.9     21.2%        0.8 
---------------  --------  --------  ---------  --------  --------- 
 

CRD Capital base(1)

 
                                                                30.09.21    30.06.21  Change(5)    31.12.20  Change(5) 
                                                                $million    $million          %    $million          % 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
CET1 instruments and reserves 
Capital instruments and the related share premium accounts         5,528       5,548          -       5,564        (1) 
                                                              ----------  ----------  ---------  ----------  --------- 
Of which: share premium accounts                                   3,989       3,989          -       3,989          - 
                                                              ----------  ----------  ---------  ----------  --------- 
Retained earnings(2)                                              25,210      25,695        (2)      25,723        (2) 
Accumulated other comprehensive income (and other reserves)       11,936      12,278        (3)      12,688        (6) 
Non-controlling interests (amount allowed in consolidated 
 CET1)                                                               197         191          3         180          9 
Independently reviewed interim and year-end profits                2,691       1,924         40         718        275 
Foreseeable dividends                                              (744)       (315)      (136)       (481)       (55) 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
CET1 capital before regulatory adjustments                        44,818      45,321        (1)      44,392          1 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
CET1 regulatory adjustments                                                                                          - 
Additional value adjustments (prudential valuation 
 adjustments)                                                      (569)       (632)         10       (490)       (16) 
Intangible assets (net of related tax liability)(3)              (4,164)     (4,072)        (2)     (4,274)          3 
Deferred tax assets that rely on future profitability 
 (excludes those arising from temporary differences)               (152)       (109)       (39)       (138)       (10) 
Fair value reserves related to net losses on cash flow 
 hedges                                                               24          38       (37)          52       (54) 
Deduction of amounts resulting from the calculation of 
 excess expected loss                                              (696)       (864)         19       (701)          1 
Net gains on liabilities at fair value resulting from 
 changes 
 in own credit risk                                                   45          53       (15)          52       (13) 
Defined-benefit pension fund assets                                 (62)        (60)        (3)        (40)       (55) 
Fair value gains arising from the institution's own credit 
 risk related to derivative liabilities                             (45)        (46)          2        (48)          6 
Exposure amounts which could qualify for risk weighting of 
 1250%                                                              (32)        (40)         20        (26)       (23) 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
Total regulatory adjustments to CET1                             (5,651)     (5,732)          1     (5,613)        (1) 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
CET1 capital                                                      39,167      39,589        (1)      38,779          1 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
Additional Tier 1 capital (AT1) instruments                        6,811       6,313          8       5,632         21 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
AT1 regulatory adjustments                                          (20)        (20)          -        (20)          - 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
Tier 1 capital                                                    45,958      45,882          -      44,391          4 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
                                                                                                                     - 
                                                              ----------  ----------  ---------  ----------  --------- 
Tier 2 capital instruments                                        12,943      13,309        (3)      12,687          2 
Tier 2 regulatory adjustments                                       (30)        (30)          -        (30)          - 
                                                              ----------  ----------  ---------  ----------  --------- 
Tier 2 capital                                                    12,913      13,279        (3)      12,657          2 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
Total capital                                                     58,871      59,161          -      57,048          3 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
Total risk-weighted assets                                       267,555     280,227        (5)     268,834          - 
------------------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
 

1 CRD capital is prepared on the regulatory scope of consolidation

2 Retained earnings includes IFRS9 capital relief (transitional) of $278 million, including dynamic relief of $67 million

3 Deduction for intangible assets includes software deduction relief of $1,054 million as the CRR 'Quick Fix' measures

4 Change is percentage points difference between two points rather than percentage change

5 Variance is increase/(decrease) comparing current reporting period to prior reporting periods

Page 36

Capital review continued

Movement in total capital

 
                                                                                                  9 months 
                                                                                                     ended 
                                                                                                            Year ended 
                                                                                                  30.09.21    31.12.20 
                                                                                                  $million    $million 
----------------------------------------------------------------------------------------------  ----------  ---------- 
CET1 at 1 January                                                                                   38,779      36,513 
Ordinary shares issued in the period and share premium                                                   -           - 
Share buy-back                                                                                       (506)       (242) 
Profit for the period                                                                                2,691         718 
Foreseeable dividends deducted from CET1                                                             (744)       (481) 
Difference between dividends paid and foreseeable dividends                                          (209)         476 
Movement in goodwill and other intangible assets                                                       110       1,044 
Foreign currency translation differences                                                             (625)         700 
Non-controlling interests                                                                               17       (543) 
Movement in eligible other comprehensive income                                                      (117)         324 
Deferred tax assets that rely on future profitability                                                 (14)         (9) 
Decrease/(increase) in excess expected loss                                                              5         121 
Additional value adjustments (prudential valuation adjustment)                                        (79)         125 
IFRS 9 transitional impact on regulatory reserves including day one                                  (116)          35 
Exposure amounts which could qualify for risk weighting                                                (6)          36 
Fair value gains arising from the institution's own Credit Risk related to derivative 
 liabilities                                                                                             3        (10) 
Other                                                                                                 (22)        (28) 
----------------------------------------------------------------------------------------------  ----------  ---------- 
CET1 at 30 September/31 December                                                                    39,167      38,779 
----------------------------------------------------------------------------------------------  ----------  ---------- 
 
AT1 at 1 January                                                                                     5,612       7,164 
Net issuances (redemptions)                                                                          1,736       (995) 
Foreign currency translation difference                                                                (3)           8 
Excess on AT1 grandfathered limit (ineligible)                                                       (554)       (565) 
----------------------------------------------------------------------------------------------  ----------  ---------- 
AT1 at 30 September/31 December                                                                      6,791       5,612 
----------------------------------------------------------------------------------------------  ----------  ---------- 
 
Tier 2 capital at 1 January                                                                         12,657      12,288 
Regulatory amortisation                                                                              (779)       (463) 
Net issuances (redemptions)                                                                            638        (69) 
Foreign currency translation difference                                                              (158)         257 
Tier 2 ineligible minority interest                                                                      1          82 
Recognition of ineligible AT1                                                                          554         565 
Other                                                                                                    -         (3) 
----------------------------------------------------------------------------------------------  ----------  ---------- 
Tier 2 capital at 30 September/31 December                                                          12,913      12,657 
----------------------------------------------------------------------------------------------  ----------  ---------- 
Total capital at 30 September/31 December                                                           58,871      57,048 
----------------------------------------------------------------------------------------------  ----------  ---------- 
 

Page 37

Capital review continued

Risk-weighted assets by business

 
                                                                  30.09.21 
                                                --------------------------------------------- 
                                                   Credit  Operational     Market 
                                                     risk         risk       risk  Total risk 
                                                 $million     $million   $million    $million 
----------------------------------------------  ---------  -----------  ---------  ---------- 
Corporate, Commercial & Institutional Banking     124,699       16,595     20,722     162,016 
Consumer, Private & Business Banking               44,083        8,504          -      52,587 
Central & other items                              50,846        2,017         89      52,952 
----------------------------------------------  ---------  -----------  ---------  ---------- 
Total risk-weighted assets                        219,628       27,116     20,811     267,555 
----------------------------------------------  ---------  -----------  ---------  ---------- 
 
 
                                                                  30.06.21 
                                                --------------------------------------------- 
                                                   Credit  Operational     Market 
                                                     risk         risk       risk  Total risk 
                                                 $million     $million   $million    $million 
----------------------------------------------  ---------  -----------  ---------  ---------- 
Corporate, Commercial & Institutional Banking     134,328       16,595     23,690     174,613 
Consumer, Private & Business Banking               47,660        8,504          -      56,164 
Central & other items                              47,360        2,017         73      49,450 
----------------------------------------------  ---------  -----------  ---------  ---------- 
Total risk-weighted assets                        229,348       27,116     23,763     280,227 
----------------------------------------------  ---------  -----------  ---------  ---------- 
 
 
                                                                 31.12.20(1) 
                                                --------------------------------------------- 
                                                   Credit  Operational     Market 
                                                     risk         risk       risk  Total risk 
                                                 $million     $million   $million    $million 
----------------------------------------------  ---------  -----------  ---------  ---------- 
Corporate, Commercial & Institutional Banking     127,663       15,963     21,465     165,091 
Consumer, Private & Business Banking               44,755        8,338          -      53,093 
Central & other items                              48,023        2,499        128      50,650 
----------------------------------------------  ---------  -----------  ---------  ---------- 
Total risk-weighted assets                        220,441       26,800     21,593     268,834 
----------------------------------------------  ---------  -----------  ---------  ---------- 
 

1 Following the Group's change in organisational structure, there has been an integration of Corporate & Institutional Banking and Commercial Banking to Corporate, Commercial & Institutional Banking; Private Banking and Retail Banking to Consumer, Private & Business Banking. Prior period has been restated.

Risk-weighted assets by geographic region

 
                               30.09.21    30.06.21  Change(1)  31.12.20(2)  Change(1) 
                               $million    $million          %     $million          % 
---------------------------  ----------  ----------  ---------  -----------  --------- 
Asia                            172,205     182,172        (5)      174,283        (1) 
Africa & Middle East             49,040      52,596        (7)       51,149        (4) 
Europe & Americas                48,476      48,556          -       45,758          6 
Central & other items           (2,166)     (3,097)         30      (2,356)          8 
---------------------------  ----------  ----------  ---------  -----------  --------- 
Total risk-weighted assets      267,555     280,227        (5)      268,834          - 
---------------------------  ----------  ----------  ---------  -----------  --------- 
 

1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods

2 Following the Group's change in organisational structure, there has been an integration of Greater China & North Asia and ASEAN & South Asia to Asia. Prior period has been restated

Page 38

Capital review continued

Movement in risk-weighted assets

 
                                                     Credit risk 
                                  ------------------------------------------------- 
                                                    Consumer, 
                                        Corporate,    Private    Central 
                                        Commercial          &          & 
                                   & Institutional   Business      other             Operational     Market      Total 
                                           Banking    Banking      items      Total         risk       risk       risk 
                                          $million   $million   $million   $million     $million   $million   $million 
--------------------------------  ----------------  ---------  ---------  ---------  -----------  ---------  --------- 
At 31 December 2019                        123,667     42,819     49,178    215,664       27,620     20,806    264,090 
--------------------------------  ----------------  ---------  ---------  ---------  -----------  ---------  --------- 
At 01 January 2020(1)                      123,611     42,875     49,178    215,664       27,620     20,806    264,090 
Assets (decline)/growth                    (9,743)        520      3,711    (5,512)            -          -    (5,512) 
Asset quality                               12,190        323      2,409     14,922            -          -     14,922 
Risk-weighted assets 
 efficiencies                                 (71)          -          -       (71)            -          -       (71) 
Model, methodology and policy 
 changes                                       247        134        661      1,042            -    (1,500)      (458) 
Disposals                                        -          -    (7,859)    (7,859)      (1,003)      (159)    (9,021) 
Foreign currency translation                 1,429        903       (77)      2,255            -          -      2,255 
Other, including non-credit risk 
 movements                                       -          -          -          -          183      2,446      2,629 
--------------------------------  ----------------  ---------  ---------  ---------  -----------  ---------  --------- 
At 31 December 2020                        127,663     44,755     48,023    220,441       26,800     21,593    268,834 
--------------------------------  ----------------  ---------  ---------  ---------  -----------  ---------  --------- 
Assets (decline)/growth                        999      4,729      3,944      9,672            -          -      9,672 
Asset quality                              (1,790)      (461)       (60)    (2,311)            -          -    (2,311) 
Risk-weighted assets 
 efficiencies                                (415)       (30)      (657)    (1,102)            -          -    (1,102) 
Model, methodology and policy 
 changes                                         -    (3,701)          -    (3,701)            -          -    (3,701) 
Acquisitions/Disposals                           -          -          -          -            -          -          - 
Foreign currency translation               (1,758)    (1,209)      (781)    (3,748)            -          -    (3,748) 
Other, including non-credit risk 
 movements                                       -          -        377        377          316      (782)       (89) 
--------------------------------  ----------------  ---------  ---------  ---------  -----------  ---------  --------- 
At 30 September 2021                       124,699     44,083     50,846    219,628       27,116     20,811    267,555 
--------------------------------  ----------------  ---------  ---------  ---------  -----------  ---------  --------- 
 

1 Following a reorganisation of certain clients, there has been a reclassification of balances across client segments. 1 January 2020 balances have been restated.

Page 39

Capital review continued

UK leverage ratio

 
                                                         30.09.21    30.06.21  Change(3)    31.12.20  Change(3) 
                                                         $million    $million          %    $million          % 
-----------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
Tier 1 capital (transitional)                              45,958      45,882          -      44,391          4 
Additional Tier 1 capital subject to phase out              (557)       (557)          -     (1,114)         50 
-----------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
Tier 1 capital (end point)(1)                              45,401      45,325          -      43,277          5 
-----------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
Derivative financial instruments                           52,668      52,254          1      69,467       (24) 
Derivative cash collateral                                 10,639       9,832          8      11,759       (10) 
Securities financing transactions (SFTs)                   78,747      69,555         13      67,570         17 
Loans and advances and other assets                       675,048     664,269          2     640,254          5 
-----------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
Total on-balance sheet assets                             817,102     795,910          3     789,050          4 
Regulatory consolidation adjustments(2)                  (72,047)    (67,508)        (7)    (60,059)       (20) 
Derivatives adjustments                                                                -                      - 
                                                       ----------  ----------  ---------  ----------  --------- 
Derivatives netting                                      (33,996)    (33,043)        (3)    (44,257)         23 
Adjustments to cash collateral                           (18,089)    (16,784)        (8)    (21,278)         15 
Net written credit protection                               1,551       1,505          3       1,284         21 
Potential future exposure on derivatives                   51,199      49,471          3      42,410         21 
                                                       ----------  ----------  ---------  ----------  --------- 
Total derivatives adjustments                                 665       1,149       (42)    (21,841)        103 
Counterparty risk leverage exposure measure for SFTs       14,711       9,178         60       4,969        196 
Off-balance sheet items                                   135,572     133,785          1     128,167          6 
Regulatory deductions from Tier 1 capital                 (5,584)     (5,682)          2     (5,521)        (1) 
-----------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
UK leverage exposure (end point)                          890,419     866,832          3     834,765          7 
UK leverage ratio (end point)(4)                             5.1%        5.2%      (0.1)        5.2%      (0.1) 
-----------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
UK leverage exposure quarterly average                    873,156     879,678        (1)     837,147          4 
UK leverage ratio quarterly average(4)                       5.2%        5.1%        0.1        5.2%          - 
-----------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
Countercyclical leverage ratio buffer(4)                     0.1%        0.1%          -        0.0%        0.1 
G-SII additional leverage ratio buffer(4)                    0.4%        0.4%          -        0.4%          - 
-----------------------------------------------------  ----------  ----------  ---------  ----------  --------- 
 

1 Tier 1 Capital (end point) is adjusted only for Grandfathered Additional Tier 1 instruments

2 Includes adjustment for qualifying central bank claims

3 Variance is increase/(decrease) comparing current reporting period to prior reporting periods

4 Change is the percentage point difference between the two periods, rather than the percentage change

Page 40

Financial statements

Condensed consolidated interim income statement

For the nine months ended 30 September 2021

 
                                                                 9 months    9 months 
                                                                    ended       ended 
                                                                 30.09.21    30.09.20 
                                                                 $million    $million 
-------------------------------------------------------------  ----------  ---------- 
Interest income                                                     7,704       9,604 
Interest expense                                                  (2,601)     (4,507) 
-------------------------------------------------------------  ----------  ---------- 
Net interest income                                                 5,103       5,097 
                                                               ----------  ---------- 
Fees and commission income                                          3,432       2,941 
Fees and commission expense                                         (583)       (465) 
                                                               ----------  ---------- 
Net fee and commission income                                       2,849       2,476 
Net trading income                                                  2,762       3,003 
Other operating income                                                678       1,029 
-------------------------------------------------------------  ----------  ---------- 
Operating income                                                   11,392      11,605 
                                                               ----------  ---------- 
Staff costs                                                       (5,670)     (5,094) 
Premises costs                                                      (282)       (274) 
General administrative expenses                                   (1,025)       (992) 
Depreciation and amortisation                                       (891)       (903) 
                                                               ----------  ---------- 
Operating expenses                                                (7,868)     (7,263) 
-------------------------------------------------------------  ----------  ---------- 
Operating profit before impairment losses and taxation              3,524       4,342 
Credit impairment                                                    (57)     (1,934) 
Goodwill, property, plant and equipment and other impairment         (99)       (487) 
Profit from associates and joint ventures                             187         141 
-------------------------------------------------------------  ----------  ---------- 
Profit before taxation                                              3,555       2,062 
Taxation                                                            (860)       (835) 
-------------------------------------------------------------  ----------  ---------- 
Profit for the period                                               2,695       1,227 
-------------------------------------------------------------  ----------  ---------- 
 
Profit attributable to: 
Non-controlling interests                                              18          25 
Parent company shareholders                                         2,677       1,202 
-------------------------------------------------------------  ----------  ---------- 
Profit for the period                                               2,695       1,227 
-------------------------------------------------------------  ----------  ---------- 
 
                                                                    cents       cents 
-------------------------------------------------------------  ----------  ---------- 
Earnings per share: 
Basic earnings per ordinary share                                    75.6        29.7 
Diluted earnings per ordinary share                                  74.4        29.3 
-------------------------------------------------------------  ----------  ---------- 
 

Page 41

Financial statements continued

Condensed consolidated interim statement of comprehensive income

For the nine months ended 30 September 2021

 
                                                                                                9 months    9 months 
                                                                                                   ended       ended 
                                                                                                30.09.21    30.09.20 
                                                                                                $million    $million 
--------------------------------------------------------------------------------------------  ----------  ---------- 
Profit for the period                                                                              2,695       1,227 
Other comprehensive (loss)/income 
  Items that will not be reclassified to income statement:                                           227           1 
                                                                                              ----------  ---------- 
  Own credit gains on financial liabilities designated at fair value through profit or loss            7          21 
  Equity instruments at fair value through other comprehensive income                                152          65 
  Actuarial gains/(losses) on retirement benefit obligations                                         128        (52) 
  Taxation relating to components of other comprehensive income                                     (60)        (33) 
                                                                                              ----------  ---------- 
  Items that may be reclassified subsequently to income statement:                                 (896)         192 
  Exchange differences on translation of foreign operations: 
                                                                                              ----------  ---------- 
     Net losses taken to equity                                                                    (781)       (248) 
     Net gains/(losses) on net investment hedges                                                     151        (20) 
     Reclassified to income statement on sale of joint venture                                         -         246 
  Share of other comprehensive income/(loss) from associates and joint ventures                        3        (20) 
  Debt instruments at fair value through other comprehensive income: 
     Net valuation (losses)/gains taken to equity                                                  (202)         852 
     Reclassified to income statement                                                              (164)       (562) 
     Net impact of expected credit losses                                                              8           8 
  Cash flow hedges: 
     Net gains/(losses) taken to equity                                                               15        (45) 
     Reclassified to income statement                                                                 17          14 
  Taxation relating to components of other comprehensive income                                       57        (33) 
                                                                                              ----------  ---------- 
Other comprehensive (loss)/income for the period, net of taxation                                  (669)         193 
--------------------------------------------------------------------------------------------  ----------  ---------- 
Total comprehensive income for the period                                                          2,026       1,420 
--------------------------------------------------------------------------------------------  ----------  ---------- 
 
Total comprehensive income attributable to: 
Non-controlling interests                                                                             14          19 
Parent company shareholders                                                                        2,012       1,401 
--------------------------------------------------------------------------------------------  ----------  ---------- 
Total comprehensive income for the period                                                          2,026       1,420 
--------------------------------------------------------------------------------------------  ----------  ---------- 
 

Page 42

Financial statements continued

Condensed consolidated interim balance sheet

As at 30 September 2021

 
                                                                    30.09.21    31.12.20 
                                                                    $million    $million 
----------------------------------------------------------------  ----------  ---------- 
Assets 
Cash and balances at central banks                                    75,617      66,712 
Financial assets held at fair value through profit or loss           112,782     106,787 
Derivative financial instruments                                      52,668      69,467 
Loans and advances to banks                                           45,754      44,347 
Loans and advances to customers                                      302,493     281,699 
Investment securities                                                152,422     153,315 
Other assets                                                          57,681      48,688 
Current tax assets                                                       629         808 
Prepayments and accrued income                                         2,114       2,122 
Interests in associates and joint ventures                             2,334       2,162 
Goodwill and intangible assets                                         5,347       5,063 
Property, plant and equipment                                          5,860       6,515 
Deferred tax assets                                                      837         919 
Assets classified as held for sale                                       564         446 
----------------------------------------------------------------  ----------  ---------- 
Total assets                                                         817,102     789,050 
----------------------------------------------------------------  ----------  ---------- 
Liabilities 
Deposits by banks                                                     34,480      30,255 
Customer accounts                                                    453,260     439,339 
Repurchase agreements and other similar secured borrowing             11,569       1,903 
Financial liabilities held at fair value through profit or loss       76,252      68,373 
Derivative financial instruments                                      52,130      71,533 
Debt securities in issue                                              53,424      55,550 
Other liabilities                                                     59,618      47,904 
Current tax liabilities                                                  375         660 
Accruals and deferred income                                           4,314       4,546 
Subordinated liabilities and other borrowed funds                     16,819      16,654 
Deferred tax liabilities                                                 748         695 
Provisions for liabilities and charges                                   446         466 
Retirement benefit obligations                                           332         443 
----------------------------------------------------------------  ----------  ---------- 
Total liabilities                                                    763,767     738,321 
----------------------------------------------------------------  ----------  ---------- 
Equity 
Share capital and share premium account                                7,022       7,058 
Other reserves                                                        11,936      12,688 
Retained earnings                                                     27,708      26,140 
----------------------------------------------------------------  ----------  ---------- 
Total parent company shareholders' equity                             46,666      45,886 
Other equity instruments                                               6,254       4,518 
----------------------------------------------------------------  ----------  ---------- 
Total equity excluding non-controlling interests                      52,920      50,404 
Non-controlling interests                                                415         325 
----------------------------------------------------------------  ----------  ---------- 
Total equity                                                          53,335      50,729 
----------------------------------------------------------------  ----------  ---------- 
Total equity and liabilities                                         817,102     789,050 
----------------------------------------------------------------  ----------  ---------- 
 

Page 43

Financial statements continued

Condensed consolidated statement of changes in equity

For the nine months ended 30 September 2021

 
                                                                                                                                                                                                                       Fair value                                    Fair value 
                                                                                                                                                                                       through other comprehensive income reserve    through other comprehensive income reserve 
                Ordinary share capital and share premium account  Preference share capital and share premium account  Capital and merger reserves(1)  Own credit adjustment reserve                                        - debt                                      - equity  Cash flow hedge reserve  Translation reserve  Retained earnings  Parent company shareholders' equity  Other equity instruments  Non-controlling interests       Total 
                                                        $million                                            $million                        $million                       $million                                      $million                                      $million                 $million             $million           $million                             $million                  $million                   $million    $million 
--------------  ------------------------------------------------  --------------------------------------------------  ------------------------------  -----------------------------  --------------------------------------------  --------------------------------------------  -----------------------  -------------------  -----------------  -----------------------------------  ------------------------  -------------------------  ---------- 
As at 1 
 January 2020                                              5,584                                               1,494                          17,187                              2                                           197                                           150                     (59)              (5,792)             26,072                               44,835                     5,513                        313      50,661 
Profit for the 
 period                                                        -                                                   -                               -                              -                                             -                                             -                        -                    -                724                                  724                         -                         27         751 
Other 
 comprehensive 
 (loss)/income                                                 -                                                   -                               -                           (54)                                           332                                           (2)                        7                  631              11(2)                                  925                         -                       (12)         913 
Distributions                                                  -                                                   -                               -                              -                                             -                                             -                        -                    -                  -                                    -                         -                       (20)        (20) 
Other equity 
 instruments 
 issued, net 
 of expenses                                                   -                                                   -                               -                              -                                             -                                             -                        -                    -                  -                                    -                       992                          -         992 
Redemption of 
 other equity 
 instruments                                                   -                                                   -                               -                              -                                             -                                             -                        -                    -               (13)                                 (13)                   (1,987)                          -     (2,000) 
Treasury 
 shares net 
 movement                                                      -                                                   -                               -                              -                                             -                                             -                        -                    -               (90)                                 (90)                         -                          -        (90) 
Share option 
 expense, net 
 of taxation                                                   -                                                   -                               -                              -                                             -                                             -                        -                    -                133                                  133                         -                          -         133 
Dividends on 
 preference 
 shares and 
 AT1 
 securities                                                    -                                                   -                               -                              -                                             -                                             -                        -                    -              (395)                                (395)                         -                          -       (395) 
Share 
 buy-back(3)                                                (20)                                                   -                              20                              -                                             -                                             -                        -                    -              (242)                                (242)                         -                          -       (242) 
Other 
 movements                                                     -                                                   -                               -                              -                                             -                                             -                        -                   69            (60)(4)                                    9                         -                      17(5)          26 
--------------  ------------------------------------------------  --------------------------------------------------  ------------------------------  -----------------------------  --------------------------------------------  --------------------------------------------  -----------------------  -------------------  -----------------  -----------------------------------  ------------------------  -------------------------  ---------- 
As at 31 
 December 2020                                             5,564                                               1,494                          17,207                           (52)                                           529                                           148                     (52)              (5,092)             26,140                               45,886                     4,518                        325      50,729 
--------------  ------------------------------------------------  --------------------------------------------------  ------------------------------  -----------------------------  --------------------------------------------  --------------------------------------------  -----------------------  -------------------  -----------------  -----------------------------------  ------------------------  -------------------------  ---------- 
Profit for the 
 period                                                        -                                                   -                               -                              -                                             -                                             -                        -                    -              2,677                                2,677                         -                         18       2,695 
Other 
 comprehensive 
 income/(loss)                                                 -                                                   -                               -                              7                                         (295)                                            94                       28                (625)             126(2)                                (665)                         -                        (4)       (669) 
Distributions                                                  -                                                   -                               -                              -                                             -                                             -                        -                    -                  -                                    -                         -                       (25)        (25) 
Other equity 
 instruments 
 issued, net 
 of expenses                                                   -                                                   -                               -                              -                                             -                                             -                        -                    -                  -                                    -                     2,728                          -       2,728 
Redemption of 
 other equity 
 instruments                                                   -                                                   -                               -                              -                                             -                                             -                        -                    -               (50)                                 (50)                     (992)                          -     (1,042) 
Treasury 
 shares net 
 movement                                                      -                                                   -                               -                              -                                             -                                             -                        -                    -              (136)                                (136)                         -                          -       (136) 
Share option 
 expense, net 
 of taxation                                                   -                                                   -                               -                              -                                             -                                             -                        -                    -                128                                  128                         -                          -         128 
Dividends on 
 ordinary 
 shares                                                        -                                                   -                               -                              -                                             -                                             -                        -                    -              (375)                                (375)                         -                          -       (375) 
Dividends on 
 preference 
 shares and 
 AT1 
 securities                                                    -                                                   -                               -                              -                                             -                                             -                        -                    -              (315)                                (315)                         -                          -       (315) 
Share 
 buy-back(6,7)                                              (39)                                                   -                              39                              -                                             -                                             -                        -                    -              (506)                                (506)                         -                          -       (506) 
Other 
 movements                                                     3                                                   -                               -                              -                                             -                                             -                        -                    -              19(8)                                   22                         -                     101(9)         123 
--------------  ------------------------------------------------  --------------------------------------------------  ------------------------------  -----------------------------  --------------------------------------------  --------------------------------------------  -----------------------  -------------------  -----------------  -----------------------------------  ------------------------  -------------------------  ---------- 
As at 30 
 September 
 2021                                                      5,528                                               1,494                          17,246                           (45)                                           234                                           242                     (24)              (5,717)             27,708                               46,666                     6,254                        415      53,335 
--------------  ------------------------------------------------  --------------------------------------------------  ------------------------------  -----------------------------  --------------------------------------------  --------------------------------------------  -----------------------  -------------------  -----------------  -----------------------------------  ------------------------  -------------------------  ---------- 
 

1 Includes capital reserve of $5 million, capital redemption reserve of $130 million and merger reserve of $17,111 million

2 Comprises actuarial gain, net of taxation, and share from associates and joint ventures $126 million ($11 million for the year ended 31 December 2020)

3 On 28 February 2020, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases was $20 million, and the total consideration paid was $242 million. The total number of shares purchased was 40,029,585 representing 1.25 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account. On 1 April 2020, the Group announced that, in response to a request from the Prudential Regulation Authority and as a consequence of the unprecedented challenges facing the world due to the COVID-19 pandemic, its board had decided after careful consideration to withdraw the recommendation to pay a final dividend for 2019 of 20 cents per ordinary share, and to suspend the buy-back programme

4 Includes $69 million related to prior period adjustments to reclass FX movements from translation reserve to retained earnings ($45 million related to FX movements of the hedging instruments for net investment hedges and $24 million related to FX movements for monetary items, which were considered structural positions), and $9 million increase related to revenue reserves of PT Bank Permata Tbk

5 Movement related to non-controlling interest from Mox Bank Limited

6 On 25 February 2021, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases was $19 million, and the total consideration paid was $255 million (including $1.5 million of fees and stamp duty). The total number of shares purchased was 37,148,399 representing 1.18 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account

7 On 3 August 2021, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases was $20 million, and the total consideration paid was $251 million (including $1.5 million of fees and stamp duty). The total number of shares purchased was 39,914,763 representing 1.28 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account

8 Movement mainly related to increase in non-controlling interest from SC Digital Solutions (SG) Ltd

9 Movements related to non-controlling interest from Mox Bank Limited ($21 million), SC Digital Solutions (SG) Ltd ($55 million), Currency Fair Ltd ($22 million)

Page 44

Financial statements continued

Basis of preparation

This statement covers the results of Standard Chartered PLC together with its subsidiaries and equity accounted interest in associates and jointly controlled entities (the Group) for the nine months ended 30 September 2021. The financial information on which this statement is based, and the data set out in the appendix to this statement, are unaudited and have been prepared in accordance with the Group's accounting policies. The Group's significant accounting policies are described in the Annual Report 2020, which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union (EU). The Group's Annual Report 2021 will be prepared in accordance with United Kingdom (UK) adopted international accounting standards.

The interim financial information does not constitute a full or condensed set of financial statements under IAS 34 'Interim Financial Reporting' as contained in UK-adopted international accounting standards. The interim financial information has been prepared in accordance with the recognition and measurement principles, but not the disclosure requirements under UK-adopted international accounting standards.

The information in this document does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2020, which contained an unqualified audit report under Section 495 of the Companies Act 2006 (which did not make any statements under Section 498 of the Companies Act 2006) have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.

Comparatives

The Group meets the criteria to offset its derivative assets and liabilities and the related variation margin for the Group's (house) trades cleared with LCH Forexclear. The impact of this as at 30 September 2021 is a decrease in the derivative assets and other assets (variation margin) of $1.6 bn and derivative liabilities of $1.6bn. Prior period comparative information have not been restated as the effect would not be material. The impact at 31 December 2020 would have been a decrease in the derivative assets of $1.8bn, derivative liabilities and other liabilities (variation margin) of $1.8bn.

Going concern

The directors have assessed the Group's ability to continue as a going concern. This assessment has been made

having considered the impact of COVID-19, macroeconomic and geopolitical headwinds, including:

-- A review of the Group Corporate Plan

-- An assessment of the actual performance to date, loan book quality, credit impairment, legal, regulatory and compliance matters, and the annual budget

-- Consideration of stress testing performed, including both the Bank of England annual stress test and a Group Recovery and Resolution Plan (RRP) as submitted to the PRA, which demonstrate that the Group has sufficient capital and liquidity to continue as a going concern and meet minimum regulatory capital and liquidity requirements

-- Analysis of the capital, funding and liquidity position of the Group, including the capital, liquidity and leverage ratios

-- The level of debt in issue, including redemptions and issuances during the year, debt falling due for repayment in the next 12 months and further planned debt issuances, including the appetite in the market for the Group's debt

-- A detailed review of all principal and emerging risks

Based on the analysis performed, the directors confirm they are satisfied that the Group has adequate resources to continue in business for the period from 2 November 2021 to 2 November 2022. For this reason, the Group continues to adopt the going concern basis of accounting for preparing the financial statements.

Page 45

Other supplementary financial information

Average balance sheets and yields

Average assets

 
                                                                          9 months ended 30.09.21 
                                                      ---------------------------------------------------------------- 
                                                            Average    Average             Gross yield 
                                                       non-interest   interest                interest 
                                                            earning    earning   Interest      earning     Gross yield 
                                                            balance    balance     income      balance   total balance 
                                                           $million   $million   $million            %               % 
----------------------------------------------------  -------------  ---------  ---------  -----------  -------------- 
Cash and balances at central banks                           22,945     57,362         69         0.16            0.11 
Gross loans and advances to banks                            23,512     46,091        369         1.07            0.71 
Gross loans and advances to customers                        54,632    306,924      5,721         2.49            2.12 
Impairment provisions against loans and advances 
 to banks and customers                                           -    (6,374)          -            -               - 
Investment securities                                        31,746    153,280      1,545         1.35            1.12 
Property, plant and equipment and intangible assets           8,916          -          -            -               - 
Prepayments, accrued income and other assets                110,815          -          -            -               - 
Investment associates and joint ventures                      2,297          -          -            -               - 
----------------------------------------------------  -------------  ---------  ---------  -----------  -------------- 
Total average assets                                        254,863    557,283      7,704         1.85            1.27 
----------------------------------------------------  -------------  ---------  ---------  -----------  -------------- 
 
 
                                                                          6 months ended 30.06.21 
                                                      ---------------------------------------------------------------- 
                                                            Average    Average             Gross yield 
                                                       non-interest   interest                interest 
                                                            earning    earning   Interest      earning     Gross yield 
                                                            balance    balance     income      balance   total balance 
                                                           $million   $million   $million            %               % 
----------------------------------------------------  -------------  ---------  ---------  -----------  -------------- 
Cash and balances at central banks                           23,174     56,473         42         0.15            0.11 
Gross loans and advances to banks                            22,809     46,623        247         1.07            0.72 
Gross loans and advances to customers                        53,335    305,302      3,780         2.50            2.13 
Impairment provisions against loans and advances 
 to banks and customers                                           -    (6,451)          -            -               - 
Investment securities                                        31,605    155,268      1,053         1.37            1.14 
Property, plant and equipment and intangible assets           8,960          -          -            -               - 
Prepayments, accrued income and other assets                113,672          -          -            -               - 
Investment associates and joint ventures                      2,267          -          -            -               - 
----------------------------------------------------  -------------  ---------  ---------  -----------  -------------- 
Total average assets                                        255,822    557,215      5,122         1.85            1.27 
----------------------------------------------------  -------------  ---------  ---------  -----------  -------------- 
 
 
                                                                          9 months ended 30.09.20 
                                                      ---------------------------------------------------------------- 
                                                            Average    Average             Gross yield 
                                                       non-interest   interest                interest 
                                                            earning    earning   Interest      earning     Gross yield 
                                                            balance    balance     income      balance   total balance 
                                                           $million   $million   $million            %               % 
----------------------------------------------------  -------------  ---------  ---------  -----------  -------------- 
Cash and balances at central banks                           17,051     41,386         93         0.30            0.21 
Gross loans and advances to banks                            28,221     54,750        646         1.58            1.04 
Gross loans and advances to customers                        50,504    289,387      6,663         3.08            2.62 
Impairment provisions against loans and advances 
 to banks and customers                                           -    (6,341)          -            -               - 
Investment securities                                        27,775    143,069      2,202         2.06            1.72 
Property, plant and equipment and intangible assets          10,235          -          -            -               - 
Prepayments, accrued income and other assets                113,718          -          -            -               - 
Investment associates and joint ventures                      2,118          -          -            -               - 
----------------------------------------------------  -------------  ---------  ---------  -----------  -------------- 
Total average assets                                        249,622    522,251      9,604         2.46            1.66 
----------------------------------------------------  -------------  ---------  ---------  -----------  -------------- 
 

Page 46

Other supplementary financial information continued

Average liabilities

 
                                                                         9 months ended 30.09.21 
                                                      -------------------------------------------------------------- 
                                                            Average    Average             Rate paid 
                                                       non-interest   interest              interest 
                                                            bearing    bearing   Interest    bearing       Rate paid 
                                                            balance    balance    expense    balance   total balance 
                                                           $million   $million   $million          %               % 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
Deposits by banks                                            19,094     26,530        104       0.52            0.30 
Customer accounts: 
  Current accounts and savings deposits                      49,937    259,389        608       0.31            0.26 
  Time and other deposits                                    52,444    149,719      1,046       0.93            0.69 
Debt securities in issue                                      6,337     60,006        425       0.95            0.86 
Accruals, deferred income and other liabilities             115,108      1,164         40       4.59            0.05 
Subordinated liabilities and other borrowed funds                 -     16,525        378       3.06            3.06 
Non-controlling interests                                       370          -          -          -               - 
Shareholders' funds                                          51,662          -          -          -               - 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
                                                            294,952    513,333      2,601       0.68            0.43 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
 
Adjustment for Financial Markets funding costs                                       (77) 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
Financial guarantee fees on interest earning assets                                    73 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
Total average liabilities and shareholders' funds           294,952    513,333      2,597       0.68            0.43 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
 
 
                                                                         6 months ended 30.06.21 
                                                      -------------------------------------------------------------- 
                                                            Average    Average             Rate paid 
                                                       non-interest   interest              interest 
                                                            bearing    bearing   Interest    bearing       Rate paid 
                                                            balance    balance    expense    balance   total balance 
                                                           $million   $million   $million          %               % 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
Deposits by banks                                            17,261     26,599         74       0.56            0.34 
Customer accounts: 
  Current accounts and savings deposits                      48,934    257,233        388       0.30            0.26 
  Time and other deposits                                    53,606    151,262        733       0.98            0.72 
Debt securities in issue                                      6,129     61,232        284       0.94            0.85 
Accruals, deferred income and other liabilities             118,293      1,093         27       4.98            0.05 
Subordinated liabilities and other borrowed funds                 -     16,386        246       3.03            3.03 
Non-controlling interests                                       330          -          -          -               - 
Shareholders' funds                                          51,085          -          -          -               - 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
                                                            295,638    513,805      1,752       0.69            0.44 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
 
Adjustment for Financial Markets funding costs                                       (52) 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
Financial guarantee fees on interest earning assets                                    47 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
Total average liabilities and shareholders' funds           295,638    513,805      1,747       0.69            0.44 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
 

Page 47

Other supplementary financial information continued

 
                                                                         9 months ended 30.09.20 
                                                      -------------------------------------------------------------- 
                                                            Average    Average             Rate paid 
                                                       non-interest   interest              interest 
                                                            bearing    bearing   Interest    bearing       Rate paid 
                                                            balance    balance    expense    balance   total balance 
                                                           $million   $million   $million          %               % 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
Deposits by banks                                            18,435     26,206        271       1.38            0.81 
Customer accounts: 
  Current accounts and savings deposits                      42,123    219,054        995       0.61            0.51 
  Time and other deposits                                    58,750    158,579      2,028       1.71            1.25 
Debt securities in issue                                      7,083     52,493        670       1.70            1.50 
Accruals, deferred income and other liabilities             119,134      1,204         45       4.99            0.05 
Subordinated liabilities and other borrowed funds                 -     16,242        498       4.10            4.10 
Non-controlling interests                                       309          -          -          -               - 
Shareholders' funds                                          50,306          -          -          -               - 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
                                                            296,140    473,778      4,507       1.27            0.78 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
 
Adjustment for Financial Markets funding costs                                      (148) 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
Financial guarantee fees on interest earning assets                                     - 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
Total average liabilities and shareholders' funds           296,140    473,778      4,359       1.23            0.76 
----------------------------------------------------  -------------  ---------  ---------  ---------  -------------- 
 

Page 48

CONTACT INFORMATION

Global headquarters

Standard Chartered Group

1 Basinghall Avenue

London, EC2V 5DD

United Kingdom

telephone: +44 (0)20 7885 8888

facsimile: +44 (0)20 7885 9999

Shareholder enquiries

ShareCare information

website: sc.com/shareholders

helpline: +44 (0)370 702 0138

ShareGift information

website: ShareGift.org

helpline: +44 (0)20 7930 3737

Registrar information

UK

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol, BS99 6ZZ

helpline: +44 (0)370 702 0138

Hong Kong

Computershare Hong Kong Investor Services Limited

17M Floor, Hopewell Centre

183 Queen's Road East

Wan Chai

Hong Kong

website: computershare.com/hk/investors

Chinese translation

Computershare Hong Kong Investor Services Limited

17M Floor, Hopewell Centre

183 Queen's Road East

Wan Chai

Hong Kong

Register for electronic communications

website: investorcentre.co.uk

For further information, please contact:

Gregg Powell, Head of Investor Relations

+852 2820 3050

LSE Stock code: STAN.LN

HKSE Stock code: 02888

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