Standard Chartered PLC - Half Year
Results 2024 - Part 2
Table of content
Risk review
|
2
|
Capital review
|
59
|
Financial statements
|
65
|
Other supplementary
information
|
120
|
Glossary
|
133
|
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.
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.
Page
1
Risk review and Capital review
Risk Index
|
|
Risk profile
|
Credit risk
|
Basis of preparation
|
Credit risk overview
|
Impairment model
|
Staging of financial instruments
|
IFRS 9 expected credit loss principles and
approaches
|
Summary of Credit Risk Performance
|
Maximum exposure to Credit risk
|
Analysis of financial instrument by
stage
|
Credit quality analysis
|
• Credit
quality by client segment
|
• Loans and
advances by client segment credit quality analysis by key
geography
|
Movement in gross exposures and credit
impairment for loans and advances, debt securities, undrawn
commitments and financial guarantees
|
Movement of debt securities, additional tier one
and other eligible bills
|
Analysis of stage 2 balances
|
Credit impairment charge
|
Problem credit management and
provisioning
|
• Forborne and
other modified loans by client segment
|
• Forborne and
other modified loans by country
|
Credit risk mitigation
|
• Collateral
held on loans and advances
|
• Collateral -
Corporate & Investment Banking
|
• Collateral -
Wealth & Retail Banking
|
• Mortgage
loan-to-value ratios by country
|
• Collateral
and other credit enhancements possessed or called upon
|
• Other Credit
risk mitigation
|
Other portfolio analysis
|
• Credit
quality by industry
|
• Industry
analysis of loans and advances by key geography
|
• Vulnerable,
cyclical and high carbon sectors
|
• China
commercial real estate
|
• Debt
securities and other eligible bills
|
IFRS 9 expected credit loss
methodology
|
Traded risk
|
Market risk movements
|
Counterparty Credit risk
|
Derivative financial instruments Credit risk
mitigation
|
Liquidity and Funding risk
|
Liquidity and Funding risk metrics
|
Liquidity analysis of the Group's balance
sheet
|
Interest Rate risk in the Banking
Book
|
Operational and Technology risk
|
Operational and Technology risk
profile
|
Capital
|
Capital summary
|
• Capital
ratio
|
• Capital
base
|
• Movement in
total capital
|
Risk-weighted asset
|
Leverage ratio
|
Page
2
The following parts of the Risk
review and Capital review form part of these financial statements
and are reviewed by the external auditors:
a) Risk review:
Disclosures marked as 'reviewed' from the start of Credit
risk section to the end of Operational and Technology risk in the
same section; and
b) Capital review:
Tables marked as 'reviewed' from the start of 'Capital base'
to the end of 'Movement in total capital', excluding 'Total
risk-weighted assets'
Page
3
Risk review
Credit Risk (reviewed)
Basis of preparation
Unless otherwise stated the balance sheet and
income statement information presented within this section is based
on the Group's management view. This is principally the location
from which a client relationship is managed, which may differ from
where it is financially booked and may be shared between businesses
and/or regions. This view reflects how the client segments and
regions are managed internally.
Loans and advances to customers and banks held
at amortised cost in this 'Risk profile' section include reverse
repurchase agreement balances held at amortised cost, per Note 16
Reverse repurchase and repurchase agreements including other
similar secured lending and borrowing.
Credit Risk overview
Credit Risk is the potential for loss due to the
failure of a counterparty to meet its contractual obligations to
pay the Group. Credit exposures arise from both the banking and
trading books.
Impairment model
IFRS 9 mandates an impairment model that
requires the recognition of expected credit losses (ECL) on all
financial debt instruments held at amortised cost, Fair Value
through Other Comprehensive Income (FVOCI), undrawn loan
commitments and financial guarantees.
Staging of financial instruments
Financial instruments that are not already
credit-impaired are originated into stage 1 and a 12-month expected
credit loss provision is recognised.
Instruments will remain in stage 1 until they
are repaid, unless they experience significant credit deterioration
(stage 2) or they become credit-impaired (stage 3).
Instruments will transfer to stage 2 and a
lifetime expected credit loss provision is recognised when there
has been a significant change in the Credit Risk compared to what
was expected at origination.
The framework used to determine a Significant
increase in Credit Risk (SICR) is set out below.
Stage 1
• 12-month
ECL
•
Performing
Stage 2
• Lifetime expected
credit loss
• Performing but has
exhibited significant increase in Credit Risk (SICR)
Stage 3
•
Credit-impaired
•
Non-performing
Page
4
IFRS 9 expected credit loss principles and
approaches
The main methodology principles and approach
adopted by the Group are set out in the following table.
Title
|
Supplementary Information
|
Approach for determining expected credit
losses
|
IFRS 9 methodology
Determining lifetime expected credit loss for
revolving products
Post model adjustments
|
Incorporation of forward-looking
information
|
Incorporation of forward-looking
information
Forecast of key macroeconomic variables
underlying the expected
credit loss calculation and the impact of non-linearity
Judgemental adjustments and sensitivity to
macroeconomic variables
|
SICR
|
Quantitative and qualitative criteria
|
Assessment of credit-impaired financial
assets
|
Consumer and Business Banking clients
Corporate and Investment Banking (CIB) and
Private Banking clients
Write-offs
|
Transfers between stages
|
Movement in loan exposures and expected credit
losses
|
Modified financial assets
|
Forbearance and other modified loans
|
Governance and application of expert credit
judgement in respect of expected credit losses
|
|
Summary of Credit Risk Performance
Maximum exposure
The Group's on-balance sheet maximum exposure to
Credit Risk increased by $9.1 billion to $807 billion (31 December
2023: $798 billion). Cash and balances at Central bank decreased by
$5.8 billion to $64 billion (31 December 2023: $70 billion) due to
reduced placements with a Central Bank. Loans to banks held at
amortised cost remained stable at $45 billion (31 December 2023:
$45 billion). Fair Value through profit and loss increased by $32
billion to $176 billion (31 December 2023: $144 billion), largely
due to an increase in debt securities and reverse repos. This was
partly offset by a $11 billion decrease in loans and advances to
customers to $276 billion (31 December 2023: $287 billion) of which
$5 billion was due to a reduction in mortgages in Korea and Hong
Kong due to low new business driven by the higher interest rate
environment, as well as a $4.2 billion reduction in Central and
other items mainly due to matured loan exposures. Debt securities
decreased by $8.7 billion to $152 billion (31 December
2023: $160 billion). Off-balance sheet instruments increased by
$7.9 billion to $265 billion (31 December 2023: $257 billion),
due to an increase in financial guarantees and other equivalents,
which were driven by new business.
Further details can be found in the 'Maximum
exposure to Credit Risk' section.
Loans and Advances
94 per cent (31 December 2023: 94 per cent) of
the Group's gross loans and advances to customers remain in stage 1
at $281 billion (31 December 2023: $292 billion), reflecting
our continued focus on high-quality origination.
Stage 1 loans and advances decreased by $9.4
billion to $264 billion (31 December 2023: $274 billion). For
Wealth and Retail Banking (WRB), stage 1 balances decreased by $5.4
billion to $118 billion (31 December 2023: $123 billion), of which
$5 billion was mainly due to a decrease in mortgages. This was
driven by a slowdown in sales in Korea and Hong Kong, due to the
high interest rate environment. For Corporate and Investment
Banking (CIB), stage 1 balances remained stable at $121 billion (31
December 2023: $121 billion). For Central and other items, stage 1
balances decreased by $4.5 billion to $24 billion (31 December
2023: $28 billion) due to a reduction in reverse repos. Stage 1
cover ratio remained stable at 0.2 per cent (31 December 2023: 0.2
per cent).
Stage 2 loans and advances to customers
decreased by $1.2 billion to $10 billion (31 December 2023: $11.2
billion). For WRB, stage 2 balances decreased by $0.5 billion to
$1.8 billion (31 December 2023: $2.3 billion). This was mainly
driven by the lower new bookings of the mortgage portfolio in Korea
and Hong Kong, due to the high interest rate environment. Higher
risk exposure net decrease of $1 billion to $0.1 billion (31
December 2023: $1 billion) from Central and other items, was
due to the maturity of short-term loan exposures being
replaced with debt securities in the Middle East. Total stage 2
cover ratio decreased by 0.1 per cent to 3.6 per cent (31
December 2023: 3.7 per cent). The decrease was driven by China
commercial real estate (CRE) overlay releases in CIB largely due to
repayments, which was partly offset by an increase in WRB due to
exposure reductions. Ventures cover ratio increased by 7 per cent
to 46 per cent (31 December 2023: 39 per cent) due to higher levels
of delinquencies in Q1 2024, however this improved during Q2 2024
following credit measures being put in place in
Q4 2023.
Page
5
Stage 3 loans and advances decreased by $0.6
billion to $6.6 billion (31 December 2023: $7.2 billion) due to
repayments, debt sales and write-offs in CIB. The CIB stage 3 cover
ratio increased by 4 per cent to 68 per cent (31 December 2023: 64
per cent) as a result of repayments and write-offs. The WRB stage 3
loans remains broadly stable at $1.5 billion (31 December 2023:
$1.5 billion). The WRB stage 3 cover ratio decreased by 5 per
cent to 46 per cent (31 December 2023: 51 per cent) driven by
reduction in personal loan provisions in Malaysia due to unsecured
assets reclassified as held for sale. Stage 3 Central and other
items decreased by $160 million to $0.1 billion (31 December 2023:
$0.2 billion) as funds were reinvested into debt securities for
liquidity purposes. Total stage 3 cover ratio increased by 3 per
cent to 63 per cent (31 December 2023: 60 per cent) due to a
decrease in exposures. The cover ratio after collateral increased
by 6 per cent to 82 per cent (31 December 2023: 76 per
cent).
Further details can be found in the 'Analysis
of financial instruments by stage' section in pages 42 and 43;
'Credit quality by client segment' section; and 'Credit quality by
industry' section,
Analysis of stage 2
The key SICR driver which caused exposures to be
classified as stage 2 remains an increase in probability of default
(PD). The proportion of exposures in CIB in stage 2 decreased due
to a reduction in clients placed on non-purely precautionary early
alert that have not breached PD thresholds. In WRB, the proportion
of loans in stage 2 from 30 days past due trigger remained stable.
In Central and other items, the decrease in CG12 was due to the
maturity of short-term loan exposures being replaced with debt
securities in the Middle East.
Further details can be found in the 'Analysis
of stage 2 balances' section.
Credit impairment charges
The Group's ongoing credit impairment was a net
charge of $249 million (30 June 2023: $172 million).
For CIB, stage 1 and 2 impairment charges
decreased by $71 million to a net release of $38 million (30 June
2023: $33 million), due to $55 million China CRE overlay releases
driven by repayments, and sovereign upgrades. This was partly
offset by portfolio movements.
CIB stage 3 impairment charges decreased by $33
million to $3 million (30 June 2023: $36 million) due to a number
of recoveries, which was partly offset by additional impairments on
the China CRE portfolio including one new downgrade.
For WRB, stage 1 and 2 impairment charges
increased by $120 million to $135 million (30 June 2023: $15
million) mainly due to the release of COVID-19 overlays and other
one-off releases present in 2023. Growth in the Digital Partnership
portfolio has also resulted in an increase in ECL.
WRB stage 3 impairment charges increased by $54
million to $147 million (30 June 2023: $93 million). This was
driven by gross charge-offs in credit cards and personal loans
(mainly in China, Hong Kong, Singapore and Korea) on account of the
higher interest rate environment impacting customer affordability,
as well as maturation of digital partnerships (in China, Indonesia,
and Vietnam).
For Ventures, total impairment charges increased
by $20 million to $43 million (30 June 2023: $23 million). Of the
$43 million charge, Mox Bank accounts for $33 million. Stage 1 and
2 impairment charges decreased by $5 million to $7 million (30 June
2023: $12 million). Out of the $7 million charge, $2 million was
from Mox Bank and $5 million was from Trust Bank. Mox Bank's
delinquency and flow rates have improved on both the new and legacy
books as new credit control measures have taken effect over the
course of 2024.
Ventures stage 3 impairment charges increased by
$25 million to $36 million (30 June 2023: $11 million). Of the $36
million, $30 million was from Mox Bank due to gross
charge-offs and bankruptcy-related charges. These charges declined
as we progressed through H1 2024.
For Central and other items, stage 1 and 2
impairment charges decreased by $4 million to a net release of $31
million (30 June 2023: net release of $27 million) due to sovereign
upgrades, driven by improvements in the macroeconomic environment.
The charges also declined due to a portfolio of debt securities
maturing, which were being held by Treasury and accounted for under
FVOCI.
Central and other items stage 3 impairment
charges decreased by $9 million to a net release of $10 million (30
June 2023: net release of $1 million) due to an upgrade in a
sovereign's local currency position to CG12C (higher
risk).
Further details can be found in the
'Credit impairment charge' section.
Page
6
Vulnerable and cyclical sectors
Total net on-balance sheet exposure to
vulnerable and cyclical sectors increased by $4.8 billion to $33
billion (31 December 2023: $29 billion) largely due to increases in
the Oil and Gas and Commodity Traders sectors in stage 1. Stage 2
vulnerable and cyclical sector loans decreased by $0.3 billion to
$3.1 billion (31 December 2023: $3.4 billion) mainly due to CRE.
Stage 3 vulnerable and cyclical sector loans decreased by $0.3
billion to $3.3 billion (31 December 2023: $3.6 billion) mainly due
to a loan sales in the CRE sector, which was partly offset by one
new downgrade.
The Group provides loans to CRE counterparties
of which $8.9 billion is to counterparties in CIB where the source
of repayment is substantially derived from rental or sale of real
estate and is secured by real estate collateral. The remaining CRE
loans comprise working capital loans to real estate corporates,
loans with non-property collateral, unsecured loans and loans to
real estate entities of diversified conglomerates. The average LTV
ratio of the performing book CRE portfolio has increased to 53 per
cent (31 December 2023: 52 per cent). The proportion of loans with
an LTV greater than 80 per cent has increased to 4 per cent
(31 December 2023: 3 per cent).
Further details can be found in the
'Vulnerable, cyclical and high carbon sectors' section.
China commercial real estate
Total exposure to China CRE decreased by $0.4
billion to $2.2 billion (31 December 2023: $2.6 billion) mainly
from repayments. The proportion of credit impaired amortised cost
loans to customers increased to 67 per cent (31 December 2023: 58
per cent) largely due to repayments in the performing portfolio and
a downgrade. Stage 3 provision coverage increased to 77 per cent
(31 December 2023: 72 per cent) reflecting increased provisions
made during the period. The proportion of the loan book rated as
higher risk was stable at 0.4 per cent (31 December 2023: 0.3 per
cent).
The Group continues to hold a judgemental
management overlay in respect of the performing portfolio, which
decreased by $55 million to $86 million (31 December 2023: $141
million) due to repayments and a downgrade to stage 3.
The Group is further indirectly exposed to China
CRE through its associate investment in China Bohai
Bank.
Further details can be found in the
'China commercial real estate' section.
Page
7
Maximum exposure to Credit Risk (reviewed)
The table below presents the Group's maximum
exposure to Credit Risk for its on-balance sheet and off-balance
sheet financial instruments as at 30 June 2024, before and after
taking into account any collateral held or other Credit Risk
mitigation.
Further details can be found in the
'Summary of Credit Risk performance' section.
|
30.06.24
|
31.12.23
|
Maximum exposure
$million
|
Credit risk management
|
Net exposure
$million
|
Maximum exposure
$million
|
Credit risk management
|
Net exposure
$million
|
Collateral8
$million
|
Master netting agreements
$million
|
Collateral8
$million
|
Master netting agreements
$million
|
On-balance sheet
|
|
|
|
|
|
|
|
|
Cash and balances at central banks
|
64,086
|
|
|
64,086
|
69,905
|
|
|
69,905
|
Loans and advances to banks1
|
45,231
|
3,991
|
|
41,240
|
44,977
|
1,738
|
|
43,239
|
of which - reverse repurchase agreements and
other similar secured lending7
|
3,991
|
3,991
|
|
-
|
1,738
|
1,738
|
|
-
|
Loans and advances to customers1
|
275,896
|
115, 872
|
|
160,024
|
286,975
|
118,492
|
|
168,483
|
of which - reverse repurchase agreements and
other similar secured lending7
|
7,788
|
7,788
|
|
-
|
13,996
|
13,996
|
|
-
|
Investment securities - Debt securities and
other eligible bills2
|
151,580
|
|
|
151,580
|
160,263
|
|
|
160,263
|
Fair value through profit or loss3, 7
|
176,460
|
93,202
|
-
|
83,258
|
144,276
|
81,847
|
-
|
62,429
|
Loans and advances to banks
|
2,193
|
|
|
2,193
|
2,265
|
|
|
2,265
|
Loans and advances to customers
|
6,877
|
|
|
6,877
|
7,212
|
|
|
7,212
|
Reverse repurchase agreements and
other similar lending7
|
93,202
|
93,202
|
|
-
|
81,847
|
81,847
|
|
-
|
Investment securities - Debt securities
and other eligible bills2
|
74,188
|
|
|
74,188
|
52,952
|
|
|
52,952
|
Derivative financial instruments4, 7
|
48,647
|
11,285
|
34,398
|
2,964
|
50,434
|
8,440
|
39,293
|
2,701
|
Accrued income
|
2,786
|
|
|
2,786
|
2,673
|
|
|
2,673
|
Assets held for sale9
|
517
|
|
|
517
|
701
|
|
|
701
|
Other assets5
|
42,206
|
|
|
42,206
|
38,140
|
|
|
38,140
|
Total balance sheet
|
807,409
|
224,350
|
34,398
|
548,661
|
798,344
|
210,517
|
39,293
|
548,534
|
Off-balance sheet6
|
|
|
|
|
|
|
|
|
Undrawn Commitments
|
178,568
|
3,078
|
|
175,490
|
182,390
|
2,940
|
|
179,450
|
Financial Guarantees and other
equivalents
|
86,094
|
2,351
|
|
83,743
|
74,414
|
2,590
|
|
71,824
|
Total off-balance sheet
|
264,662
|
5,429
|
-
|
259,233
|
256,804
|
5,530
|
-
|
251,274
|
Total
|
1,072,071
|
229,779
|
34,398
|
807,894
|
1,055,148
|
216,047
|
39,293
|
799,808
|
1. An analysis of credit quality is set out in
the credit quality analysis section. Further details of collateral
held by client segment and stage are set out in the collateral
analysis section
2. Excludes equity and other investments of
$823 million (31 December 2023: $992 million). Further details are
set out in Note 13 financial instruments
3. Excludes equity and other investments of
$5,264 million (31 December 2023: $2,940 million). Further details
are set out in Note 13 financial instruments
4 The Group enters into master netting
agreements, which in the event of default result in a single amount
owed by or to the counterparty through netting the sum of the
positive and negative mark-to-market values of applicable
derivative transactions
5. Other assets include Hong Kong certificates
of indebtedness, cash collateral, and acceptances, in addition to
unsettled trades and other financial assets
6. Excludes ECL allowances which are reported
under Provisions for liabilities and charges
7. Collateral capped at maximum exposure
(over-collateralised)
8. Adjusted for over-collateralisation, which
has been determined with reference to the drawn and undrawn
component as this best reflects the effect on the amount arising
from expected credit losses
9. The amount is after ECL. Further details are
set out in Note 20 Assets held for sale and associated
liabilities
Page
8
Analysis of financial instruments by stage
(reviewed)
The table below presents the gross and credit
impairment balances by stage for the Group's amortised cost and
FVOCI financial instruments as at 30 June 2024.
Further details can be found in the
'Summary of Credit Risk performance' section.
|
30.06.24
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Gross balance1
$million
|
Total credit impairment
$million
|
Net carrying value
$million
|
Gross balance1
$million
|
Total credit impairment
$million
|
Net carrying value
$million
|
Gross balance1
$million
|
Total credit impairment
$million
|
Net carrying value
$million
|
Gross balance1
$million
|
Total credit impairment
$million
|
Net carrying value
$million
|
Cash and balances at central banks
|
63,238
|
-
|
63,238
|
339
|
-
|
339
|
522
|
(13)
|
509
|
64,099
|
(13)
|
64,086
|
Loans and advances
to banks (amortised cost)
|
44,793
|
(4)
|
44,789
|
392
|
(3)
|
389
|
57
|
(4)
|
53
|
45,242
|
(11)
|
45,231
|
Loans and advances to customers (amortised
cost)
|
264,249
|
(480)
|
263,769
|
10,005
|
(362)
|
9,643
|
6,639
|
(4,155)
|
2,484
|
280,893
|
(4,997)
|
275,896
|
Debt securities and other
eligible bills⁵
|
149,422
|
(23)
|
|
1,787
|
(10)
|
|
387
|
(16)
|
|
151,596
|
(49)
|
|
Amortised cost
|
55,961
|
(16)
|
55,945
|
396
|
-
|
396
|
62
|
-
|
62
|
56,419
|
(16)
|
56,403
|
FVOCI2
|
93,461
|
(7)
|
|
1,391
|
(10)
|
|
325
|
(16)
|
|
95,177
|
(33)
|
|
Accrued income (amortised cost)4
|
2,786
|
|
2,786
|
|
|
-
|
|
|
-
|
2,786
|
-
|
2,786
|
Assets held
for sale⁴
|
429
|
-
|
429
|
50
|
(1)
|
49
|
114
|
(75)
|
39
|
593
|
(76)
|
517
|
Other assets
|
42,209
|
(3)
|
42,206
|
-
|
-
|
-
|
3
|
(3)
|
-
|
42,212
|
(6)
|
42,206
|
Undrawn commitments3
|
173,625
|
(46)
|
|
4,935
|
(47)
|
|
8
|
-
|
|
178,568
|
(93)
|
|
Financial guarantees,
trade credits
and irrevocable letter of credits3
|
83,957
|
(12)
|
|
1,423
|
(6)
|
|
714
|
(142)
|
|
86,094
|
(160)
|
|
Total
|
824,708
|
(568)
|
|
18,931
|
(429)
|
|
8,444
|
(4,408)
|
|
852,083
|
(5,405)
|
|
1 Gross carrying amount for off-balance
sheet refers to notional values
2 These instruments are held at fair
value on the balance sheet. The ECL provision in respect of debt
securities measured at FVOCI is held within the OCI
reserve
3 These are off-balance sheet
instruments. Only the ECL is recorded on-balance sheet as a
financial liability and therefore there is no "net carrying
amount". ECL allowances on off-balance sheet instruments are held
as liability provisions to the extent that the drawn and undrawn
components of loan exposures can be separately identified.
Otherwise they will be reported against the drawn
component
4 Stage 1 ECL is not material
5 Stage 3 gross includes $23 million (31
December 2023: $80 million) originated credit-impaired debt
securities with impairment of $nil million (31 December 2023:
$14 million)
Page
9
|
31.12.23
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Gross balance1
$million
|
Total credit impairment
$million
|
Net carrying value
$million
|
Gross balance1
$million
|
Total credit impairment
$million
|
Net carrying value
$million
|
Gross balance1
$million
|
Total credit impairment
$million
|
Net carrying value
$million
|
Gross balance1
$million
|
Total credit impairment
$million
|
Net carrying value
$million
|
Cash and balances at central banks
|
69,313
|
-
|
69,313
|
207
|
(7)
|
200
|
404
|
(12)
|
392
|
69,924
|
(19)
|
69,905
|
Loans and advances
to banks (amortised cost)
|
44,384
|
(8)
|
44,376
|
540
|
(10)
|
530
|
77
|
(6)
|
71
|
45,001
|
(24)
|
44,977
|
Loans and advances to customers (amortised
cost)
|
273,692
|
(430)
|
273,262
|
11,225
|
(420)
|
10,805
|
7,228
|
(4,320)
|
2,908
|
292,145
|
(5,170)
|
286,975
|
Debt securities and other
eligible bills5
|
158,314
|
(26)
|
|
1,860
|
(34)
|
|
164
|
(61)
|
|
160,338
|
(121)
|
|
Amortised cost
|
56,787
|
(16)
|
56,771
|
103
|
(2)
|
101
|
120
|
(57)
|
63
|
57,010
|
(75)
|
56,935
|
FVOCI2
|
101,527
|
(10)
|
|
1,757
|
(32)
|
|
44
|
(4)
|
|
103,328
|
(46)
|
|
Accrued income (amortised cost)4
|
2,673
|
|
2,673
|
|
|
-
|
|
|
-
|
2,673
|
-
|
2,673
|
Assets held
for sale4
|
661
|
(33)
|
628
|
76
|
(4)
|
72
|
1
|
-
|
1
|
738
|
(37)
|
701
|
Other assets
|
38,139
|
-
|
38,139
|
-
|
-
|
-
|
4
|
(3)
|
1
|
38,143
|
(3)
|
38,140
|
Undrawn commitments3
|
176,654
|
(52)
|
|
5,733
|
(39)
|
|
3
|
-
|
|
182,390
|
(91)
|
|
Financial guarantees,
trade credits
and irrevocable letter of credits3
|
70,832
|
(10)
|
|
2,910
|
(14)
|
|
672
|
(112)
|
|
74,414
|
(136)
|
|
Total
|
834,662
|
(559)
|
|
22,551
|
(528)
|
|
8,553
|
(4,514)
|
|
865,766
|
(5,601)
|
|
1 Gross carrying amount for off-balance
sheet refers to notional values
2 These instruments are held at fair
value on the balance sheet. The ECL provision in respect of debt
securities measured at FVOCI is held within the OCI
reserve
3 These are off-balance sheet
instruments. Only the ECL is recorded on-balance sheet as a
financial liability and therefore there is no "net carrying
amount". ECL allowances on off-balance sheet instruments are held
as liability provisions to the extent that the drawn and undrawn
components of loan exposures can be separately identified.
Otherwise they will be reported against the drawn
component
4 Stage 1 ECL is not material
5 Stage 3 gross includes $80 million
originated credit-impaired debt securities with impairment of $14
million
Credit quality analysis
Credit quality by client segment (reviewed)
For CIB, exposures are analysed by credit grade
(CG), which plays a central role in the quality assessment and
monitoring of risk. All loans are assigned a CG, which is reviewed
periodically and amended in light of changes in the borrower's
circumstances or behaviour. CGs 1 to 12 are assigned to stage 1 and
stage 2 (performing) clients or accounts, while CGs 13 and 14 are
assigned to stage 3 (credit-impaired) clients. Consumer and
Business Banking portfolios are analysed by days past due and
Private Banking by the type of collateral held.
Mapping of credit quality
The Group uses the following internal risk
mapping to determine the credit quality for loans.
Credit quality description
|
Corporate & Investment Banking
|
Private Banking1
|
Wealth & Retail Banking5
|
Internal grade mapping
|
S&P external ratings equivalent
|
Regulatory PD range (%)
|
Internal ratings
|
Internal grade mapping
|
Strong
|
1A to 5B
|
AAA/AA+ to BBB-/BB+²
|
0 to 0.425
|
Class I and Class IV
|
Current loans (no past dues nor
impaired)
|
Satisfactory
|
6A to 11C
|
BB+/BB to B-/CCC+³
|
0.426 to 15.75
|
Class II and Class III
|
Loans past due till 29 days
|
Higher risk
|
Grade 12
|
CCC+ to C⁴
|
15.751 to 99.999
|
Stressed Assets Group (SAG) managed
|
Past due loans 30 days and over till 90
days
|
1 For Private Banking, classes of risk
represent the type of collateral held. Class I represents
facilities with liquid collateral, such as cash and marketable
securities. Class II represents unsecured/partially secured
facilities and those with illiquid collateral, such as equity in
private enterprises. Class III represents facilities with
residential or commercial real estate collateral. Class IV covers
margin trading facilities
2 Banks' rating: AAA/AA+ to BB+.
Sovereigns' rating: AAA to BB+
3 Banks' rating: BB to "CCC+ to C".
Sovereigns' rating: BB+/BB to B-/CCC+
4 Banks' rating: CCC+ to C. Sovereigns'
rating: CCC+ to "CCC+ to C"
5 Wealth & Retail Banking excludes
Private Banking. Medium enterprise clients within Business Banking
are managed using the same internal credit grades as CIB
The table below sets out the gross loans and
advances held at amortised cost, expected credit loss provisions
and
expected credit loss coverage by business segment and stage.
Expected credit loss coverage represents the expected
credit loss reported for each segment and stage as a proportion of
the gross loan balance for each segment and stage.
Further details can be found in the
'Summary of Credit Risk performance' section.
Loans and advances by client segment
(reviewed)
Amortised cost
|
30.06.24
|
Banks
$million
|
Customers
|
Undrawn commitments
$million
|
Financial Guarantees
$million
|
Corporate & Investment Banking
$million
|
Wealth & Retail Banking
$million
|
Ventures
$million
|
Central & other items
$million
|
Customer Total
$million
|
Stage 1
|
44,793
|
121,272
|
118,064
|
1,103
|
23,810
|
264,249
|
173,625
|
83,957
|
- Strong
|
35,029
|
83,625
|
112,547
|
1,088
|
23,424
|
220,684
|
158,620
|
56,826
|
- Satisfactory
|
9,764
|
37,647
|
5,517
|
15
|
386
|
43,565
|
15,005
|
27,131
|
Stage 2
|
392
|
7,980
|
1,848
|
48
|
129
|
10,005
|
4,935
|
1,423
|
- Strong
|
173
|
1,129
|
1,333
|
32
|
-
|
2,494
|
1,768
|
303
|
- Satisfactory
|
161
|
6,074
|
172
|
5
|
-
|
6,251
|
2,953
|
912
|
- Higher risk
|
58
|
777
|
343
|
11
|
129
|
1,260
|
214
|
208
|
Of which (stage 2):
|
|
|
|
|
|
|
|
|
- Less than 30 days past due
|
-
|
228
|
172
|
5
|
-
|
405
|
-
|
-
|
- More than 30 days past due
|
3
|
7
|
343
|
11
|
-
|
361
|
-
|
-
|
Stage 3, credit-impaired financial
assets
|
57
|
5,048
|
1,518
|
9
|
64
|
6,639
|
8
|
714
|
Gross balance¹
|
45,242
|
134,300
|
121,430
|
1,160
|
24,003
|
280,893
|
178,568
|
86,094
|
Stage 1
|
(4)
|
(110)
|
(350)
|
(20)
|
-
|
(480)
|
(46)
|
(12)
|
- Strong
|
(2)
|
(70)
|
(274)
|
(19)
|
-
|
(363)
|
(30)
|
(3)
|
- Satisfactory
|
(2)
|
(40)
|
(76)
|
(1)
|
-
|
(117)
|
(16)
|
(9)
|
Stage 2
|
(3)
|
(206)
|
(134)
|
(22)
|
-
|
(362)
|
(47)
|
(6)
|
- Strong
|
(2)
|
(15)
|
(49)
|
(16)
|
-
|
(80)
|
(9)
|
(1)
|
- Satisfactory
|
(1)
|
(144)
|
(27)
|
(3)
|
-
|
(174)
|
(26)
|
(2)
|
- Higher risk
|
-
|
(47)
|
(58)
|
(3)
|
-
|
(108)
|
(12)
|
(3)
|
Of which (stage 2):
|
|
|
|
|
|
|
|
|
- Less than 30 days past due
|
-
|
(15)
|
(27)
|
(3)
|
-
|
(45)
|
-
|
-
|
- More than 30 days past due
|
-
|
-
|
(58)
|
(3)
|
-
|
(61)
|
-
|
-
|
Stage 3, credit-impaired financial
assets
|
(4)
|
(3,449)
|
(697)
|
(9)
|
-
|
(4,155)
|
-
|
(142)
|
Total credit impairment
|
(11)
|
(3,765)
|
(1,181)
|
(51)
|
-
|
(4,997)
|
(93)
|
(160)
|
Net carrying value
|
45,231
|
130,535
|
120,249
|
1,109
|
24,003
|
275,896
|
|
|
Stage 1
|
0.0%
|
0.1%
|
0.3%
|
1.8%
|
0.0%
|
0.2%
|
0.0%
|
0.0%
|
- Strong
|
0.0%
|
0.1%
|
0.2%
|
1.7%
|
0.0%
|
0.2%
|
0.0%
|
0.0%
|
- Satisfactory
|
0.0%
|
0.1%
|
1.4%
|
6.7%
|
0.0%
|
0.3%
|
0.1%
|
0.0%
|
Stage 2
|
0.8%
|
2.6%
|
7.3%
|
45.8%
|
0.0%
|
3.6%
|
1.0%
|
0.4%
|
- Strong
|
1.2%
|
1.3%
|
3.7%
|
50.0%
|
0.0%
|
3.2%
|
0.5%
|
0.3%
|
- Satisfactory
|
0.6%
|
2.4%
|
15.7%
|
60.0%
|
0.0%
|
2.8%
|
0.9%
|
0.2%
|
- Higher risk
|
0.0%
|
6.0%
|
16.9%
|
27.3%
|
0.0%
|
8.6%
|
5.6%
|
1.4%
|
Of which (stage 2):
|
|
|
|
|
|
|
|
|
- Less than 30 days past due
|
0.0%
|
6.6%
|
15.7%
|
60.0%
|
0.0%
|
11.1%
|
0.0%
|
0.0%
|
- More than 30 days past due
|
0.0%
|
0.0%
|
16.9%
|
27.3%
|
0.0%
|
16.9%
|
0.0%
|
0.0%
|
Stage 3, credit-impaired financial
assets (S3)
|
7.0%
|
68.3%
|
45.9%
|
100.0%
|
0.0%
|
62.6%
|
0.0%
|
19.9%
|
- Stage 3 Collateral
|
2
|
635
|
664
|
-
|
-
|
1,299
|
-
|
47
|
- Stage 3 Cover ratio (after
collateral)
|
10.5%
|
80.9%
|
89.7%
|
100.0%
|
0.0%
|
82.2%
|
0.0%
|
26.5%
|
Cover ratio
|
0.0%
|
2.8%
|
1.0%
|
4.4%
|
0.0%
|
1.8%
|
0.1%
|
0.2%
|
Fair value through profit or loss
|
|
|
|
|
|
|
|
|
Performing
|
42,461
|
59,769
|
9
|
-
|
-
|
59,778
|
-
|
-
|
- Strong
|
37,129
|
40,917
|
6
|
-
|
-
|
40,923
|
-
|
-
|
- Satisfactory
|
5,332
|
18,801
|
3
|
-
|
-
|
18,804
|
-
|
-
|
- Higher risk
|
-
|
51
|
-
|
-
|
-
|
51
|
-
|
-
|
Defaulted (CG13-14)
|
-
|
33
|
-
|
-
|
-
|
33
|
-
|
-
|
Gross balance (FVTPL)2
|
42,461
|
59,802
|
9
|
-
|
-
|
59,811
|
-
|
-
|
Net carrying value (incl FVTPL)
|
87,692
|
190,337
|
120,258
|
1,109
|
24,003
|
335,707
|
-
|
-
|
1 Loans and advances includes reverse
repurchase agreements and other similar secured lending of $7,788
million under Customers and of $3,991 million under Banks, held at
amortised cost
2 Loans and advances includes reverse
repurchase agreements and other similar secured lending of $52,934
million under Customers and of $40,268 million under Banks, held at
fair value through profit or loss
Amortised cost
|
31.12.23
|
Banks
$million
|
Customers
|
Undrawn commitments
$million
|
Financial Guarantees
$million
|
Corporate & Investment Banking
$million
|
Wealth & Retail Banking
$million
|
Ventures
$million
|
Central & other items
$million
|
Customer Total
$million
|
Stage 1
|
44,384
|
120,886
|
123,486
|
1,015
|
28,305
|
273,692
|
176,654
|
70,832
|
- Strong
|
35,284
|
84,248
|
118,193
|
1,000
|
27,967
|
231,408
|
162,643
|
47,885
|
- Satisfactory
|
9,100
|
36,638
|
5,293
|
15
|
338
|
42,284
|
14,011
|
22,947
|
Stage 2
|
540
|
7,902
|
2,304
|
54
|
965
|
11,225
|
5,733
|
2,910
|
- Strong
|
55
|
1,145
|
1,761
|
34
|
-
|
2,940
|
1,090
|
830
|
- Satisfactory
|
212
|
5,840
|
206
|
7
|
-
|
6,053
|
4,169
|
1,823
|
- Higher risk
|
273
|
917
|
337
|
13
|
965
|
2,232
|
474
|
257
|
Of which (stage 2):
|
|
|
|
|
|
|
|
|
- Less than 30 days past due
|
-
|
78
|
206
|
7
|
-
|
291
|
-
|
-
|
- More than 30 days past due
|
-
|
10
|
337
|
13
|
-
|
360
|
-
|
-
|
Stage 3, credit-impaired financial
assets
|
77
|
5,508
|
1,484
|
12
|
224
|
7,228
|
3
|
672
|
Gross balance1
|
45,001
|
134,296
|
127,274
|
1,081
|
29,494
|
292,145
|
182,390
|
74,414
|
Stage 1
|
(8)
|
(101)
|
(314)
|
(15)
|
-
|
(430)
|
(52)
|
(10)
|
- Strong
|
(3)
|
(34)
|
(234)
|
(14)
|
-
|
(282)
|
(31)
|
(2)
|
- Satisfactory
|
(5)
|
(67)
|
(80)
|
(1)
|
-
|
(148)
|
(21)
|
(8)
|
Stage 2
|
(10)
|
(257)
|
(141)
|
(21)
|
(1)
|
(420)
|
(39)
|
(14)
|
- Strong
|
(1)
|
(18)
|
(65)
|
(14)
|
-
|
(97)
|
(5)
|
-
|
- Satisfactory
|
(2)
|
(179)
|
(22)
|
(3)
|
-
|
(204)
|
(23)
|
(7)
|
- Higher risk
|
(7)
|
(60)
|
(54)
|
(4)
|
(1)
|
(119)
|
(11)
|
(7)
|
Of which (stage 2):
|
|
|
|
|
|
|
|
|
- Less than 30 days past due
|
-
|
(2)
|
(22)
|
(3)
|
-
|
(27)
|
-
|
-
|
- More than 30 days past due
|
-
|
(1)
|
(54)
|
(4)
|
-
|
(59)
|
-
|
-
|
Stage 3, credit-impaired financial
assets
|
(6)
|
(3,533)
|
(760)
|
(12)
|
(15)
|
(4,320)
|
-
|
(112)
|
Total credit impairment
|
(24)
|
(3,891)
|
(1,215)
|
(48)
|
(16)
|
(5,170)
|
(91)
|
(136)
|
Net carrying value
|
44,977
|
130,405
|
126,059
|
1,033
|
29,478
|
286,975
|
-
|
-
|
Stage 1
|
0.0%
|
0.1%
|
0.3%
|
1.5%
|
0.0%
|
0.2%
|
0.0%
|
0.0%
|
- Strong
|
0.0%
|
0.0%
|
0.2%
|
1.4%
|
0.0%
|
0.1%
|
0.0%
|
0.0%
|
- Satisfactory
|
0.1%
|
0.2%
|
1.5%
|
6.7%
|
0.0%
|
0.4%
|
0.1%
|
0.0%
|
Stage 2
|
1.9%
|
3.3%
|
6.1%
|
38.9%
|
0.1%
|
3.7%
|
0.7%
|
0.5%
|
- Strong
|
1.8%
|
1.6%
|
3.7%
|
41.2%
|
0.0%
|
3.3%
|
0.5%
|
(0.0)%
|
- Satisfactory
|
0.9%
|
3.1%
|
10.7%
|
42.9%
|
0.0%
|
3.4%
|
0.6%
|
0.4%
|
- Higher risk
|
2.6%
|
6.5%
|
16.0%
|
30.8%
|
0.1%
|
5.3%
|
2.3%
|
2.7%
|
Of which (stage 2):
|
|
|
|
|
|
|
|
|
- Less than 30 days past due
|
0.0%
|
2.6%
|
10.7%
|
42.9%
|
0.0%
|
9.3%
|
0.0%
|
0.0%
|
- More than 30 days past due
|
0.0%
|
10.0%
|
16.0%
|
30.8%
|
0.0%
|
16.4%
|
0.0%
|
0.0%
|
Stage 3, credit-impaired financial
assets (S3)
|
7.8%
|
64.1%
|
51.2%
|
100.0%
|
6.7%
|
59.8%
|
0.0%
|
16.7%
|
- Stage 3 Collateral
|
2
|
621
|
554
|
-
|
-
|
1,175
|
-
|
34
|
- Stage 3 Cover ratio (after
collateral)
|
10.4%
|
75.4%
|
88.5%
|
100.0%
|
6.7%
|
76.0%
|
0.0%
|
21.7%
|
Cover ratio
|
0.1%
|
2.9%
|
1.0%
|
4.4%
|
0.1%
|
1.8%
|
0.0%
|
0.2%
|
Fair value through profit or loss
|
|
|
|
|
|
|
|
|
Performing
|
32,813
|
58,465
|
13
|
-
|
-
|
58,478
|
-
|
-
|
- Strong
|
28,402
|
38,014
|
13
|
-
|
-
|
38,027
|
-
|
-
|
- Satisfactory
|
4,411
|
20,388
|
-
|
-
|
-
|
20,388
|
-
|
-
|
- Higher risk
|
-
|
63
|
-
|
-
|
-
|
63
|
-
|
-
|
Defaulted (CG13-14)
|
-
|
33
|
-
|
-
|
-
|
33
|
-
|
-
|
Gross balance (FVTPL)2
|
32,813
|
58,498
|
13
|
-
|
-
|
58,511
|
-
|
-
|
Net carrying value (incl FVTPL)
|
77,790
|
188,903
|
126,072
|
1,033
|
29,478
|
345,486
|
-
|
-
|
1 Loans and advances includes
reverse repurchase agreements and other similar secured lending of
$13,996 million under Customers and of $1,738 million under Banks,
held at amortised cost
2 Loans and advances includes
reverse repurchase agreements and other similar secured lending of
$51,299 million under Customers and of $30,548 million under Banks,
held at fair value through profit or loss
Page
13
Loans and advances by client segment credit quality
analysis
Credit grade
|
Regulatory 1 year PD range (%)
|
S&P external ratings equivalent
|
Corporate & Investment Banking
|
30.06.24
|
Gross
|
Credit impairment
|
Stage 1 $million
|
Stage 2 $million
|
Stage 3 $million
|
Total $million
|
Stage 1 $million
|
Stage 2 $million
|
Stage 3 $million
|
Total $million
|
Total Coverage %
|
Strong
|
|
|
83,625
|
1,129
|
-
|
84,754
|
(70)
|
(15)
|
-
|
(85)
|
0.1%
|
1A-2B
|
0 - 0.045
|
A+ and Above
|
11,929
|
28
|
-
|
11,957
|
(2)
|
-
|
-
|
(2)
|
0.0%
|
3A-4A
|
0.046 - 0.110
|
A/A- to BBB+/BBB
|
33,470
|
559
|
-
|
34,029
|
(7)
|
(3)
|
-
|
(10)
|
0.0%
|
4B-5B
|
0.111 - 0.425
|
BBB to BBB-/BB+
|
38,226
|
542
|
-
|
38,768
|
(61)
|
(12)
|
-
|
(73)
|
0.2%
|
Satisfactory
|
|
|
37,647
|
6,074
|
-
|
43,721
|
(40)
|
(144)
|
-
|
(184)
|
0.4%
|
6A-7B
|
0.426 - 1.350
|
BB+/BB to BB-
|
24,516
|
2,010
|
-
|
26,526
|
(19)
|
(80)
|
-
|
(99)
|
0.4%
|
8A-9B
|
1.351 - 4.000
|
BB-/B+ to B
|
8,614
|
2,557
|
-
|
11,171
|
(12)
|
(49)
|
-
|
(61)
|
0.5%
|
10A-11C
|
4.001 - 15.75
|
B/B- to B-/CCC+
|
4,517
|
1,507
|
-
|
6,024
|
(9)
|
(15)
|
-
|
(24)
|
0.4%
|
Higher risk
|
|
|
-
|
777
|
-
|
777
|
-
|
(47)
|
-
|
(47)
|
6.0%
|
12
|
15.751 - 99.999
|
CCC+/C
|
-
|
777
|
-
|
777
|
-
|
(47)
|
-
|
(47)
|
6.0%
|
Credit-impaired
|
|
|
-
|
-
|
5,048
|
5,048
|
-
|
-
|
(3,449)
|
(3,449)
|
68.3%
|
13-14
|
100
|
Defaulted
|
-
|
-
|
5,048
|
5,048
|
-
|
-
|
(3,449)
|
(3,449)
|
68.3%
|
Total
|
|
|
121,272
|
7,980
|
5,048
|
134,300
|
(110)
|
(206)
|
(3,449)
|
(3,765)
|
2.8%
|
Credit grade
|
Regulatory 1 year PD range (%)
|
S&P external ratings equivalent
|
Corporate & Investment Banking
|
31.12.23
|
Gross
|
Credit impairment
|
Stage 1 $million
|
Stage 2 $million
|
Stage 3 $million
|
Total $million
|
Stage 1 $million
|
Stage 2 $million
|
Stage 3 $million
|
Total $million
|
Total Coverage %
|
Strong
|
|
|
84,248
|
1,145
|
-
|
85,393
|
(34)
|
(18)
|
-
|
(52)
|
0.1%
|
1A-2B
|
0 - 0.045
|
A+ and Above
|
10,891
|
81
|
-
|
10,972
|
(1)
|
-
|
-
|
(1)
|
0.0%
|
3A-4A
|
0.046 - 0.110
|
A/A- to BBB+/BBB
|
31,974
|
558
|
-
|
32,532
|
(3)
|
-
|
-
|
(3)
|
0.0%
|
4B-5B
|
0.111 - 0.425
|
BBB to BBB-/BB+
|
41,383
|
506
|
-
|
41,889
|
(30)
|
(18)
|
-
|
(48)
|
0.1%
|
Satisfactory
|
|
|
36,638
|
5,840
|
-
|
42,478
|
(67)
|
(179)
|
-
|
(246)
|
0.6%
|
6A-7B
|
0.426 - 1.350
|
BB+/BB to BB-
|
24,296
|
1,873
|
-
|
26,169
|
(38)
|
(77)
|
-
|
(115)
|
0.4%
|
8A-9B
|
1.351 - 4.000
|
BB-/B+ to B
|
8,196
|
2,273
|
-
|
10,469
|
(13)
|
(90)
|
-
|
(103)
|
1.0%
|
10A-11C
|
4.001 - 15.75
|
B/B- to B-/CCC+
|
4,146
|
1,694
|
-
|
5,840
|
(16)
|
(12)
|
-
|
(28)
|
0.5%
|
Higher risk
|
|
|
-
|
917
|
-
|
917
|
-
|
(60)
|
-
|
(60)
|
6.5%
|
12
|
15.751 - 99.999
|
CCC+/C
|
-
|
917
|
-
|
917
|
-
|
(60)
|
-
|
(60)
|
6.5%
|
Credit-impaired
|
|
|
-
|
-
|
5,508
|
5,508
|
-
|
-
|
(3,533)
|
(3,533)
|
64.1%
|
13-14
|
100
|
Defaulted
|
-
|
-
|
5,508
|
5,508
|
-
|
-
|
(3,533)
|
(3,533)
|
64.1%
|
Total
|
|
|
120,886
|
7,902
|
5,508
|
134,296
|
(101)
|
(257)
|
(3,533)
|
(3,891)
|
2.9%
|
Page
14
Loans and advances by client segment credit
quality analysis by key geography
Corporate & Investment Banking
|
Corporate & Investment
Banking
|
30.06.24
|
Gross
|
Credit impairment
|
Stage 1
|
Stage 2
|
Stage 3
|
Stage 1
|
Stage 2
|
Stage 3
|
Coverage
|
Strong $million
|
Satis-factory $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Higher Risk $million
|
Total $million
|
De-faulted $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Higher Risk $million
|
Total $million
|
De-faulted $million
|
Total $million
|
%
|
Hong Kong
|
31,685
|
10,144
|
41,829
|
199
|
1,065
|
27
|
1,291
|
1,371
|
44,491
|
(36)
|
(7)
|
(43)
|
(2)
|
(70)
|
(3)
|
(75)
|
(1,111)
|
(1,229)
|
2.8%
|
Corporate Lending
|
14,459
|
6,614
|
21,073
|
162
|
853
|
27
|
1,042
|
1,361
|
23,476
|
(36)
|
(4)
|
(40)
|
(1)
|
(70)
|
(3)
|
(74)
|
(1,111)
|
(1,225)
|
5.2%
|
Non Corporate Lending¹
|
2,848
|
1,685
|
4,533
|
-
|
212
|
-
|
212
|
10
|
4,755
|
-
|
(2)
|
(2)
|
-
|
-
|
-
|
-
|
-
|
(2)
|
0.0%
|
Banks
|
14,378
|
1,845
|
16,223
|
37
|
-
|
-
|
37
|
-
|
16,260
|
-
|
(1)
|
(1)
|
(1)
|
-
|
-
|
(1)
|
-
|
(2)
|
0.0%
|
Singapore
|
15,821
|
7,122
|
22,943
|
352
|
665
|
9
|
1,026
|
283
|
24,252
|
(5)
|
(5)
|
(10)
|
-
|
(18)
|
(3)
|
(21)
|
(90)
|
(121)
|
0.5%
|
Corporate Lending
|
8,421
|
3,348
|
11,769
|
319
|
515
|
9
|
843
|
236
|
12,848
|
(5)
|
(4)
|
(9)
|
-
|
(13)
|
(3)
|
(16)
|
(90)
|
(115)
|
0.9%
|
Non Corporate Lending¹
|
1,395
|
572
|
1,967
|
30
|
144
|
-
|
174
|
-
|
2,141
|
-
|
(1)
|
(1)
|
-
|
(5)
|
-
|
(5)
|
-
|
(6)
|
0.3%
|
Banks
|
6,005
|
3,202
|
9,207
|
3
|
6
|
-
|
9
|
47
|
9,263
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0.0%
|
UK
|
16,196
|
3,489
|
19,685
|
189
|
2,085
|
117
|
2,391
|
349
|
22,425
|
(7)
|
-
|
(7)
|
(7)
|
(34)
|
-
|
(41)
|
(198)
|
(246)
|
1.1%
|
Corporate Lending
|
6,957
|
835
|
7,792
|
188
|
1,670
|
-
|
1,858
|
224
|
9,874
|
(7)
|
-
|
(7)
|
(7)
|
(31)
|
-
|
(38)
|
(173)
|
(218)
|
2.2%
|
Non Corporate Lending¹
|
7,096
|
1,023
|
8,119
|
1
|
353
|
110
|
464
|
121
|
8,704
|
-
|
-
|
-
|
-
|
(3)
|
-
|
(3)
|
(21)
|
(24)
|
0.3%
|
Banks
|
2,143
|
1,631
|
3,774
|
-
|
62
|
7
|
69
|
4
|
3,847
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(4)
|
(4)
|
0.1%
|
US
|
14,367
|
4,151
|
18,518
|
104
|
269
|
13
|
386
|
4
|
18,908
|
(4)
|
(2)
|
(6)
|
-
|
-
|
-
|
-
|
(4)
|
(10)
|
0.1%
|
Corporate Lending
|
5,706
|
2,056
|
7,762
|
-
|
264
|
-
|
264
|
1
|
8,027
|
(3)
|
(2)
|
(5)
|
-
|
-
|
-
|
-
|
(1)
|
(6)
|
0.1%
|
Non Corporate Lending¹
|
7,640
|
441
|
8,081
|
18
|
5
|
-
|
23
|
3
|
8,107
|
(1)
|
-
|
(1)
|
-
|
-
|
-
|
-
|
(3)
|
(4)
|
0.0%
|
Banks
|
1,021
|
1,654
|
2,675
|
86
|
-
|
13
|
99
|
-
|
2,774
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0.0%
|
China
|
11,005
|
2,641
|
13,646
|
-
|
174
|
21
|
195
|
249
|
14,090
|
(3)
|
(1)
|
(4)
|
-
|
-
|
(2)
|
(2)
|
(131)
|
(137)
|
1.0%
|
Corporate Lending
|
4,976
|
2,069
|
7,045
|
-
|
174
|
21
|
195
|
246
|
7,486
|
(1)
|
(1)
|
(2)
|
-
|
-
|
(2)
|
(2)
|
(131)
|
(135)
|
1.8%
|
Non Corporate Lending¹
|
3,515
|
309
|
3,824
|
-
|
-
|
-
|
-
|
-
|
3,824
|
(1)
|
-
|
(1)
|
-
|
-
|
-
|
-
|
-
|
(1)
|
0.0%
|
Banks
|
2,514
|
263
|
2,777
|
-
|
-
|
-
|
-
|
3
|
2,780
|
(1)
|
-
|
(1)
|
-
|
-
|
-
|
-
|
-
|
(1)
|
0.0%
|
Other
|
29,580
|
19,864
|
49,444
|
458
|
1,977
|
648
|
3,083
|
2,849
|
55,376
|
(17)
|
(27)
|
(44)
|
(8)
|
(23)
|
(39)
|
(70)
|
(1,919)
|
(2,033)
|
3.7%
|
Corporate Lending
|
16,478
|
15,285
|
31,763
|
394
|
1,160
|
610
|
2,164
|
2,740
|
36,667
|
(9)
|
(21)
|
(30)
|
(7)
|
(22)
|
(39)
|
(68)
|
(1,813)
|
(1,911)
|
5.2%
|
Non Corporate Lending¹
|
4,134
|
3,410
|
7,544
|
17
|
724
|
-
|
741
|
106
|
8,391
|
(7)
|
(5)
|
(12)
|
-
|
-
|
-
|
-
|
(106)
|
(118)
|
1.4%
|
Banks
|
8,968
|
1,169
|
10,137
|
47
|
93
|
38
|
178
|
3
|
10,318
|
(1)
|
(1)
|
(2)
|
(1)
|
(1)
|
-
|
(2)
|
-
|
(4)
|
0.0%
|
Total
|
118,654
|
47,411
|
166,065
|
1,302
|
6,235
|
835
|
8,372
|
5,105
|
179,542
|
(72)
|
(42)
|
(114)
|
(17)
|
(145)
|
(47)
|
(209)
|
(3,453)
|
(3,776)
|
2.1%
|
1 Include financing, insurance and
non-banking corporations and governments
Page
15
|
Corporate & Investment Banking
|
31.12.23
|
Gross
|
Credit impairment
|
Stage 1
|
Stage 2
|
Stage 3
|
Stage 1
|
Stage 2
|
Stage 3
|
Coverage
|
Strong $million
|
Satis-factory $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Higher Risk $million
|
Total $million
|
De-faulted $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Higher Risk $million
|
Total $million
|
De-faulted $million
|
Total $million
|
%
|
Hong Kong
|
32,997
|
10,151
|
43,148
|
167
|
937
|
30
|
1,134
|
1,284
|
45,566
|
(7)
|
(23)
|
(30)
|
(4)
|
(118)
|
(3)
|
(125)
|
(1,025)
|
(1,180)
|
2.6%
|
Corporate Lending
|
14,401
|
6,289
|
20,690
|
165
|
855
|
30
|
1,050
|
1,219
|
22,959
|
(5)
|
(20)
|
(25)
|
(3)
|
(118)
|
(3)
|
(124)
|
(1,024)
|
(1,173)
|
5.1%
|
Non Corporate Lending¹
|
2,544
|
2,458
|
5,002
|
1
|
81
|
-
|
82
|
65
|
5,149
|
(1)
|
(2)
|
(3)
|
-
|
-
|
-
|
-
|
(1)
|
(4)
|
0.1%
|
Banks
|
16,052
|
1,404
|
17,456
|
1
|
1
|
-
|
2
|
-
|
17,458
|
(1)
|
(1)
|
(2)
|
(1)
|
-
|
-
|
(1)
|
-
|
(3)
|
0.0%
|
Singapore
|
13,180
|
6,046
|
19,226
|
361
|
509
|
36
|
906
|
285
|
20,417
|
(4)
|
(4)
|
(8)
|
(11)
|
(14)
|
(4)
|
(29)
|
(75)
|
(112)
|
0.5%
|
Corporate Lending
|
5,766
|
2,334
|
8,100
|
304
|
504
|
36
|
844
|
221
|
9,165
|
(4)
|
(3)
|
(7)
|
(11)
|
(13)
|
(4)
|
(28)
|
(74)
|
(109)
|
1.2%
|
Non Corporate Lending¹
|
1,687
|
510
|
2,197
|
57
|
2
|
-
|
59
|
-
|
2,256
|
-
|
(1)
|
(1)
|
-
|
-
|
-
|
-
|
-
|
(1)
|
0.0%
|
Banks
|
5,727
|
3,202
|
8,929
|
-
|
3
|
-
|
3
|
64
|
8,996
|
-
|
-
|
-
|
-
|
(1)
|
-
|
(1)
|
(1)
|
(2)
|
0.0%
|
UK
|
8,364
|
4,171
|
12,535
|
56
|
785
|
83
|
924
|
257
|
13,716
|
(5)
|
(5)
|
(10)
|
-
|
(14)
|
(7)
|
(21)
|
(209)
|
(240)
|
1.7%
|
Corporate Lending
|
5,407
|
1,559
|
6,966
|
52
|
539
|
71
|
662
|
250
|
7,878
|
(4)
|
(5)
|
(9)
|
-
|
(13)
|
(7)
|
(20)
|
(202)
|
(231)
|
2.9%
|
Non Corporate Lending¹
|
558
|
1,244
|
1,802
|
-
|
160
|
-
|
160
|
3
|
1,965
|
(1)
|
-
|
(1)
|
-
|
(1)
|
-
|
(1)
|
(3)
|
(5)
|
0.3%
|
Banks
|
2,399
|
1,368
|
3,767
|
4
|
86
|
12
|
102
|
4
|
3,873
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(4)
|
(4)
|
0.1%
|
US
|
14,550
|
4,742
|
19,292
|
219
|
176
|
19
|
414
|
5
|
19,711
|
(2)
|
(2)
|
(4)
|
-
|
-
|
-
|
-
|
(5)
|
(9)
|
0.0%
|
Corporate Lending
|
7,487
|
2,765
|
10,252
|
146
|
130
|
-
|
276
|
1
|
10,529
|
(1)
|
(2)
|
(3)
|
-
|
-
|
-
|
-
|
(1)
|
(4)
|
0.0%
|
Non Corporate Lending¹
|
6,181
|
425
|
6,606
|
25
|
4
|
-
|
29
|
4
|
6,639
|
(1)
|
-
|
(1)
|
-
|
-
|
-
|
-
|
(4)
|
(5)
|
0.1%
|
Banks
|
882
|
1,552
|
2,434
|
48
|
42
|
19
|
109
|
-
|
2,543
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0.0%
|
China
|
9,737
|
2,733
|
12,470
|
31
|
298
|
8
|
337
|
262
|
13,069
|
(3)
|
(4)
|
(7)
|
-
|
-
|
-
|
-
|
(125)
|
(132)
|
1.0%
|
Corporate Lending
|
4,723
|
2,179
|
6,902
|
31
|
297
|
8
|
336
|
259
|
7,497
|
(2)
|
(1)
|
(3)
|
-
|
-
|
-
|
-
|
(125)
|
(128)
|
1.7%
|
Non Corporate Lending¹
|
3,254
|
318
|
3,572
|
-
|
-
|
-
|
-
|
-
|
3,572
|
(1)
|
-
|
(1)
|
-
|
-
|
-
|
-
|
-
|
(1)
|
0.0%
|
Banks
|
1,760
|
236
|
1,996
|
-
|
1
|
-
|
1
|
3
|
2,000
|
-
|
(3)
|
(3)
|
-
|
-
|
-
|
-
|
-
|
(3)
|
0.2%
|
Other
|
40,704
|
17,895
|
58,599
|
366
|
3,347
|
1,014
|
4,727
|
3,492
|
66,818
|
(16)
|
(34)
|
(50)
|
(4)
|
(35)
|
(53)
|
(92)
|
(2,100)
|
(2,242)
|
3.4%
|
Corporate Lending
|
16,189
|
15,034
|
31,223
|
345
|
2,322
|
678
|
3,345
|
3,335
|
37,903
|
(8)
|
(27)
|
(35)
|
(3)
|
(28)
|
(46)
|
(77)
|
(2,012)
|
(2,124)
|
5.6%
|
Non Corporate Lending¹
|
16,051
|
1,523
|
17,574
|
19
|
946
|
94
|
1,059
|
151
|
18,784
|
(6)
|
(6)
|
(12)
|
(1)
|
(6)
|
-
|
(7)
|
(87)
|
(106)
|
0.6%
|
Banks
|
8,464
|
1,338
|
9,802
|
2
|
79
|
242
|
323
|
6
|
10,131
|
(2)
|
(1)
|
(3)
|
-
|
(1)
|
(7)
|
(8)
|
(1)
|
(12)
|
0.1%
|
Total
|
119,532
|
45,738
|
165,270
|
1,200
|
6,052
|
1,190
|
8,442
|
5,585
|
179,297
|
(37)
|
(72)
|
(109)
|
(19)
|
(181)
|
(67)
|
(267)
|
(3,539)
|
(3,915)
|
2.2%
|
1 Include financing, insurance and
non-banking corporations and governments
Page
16
Wealth & Retail Banking
|
Wealth & Retail
Banking
|
30.06.24
|
Gross
|
Credit impairment
|
Stage 1
|
Stage 2
|
Stage 3
|
Stage 1
|
Stage 2
|
Stage 3
|
Coverage
|
Strong $million
|
Satis-factory $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Higher Risk $million
|
Total $million
|
De-faulted $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Higher Risk $million
|
Total $million
|
De-faulted $million
|
Total $million
|
%
|
Hong Kong
|
41,284
|
196
|
41,480
|
351
|
44
|
36
|
431
|
189
|
42,100
|
(28)
|
(29)
|
(57)
|
(12)
|
(10)
|
(10)
|
(32)
|
(49)
|
(138)
|
0.3%
|
Mortgages
|
31,424
|
151
|
31,575
|
142
|
30
|
13
|
185
|
65
|
31,825
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(4)
|
(4)
|
0.0%
|
Credit cards
|
3,300
|
28
|
3,328
|
43
|
10
|
14
|
67
|
9
|
3,404
|
(14)
|
(28)
|
(42)
|
(4)
|
(9)
|
(5)
|
(18)
|
(9)
|
(69)
|
2.0%
|
Others
|
6,560
|
17
|
6,577
|
166
|
4
|
9
|
179
|
115
|
6,871
|
(14)
|
(1)
|
(15)
|
(8)
|
(1)
|
(5)
|
(14)
|
(36)
|
(65)
|
0.9%
|
Singapore
|
26,551
|
73
|
26,624
|
207
|
39
|
36
|
282
|
301
|
27,207
|
(14)
|
(15)
|
(29)
|
-
|
(5)
|
(5)
|
(10)
|
(249)
|
(288)
|
1.1%
|
Mortgages
|
14,287
|
21
|
14,308
|
161
|
31
|
15
|
207
|
20
|
14,535
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(4)
|
(4)
|
0.0%
|
Credit cards
|
1,617
|
21
|
1,638
|
10
|
5
|
16
|
31
|
10
|
1,679
|
(4)
|
(15)
|
(19)
|
-
|
(5)
|
(4)
|
(9)
|
(8)
|
(36)
|
2.1%
|
Others
|
10,647
|
31
|
10,678
|
36
|
3
|
5
|
44
|
271
|
10,993
|
(10)
|
-
|
(10)
|
-
|
-
|
(1)
|
(1)
|
(237)
|
(248)
|
2.3%
|
Korea
|
18,532
|
180
|
18,712
|
368
|
10
|
21
|
399
|
105
|
19,216
|
(26)
|
(2)
|
(28)
|
(11)
|
(2)
|
(2)
|
(15)
|
(29)
|
(72)
|
0.4%
|
Mortgages
|
13,230
|
133
|
13,363
|
280
|
8
|
17
|
305
|
57
|
13,725
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1)
|
(1)
|
0.0%
|
Credit cards
|
64
|
1
|
65
|
1
|
-
|
-
|
1
|
-
|
66
|
(1)
|
-
|
(1)
|
-
|
-
|
-
|
-
|
-
|
(1)
|
1.5%
|
Others
|
5,238
|
46
|
5,284
|
87
|
2
|
4
|
93
|
48
|
5,425
|
(25)
|
(2)
|
(27)
|
(11)
|
(2)
|
(2)
|
(15)
|
(28)
|
(70)
|
1.3%
|
Others
|
26,180
|
5,068
|
31,248
|
407
|
79
|
250
|
736
|
923
|
32,907
|
(206)
|
(30)
|
(236)
|
(26)
|
(10)
|
(41)
|
(77)
|
(370)
|
(683)
|
2.1%
|
Mortgages
|
14,589
|
2,249
|
16,838
|
137
|
38
|
136
|
311
|
444
|
17,593
|
(5)
|
(4)
|
(9)
|
(1)
|
(1)
|
(1)
|
(3)
|
(123)
|
(135)
|
0.8%
|
Credit cards
|
1,400
|
88
|
1,488
|
74
|
1
|
17
|
92
|
47
|
1,627
|
(23)
|
(8)
|
(31)
|
(7)
|
-
|
(11)
|
(18)
|
(21)
|
(70)
|
4.3%
|
Others
|
10,191
|
2,731
|
12,922
|
196
|
40
|
97
|
333
|
432
|
13,687
|
(178)
|
(18)
|
(196)
|
(18)
|
(9)
|
(29)
|
(56)
|
(226)
|
(478)
|
3.5%
|
Total
|
112,547
|
5,517
|
118,064
|
1,333
|
172
|
343
|
1,848
|
1,518
|
121,430
|
(274)
|
(76)
|
(350)
|
(49)
|
(27)
|
(58)
|
(134)
|
(697)
|
(1,181)
|
1.0%
|
|
Wealth & Retail Banking
|
31.12.23
|
Gross
|
Credit impairment
|
Stage 1
|
Stage 2
|
Stage 3
|
Stage 1
|
Stage 2
|
Stage 3
|
Coverage
|
Strong $million
|
Satis-factory $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Higher Risk $million
|
Total $million
|
De-faulted $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Total $million
|
Strong $million
|
Satis-factory $million
|
Higher Risk $million
|
Total $million
|
De-faulted $million
|
Total $million
|
%
|
Hong Kong
|
42,161
|
230
|
42,391
|
480
|
66
|
40
|
586
|
164
|
43,141
|
(17)
|
(33)
|
(50)
|
(14)
|
(10)
|
(9)
|
(33)
|
(39)
|
(122)
|
0.3%
|
Mortgages
|
32,374
|
152
|
32,526
|
282
|
53
|
13
|
348
|
63
|
32,937
|
-
|
-
|
-
|
(1)
|
-
|
-
|
(1)
|
(1)
|
(2)
|
0.0%
|
Credit cards
|
3,278
|
32
|
3,310
|
46
|
9
|
13
|
68
|
8
|
3,386
|
(2)
|
(32)
|
(34)
|
(5)
|
(9)
|
(5)
|
(19)
|
(8)
|
(61)
|
1.8%
|
Others
|
6,509
|
46
|
6,555
|
152
|
4
|
14
|
170
|
93
|
6,818
|
(15)
|
(1)
|
(16)
|
(8)
|
(1)
|
(4)
|
(13)
|
(30)
|
(59)
|
0.9%
|
Singapore
|
26,412
|
64
|
26,476
|
379
|
41
|
32
|
452
|
280
|
27,208
|
(8)
|
(18)
|
(26)
|
(2)
|
(5)
|
(4)
|
(11)
|
(245)
|
(282)
|
1.0%
|
Mortgages
|
14,992
|
16
|
15,008
|
230
|
34
|
11
|
275
|
13
|
15,296
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(4)
|
(4)
|
0.0%
|
Credit cards
|
1,679
|
21
|
1,700
|
11
|
5
|
14
|
30
|
8
|
1,738
|
-
|
(17)
|
(17)
|
-
|
(5)
|
(3)
|
(8)
|
(8)
|
(33)
|
1.9%
|
Others
|
9,741
|
27
|
9,768
|
138
|
2
|
7
|
147
|
259
|
10,174
|
(8)
|
(1)
|
(9)
|
(2)
|
-
|
(1)
|
(3)
|
(233)
|
(245)
|
2.4%
|
Korea
|
22,965
|
211
|
23,176
|
462
|
20
|
9
|
491
|
93
|
23,760
|
(40)
|
-
|
(40)
|
(18)
|
-
|
-
|
(18)
|
(19)
|
(77)
|
0.3%
|
Mortgages
|
16,534
|
164
|
16,698
|
364
|
18
|
8
|
390
|
69
|
17,157
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0.0%
|
Credit cards
|
113
|
2
|
115
|
3
|
-
|
-
|
3
|
-
|
118
|
(4)
|
-
|
(4)
|
-
|
-
|
-
|
-
|
-
|
(4)
|
3.4%
|
Others
|
6,318
|
45
|
6,363
|
95
|
2
|
1
|
98
|
24
|
6,485
|
(36)
|
-
|
(36)
|
(18)
|
-
|
-
|
(18)
|
(19)
|
(73)
|
1.1%
|
Others
|
26,655
|
4,788
|
31,443
|
440
|
79
|
256
|
775
|
947
|
33,165
|
(169)
|
(29)
|
(198)
|
(31)
|
(7)
|
(41)
|
(79)
|
(457)
|
(734)
|
2.2%
|
Mortgages
|
14,681
|
2,297
|
16,978
|
155
|
48
|
134
|
337
|
374
|
17,689
|
(5)
|
(2)
|
(7)
|
(2)
|
(1)
|
(1)
|
(4)
|
(118)
|
(129)
|
0.7%
|
Credit cards
|
1,420
|
68
|
1,488
|
73
|
1
|
15
|
89
|
40
|
1,617
|
(26)
|
(9)
|
(35)
|
(7)
|
-
|
(10)
|
(17)
|
(16)
|
(68)
|
4.2%
|
Others
|
10,554
|
2,423
|
12,977
|
212
|
30
|
107
|
349
|
533
|
13,859
|
(138)
|
(18)
|
(156)
|
(22)
|
(6)
|
(30)
|
(58)
|
(323)
|
(537)
|
3.9%
|
Total
|
118,193
|
5,293
|
123,486
|
1,761
|
206
|
337
|
2,304
|
1,484
|
127,274
|
(234)
|
(80)
|
(314)
|
(65)
|
(22)
|
(54)
|
(141)
|
(760)
|
(1,215)
|
1.0%
|
Movement in gross exposures and credit
impairment for loans and advances, debt securities, undrawn
commitments and financial guarantees (reviewed)
The tables overleaf set out the movement in
gross exposures and credit impairment by stage in respect of
amortised cost loans to banks and customers, undrawn commitments,
financial guarantees and debt securities classified at amortised
cost and FVOCI. The tables are presented for the Group, debt
securities and other eligible bills.
Methodology
The movement lines within the tables are an
aggregation of monthly movements over the year and will therefore
reflect the accumulation of multiple trades during the year. The
credit impairment charge in the income statement comprises the
amounts within the boxes in the table below, less recoveries of
amounts previously written off. Discount unwind is reported in net
interest income and related to stage 3 financial instruments
only.
Page
17
The approach for determining the key line items
in the tables is set out below.
• Transfers - transfers between stages are deemed
to occur at the beginning of a month based on prior month closing
balances.
• Net
remeasurement from stage changes - the remeasurement
of credit impairment provisions arising from a change in stage is
reported within the stage that the assets are transferred to. For
example, assets transferred into stage 2 are remeasured from a
12-month to a lifetime expected credit loss, with the effect of
remeasurement reported in stage 2. For stage 3, this represents the
initial remeasurement from specific provisions recognised on
individual assets transferred into stage 3 in the year.
• Net
changes in exposures - new business written less
repayments in the year. Within stage 1, new business written will
attract up to 12 months of expected credit loss charges. Repayments
of non-amortising loans (primarily within CIB) will have low
amounts of expected credit loss provisions attributed to them, due
to the release of provisions over the term to maturity. In stages 2
and 3, the net change in exposures reflect repayments although
stage 2 may include new facilities where clients are on non-purely
precautionary early alert, are CG 12, or when non-investment grade
debt securities are acquired.
• Changes
in risk parameters - for stages 1 and 2, this reflects
changes in the probability of default (PD), loss given default
(LGD) and exposure at default (EAD) of assets during the year,
which includes the impact of releasing provisions over the term to
maturity. It also includes the effect of changes in forecasts of
macroeconomic variables during the year. In stage 3, this line
represents additional specific provisions recognised on exposures
held within stage 3.
• Interest
due but not paid - change in contractual amount of
interest due in stage 3 financial instruments but not paid, being
the net of accruals, repayments and write-offs, together with the
corresponding change in credit impairment.
Changes to ECL models, which incorporate changes
to model approaches and methodologies, are not reported as a
separate line item as these have an impact over a number of lines
and stages.
Movements during the year
Stage 1 gross exposures decreased by $7.8
billion to $716 billion (31 December 2023: $724 billion). CIB
increased by $20.5 billion to $358 billion (31 December 2023: $337
billion) largely due to higher amounts of financial guarantees. WRB
decreased by $15.6 billion to $175 billion (31 December 2023: $191
billion), largely due to the mortgage portfolio in Korea and Hong
Kong, as well as off balance sheet commitments. Stage 1 debt
securities decreased by $8.9 billion to $149 billion (31 December
2023: $158 billion).
Total stage 1 provisions increased by $39
million to $565 million (31 December 2023: $526 million). CIB
provisions decreased by $7 million to $144 million (31 December
2023: $151 million), due to China CRE overlay releases driven by
repayments. This was partly offset by increases due to portfolio
movements. WRB provisions increased by $33 million to $358 million
(31 December 2023: $325 million), due to delinquencies in personal
loans and unsecured lending portfolio. There was also $10 million
overlay charges on Hong Kong and Singapore credit cards due to an
increase in industry bankruptcy trends.
Stage 2 gross exposures decreased by $3.7
billion to $19 billion (31 December 2023: $22 billion), primarily
driven by a net reduction in CIB exposures from off-balance sheet
instruments, and in Central and other items where a portfolio of
debt securities were maturing, which were being held by Treasury
and accounted for under FVOCI. WRB exposures decreased by $0.5
billion to $2 billion (31 December 2023: $2.5 billion). Debt
securities remained broadly stable at $1.8 billion (31 December
2023: $1.9 billion).
Stage 2 provisions decreased by $89 million to
$428 million (31 December 2023: $517 million). CIB provisions
decreased by $59 million to $259 million (31 December 2023:
$318 million) from China CRE overlay releases largely due to
repayments, and releases due to a sovereign upgrade. This was
partly offset by portfolio movements. Debt securities provisions
decreased by $24 million to $10 million (31 December 2023: $34
million) mainly due to a sovereign upgrade, which was driven by an
improvement in the macroeconomic environment. The decrease was also
due to the maturity of a portfolio of debt securities, which were
being held by Treasury and accounted for under FVOCI.
The impact of model and methodology updates in
H1 2024 reduced modelled provisions by $13 million across stages 1,
2 and 3 in WRB.
Page
18
Stage 3 gross loans for CIB decreased by $0.4
billion to $5.8 billion (31 December 2023: $6.3 billion) due to
repayments and write-offs, which were partly offset by new inflows.
CIB provisions decreased by $58 million to $3.6 billion (31
December 2023: $3.7 billion), due to releases from repayments and
write-offs, which was offset by charges from new downgrades. WRB
stage 3 loans was stable at $1.5 billion (31 December 2023: $1.5
billion) but provisions decreased by $61 million to $0.7 billion
(31 December 2023: $0.8 billion) due to the unsecured
portfolio being classified as held for sale in Malaysia. Debt
securities increased by $223 million to $387 million (31 December
2023: $164 million) due to sovereign client positions.
All segments (reviewed)
|
Stage 1
|
Stage 2
|
Stage 35
|
Total
|
Gross balance3
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance3
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance3
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance3
$million
|
Total credit impair-ment
$million
|
Net
$million
|
As at 1 January 2023
|
720,112
|
(645)
|
719,467
|
27,479
|
(618)
|
26,861
|
8,841
|
(4,724)
|
4,117
|
756,432
|
(5,987)
|
750,445
|
Transfers to stage 1
|
19,594
|
(661)
|
18,933
|
(19,583)
|
661
|
(18,922)
|
(11)
|
-
|
(11)
|
-
|
-
|
-
|
Transfers to stage 2
|
(42,628)
|
174
|
(42,454)
|
42,793
|
(182)
|
42,611
|
(165)
|
8
|
(157)
|
-
|
-
|
-
|
Transfers to stage 3
|
(96)
|
6
|
(90)
|
(2,329)
|
326
|
(2,003)
|
2,425
|
(332)
|
2,093
|
-
|
-
|
-
|
Net change in exposures
|
23,717
|
(185)
|
23,532
|
(22,727)
|
22
|
(22,705)
|
(1,708)
|
624
|
(1,084)
|
(718)
|
461
|
(257)
|
Net remeasurement from stage changes
|
-
|
52
|
52
|
-
|
(199)
|
(199)
|
-
|
(163)
|
(163)
|
-
|
(310)
|
(310)
|
Changes in risk parameters
|
-
|
202
|
202
|
-
|
(32)
|
(32)
|
-
|
(1,100)
|
(1,100)
|
-
|
(930)
|
(930)
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,027)
|
1,027
|
-
|
(1,027)
|
1,027
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
(83)
|
83
|
-
|
(83)
|
83
|
-
|
Discount unwind
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
180
|
180
|
-
|
180
|
180
|
Exchange translation differences and
other movements¹
|
3,177
|
531
|
3,708
|
(3,365)
|
(495)
|
(3,860)
|
(128)
|
(102)
|
(230)
|
(316)
|
(66)
|
(382)
|
As at 31 December 2023²
|
723,876
|
(526)
|
723,350
|
22,268
|
(517)
|
21,751
|
8,144
|
(4,499)
|
3,645
|
754,288
|
(5,542)
|
748,746
|
Income statement ECL (charge)/release
|
|
69
|
|
|
(209)
|
|
|
(639)
|
|
|
(779)
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
271
|
|
|
271
|
|
Total credit impairment
(charge)/release
|
|
69
|
|
|
(209)
|
|
|
(368)
|
|
|
(508)
|
|
As at 1 January 2024
|
723,876
|
(526)
|
723,350
|
22,268
|
(517)
|
21,751
|
8,144
|
(4,499)
|
3,645
|
754,288
|
(5,542)
|
748,746
|
Transfers to stage 1
|
8,877
|
(299)
|
8,578
|
(8,862)
|
299
|
(8,563)
|
(15)
|
-
|
(15)
|
-
|
-
|
-
|
Transfers to stage 2
|
(18,521)
|
121
|
(18,400)
|
18,617
|
(122)
|
18,495
|
(96)
|
1
|
(95)
|
-
|
-
|
-
|
Transfers to stage 3
|
(347)
|
16
|
(331)
|
(576)
|
108
|
(468)
|
923
|
(124)
|
799
|
-
|
-
|
-
|
Net change in exposures
|
13,748
|
(72)
|
13,676
|
(11,669)
|
27
|
(11,642)
|
(563)
|
165
|
(398)
|
1,516
|
120
|
1,636
|
Net remeasurement from stage changes
|
-
|
44
|
44
|
-
|
(117)
|
(117)
|
-
|
(145)
|
(145)
|
-
|
(218)
|
(218)
|
Changes in risk parameters
|
-
|
68
|
68
|
-
|
(25)
|
(25)
|
-
|
(314)
|
(314)
|
-
|
(271)
|
(271)
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(578)
|
578
|
-
|
(578)
|
578
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
13
|
(13)
|
-
|
13
|
(13)
|
-
|
Discount unwind
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
69
|
69
|
-
|
69
|
69
|
Exchange translation differences and
other movements¹
|
(11,587)
|
83
|
(11,504)
|
(1,236)
|
(81)
|
(1,317)
|
(23)
|
(35)
|
(58)
|
(12,846)
|
(33)
|
(12,879)
|
As at 30 June 2024²
|
716,046
|
(565)
|
715,481
|
18,542
|
(428)
|
18,114
|
7,805
|
(4,317)
|
3,488
|
742,393
|
(5,310)
|
737,083
|
Income statement ECL
(charge)/release⁶
|
|
40
|
|
|
(115)
|
|
|
(294)
|
|
|
(369)
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
130
|
|
|
130
|
|
Total credit impairment
(charge)/release4
|
|
40
|
|
|
(115)
|
|
|
(164)
|
|
|
(239)
|
|
1 Includes fair value adjustments and
amortisation on debt securities
2 Excludes Cash and balances at central
banks, Accrued income, Assets held for sale and Other assets gross
balances of $109,690 million (2023: $111,478 million) and Total
credit impairment of $95 million (2023: $59 million)
3 Does not include $1 million (2023:
Nil) release relating to Other assets
4 Reported basis
5 Stage 3 gross includes $23 million
(2023: $80 million) originated credit-impaired debt securities with
impairment of Nil (2023: $14 million)
6 The gross balance includes the
notional amount of off balance sheet instruments
Page
19
Of which - movement of debt securities,
additional tier one and other eligible bills (reviewed)
Amortised cost and FVOCI
|
Stage 1
|
Stage 2
|
Stage 32
|
Total
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net3
$million
|
As at 1 January 2023
|
166,103
|
(25)
|
166,078
|
5,455
|
(90)
|
5,365
|
144
|
(106)
|
38
|
171,702
|
(221)
|
171,481
|
Transfers to stage 1
|
371
|
(65)
|
306
|
(371)
|
65
|
(306)
|
-
|
-
|
-
|
-
|
-
|
-
|
Transfers to stage 2
|
(884)
|
14
|
(870)
|
884
|
(14)
|
870
|
-
|
-
|
-
|
-
|
-
|
-
|
Transfers to stage 3
|
-
|
-
|
-
|
(16)
|
-
|
(16)
|
16
|
-
|
16
|
-
|
-
|
-
|
Net change in exposures
|
(11,583)
|
(28)
|
(11,611)
|
(1,899)
|
(44)
|
(1,943)
|
7
|
-
|
7
|
(13,475)
|
(72)
|
(13,547)
|
Net remeasurement from stage changes
|
-
|
7
|
7
|
-
|
(18)
|
(18)
|
-
|
-
|
-
|
-
|
(11)
|
(11)
|
Changes in risk parameters
|
-
|
32
|
32
|
-
|
105
|
105
|
-
|
(4)
|
(4)
|
-
|
133
|
133
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Exchange translation differences and
other movements1
|
4,307
|
39
|
4,346
|
(2,193)
|
(38)
|
(2,231)
|
(3)
|
49
|
46
|
2,111
|
50
|
2,161
|
As at 31 December 2023
|
158,314
|
(26)
|
158,288
|
1,860
|
(34)
|
1,826
|
164
|
(61)
|
103
|
160,338
|
(121)
|
160,217
|
Income statement ECL (charge)/release
|
|
11
|
|
|
43
|
|
|
(4)
|
|
|
50
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total credit impairment
(charge)/release
|
|
11
|
|
|
43
|
|
|
(4)
|
|
|
50
|
|
As at 1 January 2024
|
158,314
|
(26)
|
158,288
|
1,860
|
(34)
|
1,826
|
164
|
(61)
|
103
|
160,338
|
(121)
|
160,217
|
Transfers to stage 1
|
125
|
-
|
125
|
(125)
|
-
|
(125)
|
-
|
-
|
-
|
-
|
-
|
-
|
Transfers to stage 2
|
(555)
|
42
|
(513)
|
555
|
(42)
|
513
|
-
|
-
|
-
|
-
|
-
|
-
|
Transfers to stage 3
|
(131)
|
-
|
(131)
|
131
|
-
|
131
|
-
|
-
|
-
|
-
|
-
|
-
|
Net change in exposures
|
(5,162)
|
(4)
|
(5,166)
|
2
|
(9)
|
(7)
|
272
|
22
|
294
|
(4,888)
|
9
|
(4,879)
|
Net remeasurement from stage changes
|
-
|
-
|
-
|
-
|
2
|
2
|
-
|
-
|
-
|
-
|
2
|
2
|
Changes in risk parameters
|
-
|
4
|
4
|
-
|
26
|
26
|
-
|
-
|
-
|
-
|
30
|
30
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(51)
|
51
|
-
|
(51)
|
51
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Exchange translation differences and
other movements1
|
(3,169)
|
(39)
|
(3,208)
|
(636)
|
47
|
(589)
|
2
|
(28)
|
(26)
|
(3,803)
|
(20)
|
(3,823)
|
As at 30 June 2024
|
149,422
|
(23)
|
149,399
|
1,787
|
(10)
|
1,777
|
387
|
(16)
|
371
|
151,596
|
(49)
|
151,547
|
Income statement ECL (charge)/release
|
|
-
|
|
|
19
|
|
|
22
|
|
|
41
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total credit impairment
(charge)/release
|
|
-
|
|
|
19
|
|
|
22
|
|
|
41
|
|
1 Includes fair value adjustments and
amortisation on debt securities
2 Stage 3 includes gross of $23 million
(31 December 2023: $80 million) and ECL Nil (31 December 2023: $14
million) originated credit-impaired debt securities
3 FVOCI instruments are not presented
net of ECL. While the presentation is on a net basis for the table,
the total net on-balance sheet amount to $151,580 million
(31 December 2023: $160,263 million). Refer to the Analysis of
financial instrument by stage table
Page
20
Corporate & Investment Banking (reviewed)
Amortised cost and FVOCI
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
As at 1 January 2023
|
315,437
|
(194)
|
315,243
|
20,148
|
(411)
|
19,737
|
6,994
|
(3,822)
|
3,172
|
342,579
|
(4,427)
|
338,152
|
Transfers to stage 1
|
14,948
|
(347)
|
14,601
|
(14,948)
|
347
|
(14,601)
|
-
|
-
|
-
|
-
|
-
|
-
|
Transfers to stage 2
|
(34,133)
|
80
|
(34,053)
|
34,175
|
(88)
|
34,087
|
(42)
|
8
|
(34)
|
-
|
-
|
-
|
Transfers to stage 3
|
(17)
|
-
|
(17)
|
(1,270)
|
141
|
(1,129)
|
1,287
|
(141)
|
1,146
|
-
|
-
|
-
|
Net change in exposures
|
41,314
|
(73)
|
41,241
|
(20,084)
|
89
|
(19,995)
|
(1,335)
|
623
|
(712)
|
19,895
|
639
|
20,534
|
Net remeasurement from stage changes
|
-
|
15
|
15
|
-
|
(45)
|
(45)
|
-
|
(82)
|
(82)
|
-
|
(112)
|
(112)
|
Changes in risk parameters
|
-
|
60
|
60
|
-
|
(68)
|
(68)
|
-
|
(668)
|
(668)
|
-
|
(676)
|
(676)
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(340)
|
340
|
-
|
(340)
|
340
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
(120)
|
120
|
-
|
(120)
|
120
|
-
|
Discount unwind
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
155
|
155
|
-
|
155
|
155
|
Exchange translation differences and
other movements
|
(360)
|
308
|
(52)
|
(1,148)
|
(283)
|
(1,431)
|
(188)
|
(184)
|
(372)
|
(1,696)
|
(159)
|
(1,855)
|
As at 31 December 2023
|
337,189
|
(151)
|
337,038
|
16,873
|
(318)
|
16,555
|
6,256
|
(3,651)
|
2,605
|
360,318
|
(4,120)
|
356,198
|
Income statement ECL
(charge)/release2
|
|
2
|
|
|
(24)
|
|
|
(127)
|
|
|
(149)
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
31
|
|
|
31
|
|
Total credit impairment
(charge)/release
|
|
2
|
|
|
(24)
|
|
|
(96)
|
|
|
(118)
|
|
As at 1 January 2024
|
337,189
|
(151)
|
337,038
|
16,873
|
(318)
|
16,555
|
6,256
|
(3,651)
|
2,605
|
360,318
|
(4,120)
|
356,198
|
Transfers to stage 1
|
5,730
|
(144)
|
5,586
|
(5,730)
|
144
|
(5,586)
|
-
|
-
|
-
|
-
|
-
|
-
|
Transfers to stage 2
|
(14,220)
|
41
|
(14,179)
|
14,245
|
(42)
|
14,203
|
(25)
|
1
|
(24)
|
-
|
-
|
-
|
Transfers to stage 3
|
(118)
|
13
|
(105)
|
(147)
|
(3)
|
(150)
|
265
|
(10)
|
255
|
-
|
-
|
-
|
Net change in exposures
|
32,957
|
(23)
|
32,934
|
(10,137)
|
39
|
(10,098)
|
(479)
|
127
|
(352)
|
22,341
|
143
|
22,484
|
Net remeasurement from stage changes
|
-
|
12
|
12
|
(1)
|
(32)
|
(33)
|
-
|
(83)
|
(83)
|
(1)
|
(103)
|
(104)
|
Changes in risk parameters
|
-
|
38
|
38
|
-
|
3
|
3
|
-
|
(69)
|
(69)
|
-
|
(28)
|
(28)
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(107)
|
107
|
-
|
(107)
|
107
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
16
|
(16)
|
-
|
16
|
(16)
|
-
|
Discount unwind
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
54
|
54
|
-
|
54
|
54
|
Exchange translation differences and
other movements
|
(3,878)
|
70
|
(3,808)
|
(538)
|
(50)
|
(588)
|
(102)
|
(53)
|
(155)
|
(4,518)
|
(33)
|
(4,551)
|
As at 30 June 2024
|
357,660
|
(144)
|
357,516
|
14,565
|
(259)
|
14,306
|
5,824
|
(3,593)
|
2,231
|
378,049
|
(3,996)
|
374,053
|
Income statement ECL
(charge)/release²
|
|
27
|
|
|
10
|
|
|
(25)
|
|
|
12
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
5
|
|
|
5
|
|
Total credit impairment
(charge)/release
|
|
27
|
|
|
10
|
|
|
(20)
|
|
|
17
|
|
1 The gross balance includes the
notional amount of off balance sheet instruments
2 Does not include release relating to
Other assets
Page
21
Wealth & Retail Banking (reviewed)
Amortised cost and FVOCI
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
As at 1 January 2023
|
193,239
|
(413)
|
192,826
|
1,821
|
(118)
|
1,703
|
1,454
|
(776)
|
678
|
196,514
|
(1,307)
|
195,207
|
Transfers to stage 1
|
4,265
|
(246)
|
4,019
|
(4,254)
|
246
|
(4,008)
|
(11)
|
-
|
(11)
|
-
|
-
|
-
|
Transfers to stage 2
|
(7,544)
|
73
|
(7,471)
|
7,667
|
(73)
|
7,594
|
(123)
|
-
|
(123)
|
-
|
-
|
-
|
Transfers to stage 3
|
(64)
|
1
|
(63)
|
(1,049)
|
187
|
(862)
|
1,113
|
(188)
|
925
|
-
|
-
|
-
|
Net change in exposures
|
1,965
|
(78)
|
1,887
|
(1,713)
|
14
|
(1,699)
|
(395)
|
-
|
(395)
|
(143)
|
(64)
|
(207)
|
Net remeasurement from stage changes
|
-
|
31
|
31
|
-
|
(137)
|
(137)
|
-
|
(38)
|
(38)
|
-
|
(144)
|
(144)
|
Changes in risk parameters
|
-
|
110
|
110
|
-
|
(69)
|
(69)
|
-
|
(426)
|
(426)
|
-
|
(385)
|
(385)
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(649)
|
649
|
-
|
(649)
|
649
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
37
|
(37)
|
-
|
37
|
(37)
|
-
|
Discount unwind
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
24
|
24
|
-
|
24
|
24
|
Exchange translation differences and
other movements
|
(862)
|
197
|
(665)
|
-
|
(190)
|
(190)
|
59
|
33
|
92
|
(803)
|
40
|
(763)
|
As at 31 December 2023
|
190,999
|
(325)
|
190,674
|
2,472
|
(140)
|
2,332
|
1,485
|
(759)
|
726
|
194,956
|
(1,224)
|
193,732
|
Income statement ECL (charge)/release
|
|
63
|
|
|
(192)
|
|
|
(464)
|
|
|
(593)
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
239
|
|
|
239
|
|
Total credit impairment
(charge)/release
|
|
63
|
|
|
(192)
|
|
|
(225)
|
|
|
(354)
|
|
As at 1 January 2024
|
190,999
|
(325)
|
190,674
|
2,472
|
(140)
|
2,332
|
1,485
|
(759)
|
726
|
194,956
|
(1,224)
|
193,732
|
Transfers to stage 1
|
2,963
|
(146)
|
2,817
|
(2,948)
|
146
|
(2,802)
|
(15)
|
-
|
(15)
|
-
|
-
|
-
|
Transfers to stage 2
|
(3,684)
|
36
|
(3,648)
|
3,755
|
(36)
|
3,719
|
(71)
|
-
|
(71)
|
-
|
-
|
-
|
Transfers to stage 3
|
(57)
|
-
|
(57)
|
(568)
|
112
|
(456)
|
625
|
(112)
|
513
|
-
|
-
|
-
|
Net change in exposures
|
(11,173)
|
(27)
|
(11,200)
|
(668)
|
(3)
|
(671)
|
(196)
|
-
|
(196)
|
(12,037)
|
(30)
|
(12,067)
|
Net remeasurement from stage changes
|
-
|
16
|
16
|
-
|
(82)
|
(82)
|
-
|
(26)
|
(26)
|
-
|
(92)
|
(92)
|
Changes in risk parameters
|
-
|
15
|
15
|
-
|
(54)
|
(54)
|
-
|
(245)
|
(245)
|
-
|
(284)
|
(284)
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(382)
|
382
|
-
|
(382)
|
382
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
(3)
|
3
|
-
|
(3)
|
3
|
-
|
Discount unwind
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
15
|
15
|
-
|
15
|
15
|
Exchange translation differences and
other movements
|
(3,604)
|
73
|
(3,531)
|
(38)
|
(81)
|
(119)
|
79
|
44
|
123
|
(3,563)
|
36
|
(3,527)
|
As at 30 June 2024
|
175,444
|
(358)
|
175,086
|
2,005
|
(138)
|
1,867
|
1,522
|
(698)
|
824
|
178,971
|
(1,194)
|
177,777
|
Income statement ECL (charge)/release
|
|
4
|
|
|
(139)
|
|
|
(271)
|
|
|
(406)
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
124
|
|
|
124
|
|
Total credit impairment
(charge)/release
|
|
4
|
|
|
(139)
|
|
|
(147)
|
|
|
(282)
|
|
1 The gross balance includes the
notional amount of off-balance sheet instruments
Page
22
Wealth & Retail Banking - Secured
(reviewed)
Amortised cost and FVOCI
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
As at 1 January 2023
|
135,362
|
(60)
|
135,302
|
1,413
|
(17)
|
1,396
|
1,028
|
(552)
|
476
|
137,803
|
(629)
|
137,174
|
Transfers to stage 1
|
3,311
|
(20)
|
3,291
|
(3,302)
|
20
|
(3,282)
|
(9)
|
-
|
(9)
|
-
|
-
|
-
|
Transfers to stage 2
|
(5,340)
|
11
|
(5,329)
|
5,436
|
(9)
|
5,427
|
(96)
|
(2)
|
(98)
|
-
|
-
|
-
|
Transfers to stage 3
|
(28)
|
1
|
(27)
|
(463)
|
1
|
(462)
|
491
|
(2)
|
489
|
-
|
-
|
-
|
Net change in exposures
|
(3,138)
|
(16)
|
(3,154)
|
(1,250)
|
3
|
(1,247)
|
(216)
|
-
|
(216)
|
(4,604)
|
(13)
|
(4,617)
|
Net remeasurement from stage changes
|
-
|
4
|
4
|
-
|
(16)
|
(16)
|
-
|
(3)
|
(3)
|
-
|
(15)
|
(15)
|
Changes in risk parameters
|
-
|
22
|
22
|
-
|
24
|
24
|
-
|
(110)
|
(110)
|
-
|
(64)
|
(64)
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(109)
|
109
|
-
|
(109)
|
109
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
(3)
|
3
|
-
|
(3)
|
3
|
-
|
Discount unwind
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
12
|
12
|
-
|
12
|
12
|
Exchange translation differences and
other movements
|
(369)
|
25
|
(344)
|
(7)
|
(22)
|
(29)
|
(24)
|
20
|
(4)
|
(400)
|
23
|
(377)
|
As at 31 December 2023
|
129,798
|
(33)
|
129,765
|
1,827
|
(16)
|
1,811
|
1,062
|
(525)
|
537
|
132,687
|
(574)
|
132,113
|
Income statement ECL (charge)/release
|
|
10
|
|
|
11
|
|
|
(113)
|
|
|
(92)
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
68
|
|
|
68
|
|
Total credit impairment
(charge)/release
|
|
10
|
|
|
11
|
|
|
(45)
|
|
|
(24)
|
|
As at 1 January 2024
|
129,798
|
(33)
|
129,765
|
1,827
|
(16)
|
1,811
|
1,062
|
(525)
|
537
|
132,687
|
(574)
|
132,113
|
Transfers to stage 1
|
2,353
|
(13)
|
2,340
|
(2,342)
|
13
|
(2,329)
|
(11)
|
-
|
(11)
|
-
|
-
|
-
|
Transfers to stage 2
|
(2,542)
|
3
|
(2,539)
|
2,591
|
(3)
|
2,588
|
(49)
|
-
|
(49)
|
-
|
-
|
-
|
Transfers to stage 3
|
(16)
|
-
|
(16)
|
(234)
|
2
|
(232)
|
250
|
(2)
|
248
|
-
|
-
|
-
|
Net change in exposures
|
(6,534)
|
(4)
|
(6,538)
|
(431)
|
2
|
(429)
|
(113)
|
-
|
(113)
|
(7,078)
|
(2)
|
(7,080)
|
Net remeasurement from stage changes
|
-
|
4
|
4
|
-
|
(10)
|
(10)
|
-
|
(1)
|
(1)
|
-
|
(7)
|
(7)
|
Changes in risk parameters
|
-
|
(9)
|
(9)
|
-
|
17
|
17
|
-
|
(62)
|
(62)
|
-
|
(54)
|
(54)
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(63)
|
63
|
-
|
(63)
|
63
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
23
|
(23)
|
-
|
23
|
(23)
|
-
|
Discount unwind
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
8
|
8
|
-
|
8
|
8
|
Exchange translation differences and
other movements
|
(2,768)
|
13
|
(2,755)
|
(26)
|
(17)
|
(43)
|
37
|
24
|
61
|
(2,757)
|
20
|
(2,737)
|
As at 30 June 2024
|
120,291
|
(39)
|
120,252
|
1,385
|
(12)
|
1,373
|
1,136
|
(518)
|
618
|
122,812
|
(569)
|
122,243
|
Income statement ECL (charge)/release
|
|
(9)
|
|
|
9
|
|
|
(63)
|
|
|
(63)
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
43
|
|
|
43
|
|
Total credit impairment
(charge)/release
|
|
(9)
|
|
|
9
|
|
|
(20)
|
|
|
(20)
|
|
1 The gross balance includes the
notional amount of off balance sheet instruments
Page
23
Wealth & Retail Banking - Unsecured
(reviewed)
Amortised cost and FVOCI
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
Gross balance1
$million
|
Total credit impair-ment
$million
|
Net
$million
|
As at 1 January 2023
|
57,877
|
(353)
|
57,524
|
408
|
(101)
|
307
|
426
|
(224)
|
202
|
58,711
|
(678)
|
58,033
|
Transfers to stage 1
|
954
|
(226)
|
728
|
(952)
|
226
|
(726)
|
(2)
|
-
|
(2)
|
-
|
-
|
-
|
Transfers to stage 2
|
(2,204)
|
62
|
(2,142)
|
2,231
|
(64)
|
2,167
|
(27)
|
2
|
(25)
|
-
|
-
|
-
|
Transfers to stage 3
|
(36)
|
-
|
(36)
|
(586)
|
186
|
(400)
|
622
|
(186)
|
436
|
-
|
-
|
-
|
Net change in exposures
|
5,103
|
(62)
|
5,041
|
(463)
|
11
|
(452)
|
(179)
|
-
|
(179)
|
4,461
|
(51)
|
4,410
|
Net remeasurement from stage changes
|
-
|
27
|
27
|
-
|
(121)
|
(121)
|
-
|
(35)
|
(35)
|
-
|
(129)
|
(129)
|
Changes in risk parameters
|
-
|
88
|
88
|
-
|
(93)
|
(93)
|
-
|
(316)
|
(316)
|
-
|
(321)
|
(321)
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(540)
|
540
|
-
|
(540)
|
540
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
40
|
(40)
|
-
|
40
|
(40)
|
-
|
Discount unwind
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
12
|
12
|
-
|
12
|
12
|
Exchange translation differences and
other movements
|
(493)
|
172
|
(321)
|
7
|
(168)
|
(161)
|
83
|
13
|
96
|
(403)
|
17
|
(386)
|
As at 31 December 2023
|
61,201
|
(292)
|
60,909
|
645
|
(124)
|
521
|
423
|
(234)
|
189
|
62,269
|
(650)
|
61,619
|
Income statement ECL (charge)/release
|
|
53
|
|
|
(203)
|
|
|
(351)
|
|
|
(501)
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
171
|
|
|
171
|
|
Total credit impairment
(charge)/release
|
|
53
|
|
|
(203)
|
|
|
(180)
|
|
|
(330)
|
|
As at 1 January 2024
|
61,201
|
(292)
|
60,909
|
645
|
(124)
|
521
|
423
|
(234)
|
189
|
62,269
|
(650)
|
61,619
|
Transfers to stage 1
|
610
|
(133)
|
477
|
(606)
|
133
|
(473)
|
(4)
|
-
|
(4)
|
-
|
-
|
-
|
Transfers to stage 2
|
(1,142)
|
33
|
(1,109)
|
1,164
|
(33)
|
1,131
|
(22)
|
-
|
(22)
|
-
|
-
|
-
|
Transfers to stage 3
|
(41)
|
-
|
(41)
|
(334)
|
110
|
(224)
|
375
|
(110)
|
265
|
-
|
-
|
-
|
Net change in exposures
|
(4,639)
|
(23)
|
(4,662)
|
(237)
|
(5)
|
(242)
|
(83)
|
-
|
(83)
|
(4,959)
|
(28)
|
(4,987)
|
Net remeasurement from stage changes
|
-
|
12
|
12
|
-
|
(72)
|
(72)
|
-
|
(25)
|
(25)
|
-
|
(85)
|
(85)
|
Changes in risk parameters
|
-
|
24
|
24
|
-
|
(71)
|
(71)
|
-
|
(183)
|
(183)
|
-
|
(230)
|
(230)
|
Write-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
(319)
|
319
|
-
|
(319)
|
319
|
-
|
Interest due but unpaid
|
-
|
-
|
-
|
-
|
-
|
-
|
(26)
|
26
|
-
|
(26)
|
26
|
-
|
Discount unwind
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
7
|
7
|
-
|
7
|
7
|
Exchange translation differences and
other movements
|
(836)
|
60
|
(776)
|
(12)
|
(64)
|
(76)
|
42
|
20
|
62
|
(806)
|
16
|
(790)
|
As at 30 June 2024
|
55,153
|
(319)
|
54,834
|
620
|
(126)
|
494
|
386
|
(180)
|
206
|
56,159
|
(625)
|
55,534
|
Income statement ECL (charge)/release
|
|
13
|
|
|
(148)
|
|
|
(208)
|
|
|
(343)
|
|
Recoveries of amounts previously written
off
|
|
-
|
|
|
-
|
|
|
81
|
|
|
81
|
|
Total credit impairment
(charge)/release
|
|
13
|
|
|
(148)
|
|
|
(127)
|
|
|
(262)
|
|
1 The gross balance includes the
notional amount of off balance sheet instruments
Page
24
Analysis of stage 2 balances
The table below analyses total stage 2 gross
on-and off-balance sheet exposures and associated expected credit
provisions by the key SICR driver that caused the exposures to be
classified as stage 2 as at 30 June 2024 and 31 December 2023 for
each segment.
Where multiple drivers apply, the exposure is
allocated based on the table order. For example, a loan may have
breached the PD thresholds and could also be on non-purely
precautionary early alert; in this instance, the exposure is
reported under 'Increase in PD'.
Further details can be found in the
'Summary of Credit Risk performance' section.
|
30.06.24
|
Corporate &
Investment Banking
|
Wealth & Retail Banking
|
Ventures
|
Central & other items1
|
Total
|
Gross
$million
|
ECL
$million
|
Cove-rage
%
|
Gross
$million
|
ECL
$million
|
Cove-rage
%
|
Gross
$million
|
ECL
$million
|
Cove-rage
%
|
Gross
$million
|
ECL
$million
|
Cove-rage
%
|
Gross
$million
|
ECL
$million
|
Cove-rage
%
|
Increase in PD
|
7,885
|
115
|
1.5%
|
1,626
|
125
|
7.7%
|
51
|
25
|
49.0%
|
452
|
4
|
0.9%
|
10,014
|
269
|
2.7%
|
Non-purely precautionary
early alert
|
4,019
|
35
|
0.9%
|
30
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
4,049
|
35
|
0.9%
|
Higher risk (CG12)
|
674
|
22
|
3.3%
|
17
|
-
|
0.0%
|
-
|
-
|
0.0%
|
1,427
|
3
|
0.2%
|
2,118
|
25
|
1.2%
|
Sub-investment grade
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
Top up/Sell down (Private Banking)
|
-
|
-
|
0.0%
|
39
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
39
|
-
|
0.0%
|
Others
|
1,987
|
1
|
0.1%
|
147
|
4
|
2.7%
|
-
|
-
|
0.0%
|
426
|
-
|
0.0%
|
2,560
|
5
|
0.2%
|
30 days past due
|
-
|
-
|
0.0%
|
146
|
9
|
6.2%
|
5
|
-
|
0.0%
|
-
|
-
|
0.0%
|
151
|
9
|
6.0%
|
Management overlay
|
-
|
86
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
86
|
0.0%
|
Total stage 2
|
14,565
|
259
|
1.8%
|
2,005
|
138
|
6.9%
|
56
|
25
|
44.6%
|
2,305
|
7
|
0.3%
|
18,931
|
429
|
2.3%
|
|
31.12.23
|
Corporate &
Investment Banking
|
Wealth & Retail Banking
|
Ventures
|
Central & other items1
|
Total
|
Gross
$million
|
ECL
$million
|
Cove-rage
%
|
Gross
$million
|
ECL
$million
|
Cove-rage
%
|
Gross
$million
|
ECL
$million
|
Cove-rage
%
|
Gross
$million
|
ECL
$million
|
Cove-rage
%
|
Gross
$million
|
ECL
$million
|
Cove-rage
%
|
Increase in PD
|
8,262
|
75
|
0.9%
|
1,962
|
109
|
5.6%
|
96
|
23
|
24.0%
|
599
|
13
|
2.2%
|
10,919
|
220
|
2.0%
|
Non-purely precautionary
early alert
|
5,136
|
26
|
0.5%
|
37
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
5,173
|
26
|
0.5%
|
Higher risk (CG12)
|
1,008
|
56
|
5.6%
|
26
|
1
|
3.8%
|
-
|
-
|
0.0%
|
2,020
|
17
|
0.8%
|
3,054
|
74
|
2.4%
|
Sub-investment grade
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
Top up/Sell down (Private Banking)
|
-
|
-
|
0.0%
|
148
|
2
|
1.4%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
148
|
2
|
1.4%
|
Others
|
2,467
|
37
|
1.5%
|
151
|
16
|
10.6%
|
-
|
-
|
0.0%
|
489
|
-
|
0.0%
|
3,107
|
53
|
1.7%
|
30 days past due
|
-
|
-
|
0.0%
|
148
|
12
|
8.1%
|
2
|
-
|
0.0%
|
-
|
-
|
0.0%
|
150
|
12
|
8.0%
|
Management overlay
|
-
|
124
|
0.0%
|
-
|
-
|
0.0%
|
-
|
-
|
0.0%
|
-
|
17
|
0.0%
|
-
|
141
|
0.0%
|
Total stage 2
|
16,873
|
318
|
1.9%
|
2,472
|
140
|
5.7%
|
98
|
23
|
23.5%
|
3,108
|
47
|
1.5%
|
22,551
|
528
|
2.3%
|
1 Includes Gross and ECL for Cash and
balances at central banks and Assets held for sale
Page
25
Credit impairment charge (reviewed)
The table below analyses credit impairment
charges or releases of the ongoing business portfolio and
restructuring business portfolio for the half year ended 30 June
2024.
Further details can be found in the
'Summary of Credit Risk performance' section.
|
30.06.24
|
30.06.23
|
Stage 1 & 2
$million
|
Stage 3
$million
|
Total
$million
|
Stage 1 & 2
$million
|
Stage 3
$million
|
Total
$million
|
Ongoing business portfolio
|
|
|
|
|
|
|
Corporate & Investment Banking
|
(38)
|
3
|
(35)
|
33
|
36
|
69
|
Wealth & Retail Banking
|
135
|
147
|
282
|
15
|
93
|
108
|
Ventures
|
7
|
36
|
43
|
12
|
11
|
23
|
Central & other items
|
(31)
|
(10)
|
(41)
|
(27)
|
(1)
|
(28)
|
Credit impairment charge/(release)
|
73
|
176
|
249
|
33
|
139
|
172
|
Restructuring business portfolio
|
|
|
|
|
|
|
Others
|
2
|
(11)
|
(9)
|
(2)
|
(9)
|
(11)
|
Credit impairment charge/(release)
|
2
|
(11)
|
(9)
|
(2)
|
(9)
|
(11)
|
Total credit impairment charge/
(release)
|
75
|
165
|
240
|
31
|
130
|
161
|
Problem credit management and
provisioning
Forborne and other modified loans by client segment
(reviewed)
A forborne loan arises when a concession has
been made to the contractual terms of a loan in response to a
customer's financial difficulties.
Net forborne loans decreased by $139 million to
$866 million (31 December 2023: $1,005 million), largely on the
non-performing forborne loans stock. The net non-performing
forborne loans decreased by $136 million to $831 million (31
December 2023: $967 million) largely due to write-offs and
repayments.
Amortised cost
|
30.06.24
|
31.12.23
|
Corporate & Investment Banking
$million
|
Wealth & Retail Banking
$million
|
Ventures
$million
|
Total
$million
|
Corporate & Investment Banking
$million
|
Wealth & Retail Banking
$million
|
Ventures
$million
|
Total
$million
|
All loans with forbearance measures
|
2,139
|
299
|
-
|
2,438
|
2,340
|
314
|
-
|
2,654
|
Credit impairment (stage 1 and 2)
|
-
|
(2)
|
-
|
(2)
|
-
|
(2)
|
-
|
(2)
|
Credit impairment (stage 3)
|
(1,450)
|
(120)
|
-
|
(1,570)
|
(1,529)
|
(118)
|
-
|
(1,647)
|
Net carrying value
|
689
|
177
|
-
|
866
|
811
|
194
|
-
|
1,005
|
Included within the above table
|
|
|
|
|
|
|
|
|
Gross performing forborne loans
|
4
|
33
|
-
|
37
|
-
|
40
|
-
|
40
|
Modification of terms and
conditions1
|
4
|
33
|
-
|
37
|
-
|
40
|
-
|
40
|
Refinancing2
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Impairment provisions
|
-
|
(2)
|
-
|
(2)
|
-
|
(2)
|
-
|
(2)
|
Modification of terms and
conditions1
|
-
|
(2)
|
-
|
(2)
|
-
|
(2)
|
-
|
(2)
|
Refinancing2
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Net performing forborne loans
|
4
|
31
|
-
|
35
|
-
|
38
|
-
|
38
|
Collateral
|
-
|
22
|
-
|
22
|
-
|
31
|
-
|
31
|
Gross non-performing forborne loans
|
2,135
|
266
|
-
|
2,401
|
2,340
|
274
|
-
|
2,614
|
Modification of terms and
conditions1
|
1,906
|
266
|
-
|
2,172
|
2,113
|
274
|
-
|
2,387
|
Refinancing2
|
229
|
-
|
-
|
229
|
227
|
-
|
-
|
227
|
Impairment provisions
|
(1,450)
|
(120)
|
-
|
(1,570)
|
(1,529)
|
(118)
|
-
|
(1,647)
|
Modification of terms and
conditions1
|
(1,240)
|
(120)
|
-
|
(1,360)
|
(1,337)
|
(118)
|
-
|
(1,455)
|
Refinancing2
|
(210)
|
-
|
-
|
(210)
|
(192)
|
-
|
-
|
(192)
|
Net non-performing forborne loans
|
685
|
146
|
-
|
831
|
811
|
156
|
-
|
967
|
Collateral
|
296
|
49
|
-
|
345
|
341
|
49
|
-
|
390
|
1 Modification of terms is any
contractual change apart from refinancing, as a result of credit
stress of the counterparty, i.e. interest reductions, loan covenant
waivers
2 Refinancing is a new contract to a
borrower in credit stress, such that they are refinanced and can
pay other debt contracts that they were unable to honour
Page
26
Forborne and other modified loans by country
Net forborne loans decreased by $139 million to
$866 million (31 December 2023: $1,005 million), mainly on the
non-performing forborne loans stock. Stage 3 forborne loans
reductions in the 'Other' category, were largely in CIB and driven
by UAE ($53 million) and Bahrain ($30 million).
Amortised cost
|
30.06.24
|
31.12.23
|
Hong Kong
$million
|
Korea
$million
|
China
$million
|
Singa-pore
$million
|
UK
$million
|
US
$million
|
Other
$million
|
Total
$million
|
Hong Kong
$million
|
Korea
$million
|
China
$million
|
Singa-pore
$million
|
UK
$million
|
US
$million
|
Other
$million
|
Total
$million
|
Performing forborne loans
|
2
|
6
|
-
|
3
|
-
|
-
|
24
|
35
|
-
|
6
|
-
|
3
|
-
|
-
|
29
|
38
|
Stage 3 forborne loans
|
135
|
20
|
91
|
34
|
49
|
1
|
501
|
831
|
104
|
22
|
114
|
37
|
46
|
1
|
643
|
967
|
Net forborne loans
|
137
|
26
|
91
|
37
|
49
|
1
|
525
|
866
|
104
|
28
|
114
|
40
|
46
|
1
|
672
|
1,005
|
Credit Risk mitigation
Potential credit losses from any given account,
customer or portfolio are mitigated using a range of tools such as
collateral, netting arrangements, credit insurance and credit
derivatives, taking into account expected volatility and
guarantees.
The reliance that can be placed on these
mitigants is carefully assessed in light of issues such as legal
certainty and enforceability, market valuation correlation and
counterparty risk of the guarantor.
The unadjusted market value of collateral across
all asset types, in respect of CIB, without adjusting for
over-collateralisation, increased to $343 billion (31 December
2023: $290 billion) predominantly due to an increase in reverse
repos.
Collateral held on loans and advances
The table below details collateral held against
exposures, separately disclosing stage 2 and stage 3 exposure and
corresponding collateral.
Amortised cost
|
30.06.24
|
Net amount outstanding
|
Collateral
|
Net exposure
|
Total
$million
|
Stage 2 financial
assets
$million
|
Credit-impaired financial
assets (S3)
$million
|
Total2
$million
|
Stage 2 financial
assets
$million
|
Credit-impaired financial
assets (S3)
$million
|
Total
$million
|
Stage 2 financial
assets
$million
|
Credit-impaired financial
assets (S3)
$million
|
Corporate & Investment Banking1
|
175,766
|
8,163
|
1,652
|
32,993
|
2,797
|
638
|
142,773
|
5,366
|
1,014
|
Wealth & Retail Banking
|
120,249
|
1,714
|
821
|
85,192
|
810
|
664
|
35,057
|
904
|
157
|
Ventures
|
1,109
|
26
|
-
|
-
|
-
|
-
|
1,109
|
26
|
-
|
Central & other items
|
24,003
|
129
|
64
|
1,678
|
128
|
-
|
22,325
|
1
|
64
|
Total
|
321,127
|
10,032
|
2,537
|
119,863
|
3,735
|
1,302
|
201,264
|
6,297
|
1,235
|
Amortised cost
|
31.12.23
|
Net amount outstanding
|
Collateral
|
Net exposure
|
Total
$million
|
Stage 2 financial
assets
$million
|
Credit-impaired financial
assets (S3)
$million
|
Total2
$million
|
Stage 2 financial
assets
$million
|
Credit-impaired financial
assets (S3)
$million
|
Total
$million
|
Stage 2 financial
assets
$million
|
Credit-impaired financial
assets (S3)
$million
|
Corporate & Investment Banking1
|
175,382
|
8,175
|
2,046
|
36,458
|
2,972
|
623
|
138,924
|
5,203
|
1,423
|
Wealth & Retail Banking
|
126,059
|
2,163
|
724
|
86,827
|
1,136
|
554
|
39,232
|
1,027
|
170
|
Ventures
|
1,033
|
33
|
-
|
-
|
-
|
-
|
1,033
|
33
|
-
|
Central & other items
|
29,478
|
964
|
209
|
2,475
|
964
|
-
|
27,003
|
-
|
209
|
Total
|
331,952
|
11,335
|
2,979
|
125,760
|
5,072
|
1,177
|
206,192
|
6,263
|
1,802
|
1 Includes loans and advances to
banks
2 Adjusted for over-collateralisation
based on the drawn and undrawn components of exposures
Page
27
Collateral - Corporate & Investment Banking
(reviewed)
Collateral taken for longer-term and
sub-investment grade corporate loans was stable at 40 per cent (31
December 2023: 41 per cent).
Our underwriting standards encourage taking
specific charges on assets and we consistently seek high-quality,
investment-grade collateral.
84 per cent (31 December 2023: 83 per cent) of
tangible collateral excluding reverse repurchase agreements and
financial guarantees held comprises physical assets or is property
based, with the remainder held in cash. Overall collateral
decreased by $3.5 billion to $33 billion (31 December 2023: $36
billion) mainly due to a decrease in reverse repos.
Non-tangible collateral, such as guarantees and
standby letters of credit, is also held against corporate
exposures,
although the financial effect of this type of collateral is less
significant in terms of recoveries. However, this is considered
when determining the loss given default and other credit-related
factors. Collateral is also held against off balance sheet
exposures, including undrawn commitments and trade-related
instruments.
Corporate & Investment Banking
Amortised cost
|
30.06.24
$million
|
31.12.23
$million
|
Maximum exposure
|
175,766
|
175,382
|
Property
|
8,634
|
9,339
|
Plant, machinery and other stock
|
947
|
933
|
Cash
|
2,782
|
2,985
|
Reverse repos
|
10,303
|
13,826
|
AAA
|
616
|
-
|
AA- to AA+
|
383
|
1,036
|
A- to A+
|
5,378
|
10,606
|
BBB- to BBB+
|
758
|
855
|
Lower than BBB-
|
35
|
169
|
Unrated
|
3,133
|
1,160
|
Financial guarantees and insurance
|
5,274
|
5,057
|
Commodities
|
14
|
5
|
Ships and aircraft
|
5,039
|
4,313
|
Total value of collateral1
|
32,993
|
36,458
|
Net exposure
|
142,773
|
138,924
|
1 Adjusted for over-collateralisation
based on the drawn and undrawn components of exposures
Collateral - Wealth & Retail Banking
(reviewed)
In WRB, fully secured products remain stable at
85 per cent of the total portfolio (31 December 2023: 85 per
cent).
The following table presents an analysis of
loans to individuals by product; split between fully secured,
partially secured and unsecured.
Amortised cost
|
30.06.24
|
31.12.23
|
Fully secured
$million
|
Partially secured
$million
|
Unsecured
$million
|
Total
$million
|
Fully secured
$million
|
Partially secured
$million
|
Unsecured
$million
|
Total
$million
|
Maximum exposure
|
101,615
|
522
|
18,112
|
120,249
|
106,914
|
505
|
18,640
|
126,059
|
Loans to individuals
|
|
|
|
|
|
|
|
|
Mortgages
|
77,535
|
-
|
-
|
77,535
|
82,943
|
-
|
-
|
82,943
|
Credit Cards & Personal Loans
|
423
|
-
|
16,850
|
17,273
|
375
|
-
|
17,395
|
17,770
|
Auto
|
224
|
-
|
-
|
224
|
312
|
-
|
-
|
312
|
Secured wealth products
|
21,197
|
-
|
-
|
21,197
|
20,303
|
-
|
-
|
20,303
|
Other
|
2,236
|
522
|
1,262
|
4,020
|
2,981
|
505
|
1,245
|
4,731
|
Total collateral1
|
|
|
|
85,192
|
|
|
|
86,827
|
Net exposure2
|
|
|
|
35,057
|
|
|
|
39,232
|
Percentage of total loans
|
85%
|
0%
|
15%
|
|
85%
|
0%
|
15%
|
|
1 Collateral values are adjusted where
appropriate in accordance with our risk mitigation policy and for
the effect of over-collateralisation
2 Amounts net of ECL
Page
28
Mortgage loan-to-value ratios by country
(reviewed)
Loan-to-value (LTV) ratios measure the ratio of
the current mortgage outstanding to the current fair value of the
properties on which they are secured.
In a majority of mortgages, the value of
property held as security significantly exceeds principal
outstanding of the mortgage loans. The average LTV of the overall
mortgage portfolio remains broadly stable at 47.9 per cent (31
December 2023: 47.1 per cent). The top three markets (Hong Kong,
Singapore and Korea) which represents 79 per cent of the mortgage
portfolio continue to have low portfolio LTVs (Hong Kong, Singapore
and Korea at 56.8 per cent, 43.0 per cent and 40.6 per cent
respectively).
An analysis of LTV ratios by geography for the
mortgage portfolio is presented in the table below.
For the Hong Kong residential mortgage
portfolio, 8.1 per cent of the portfolio was in negative equity,
representing approximately 4,000 accounts that exceeded their
property values by a total of $196 million. Of these, 13 accounts
with a total loan balance of $9.4 million were more than 90 days
past due. Under local regulations, mortgages with LTV exceeding 70
per cent (including those in negative equity) are generally
required to be insured by the Mortgage Insurance Program
(MIP).
Amortised cost
|
30.06.24
|
Hong Kong
%
Gross
|
Singapore
%
Gross
|
Korea
%
Gross
|
Other
%
Gross
|
Total
%
Gross
|
Less than 50 per cent
|
43.3
|
53.5
|
68.2
|
51.7
|
53.8
|
50 per cent to 59 per cent
|
18.8
|
23.5
|
11.6
|
15.7
|
16.9
|
60 per cent to 69 per cent
|
10.6
|
14.4
|
10.9
|
16.6
|
12.6
|
70 per cent to 79 per cent
|
4.8
|
8.2
|
8.4
|
11.3
|
7.7
|
80 per cent to 89 per cent
|
6.3
|
0.3
|
0.7
|
4.1
|
3.3
|
90 per cent to 99 per cent
|
8.1
|
0.0
|
0.1
|
0.4
|
2.9
|
100 per cent and greater
|
8.1
|
0.0
|
0.1
|
0.2
|
2.8
|
Average portfolio loan-to-value
|
56.8
|
43.0
|
40.6
|
47.6
|
47.9
|
Loans to individuals - mortgages
($million)
|
31,821
|
14,531
|
13,724
|
17,458
|
77,534
|
Amortised cost
|
31.12.23
|
Hong Kong
%
Gross
|
Singapore
%
Gross
|
Korea
%
Gross
|
Other
%
Gross
|
Total
%
Gross
|
Less than 50 per cent
|
44.9
|
50.9
|
69.5
|
51.0
|
54.9
|
50 per cent to 59 per cent
|
19.5
|
24.7
|
11.0
|
16.7
|
17.1
|
60 per cent to 69 per cent
|
9.7
|
15.2
|
9.7
|
16.3
|
11.9
|
70 per cent to 79 per cent
|
4.3
|
8.7
|
8.9
|
11.6
|
7.9
|
80 per cent to 89 per cent
|
7.3
|
0.5
|
0.6
|
3.6
|
3.3
|
90 per cent to 99 per cent
|
7.4
|
-
|
0.1
|
0.4
|
2.5
|
100 per cent and greater
|
7.0
|
-
|
0.1
|
0.4
|
2.4
|
Average portfolio loan-to-value
|
55.7
|
43.4
|
40.4
|
47.8
|
47.1
|
Loans to individuals - mortgages
($million)
|
32,935
|
15,292
|
17,157
|
17,559
|
82,943
|
Page
29
Collateral and other credit enhancements
possessed or called upon (reviewed)
The Group obtains assets by taking possession of
collateral or calling upon other credit enhancements (such as
guarantees). Repossessed properties are sold in an orderly fashion.
Where the proceeds are in excess of the outstanding loan balance
the excess is returned to the borrower.
Certain equity securities acquired may be held
by the Group for investment purposes and are classified as fair
value through profit or loss, and the related loan written off. The
carrying value of collateral possessed and held by the Group is
$11.9 million (31 December 2023: $16.5 million).
|
30.06.24
$million
|
31.12.23
$million
|
Property, plant and equipment
|
9.0
|
10.5
|
Guarantees
|
2.9
|
6.0
|
Total
|
11.9
|
16.5
|
Other Credit risk mitigation
(reviewed)
Other forms of credit risk mitigation are set
out below.
Credit default swaps
The Group has entered into credit default swaps
for portfolio management purposes, referencing loan assets with a
notional value of $3.5 billion (31 December 2023: $3.5 billion).
These credit default swaps are accounted for as financial
guarantees as per IFRS 9 as they will only reimburse the holder for
an incurred loss on an underlying debt instrument.
The Group continues to hold the underlying
assets referenced in the credit default swaps and it continues to
be exposed to related Credit Risk and Foreign Exchange Rate Risk on
these assets.
Credit linked notes
The Group has issued credit linked notes for
portfolio management purposes, referencing loan assets with a
notional value of $29.0 billion (31 December 2023: $22.5 billion).
The Group continues to hold the underlying assets for which the
credit linked notes provide mitigation. The credit linked notes are
recognised as a financial liability at amortised cost on the
balance sheet.
Derivative financial instruments
The Group enters into master netting agreements
which, in the event of default, result in a single amount owed by
or to the counterparty through netting the sum of the positive and
negative mark-to-market values of applicable derivative
transactions. Credit Risk mitigation for derivative financial
instruments is set out below.
Off-balance sheet exposures
For certain types of exposures, such as letters
of credit and guarantees, the Group obtains collateral such as cash
depending on internal Credit Risk assessments, as well as in the
case of letters of credit holding legal title to the underlying
assets should a default take place.
Other portfolio analysis
This section provides analysis of Credit quality
by industry and Industry analysis of loans and advances by key
geography.
Page
30
Credit quality by industry
Loans and advances
This section provides an analysis of the Group's
amortised cost portfolio by industry on a gross, total credit
impairment and net basis.
Further details can be found in the
'Summary of Credit Risk performance' section.
Amortised cost
|
30.06.24
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net carrying amount
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net carrying amount
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net carrying amount
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net carrying amount
|
Industry:
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy
|
11,879
|
(15)
|
11,864
|
554
|
(19)
|
535
|
894
|
(570)
|
324
|
13,327
|
(604)
|
12,723
|
Manufacturing
|
19,050
|
(9)
|
19,041
|
712
|
(14)
|
698
|
500
|
(383)
|
117
|
20,262
|
(406)
|
19,856
|
Financing, insurance
and non-banking
|
30,566
|
(9)
|
30,557
|
666
|
(5)
|
661
|
107
|
(103)
|
4
|
31,339
|
(117)
|
31,222
|
Transport, telecom
and utilities
|
15,188
|
(10)
|
15,178
|
2,178
|
(48)
|
2,130
|
431
|
(152)
|
279
|
17,797
|
(210)
|
17,587
|
Food and household products
|
8,335
|
(6)
|
8,329
|
356
|
(8)
|
348
|
290
|
(226)
|
64
|
8,981
|
(240)
|
8,741
|
Commercial real estate
|
12,650
|
(45)
|
12,605
|
1,769
|
(73)
|
1,696
|
1,606
|
(1,194)
|
412
|
16,025
|
(1,312)
|
14,713
|
Mining and quarrying
|
5,622
|
(2)
|
5,620
|
219
|
(9)
|
210
|
101
|
(59)
|
42
|
5,942
|
(70)
|
5,872
|
Consumer durables
|
6,166
|
(3)
|
6,163
|
249
|
(18)
|
231
|
311
|
(277)
|
34
|
6,726
|
(298)
|
6,428
|
Construction
|
2,415
|
(2)
|
2,413
|
466
|
(3)
|
463
|
368
|
(325)
|
43
|
3,249
|
(330)
|
2,919
|
Trading companies & distributors
|
623
|
-
|
623
|
36
|
-
|
36
|
86
|
(53)
|
33
|
745
|
(53)
|
692
|
Government
|
27,566
|
(4)
|
27,562
|
771
|
(3)
|
768
|
197
|
(19)
|
178
|
28,534
|
(26)
|
28,508
|
Other
|
5,022
|
(5)
|
5,017
|
133
|
(6)
|
127
|
221
|
(88)
|
133
|
5,376
|
(99)
|
5,277
|
Total
|
145,082
|
(110)
|
144,972
|
8,109
|
(206)
|
7,903
|
5,112
|
(3,449)
|
1,663
|
158,303
|
(3,765)
|
154,538
|
Retail Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage
|
76,084
|
(8)
|
76,076
|
1,008
|
(4)
|
1,004
|
586
|
(132)
|
454
|
77,678
|
(144)
|
77,534
|
Credit Cards
|
7,628
|
(112)
|
7,516
|
240
|
(67)
|
173
|
74
|
(53)
|
21
|
7,942
|
(232)
|
7,710
|
Personal loans and other unsecured
lending
|
10,488
|
(215)
|
10,273
|
331
|
(75)
|
256
|
243
|
(100)
|
143
|
11,062
|
(390)
|
10,672
|
Auto
|
223
|
-
|
223
|
1
|
-
|
1
|
-
|
-
|
-
|
224
|
-
|
224
|
Secured wealth products
|
20,888
|
(28)
|
20,860
|
183
|
(8)
|
175
|
488
|
(328)
|
160
|
21,559
|
(364)
|
21,195
|
Other
|
3,856
|
(7)
|
3,849
|
133
|
(2)
|
131
|
136
|
(93)
|
43
|
4,125
|
(102)
|
4,023
|
Total
|
119,167
|
(370)
|
118,797
|
1,896
|
(156)
|
1,740
|
1,527
|
(706)
|
821
|
122,590
|
(1,232)
|
121,358
|
Net carrying value (customers)¹
|
264,249
|
(480)
|
263,769
|
10,005
|
(362)
|
9,643
|
6,639
|
(4,155)
|
2,484
|
280,893
|
(4,997)
|
275,896
|
Net carrying value (Banks)¹
|
44,793
|
(4)
|
44,789
|
392
|
(3)
|
389
|
57
|
(4)
|
53
|
45,242
|
(11)
|
45,231
|
1 Includes reverse repurchase agreements
and other similar secured lending held at amortised cost of $3,991
million (Loans to Banks) and $7,788 million
(Loans to customers)
Page
31
Amortised cost
|
31.12.23
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net carrying amount
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net carrying amount
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net carrying amount
|
Gross balance
$million
|
Total credit impair-ment
$million
|
Net carrying amount
|
Industry:
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy
|
9,397
|
(8)
|
9,389
|
672
|
(22)
|
650
|
949
|
(535)
|
414
|
11,018
|
(565)
|
10,453
|
Manufacturing
|
21,239
|
(8)
|
21,231
|
708
|
(16)
|
692
|
656
|
(436)
|
220
|
22,603
|
(460)
|
22,143
|
Financing, insurance
and non-banking
|
31,633
|
(13)
|
31,620
|
571
|
(1)
|
570
|
80
|
(77)
|
3
|
32,284
|
(91)
|
32,193
|
Transport, telecom
and utilities
|
14,710
|
(8)
|
14,702
|
1,722
|
(36)
|
1,686
|
481
|
(178)
|
303
|
16,913
|
(222)
|
16,691
|
Food and household products
|
7,668
|
(15)
|
7,653
|
323
|
(7)
|
316
|
355
|
(262)
|
93
|
8,346
|
(284)
|
8,062
|
Commercial real estate
|
12,261
|
(30)
|
12,231
|
1,848
|
(129)
|
1,719
|
1,712
|
(1,191)
|
521
|
15,821
|
(1,350)
|
14,471
|
Mining and quarrying
|
5,995
|
(4)
|
5,991
|
220
|
(10)
|
210
|
151
|
(84)
|
67
|
6,366
|
(98)
|
6,268
|
Consumer durables
|
5,815
|
(3)
|
5,812
|
300
|
(21)
|
279
|
329
|
(298)
|
31
|
6,444
|
(322)
|
6,122
|
Construction
|
2,230
|
(2)
|
2,228
|
502
|
(8)
|
494
|
358
|
(326)
|
32
|
3,090
|
(336)
|
2,754
|
Trading companies & distributors
|
581
|
-
|
581
|
57
|
-
|
57
|
107
|
(58)
|
49
|
745
|
(58)
|
687
|
Government
|
33,400
|
(6)
|
33,394
|
1,783
|
(5)
|
1,778
|
367
|
(33)
|
334
|
35,550
|
(44)
|
35,506
|
Other
|
4,262
|
(4)
|
4,258
|
161
|
(3)
|
158
|
187
|
(70)
|
117
|
4,610
|
(77)
|
4,533
|
Total
|
149,191
|
(101)
|
149,090
|
8,867
|
(258)
|
8,609
|
5,732
|
(3,548)
|
2,184
|
163,790
|
(3,907)
|
159,883
|
Retail Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage
|
81,210
|
(8)
|
81,202
|
1,350
|
(5)
|
1,345
|
519
|
(123)
|
396
|
83,079
|
(136)
|
82,943
|
Credit Cards
|
7,633
|
(104)
|
7,529
|
244
|
(65)
|
179
|
69
|
(50)
|
19
|
7,946
|
(219)
|
7,727
|
Personal loans and other unsecured
lending
|
10,867
|
(188)
|
10,679
|
324
|
(77)
|
247
|
315
|
(165)
|
150
|
11,506
|
(430)
|
11,076
|
Auto
|
310
|
-
|
310
|
1
|
-
|
1
|
1
|
-
|
1
|
312
|
-
|
312
|
Secured wealth products
|
19,923
|
(22)
|
19,901
|
278
|
(10)
|
268
|
474
|
(340)
|
134
|
20,675
|
(372)
|
20,303
|
Other
|
4,558
|
(7)
|
4,551
|
161
|
(5)
|
156
|
118
|
(94)
|
24
|
4,837
|
(106)
|
4,731
|
Total
|
124,501
|
(329)
|
124,172
|
2,358
|
(162)
|
2,196
|
1,496
|
(772)
|
724
|
128,355
|
(1,263)
|
127,092
|
Net carrying value (customers)¹
|
273,692
|
(430)
|
273,262
|
11,225
|
(420)
|
10,805
|
7,228
|
(4,320)
|
2,908
|
292,145
|
(5,170)
|
286,975
|
Net carrying value (Banks)¹
|
44,384
|
(8)
|
44,376
|
540
|
(10)
|
530
|
77
|
(6)
|
71
|
45,001
|
(24)
|
44,977
|
1 Includes reverse repurchase agreements
and other similar secured lending held at amortised cost of $1,738
million (Loans to Banks) and $13,996 million (Loans to
customers)
Industry analysis of loans and advances by key
geography
This section provides an analysis of the Group's
amortised cost loan portfolio, net of provisions, by industry and
geography.
The Manufacturing sector group is spread across
a diverse range of industries, including automobiles and
components, capital goods, pharmaceuticals, biotech and life
sciences, technology hardware and equipment, chemicals, paper
products and packaging, with lending spread over 3269
clients.
Page
32
Corporate & Investment Banking
Amortised cost
|
30.06.24
|
31.12.23
|
Hong Kong
$million
|
China
$million
|
Singa-pore
$million
|
UK
$million
|
US
$million
|
Other
$million
|
Total
$million
|
Hong Kong
$million
|
China
$million
|
Singa-pore
$million
|
UK
$million
|
US
$million
|
Other
$million
|
Total
$million
|
Industry:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy
|
2,840
|
56
|
3,014
|
3,646
|
1,594
|
1,560
|
12,710
|
3,118
|
42
|
1,162
|
1,341
|
3,638
|
1,130
|
10,431
|
Manufacturing
|
3,299
|
4,353
|
1,302
|
436
|
2,111
|
8,333
|
19,834
|
3,570
|
4,309
|
1,666
|
694
|
2,921
|
8,982
|
22,142
|
Financing, insurance
and non-banking
|
3,505
|
3,823
|
2,031
|
8,535
|
8,098
|
3,943
|
29,935
|
3,700
|
3,570
|
1,708
|
1,724
|
6,627
|
14,864
|
32,193
|
Transport, telecom
and utilities
|
5,140
|
410
|
3,022
|
1,336
|
595
|
7,078
|
17,581
|
4,634
|
429
|
2,499
|
1,030
|
630
|
7,470
|
16,692
|
Food and household products
|
359
|
467
|
1,746
|
1,004
|
626
|
4,539
|
8,741
|
541
|
519
|
911
|
816
|
664
|
4,611
|
8,062
|
Commercial real estate
|
4,030
|
411
|
1,549
|
1,100
|
1,823
|
5,800
|
14,713
|
3,895
|
588
|
1,125
|
1,436
|
1,236
|
6,192
|
14,472
|
Mining and quarrying
|
955
|
691
|
506
|
1,520
|
195
|
2,005
|
5,872
|
1,028
|
735
|
427
|
1,729
|
279
|
2,071
|
6,269
|
Consumer durables
|
3,028
|
310
|
282
|
114
|
487
|
2,207
|
6,428
|
3,030
|
244
|
180
|
177
|
483
|
2,008
|
6,122
|
Construction
|
233
|
146
|
525
|
119
|
385
|
1,511
|
2,919
|
176
|
163
|
319
|
137
|
389
|
1,569
|
2,753
|
Trading companies
and distributors
|
119
|
185
|
125
|
31
|
37
|
195
|
692
|
119
|
75
|
121
|
31
|
20
|
321
|
687
|
Government
|
1,248
|
-
|
103
|
145
|
5
|
4,332
|
5,833
|
1,445
|
1
|
547
|
236
|
6
|
3,814
|
6,049
|
Other
|
2,247
|
321
|
661
|
349
|
167
|
1,532
|
5,277
|
1,676
|
265
|
646
|
257
|
264
|
1,425
|
4,533
|
Net loans and advances
to customers - CIB
|
27,003
|
11,173
|
14,866
|
18,335
|
16,123
|
43,035
|
130,535
|
26,932
|
10,940
|
11,311
|
9,608
|
17,157
|
54,457
|
130,405
|
Net loans and advances
to banks
|
16,258
|
2,779
|
9,263
|
3,843
|
2,774
|
10,314
|
45,231
|
17,457
|
1,996
|
8,994
|
3,868
|
2,544
|
10,119
|
44,978
|
Wealth & Retail Banking
Amortised cost
|
30.06.24
|
31.12.23
|
Hong Kong
$million
|
Korea
$million
|
Singapore
$million
|
Other
$million
|
Total
$million
|
Hong Kong
$million
|
Korea
$million
|
Singapore
$million
|
Other
$million
|
Total
$million
|
Retail Products:
|
|
|
|
|
|
|
|
|
|
|
Mortgages
|
31,821
|
13,724
|
14,531
|
17,458
|
77,534
|
32,935
|
17,157
|
15,292
|
17,559
|
82,943
|
Credit Cards
|
3,335
|
65
|
1,643
|
1,558
|
6,601
|
3,325
|
114
|
1,705
|
1,549
|
6,693
|
Personal Loans and other unsecured
lending
|
1,015
|
2,907
|
255
|
6,495
|
10,672
|
950
|
3,230
|
220
|
6,676
|
11,076
|
Auto
|
-
|
-
|
171
|
53
|
224
|
-
|
-
|
240
|
72
|
312
|
Secured wealth products
|
5,199
|
25
|
10,229
|
5,742
|
21,195
|
5,164
|
33
|
9,388
|
5,718
|
20,303
|
Other
|
592
|
2,423
|
90
|
918
|
4,023
|
644
|
3,149
|
82
|
856
|
4,731
|
Net loans and advances to customers -
WRB
|
41,962
|
19,144
|
26,919
|
32,224
|
120,249
|
43,018
|
23,683
|
26,927
|
32,430
|
126,058
|
Vulnerable, cyclical and high carbon
sectors
Vulnerable and cyclical sectors are those that
the Group considers to be most at risk from current economic
stresses, including volatile energy and commodity prices, and we
continue to monitor exposures to these sectors particularly
carefully.
Sectors are identified and grouped as per the
International Standard Industrial Classification (ISIC) system and
exposure numbers have been updated to include all in-scope ISIC
codes used for target setting among the high carbon
sectors.
The maximum exposures shown in the table include
Loans and Advances to Customers at Amortised cost, Fair Value
through profit or loss, and committed facilities available as per
IFRS 9 - Financial Instruments in $million.
Further details can be found in the
'Summary of Credit Risk performance' section.
Page
33
Maximum exposure
|
30.06.24
|
Maximum on Balance Sheet Exposure
(net of credit impairment)
$million
|
Collateral
$million
|
Net On Balance Sheet Exposure
$million
|
Undrawn Commitments (net of credit
impairment)
$million
|
Financial Guarantees
(net of credit impairment)
$million
|
Net Off Balance Sheet Exposure
$million
|
Total On & Off Balance Sheet
Net Exposure
$million
|
Industry:
|
|
|
|
|
|
|
|
Automotive manufacturers1
|
3,120
|
61
|
3,059
|
3,350
|
290
|
3,640
|
6,699
|
Aviation1,2
|
1,751
|
935
|
816
|
1,964
|
676
|
2,640
|
3,456
|
Of which: High Carbon Sector
|
1,395
|
970
|
425
|
1,202
|
632
|
1,834
|
2,259
|
Commodity Traders2
|
8,429
|
324
|
8,105
|
2,213
|
6,539
|
8,752
|
16,857
|
Metals & Mining1,2
|
4,651
|
325
|
4,326
|
3,653
|
1,632
|
5,285
|
9,611
|
Of which: Steel1
|
2,068
|
216
|
1,852
|
692
|
376
|
1,068
|
2,920
|
Of which: Coal Mining1
|
13
|
5
|
8
|
50
|
101
|
151
|
159
|
Of which: Aluminium1
|
535
|
33
|
502
|
388
|
118
|
506
|
1,008
|
Shipping1
|
7,285
|
4,621
|
2,664
|
2,851
|
433
|
3,284
|
5,948
|
Construction2
|
3,013
|
351
|
2,662
|
2,577
|
5,910
|
8,487
|
11,149
|
Of which: Cement1
|
949
|
55
|
894
|
621
|
277
|
898
|
1,792
|
Commercial Real Estate2
|
15,127
|
5,964
|
9,163
|
5,042
|
802
|
5,844
|
15,007
|
Of which: High Carbon Sector
|
8,511
|
3,460
|
5,051
|
2,421
|
659
|
3,080
|
8,131
|
Hotels & Tourism2
|
1,950
|
689
|
1,261
|
1,290
|
360
|
1,650
|
2,911
|
Oil & Gas1,2
|
8,100
|
1,026
|
7,074
|
8,543
|
7,070
|
15,613
|
22,687
|
Power1
|
5,356
|
1,103
|
4,253
|
3,516
|
918
|
4,434
|
8,687
|
Total3
|
58,782
|
15,399
|
43,383
|
34,999
|
24,630
|
59,629
|
103,012
|
Of which: Vulnerable and cyclical
sectors
|
43,021
|
9,614
|
33,407
|
25,282
|
22,989
|
48,271
|
81,678
|
Of which: High carbon sectors
|
37,332
|
11,550
|
25,782
|
23,634
|
10,874
|
34,508
|
60,290
|
Total Corporate & Investment
Banking4
|
190,337
|
27,434
|
162,903
|
110,067
|
74,551
|
184,618
|
347,521
|
Total Group5
|
423,399
|
119,863
|
303,536
|
178,475
|
85,934
|
264,409
|
567,945
|
1 High-carbon sectors
2 Vulnerable and cyclical
sectors
3 Maximum On Balance sheet exposure
include FVTPL portion of $2,254 million, of which Vulnerable sector
is $1,650 million and High Carbon sector is $1,186
million
4 Include On Balance sheet FVTPL amount
of $59,802 million for Corporate & Investment Banking loans to
customers
5 Total Group includes net loans and
advances to banks and net loans and advances to customers held at
amortised cost of $45,231 million and $275,896 million
respectively and loans to banks and loans and advances to customers
held at FVTPL of $42,461 million and $59,811 million respectively.
Refer to credit quality table
Page
34
|
31.12.23
|
Maximum On Balance Sheet Exposure
(net of credit impairment)
Million
|
Collateral
Million
|
Net On Balance Sheet Exposure
Million
|
Undrawn Commitments (net of credit
impairment)
Million
|
Financial Guarantees
(net of credit impairment)
Million
|
Net Off Balance Sheet Exposure
Million
|
Total On & Off Balance Sheet
Net Exposure
Million
|
Industry:
|
|
|
|
|
|
|
|
Automotive manufacturers1
|
3,564
|
65
|
3,499
|
3,791
|
538
|
4,329
|
7,828
|
Aviation1,2
|
1,775
|
974
|
801
|
1,794
|
668
|
2,462
|
3,263
|
Of which: High Carbon Sector
|
1,330
|
974
|
356
|
944
|
615
|
1,559
|
1,915
|
Commodity Traders2
|
7,406
|
303
|
7,103
|
2,591
|
6,281
|
8,872
|
15,975
|
Metals & Mining1,2,4
|
4,136
|
354
|
3,782
|
3,862
|
1,153
|
5,015
|
8,797
|
Of which: Steel1
|
1,596
|
193
|
1,403
|
601
|
358
|
959
|
2,362
|
Of which: Coal Mining1
|
29
|
9
|
20
|
51
|
99
|
150
|
170
|
Of which: Aluminium1
|
526
|
9
|
517
|
338
|
188
|
526
|
1,043
|
Shipping1
|
5,964
|
3,557
|
2,407
|
2,261
|
291
|
2,552
|
4,959
|
Construction2
|
2,853
|
448
|
2,405
|
2,753
|
5,927
|
8,680
|
11,085
|
Of which: Cement1,4
|
671
|
47
|
624
|
769
|
259
|
1,028
|
1,652
|
Commercial Real Estate2
|
14,533
|
6,363
|
8,170
|
4,658
|
311
|
4,969
|
13,139
|
Of which: High Carbon Sector
|
7,498
|
3,383
|
4,115
|
1,587
|
112
|
1,699
|
5,814
|
Hotels & Tourism2
|
1,680
|
715
|
965
|
1,339
|
227
|
1,566
|
2,531
|
Oil & Gas1,2
|
6,278
|
894
|
5,384
|
7,845
|
6,944
|
14,789
|
20,173
|
Power1
|
5,411
|
1,231
|
4,180
|
3,982
|
732
|
4,714
|
8,894
|
Total3
|
53,600
|
14,904
|
38,696
|
34,876
|
23,072
|
57,948
|
96,644
|
Of which: Vulnerable and cyclical
sectors
|
38,661
|
10,051
|
28,610
|
24,842
|
21,511
|
46,353
|
74,963
|
Of which: High carbon sectors
|
32,867
|
10,362
|
22,505
|
22,169
|
10,136
|
32,305
|
54,810
|
Total Corporate & Investment
Banking5
|
188,903
|
32,744
|
156,159
|
104,437
|
63,183
|
167,620
|
323,779
|
Total Group6
|
423,276
|
125,760
|
297,516
|
182,299
|
74,278
|
256,577
|
554,093
|
1 High-carbon sectors
2 Vulnerable and cyclical
sectors
3 Maximum On Balance sheet exposure
include FVTPL portion of $640 million, of which Vulnerable sector
is $602 million and High Carbon sector is $125 million
4 Restated Metals & Mining to align
the vulnerable and cyclical sector definition to that used for
climate reporting. Other Metals and Mining has been removed
from
high carbon sectors and Cement added to provide consistency with
climate reporting and individual high carbon sectors
5 Represented to include On Balance
sheet FVTPL amount of $58,498 million for Corporate &
Investment Banking loans to customers
6 Represented to include On Balance
sheet FVTPL amount. In 2023, total Group includes net loans and
advances to banks and net loans and advances to
customers
held at
amortised cost of $44,977 million and $286,975 million respectively
and loans to banks and loans and advances to customers held at
FVTPL of $32,813 million
and
$58,511 million respectively. Refer to credit quality
table
Page
35
Loans and advances by stage
Amortised Cost
|
30.06.24
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Gross Balance
$million
|
Total Credit Impair-ment
$million
|
Net Carrying Amount
$million
|
Gross Balance
$million
|
Total Credit Impair-ment
$million
|
Net Carrying Amount
$million
|
Gross Balance
$million
|
Total Credit Impair-ment
$million
|
Net Carrying Amount
$million
|
Gross Balance
$million
|
Total Credit Impair-ment
$million
|
Net Carrying Amount
$million
|
Industry:
|
|
|
|
|
|
|
|
|
|
|
|
|
Aviation
|
1,605
|
(1)
|
1,604
|
77
|
-
|
77
|
63
|
(12)
|
51
|
1,745
|
(13)
|
1,732
|
Commodity Traders
|
7,838
|
(2)
|
7,836
|
31
|
(1)
|
30
|
503
|
(491)
|
12
|
8,372
|
(494)
|
7,878
|
Metals & Mining
|
3,889
|
(2)
|
3,887
|
188
|
(8)
|
180
|
110
|
(66)
|
44
|
4,187
|
(76)
|
4,111
|
Construction
|
2,415
|
(2)
|
2,413
|
466
|
(3)
|
463
|
368
|
(325)
|
43
|
3,249
|
(330)
|
2,919
|
Commercial Real Estate
|
12,650
|
(45)
|
12,605
|
1,769
|
(73)
|
1,696
|
1,606
|
(1,194)
|
412
|
16,025
|
(1,312)
|
14,713
|
Hotels & Tourism
|
1,789
|
(2)
|
1,787
|
35
|
-
|
35
|
125
|
(28)
|
97
|
1,949
|
(30)
|
1,919
|
Oil & Gas
|
7,211
|
(6)
|
7,205
|
530
|
(11)
|
519
|
524
|
(149)
|
375
|
8,265
|
(166)
|
8,099
|
Total
|
37,397
|
(60)
|
37,337
|
3,096
|
(96)
|
3,000
|
3,299
|
(2,265)
|
1,034
|
43,792
|
(2,421)
|
41,371
|
Total CIB
|
121,272
|
(110)
|
121,162
|
7,980
|
(206)
|
7,774
|
5,048
|
(3,449)
|
1,599
|
134,300
|
(3,765)
|
130,535
|
Total Group
|
309,042
|
(482)
|
308,560
|
10,397
|
(367)
|
10,030
|
6,696
|
(4,159)
|
2,537
|
326,135
|
(5,008)
|
321,127
|
Amortised Cost
|
31.12.23
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Gross Balance
$million
|
Total Credit Impair-ment
$million
|
Net Carrying Amount
$million
|
Gross Balance
$million
|
Total Credit Impair-ment
$million
|
Net Carrying Amount
$million
|
Gross Balance
$million
|
Total Credit Impair-ment
$million
|
Net Carrying Amount
$million
|
Gross Balance
$million
|
Total Credit Impair-ment
$million
|
Net Carrying Amount
$million
|
Industry:
|
|
|
|
|
|
|
|
|
|
|
|
|
Aviation
|
1,619
|
-
|
1,619
|
55
|
(1)
|
54
|
74
|
(15)
|
59
|
1,748
|
(16)
|
1,732
|
Commodity Traders
|
6,912
|
(2)
|
6,910
|
129
|
(1)
|
128
|
555
|
(504)
|
51
|
7,596
|
(507)
|
7,089
|
Metals & Mining
|
3,934
|
(1)
|
3,933
|
140
|
(8)
|
132
|
154
|
(88)
|
66
|
4,228
|
(97)
|
4,131
|
Construction
|
2,230
|
(2)
|
2,228
|
502
|
(8)
|
494
|
358
|
(326)
|
32
|
3,090
|
(336)
|
2,754
|
Commercial Real Estate
|
12,261
|
(30)
|
12,231
|
1,848
|
(129)
|
1,719
|
1,712
|
(1,191)
|
521
|
15,821
|
(1,350)
|
14,471
|
Hotels & Tourism
|
1,468
|
(2)
|
1,466
|
61
|
-
|
61
|
126
|
(25)
|
101
|
1,655
|
(27)
|
1,628
|
Oil & Gas
|
5,234
|
(4)
|
5,230
|
615
|
(15)
|
600
|
571
|
(147)
|
424
|
6,420
|
(166)
|
6,254
|
Total
|
33,658
|
(41)
|
33,617
|
3,350
|
(162)
|
3,188
|
3,550
|
(2,296)
|
1,254
|
40,558
|
(2,499)
|
38,059
|
Total CIB
|
120,886
|
(101)
|
120,785
|
7,902
|
(257)
|
7,645
|
5,508
|
(3,533)
|
1,975
|
134,296
|
(3,891)
|
130,405
|
Total Group
|
318,076
|
(438)
|
317,638
|
11,765
|
(430)
|
11,335
|
7,305
|
(4,326)
|
2,979
|
337,146
|
(5,194)
|
331,952
|
Loans and advances by geography (net of credit
impairment)
|
30.06.24
|
31.12.23
|
Hong Kong
$million
|
China
$million
|
Singa-pore
$million
|
UK
$million
|
US
$million
|
Other
$million
|
Total
$million
|
Hong Kong
$million
|
China
$million
|
Singa-pore
$million
|
UK
$million
|
US
$million
|
Other
$million
|
Total
$million
|
Industry:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aviation1,2
|
232
|
32
|
473
|
628
|
198
|
169
|
1,732
|
238
|
5
|
480
|
447
|
201
|
361
|
1,732
|
Commodity Traders
|
1,020
|
673
|
1,948
|
1,943
|
674
|
1,620
|
7,878
|
1,313
|
493
|
1,560
|
2,294
|
312
|
1,117
|
7,089
|
Metals & Mining
|
313
|
404
|
357
|
458
|
98
|
2,481
|
4,111
|
346
|
430
|
115
|
773
|
209
|
2,258
|
4,131
|
Construction
|
233
|
146
|
525
|
119
|
385
|
1,511
|
2,919
|
176
|
163
|
319
|
137
|
389
|
1,570
|
2,754
|
Commercial Real Estate
|
4,030
|
411
|
1,549
|
1,100
|
1,823
|
5,800
|
14,713
|
3,895
|
588
|
1,125
|
1,436
|
1,236
|
6,192
|
14,472
|
Hotel & Tourism
|
693
|
95
|
238
|
357
|
90
|
446
|
1,919
|
355
|
85
|
123
|
289
|
163
|
613
|
1,628
|
Oil & Gas
|
2,127
|
-
|
885
|
598
|
3,840
|
649
|
8,099
|
1,410
|
4
|
694
|
554
|
2,073
|
1,518
|
6,253
|
Total
|
8,648
|
1,761
|
5,975
|
5,203
|
7,108
|
12,676
|
41,371
|
7,733
|
1,768
|
4,416
|
5,930
|
4,583
|
13,629
|
38,059
|
Page
36
Credit quality - loans and advances
Amortised Cost
Credit Grade
|
30.06.24
|
Aviation
Gross
$million
|
Commodity Traders
Gross
$million
|
Construction
Gross
$million
|
Metals & Mining
Gross
$million
|
Commercial Real Estate
Gross
$million
|
Hotel & Tourism
Gross
$million
|
Oil & Gas
Gross
$million
|
Total
Gross
$million
|
Strong
|
1,430
|
5,171
|
962
|
3,011
|
8,344
|
1,464
|
4,693
|
25,075
|
Satisfactory
|
252
|
2,696
|
1,904
|
1,015
|
6,067
|
354
|
3,033
|
15,321
|
Higher risk
|
-
|
2
|
15
|
51
|
8
|
5
|
15
|
96
|
Credit impaired (stage 3)
|
63
|
503
|
368
|
110
|
1,606
|
126
|
524
|
3,300
|
Total Gross Balance
|
1,745
|
8,372
|
3,249
|
4,187
|
16,025
|
1,949
|
8,265
|
43,792
|
Strong
|
-
|
(1)
|
-
|
(1)
|
(43)
|
(1)
|
(1)
|
(47)
|
Satisfactory
|
(1)
|
(2)
|
(5)
|
(4)
|
(75)
|
(1)
|
(16)
|
(104)
|
Higher risk
|
-
|
-
|
-
|
(6)
|
-
|
-
|
-
|
(6)
|
Credit impaired (stage 3)
|
(12)
|
(491)
|
(325)
|
(65)
|
(1,194)
|
(28)
|
(149)
|
(2,264)
|
Total Credit Impairment
|
(13)
|
(494)
|
(330)
|
(76)
|
(1,312)
|
(30)
|
(166)
|
(2,421)
|
Strong
|
0.0%
|
0.0%
|
0.0%
|
0.0%
|
0.5%
|
0.1%
|
0.0%
|
0.2%
|
Satisfactory
|
0.4%
|
0.1%
|
0.3%
|
0.4%
|
1.2%
|
0.3%
|
0.5%
|
0.7%
|
Higher risk
|
0.0%
|
0.0%
|
0.0%
|
11.8%
|
0.0%
|
0.0%
|
0.0%
|
6.3%
|
Credit impaired (stage 3)
|
19.0%
|
97.6%
|
88.3%
|
59.1%
|
74.3%
|
22.2%
|
28.4%
|
68.6%
|
Cover Ratio
|
0.7%
|
5.9%
|
10.2%
|
1.8%
|
8.2%
|
1.5%
|
2.0%
|
5.5%
|
Credit Grade
|
31.12.23
|
Aviation
Gross
$million
|
Commodity Traders
Gross
$million
|
Construction
Gross
$million
|
Metals & Mining
Gross
$million
|
Commercial Real Estate
Gross
$million
|
Hotel & Tourism
Gross
$million
|
Oil & Gas
Gross
$million
|
Total
Gross
$million
|
Strong
|
1,452
|
4,444
|
1,012
|
3,213
|
7,326
|
1,090
|
4,024
|
22,561
|
Satisfactory
|
222
|
2,592
|
1,702
|
788
|
6,751
|
439
|
1,726
|
14,220
|
Higher risk
|
-
|
5
|
18
|
73
|
32
|
-
|
101
|
229
|
Credit impaired (stage 3)
|
74
|
555
|
358
|
154
|
1,712
|
126
|
569
|
3,548
|
Total Gross Balance
|
1,748
|
7,596
|
3,090
|
4,228
|
15,821
|
1,655
|
6,420
|
40,558
|
Strong
|
-
|
(1)
|
(1)
|
-
|
(20)
|
(1)
|
(3)
|
(26)
|
Satisfactory
|
(1)
|
(2)
|
(6)
|
(1)
|
(139)
|
(1)
|
(12)
|
(162)
|
Higher risk
|
-
|
-
|
(4)
|
(8)
|
-
|
-
|
(4)
|
(16)
|
Credit impaired (stage 3)
|
(15)
|
(504)
|
(325)
|
(88)
|
(1,191)
|
(25)
|
(147)
|
(2,295)
|
Total Credit Impairment
|
(16)
|
(507)
|
(336)
|
(97)
|
(1,350)
|
(27)
|
(166)
|
(2,499)
|
Strong
|
0.0%
|
0.0%
|
0.1%
|
0.0%
|
0.3%
|
0.1%
|
0.1%
|
0.1%
|
Satisfactory
|
0.5%
|
0.1%
|
0.4%
|
0.1%
|
2.1%
|
0.2%
|
0.7%
|
1.1%
|
Higher risk
|
0.0%
|
0.0%
|
22.2%
|
11.0%
|
0.0%
|
0.0%
|
4.0%
|
7.0%
|
Credit impaired (stage 3)
|
20.3%
|
90.8%
|
90.8%
|
57.1%
|
69.6%
|
19.8%
|
25.8%
|
64.7%
|
Cover Ratio
|
0.9%
|
6.7%
|
10.9%
|
2.3%
|
8.5%
|
1.6%
|
2.6%
|
6.2%
|
Page
37
Maturity and expected credit loss for
high-carbon sectors
Sector
|
30.06.24
|
Maturity Buckets1
|
Expected
Credit Loss
$million
|
Loans and advances (Drawn funding)
$million
|
Less than
1 year
$million
|
More than
1 to 5 years
$million
|
More than
5 years
$million
|
Automotive Manufacturers
|
3,121
|
2,615
|
506
|
-
|
1
|
Aviation
|
1,403
|
181
|
133
|
1,089
|
8
|
Cement
|
984
|
586
|
398
|
-
|
35
|
Coal Mining
|
24
|
-
|
24
|
-
|
11
|
Steel
|
2,122
|
1,535
|
228
|
359
|
54
|
Aluminium
|
544
|
439
|
83
|
22
|
9
|
Oil & Gas
|
8,265
|
3,962
|
1,612
|
2,691
|
165
|
Power
|
5,453
|
1,753
|
1,083
|
2,617
|
97
|
Shipping
|
7,298
|
1,241
|
2,505
|
3,552
|
13
|
Commercial Real Estate
|
8,640
|
4,584
|
3,758
|
298
|
129
|
Total balance2,3
|
37,854
|
16,896
|
10,330
|
10,628
|
522
|
1 Maturity bucketing of gross
balances
2 Other metals and mining sector
excluded to align with climate reporting
3 Includes FVTPL
Sector
|
31.12.23
|
Maturity Buckets1
|
Expected
Credit Loss
$million
|
Loans and advances (Drawn funding)
$million
|
Less than
1 year
$million
|
More than
1 to 5 years
$million
|
More than
5 years
$million
|
Automotive Manufacturers
|
3,566
|
3,106
|
460
|
-
|
2
|
Aviation
|
1,339
|
149
|
145
|
1,045
|
9
|
Cement
|
719
|
512
|
189
|
18
|
48
|
Coal Mining
|
42
|
9
|
33
|
-
|
13
|
Steel
|
1,649
|
1,258
|
185
|
206
|
53
|
Aluminium
|
537
|
442
|
63
|
32
|
11
|
Oil & Gas
|
6,444
|
2,980
|
1,576
|
1,888
|
166
|
Power
|
5,516
|
1,933
|
1,533
|
2,050
|
105
|
Shipping
|
5,971
|
1,051
|
2,568
|
2,352
|
7
|
Commercial Real Estate
|
7,664
|
3,722
|
3,935
|
7
|
166
|
Total balance2,3
|
33,447
|
15,162
|
10,687
|
7,598
|
580
|
1 Maturity bucketing of gross
balances
2 Other metals and mining sector
excluded to align with climate reporting
3 Include FVTPL
China commercial real estate
The table below represents the on and
off-balance sheet items that are exposed to China CRE by credit
quality.
Further details can be found in
the 'Summary of Credit Risk performance' section.
Amortised cost
|
30.06.2024
|
China
$million
|
Hong Kong
$million
|
Rest of Group1
$million
|
Total
$million
|
Loans to customers
|
398
|
1,696
|
37
|
2,131
|
Off balance sheet
|
6
|
38
|
-
|
44
|
Total as at 30 June 2024
|
404
|
1,734
|
37
|
2,175
|
|
|
|
|
|
Loans to customers - By Credit
quality
|
|
|
|
|
Gross
|
|
|
|
|
Strong
|
9
|
11
|
-
|
20
|
Satisfactory
|
214
|
422
|
37
|
673
|
Higher risk
|
8
|
-
|
-
|
8
|
Credit impaired (stage 3)
|
167
|
1,263
|
-
|
1,430
|
Total as at 30 June 2024
|
398
|
1,696
|
37
|
2,131
|
|
|
|
|
|
Loans to customers - ECL
|
|
|
|
|
Strong
|
-
|
-
|
-
|
-
|
Satisfactory
|
(3)
|
(79)
|
(12)
|
(94)
|
Higher risk
|
-
|
-
|
-
|
-
|
Credit impaired (stage 3)
|
(61)
|
(1,035)
|
-
|
(1,096)
|
Total as at 30 June 2024
|
(64)
|
(1,114)
|
(12)
|
(1,190)
|
1 Rest of Group mainly includes
Singapore
Page
38
Amortised cost
|
31.12.2023
|
China
$million
|
Hong Kong
$million
|
Rest of Group1
$million
|
Total
$million
|
Loans to customers
|
584
|
1,821
|
39
|
2,444
|
Off balance sheet
|
42
|
82
|
-
|
124
|
Total as at 31 December 2023
|
626
|
1,903
|
39
|
2,568
|
|
|
|
|
|
Loans to customers - By Credit
quality
|
|
|
|
|
Gross
|
|
|
|
|
Strong
|
33
|
-
|
-
|
33
|
Satisfactory
|
339
|
619
|
39
|
997
|
Higher risk
|
8
|
-
|
-
|
8
|
Credit impaired (stage 3)
|
204
|
1,202
|
-
|
1,406
|
Total as at 31 December 2023
|
584
|
1,821
|
39
|
2,444
|
|
|
|
|
|
Loans to customers - ECL
|
|
|
|
|
Strong
|
-
|
-
|
-
|
-
|
Satisfactory
|
(3)
|
(134)
|
(12)
|
(149)
|
Higher risk
|
-
|
-
|
-
|
-
|
Credit impaired (stage 3)
|
(70)
|
(941)
|
-
|
(1,011)
|
Total as at 31 December 2023
|
(73)
|
(1,075)
|
(12)
|
(1,160)
|
1 Rest of Group mainly includes
Singapore
Debt securities and other eligible bills
(reviewed)
This section provides further detail on gross
debt securities and treasury bills.
The standard credit ratings used by the Group
are those used by Standard & Poor's or its equivalent. Debt
securities held that have a short-term rating are reported against
the long-term rating of the issuer. For securities that are
unrated, the Group applies an internal credit rating, as described
under the credit rating and measurement section on page 321 of the
2023 Annual Report.
Total gross debt securities and other eligible
bills decreased by $8.7 billion to $152 billion (31 December 2023:
$160 billion) due to capital efficiency, primarily in stage
1.
Stage 1 gross balance decreased by $8.9 billion
to $149 billion (31 December 2023: $158 billion) of which $5.1
billion of the decrease was from A- to A+ rating, mainly in Hong
Kong.
Stage 2 gross balance remained stable at $1.8
billion (31 December 2023: $1.9 billion).
Stage 3 gross balance increased by $0.2 billion
to $0.4 billion (31 December 2023: $0.2 billion) due to an increase
in Sri Lanka so as to rebuild the liquidity portfolio.
Page
39
Amortised cost and FVOCI
|
30.06.24
|
31.12.23
|
Gross
$million
|
ECL
$million
|
Net2
$million
|
Gross
$million
|
ECL
$million
|
Net2
$million
|
Stage 1
|
149,422
|
(23)
|
149,399
|
158,314
|
(26)
|
158,288
|
AAA
|
62,664
|
(9)
|
62,655
|
61,920
|
(5)
|
61,915
|
AA- to AA+
|
32,206
|
(2)
|
32,204
|
34,244
|
(2)
|
34,242
|
A- to A+
|
33,759
|
(3)
|
33,756
|
38,891
|
(2)
|
38,889
|
BBB- to BBB+
|
10,980
|
(4)
|
10,976
|
13,098
|
(7)
|
13,091
|
Lower than BBB-
|
2,766
|
(2)
|
2,764
|
1,611
|
(2)
|
1,609
|
Unrated
|
7,047
|
(3)
|
7,044
|
8,550
|
(8)
|
8,542
|
- Strong
|
6,107
|
(2)
|
6,105
|
7,415
|
(7)
|
7,408
|
- Satisfactory
|
940
|
(1)
|
939
|
1,135
|
(1)
|
1,134
|
Stage 2
|
1,787
|
(10)
|
1,777
|
1,860
|
(34)
|
1,826
|
AAA
|
11
|
(1)
|
10
|
98
|
-
|
98
|
AA- to AA+
|
21
|
-
|
21
|
22
|
-
|
22
|
A- to A+
|
344
|
-
|
344
|
81
|
-
|
81
|
BBB- to BBB+
|
541
|
(4)
|
537
|
499
|
(3)
|
496
|
Lower than BBB-
|
826
|
(4)
|
822
|
893
|
(30)
|
863
|
Unrated
|
44
|
(1)
|
43
|
267
|
(1)
|
266
|
- Strong
|
1
|
-
|
1
|
217
|
-
|
217
|
- Satisfactory
|
43
|
(1)
|
42
|
50
|
(1)
|
49
|
- High Risk
|
-
|
-
|
-
|
-
|
-
|
-
|
Stage 3
|
387
|
(16)
|
371
|
164
|
(61)
|
103
|
Lower than BBB-
|
346
|
(10)
|
336
|
72
|
(4)
|
68
|
Defaulted
|
41
|
(6)
|
35
|
92
|
(57)
|
35
|
Gross balance¹
|
151,596
|
(49)
|
151,547
|
160,338
|
(121)
|
160,217
|
1 Stage 3 gross includes $23 million (31
December 2023: $80 million) originated credit-impaired debt
securities with impairment of Nil (31 December 2023: $14
million)
2 FVOCI instrument are not presented net
of ECL. While the presentation is on a net basis for the table, the
total net on-balance sheet amount is $151,580 million
(31 December 2023: $160,263 million). Refer to the Analysis of
financial instrument by stage table
IFRS 9 expected credit loss methodology
(reviewed)
Refer to page 273 in the 2023 Annual Report for
the 'Approach for determining expected credit losses', 'Application
of lifetime' and pages 282 to 285 for 'SICR', 'Assessment of
credit-impaired financial assets' and 'Governance and application
of expert credit judgement in respect of expected credit losses'.
There have been no changes to the Group's approach in determining
SICR compared to 31 December 2023.
Composition of credit impairment provisions
The table below summarises the key components of
the Group's credit impairment provision balances at 30 June 2024
and 31 December 2023.
30 June 2024
|
Corporate & Investment Banking
$ million
|
Wealth &
Retail Banking
$ million
|
Ventures
$ million
|
Central &
other items4
$ million
|
Total
$ million
|
Modelled ECL provisions (base
forecast)
|
342
|
595
|
41
|
80
|
1,058
|
Modelled Impact of multiple economic
scenarios
|
48
|
14¹
|
-
|
-
|
62
|
Total ECL provisions before management
judgements
|
390
|
609
|
41
|
80
|
1,120
|
Includes: Model performance post model
adjustments
|
|
(23)
|
-
|
-
|
(23)
|
Judgemental post model adjustments
|
-
|
(21)2
|
10
|
-
|
(11)
|
Judgemental management
adjustments3
|
|
|
|
|
|
- China commercial real estate
|
86
|
-
|
-
|
-
|
86
|
- Other
|
-
|
13
|
-
|
-
|
13
|
Total modelled provisions
|
476
|
601
|
51
|
80
|
1,208
|
Of which: Stage 1
|
144
|
358
|
20
|
46
|
568
|
Stage 2
|
259
|
138
|
22
|
10
|
429
|
Stage 3
|
73
|
105
|
9
|
24
|
211
|
Stage 3 non-modelled provisions
|
3,521
|
593
|
-
|
83
|
4,197
|
Total credit impairment provisions
|
3,997
|
1,194
|
51
|
163
|
5,405
|
Page
40
31 December 2023
|
Corporate & Investment Banking
$ million
|
Wealth &
Retail Banking
$ million
|
Ventures
$ million
|
Central &
other items4
$ million
|
Total
$ million
|
Modelled ECL provisions (base
forecast)
|
372
|
553
|
48
|
98
|
1,071
|
Modelled impact of multiple economic
scenarios
|
20
|
18
|
-
|
6
|
44
|
Total ECL provisions before management
judgements
|
392
|
571
|
48
|
104
|
1,115
|
Includes: Model performance post model
adjustments
|
(3)
|
(28)
|
-
|
-
|
(31)
|
Judgemental post model adjustments
|
-
|
4
|
-
|
-
|
4
|
Judgemental management
adjustments3
|
|
|
|
|
|
- China commercial real estate
|
141
|
-
|
-
|
-
|
141
|
- Other
|
-
|
3
|
-
|
17
|
20
|
Total modelled provisions
|
533
|
578
|
48
|
121
|
1,280
|
Of which: Stage 1
|
151
|
325
|
15
|
68
|
559
|
Stage 2
|
318
|
140
|
21
|
49
|
528
|
Stage 3
|
64
|
113
|
12
|
4
|
193
|
Stage 3 non-modelled provisions
|
3,587
|
646
|
-
|
88
|
4,321
|
Total credit impairment provisions
|
4,120
|
1,224
|
48
|
209
|
5,601
|
1 Net of a judgemental post model
adjustment to reduce ECL by $4 million (31 December 2023:
$nil)
2 Excludes $4 million (31 December 2023:
$nil) reduction in ECL which is reported within the 'Modelled
impact of multiple economic scenarios'
3 $13 million (31 December 2023: $27
million) is in stage 1, $86 million (31 December 2023: $138
million) in stage 2
4 Includes ECL on cash and balances at
central banks, accrued income, assets held for sale and other
assets
Model performance post model adjustments
(PMA)
As part of normal model monitoring and
validation operational processes, where a model's performance
breaches the monitoring thresholds or validation standards, an
assessment is performed to determine whether a model performance
post model adjustment is required to correct for the identified
model issue. Model performance post model adjustments are approved
by the Group Credit Model Assessment Committee and will be removed
when the models are enhanced to correct for the identified model
issue or the model estimates return to being within the monitoring
thresholds or validation standards.
As at 30 June 2024, model performance post model
adjustments have been applied for five models out of the total of
167 models. In aggregate, these post model adjustments reduce the
Group's impairment provisions by $23 million (2 per cent of
modelled provisions) compared with a $31 million decrease at 31
December 2023. The most significant of these relates to an
adjustment to decrease ECL for Korea personal loans as the IFRS 9
PD model is sensitive to the higher range of interest
rates.
In addition to these model performance post
model adjustments, separate judgemental post model and management
adjustments have also been applied as set out below.
|
30.06.24
$ million
|
31.12.23
$ million
|
Model performance PMAs
|
|
|
Corporate & Investment Banking
|
-
|
(3)
|
Wealth & Retail Banking
|
(23)
|
(28)
|
Total model performance PMAs
|
(23)
|
(31)
|
Key assumptions and judgements in determining
expected credit loss
Incorporation of forward-looking
information
The evolving economic environment is a key
determinant of the ability of a bank's clients to meet their
obligations as they fall due. It is a fundamental principle of IFRS
9 that the provisions banks hold against potential future Credit
Risk losses should depend, not just on the health of the economy
today, but should also take into account potential changes to the
economic environment. For example, if a bank were to anticipate a
sharp slowdown in the world economy over the coming year, it should
hold more provisions today to absorb the credit losses likely to
occur in the near future.
To capture the effect of changes to the economic
environment, the PDs and LGDs used to calculate ECL incorporate
forward-looking information in the form of forecasts of the values
of economic variables and asset prices that are likely to have an
effect on the repayment ability of the Group's clients.
Page
41
The 'base forecast' of the economic variables
and asset prices is based on management's view of the five-year
outlook, supported by projections from the Group's in-house
research team and outputs from a third-party model that project
specific economic variables and asset prices. The research team
takes consensus views into consideration, and senior management
review projections for some core country variables against
consensus when forming their view of the outlook. For the period
beyond five years, management utilises the in-house research view
and third-party model outputs, which allow for a reversion to
long-term growth rates or norms. All projections are updated on a
quarterly basis.
Forecast of key macroeconomic variables
underlying the expected credit loss calculation and the impact on
non-linearity
In the Base Forecast - management's view of the
most likely outcome - the world economy is expected grow by 3.1 per
cent in 2024 and 3.2 per cent in 2025 with Asia set to remain the
primary engine of global growth. This compares to the average of
3.7 per cent for the 10 years prior to COVID-19 (between 2010 and
2019). Growth was over 3 per cent in both 2022 and 2023 at 3.4 per
cent and 3.1 per cent, respectively.
Significant uncertainties remain around the
outlook. High geopolitical tensions remain a significant near-term
adverse risk, particularly if the evolving conflicts in the Middle
East were to intensify and disrupt energy and financial markets.
Key elections in multiple countries this year may temporarily weigh
on investment activity. The US election in particular could have
consequences for global trade in 2025. Major central banks are
likely to start their rate-cutting cycles in the coming months,
opening doors for Asian countries to ease monetary
policy.
While the quarterly Base Forecasts inform the
Group's strategic plan, one key requirement of IFRS 9 is that the
assessment of provisions should consider multiple future economic
environments. For example, the global economy may grow more quickly
or more slowly than the Base Forecast, and these variations would
have different implications for the provisions that the Group
should hold today. As the negative impact of an economic downturn
on credit losses tends to be greater than the positive impact of an
economic upturn, if the Group sets provisions only on the ECL under
the Base Forecast it might maintain a level of provisions that does
not appropriately capture the range of potential outcomes. To
address the inherent uncertainty in economic forecast, and the
property of skewness (or non-linearity), IFRS 9 requires reported
ECL to be a probability-weighted ECL, calculated over a range of
possible outcomes.
To assess the range of possible outcomes the
Group simulates a set of 50 scenarios around the Base Forecast,
calculates the ECL under each of them and assigns an equal weight
of 2 per cent to each scenario outcome. These scenarios are
generated by a Monte Carlo simulation, which addresses the
challenges of crafting many realistic alternative scenarios in the
many countries in which the Group operates by means of a model,
which produces these alternative scenarios while considering the
degree of historical uncertainty (or volatility) observed from Q1
1990 to Q1 2024 around economic outcomes, the trends in each
macroeconomic variable modelled and the correlation in the
unexplained movements around these trends. This naturally means
that each of the 50 scenarios do not have a specific narrative,
although collectively they explore a range of hypothetical
alternative outcomes for the global economy, including scenarios
that turn out better than expected and scenarios that amplify
anticipated stresses.
The GDP graphs below illustrate the shape of the
Base Forecast for key footprint markets in relation to prior
periods' actuals. The long-term growth rates are based on the pace
of economic expansion expected for 2030. The tables below provide a
summary of the Group's Base Forecast for these markets. The
peak/trough amount show the highest and lowest points within the
Base Forecast.
China's GDP growth is expected to ease to 4.8
per cent in 2024 and then to 4.5 per cent in 2025. This follows
growth of 5.2 per cent in 2023. Weak consumer confidence
and a persistent housing-market downturn cloud the economic
outlook. The slower growth for China will also temper economic
expansion of Hong Kong. Growth there is expected to be 2.6 per cent
in 2024 and 2.9 per cent in 2025, down from the 3.2 per cent for
2023. The recent weakness in domestic business confidence will also
slow the recovery in Hong Kong. Growth in India is also expected to
slow to 7 per cent in 2024 and 6.5 per cent in 2025 from
7.6 per cent last year. Supportive one-off factors are
expected to fade. Growth was recently supported by construction
activity and electricity demand (amid below-normal rains), higher
corporate profitability due to lower commodity prices, and a
still-strong global economy.
In contrast, GDP growth for Singapore is
expected to accelerate from 1.0 per cent in 2023 to just over 2.6
per cent in 2024 and to 2.9 per cent in 2025. Favourable base
effects to exports and the recovery in the global electronics and
semiconductor industry are expected to continue to support the
economy. Korea's economic growth will also benefit from the
turnaround in this key sector and the current AI 'super-cycle'. The
economy is also expected to be supported by more demand for new
ships on stricter environmental regulations and export-related
facility investment. Korea's economic growth is expected to improve
to 2.5 per cent in 2024 and 2.1 per cent in 2025 from 1.3 per cent
in 2023.
Page
42
|
30.06.24
|
China
|
Hong Kong
|
GDP growth
(YoY%)
|
Unemployment
%
|
3-month interest rates
%
|
House prices
(YoY %)
|
GDP growth
(YoY %)
|
Unemployment
%
|
3-month interest rates
%
|
House prices
(YoY %)
|
Base forecast1
|
|
|
|
|
|
|
|
|
2024
|
4.8
|
3.6
|
1.9
|
(2.9)
|
2.6
|
3.1
|
4.5
|
4.3
|
2025
|
4.5
|
3.5
|
2.0
|
0.0
|
2.9
|
3.2
|
3.7
|
5.5
|
2026
|
4.3
|
3.3
|
2.2
|
2.7
|
2.5
|
3.2
|
3.2
|
3.3
|
2027
|
4.0
|
3.2
|
2.4
|
3.7
|
2.3
|
3.2
|
2.7
|
2.7
|
2028
|
3.8
|
3.2
|
2.6
|
4.3
|
2.2
|
3.2
|
2.7
|
2.6
|
5-year average2
|
4.1
|
3.3
|
2.3
|
2.3
|
2.5
|
3.2
|
3.1
|
4.0
|
Peak
|
5.6
|
3.6
|
2.7
|
4.4
|
4.0
|
3.2
|
4.3
|
11.1
|
Trough
|
2.8
|
3.1
|
1.8
|
(3.9)
|
1.9
|
3.2
|
2.7
|
2.6
|
Monte Carlo
|
|
|
|
|
|
|
|
|
Low3
|
(0.8)
|
2.8
|
0.8
|
(6.0)
|
(4.5)
|
1.4
|
0.0
|
(19.7)
|
High4
|
9.3
|
3.8
|
4.5
|
10.1
|
8.6
|
6.1
|
6.5
|
26.8
|
|
30.06.24
|
Singapore
|
Korea
|
GDP growth
(YoY%)
|
Unemployment
%
|
3-month interest rates
%
|
House prices
(YoY%)
|
GDP growth
(YoY%)
|
Unemployment
%
|
3-month interest rates
%
|
House prices
(YoY %)
|
Base forecast1
|
|
|
|
|
|
|
|
|
2024
|
2.6
|
3.1
|
3.8
|
2.7
|
2.5
|
3.3
|
3.6
|
2.9
|
2025
|
2.9
|
2.8
|
3.1
|
2.5
|
2.1
|
3.3
|
3.2
|
5.7
|
2026
|
2.5
|
2.8
|
2.9
|
2.2
|
2.2
|
3.1
|
3.2
|
3.5
|
2027
|
2.5
|
2.8
|
2.7
|
3.0
|
2.1
|
3.0
|
3.2
|
2.4
|
2028
|
2.7
|
2.8
|
2.6
|
3.7
|
2.0
|
3.0
|
3.2
|
2.1
|
5-year average2
|
2.6
|
2.8
|
2.9
|
2.8
|
2.1
|
3.1
|
3.2
|
3.5
|
Peak
|
3.2
|
3.1
|
3.7
|
3.9
|
3.0
|
3.4
|
3.6
|
8.0
|
Trough
|
2.3
|
2.8
|
2.6
|
0.4
|
1.0
|
2.9
|
3.2
|
2.0
|
Monte Carlo
|
|
|
|
|
|
|
|
|
Low3
|
(2.6)
|
1.9
|
0.9
|
(16.1)
|
(2.7)
|
1.2
|
0.5
|
(5.7)
|
High4
|
8.3
|
4.0
|
5.2
|
23.9
|
7.0
|
5.7
|
6.4
|
12.3
|
|
30.06.24
|
India
|
Brent Crude
$ pb
|
GDP growth
(YoY%)
|
Unemployment7
%
|
3 month
interest rates
%
|
House prices
(YoY%)
|
Base forecast1
|
|
|
|
|
|
2024
|
7.0
|
NA
|
6.3
|
6.6
|
83.2
|
2025
|
6.5
|
NA
|
6.0
|
6.1
|
82.7
|
2026
|
6.5
|
NA
|
6.0
|
6.4
|
82.6
|
2027
|
6.4
|
NA
|
6.0
|
6.4
|
83.2
|
2028
|
6.5
|
NA
|
6.0
|
6.3
|
81.3
|
5-year average2
|
6.6
|
NA
|
6.0
|
6.4
|
82.4
|
Peak
|
7.7
|
NA
|
6.5
|
7.5
|
83.4
|
Trough
|
6.3
|
NA
|
6.0
|
5.9
|
80.9
|
Monte Carlo
|
|
|
|
|
|
Low3
|
1.7
|
NA
|
1.7
|
(0.9)
|
40.1
|
High4
|
11.5
|
NA
|
9.8
|
11.7
|
140.4
|
Page
43
|
31.12.23
|
China
|
Hong Kong
|
GDP growth
(YoY%)
|
Unemployment
%
|
3-month interest rates
%
|
House prices
(YoY%)⁵
|
GDP growth
(YoY%)
|
Unemployment
%
|
3-month interest rates
%
|
House prices
(YoY%)
|
5-year average2
|
4.3
|
4.0
|
2.1
|
4.6
|
2.5
|
3.4
|
3.4
|
2.8
|
Peak
|
5.7
|
4.1
|
2.5
|
7.2
|
3.8
|
3.4
|
5.0
|
4.6
|
Trough
|
3.8
|
3.8
|
1.7
|
1.5
|
1.5
|
3.4
|
2.3
|
(1.1)
|
Monte Carlo
|
|
|
|
|
|
|
|
|
Low3
|
0.6
|
3.3
|
0.8
|
(1.5)
|
(3.8)
|
1.4
|
0.3
|
(19.3)
|
High4
|
7.7
|
4.4
|
3.8
|
12.0
|
8.2
|
6.4
|
8.3
|
25.5
|
|
31.12.23
|
Singapore
|
Korea
|
GDP growth
(YoY%)
|
Unemployment
%6
|
3-month interest rates
%
|
House prices
(YoY%)
|
GDP growth
(YoY%)
|
Unemployment
%
|
3-month interest rates
%
|
House prices
(YoY%)
|
5-year average2
|
2.9
|
2.8
|
2.9
|
2.2
|
2.3
|
3.1
|
3.1
|
3.3
|
Peak
|
3.8
|
2.9
|
4.1
|
3.9
|
2.6
|
3.5
|
3.7
|
5.3
|
Trough
|
1.9
|
2.8
|
2.3
|
(0.7)
|
2.0
|
3.0
|
3.1
|
(0.3)
|
Monte Carlo
|
|
|
|
|
|
|
|
|
Low3
|
(2.4)
|
1.7
|
0.6
|
(16.2)
|
(2.3)
|
1.4
|
0.7
|
(6.1)
|
High4
|
8.5
|
3.8
|
5.9
|
19.2
|
7.0
|
5.8
|
6.3
|
12.5
|
|
31.12.23
|
India
|
Brent crude
$ pb
|
GDP growth
(YoY%)
|
Unemployment7
%
|
3-month
interest rates
%
|
House prices
(YoY%)
|
5-year average2
|
6.2
|
NA
|
6.2
|
6.1
|
88.2
|
Peak
|
9.1
|
NA
|
6.3
|
6.5
|
93.8
|
Trough
|
4.4
|
NA
|
5.8
|
4.7
|
82.8
|
Monte Carlo
|
|
|
|
|
|
Low3
|
2.1
|
NA
|
2.7
|
(0.5)
|
46.0
|
High4
|
10.5
|
NA
|
9.9
|
13.8
|
137.8
|
1 Data presented are those used in the
calculation of ECL. These may differ slightly to forecasts
presented elsewhere in this Report as they are finalised before the
period end.
2 5 year averages reported for 30.06.24
cover Q3 2024 to Q2 2029. They cover Q1 2024 to Q4 2028 for the
numbers reported for the 2023 annual report.
3 Represents the 10th percentile in the
range of economic scenarios used to determine
non-linearity.
4 Represents the 90th percentile in the
range of economic scenarios used to determine
non-linearity.
5 A judgemental management adjustment is
held in respect of the China commercial real estate sector as
discussed.
6 Singapore unemployment rate covers the
resident unemployment rate, which refers to citizens and permanent
residents.
7 India unemployment is not available
due to insufficient data
Impact of multiple economic
scenarios
The final probability-weighted ECL reported by
the Group is a simple average of the ECL for each of the 50
scenarios simulated using a Monte Carlo model. The Monte Carlo
approach has the advantage that it generates many alternative
scenarios that cover our global footprint.
The total amount of non-linearity, calculated as
the difference between the probability-weighted ECL calculated by
the Monte Carlo model and the unweighted base forecast ECL, is $62
million (31 December 2023: $44 million). The CIB and
Central and other items portfolios accounted for $48 million (31
December 2023: $26 million) of the calculated non-linearity, with
the increase from 31 December 2023 driven by the Project Finance
portfolio. The remaining $14 million (31 December 2023:
$18 million) was attributable to WRB portfolios (net of a $4
million judgemental post model adjustment).
Page
44
The impact of multiple economic scenarios on
stage 1, stage 2 and stage 3 modelled ECL is set out in the table
below, together with the management overlay and other judgemental
adjustments.
|
Base forecast
$million
|
Multiple
economic
scenarios1
$million
|
Management overlays
and other judgemental adjustments
$million
|
Total
modelled
ECL2,3
$million
|
Total expected credit loss at 30 June
2024
|
1,058
|
62
|
88
|
1,208
|
Total expected credit loss at 31 December
2023
|
1,071
|
44
|
165
|
1,280
|
1 Includes judgemental post model
adjustment of $4 million (31 December 2023: $nil million) relating
to WRB
2 Total modelled ECL comprises
stage 1 and stage 2 balances of $997 million (31 December 2023:
$1,105 million) and $194 million (31 December 2023: $193 million)
of modelled ECL on stage 3 loans
3 Includes ECL on Assets held for
sale of $17 million (31 December 2023: $34 million)
The average expected credit loss under multiple
scenarios is 6 per cent (31 December 2023: 4 per cent) higher than
the expected credit loss calculated using only the most likely
scenario (the Base Forecast). Portfolios that are more sensitive to
non-linearity include those with greater leverage and/or a longer
tenor, such as Project and Shipping Finance portfolios. Other
portfolios display minimal non-linearity owing to limited
responsiveness to macroeconomic impacts for structural reasons,
such as significant collateralisation as with the WRB mortgage
portfolios.
Judgemental management adjustments
As at 30 June 2024, the Group held judgemental
adjustments for ECL as set out in the table below. All of the
judgemental adjustments have been determined after taking account
of the model performance post model adjustments reported. They are
reassessed quarterly and are reviewed and approved by the IFRS 9
Impairment Committee and will be released when no longer
relevant.
30 June 2024
|
Corporate & Investment Banking
$ million
|
Wealth & Retail Banking
|
Ventures
$ million
|
Central &
other
$ million
|
Total
$ million
|
Mortgages
$ million
|
Credit Cards
$ million
|
Other
$ million
|
Total
$ million
|
Judgemental post model adjustments
|
-
|
1
|
(4)
|
(22)
|
(25)
|
10
|
-
|
(15)
|
Judgemental management adjustments:
|
|
|
|
|
|
|
|
|
- China CRE
|
86
|
-
|
-
|
-
|
-
|
-
|
-
|
86
|
- Other
|
-
|
1
|
11
|
1
|
13
|
-
|
-
|
13
|
Total judgemental adjustments
|
86
|
2
|
8
|
(22)
|
(12)
|
10
|
-
|
84
|
Judgemental adjustments by stage:
|
|
|
|
|
|
|
|
|
- Stage 1
|
-
|
1
|
8
|
(9)
|
-
|
10
|
-
|
10
|
- Stage 2
|
86
|
1
|
-
|
(11)
|
(10)
|
-
|
-
|
76
|
- Stage 3
|
-
|
-
|
-
|
(2)
|
(2)
|
-
|
-
|
(2)
|
31 December 2023
|
Corporate & Investment Banking
$ million
|
Wealth & Retail Banking
|
Ventures
$ million
|
Central &
other
$ million
|
Total
$ million
|
Mortgages
$ million
|
Credit Cards
$ million
|
Other
$ million
|
Total
$ million
|
Judgemental post model adjustments
|
-
|
-
|
1
|
1
|
2
|
-
|
-
|
2
|
Judgemental management adjustments:
|
|
|
|
|
|
|
|
|
- China CRE
|
141
|
-
|
-
|
-
|
-
|
-
|
-
|
141
|
- Other
|
-
|
1
|
2
|
2
|
5
|
-
|
17
|
22
|
Total judgemental adjustments
|
141
|
1
|
3
|
3
|
7
|
-
|
17
|
165
|
Judgemental adjustments by stage:
|
|
|
|
|
|
|
|
|
- Stage 1
|
17
|
1
|
3
|
6
|
10
|
-
|
-
|
27
|
- Stage 2
|
124
|
-
|
-
|
(3)
|
(3)
|
-
|
17
|
138
|
- Stage 3
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Judgemental post model adjustments
Judgemental post model adjustments that
decreased ECL by a net $15 million (31 December 2023: $2 million
increase) have been applied to certain WRB and Ventures models.
This includes a $13 million (31 December 2023: $nil) reduction in
ECL in WRB due to the expected migration of a number of
non-material portfolios to a simplified modelling approach and a
$4 million (31 December 2023: $nil) reduction in ECL relating
to non-linearity. The remaining adjustments primarily relate
to temporary factors impacting modelled outputs. These will be
released when these factors normalise.
Page
45
China commercial real estate
The real estate market in China has been in a
downturn since late 2021 as evidenced by continued decline in
sales, and investments in the sector. Liquidity issues experienced
by Chinese property developers continued into 2023 with more
developers defaulting on their obligations both offshore and
onshore. During 2023, authorities on the mainland have introduced a
slew of policies to help revive the sector and restore buying
sentiments. This has helped stabilise the market to an extent in
some cities, but demand and home prices remain muted overall.
Continued policy relaxations, including those related to house
purchase restrictions, completion support for eligible projects
from onshore financial institutions, relaxation in mortgage rates,
and further support for affordable housing, are key for reversing
the continued decline in sales and investments and ensuring a
stable outlook for 2024.
The Group's loans and advances to China CRE
clients was $2.1 billion at 30 June 2024 (31 December 2023: $2.4
billion).
Client level analysis continues to be done, with clients being
placed on purely precautionary or non-purely precautionary early
alert, where appropriate, for closer monitoring. Given the evolving
nature of the risks in the China CRE sector, a management overlay
of $86 million (31 December 2023: $141 million) has been taken by
estimating the impact of further deterioration to exposures in this
sector. The decrease from 31 December 2023 was primarily driven by
repayments and movement of one exposure to Stage 3.
Other
Overlays of $13 million (31 December 2023: $5
million) have also been applied in WRB to capture risks from
increased credit card bankruptcy industry trends in Singapore and
Hong Kong and macroeconomic environment challenges caused by
sovereign defaults or heightened sovereign risk, the impact of
which is not fully captured in the modelled outcomes. An overlay of
$17 million held in Central & Other at 31 December 2023, due to
a temporary market dislocation in the Middle East, was fully
released in the six months to 30 June 2024 as conditions
normalised.
Stage 3 assets
Credit-impaired assets managed by Stressed Asset
Group (SAG) incorporate forward-looking economic assumptions in
respect of the recovery outcomes identified and are assigned
individual probability weightings per IFRS 9. These assumptions are
not based on a Monte Carlo simulation but are informed by the Base
Forecast.
Sensitivity of expected credit loss calculation
to macroeconomic variables
The ECL calculation relies on multiple variables
and is inherently non-linear and portfolio-dependent, which implies
that no single analysis can fully demonstrate the sensitivity of
the ECL to changes in the macroeconomic variables. The Group has
conducted a series of analyses with the aim of identifying the
macroeconomic variables which might have the greatest impact on the
overall ECL. These encompassed single variable and multi-variable
exercises, using simple up/down variation and extracts from actual
calculation data, as well as bespoke scenario design
assessments.
The primary conclusion of these exercises is
that no individual macroeconomic variable is materially
influential. The Group believes this is plausible as the number of
variables used in the ECL calculation is large. This does not mean
that macroeconomic variables are uninfluential; rather, that the
Group believes that consideration of macroeconomics should involve
whole scenarios, as this aligns with the multi-variable nature of
the calculation.
The Group faces downside risks in the operating
environment related to the uncertainties surrounding the
macroeconomic outlook. To explore this, a sensitivity analysis of
ECL was undertaken to explore the effect of slower economic
recoveries across the Group's footprint markets. Two downside
scenarios were considered. The first scenario, Renewed Global Trade
Tensions (RGTT), explores an escalating trade war between the US
and China and other economies and increased geopolitical tensions
in Europe. The second more severe scenario is based on the US
Federal Reserve's regulatory Dodd-Frank Act Stress Test scenario
(Fed DFAST) which explores a deep global downturn with weakness in
developing Asia reflecting a significant slowdown in economic
growth in China. Interest rates and inflation are much lower than
base and there is a prolonged decline in property
prices.
Page
46
|
Baseline
|
RGTT
|
Fed DFAST
|
Five year average
|
Peak/Trough
|
Five year average
|
Peak/Trough
|
Five year average
|
Peak/Trough
|
China GDP
|
4.1
|
5.6/2.8
|
3.2
|
4.0/0.0
|
3.2
|
6.0/(1.5)
|
China unemployment
|
3.3
|
3.6/3.1
|
3.9
|
4.7/3.1
|
4.5
|
5.4/3.4
|
China property prices
|
2.3
|
4.4/(3.9)
|
1.4
|
4.4/(4.5)
|
0.5
|
4.4/(5.7)
|
Hong Kong GDP
|
2.5
|
4.0/1.9
|
1.6
|
2.1/0.1
|
1.6
|
4.3/(2.4)
|
Hong Kong unemployment
|
3.2
|
3.2/3.2
|
3.6
|
4.2/3.2
|
3.8
|
4.5/3.3
|
Hong Kong property prices
|
4.0
|
11.1/2.6
|
3.3
|
8.4/0.9
|
2.7
|
7.1/(2.0)
|
US GDP
|
1.8
|
2.6/1.4
|
0.9
|
1.6/(1.0)
|
1.3
|
6.4/(7.7)
|
Singapore GDP
|
2.6
|
3.2/2.3
|
1.9
|
2.7/0.0
|
1.8
|
4.7/(1.8)
|
India GDP
|
6.6
|
7.7/6.3
|
6.3
|
6.6/5.7
|
5.8
|
7.5/3.3
|
Crude oil
|
82.4
|
83.4/80.9
|
79.5
|
83.4/73.4
|
61.6
|
80.5/30.1
|
Period covered from Q3 2024 to Q2
2029.
|
Base (GDP, YoY%)
|
Fed DFAST (GDP, YoY%)
|
Difference from Base
|
2024
|
2025
|
2026
|
2027
|
2028
|
2024
|
2025
|
2026
|
2027
|
2028
|
2024
|
2025
|
2026
|
2027
|
2028
|
China
|
3.8
|
5.0
|
4.0
|
3.9
|
3.7
|
(0.1)
|
2.0
|
5.4
|
4.6
|
4.0
|
(3.9)
|
(3.0)
|
1.4
|
0.6
|
0.2
|
Hong Kong
|
3.3
|
2.6
|
2.4
|
2.3
|
2.0
|
(0.6)
|
(0.5)
|
3.7
|
3.0
|
2.2
|
(3.9)
|
(3.0)
|
1.3
|
0.7
|
0.2
|
US
|
1.7
|
1.6
|
2.4
|
1.9
|
1.6
|
(4.6)
|
(2.5)
|
5.3
|
4.8
|
3.3
|
(6.3)
|
(4.1)
|
2.9
|
2.9
|
1.7
|
Singapore
|
2.8
|
2.7
|
2.4
|
2.6
|
2.7
|
(0.3)
|
(0.8)
|
4.0
|
3.3
|
2.7
|
(3.1)
|
(3.6)
|
1.6
|
0.6
|
0.0
|
India
|
7.3
|
6.5
|
6.4
|
6.4
|
6.5
|
5.2
|
3.8
|
7.0
|
6.4
|
6.3
|
(2.1)
|
(2.7)
|
0.6
|
0.0
|
(0.1)
|
Each year is from Q3 to Q2. For example, 2024
is from Q3 2024 to Q2 2025.
|
Base (GDP, YoY%)
|
RGTT (GDP, YoY%)
|
Difference from Base
|
2024
|
2025
|
2026
|
2027
|
2028
|
2024
|
2025
|
2026
|
2027
|
2028
|
2024
|
2025
|
2026
|
2027
|
2028
|
China
|
3.8
|
5.0
|
4.0
|
3.9
|
3.7
|
1.4
|
3.7
|
3.7
|
3.7
|
3.7
|
(2.4)
|
(1.3)
|
(0.4)
|
(0.2)
|
0.0
|
Hong Kong
|
3.3
|
2.6
|
2.4
|
2.3
|
2.0
|
0.9
|
1.5
|
1.7
|
1.9
|
2.0
|
(2.4)
|
(1.0)
|
(0.7)
|
(0.4)
|
0.0
|
US
|
1.7
|
1.6
|
2.4
|
1.9
|
1.6
|
(0.3)
|
0.7
|
1.0
|
1.3
|
1.6
|
(1.9)
|
(0.9)
|
(1.4)
|
(0.6)
|
0.0
|
Singapore
|
2.8
|
2.7
|
2.4
|
2.6
|
2.7
|
0.5
|
1.9
|
2.2
|
2.4
|
2.7
|
(2.4)
|
(0.8)
|
(0.2)
|
(0.2)
|
0.0
|
India
|
7.3
|
6.5
|
6.4
|
6.4
|
6.5
|
6.1
|
6.3
|
6.4
|
6.4
|
6.5
|
(1.2)
|
(0.1)
|
(0.1)
|
0.0
|
0.0
|
Each year is from Q3 to Q2. For example, 2024
is from Q3 2024 to Q2 2025.
The total modelled stage 1 and 2 ECL provisions
(including both on and off-balance sheet instruments) would be
approximately $122 million higher under the RGTT scenario, and $175
million higher under the Fed DFAST scenario than the baseline ECL
provisions (which excluded the impact of multiple economic
scenarios and management overlays which may already capture some of
the risks in these scenarios). Stage 2 exposures as a proportion of
stage 1 and 2 exposures would increase from 4.8 per cent in the
base case to 5.1 per cent and 5.7 per cent respectively under the
RGTT and Fed DFAST scenarios. This includes the impact of exposures
transferring to stage 2 from stage 1 but does not consider an
increase in stage 3 defaults.
Under both scenarios, the majority of the
increase in ECL in CIB came from the main corporate, CRE and
Project Finance portfolios. For the portfolios under the main
corporate models, ECL would increase by $29 million and $84 million
for the RGTT and Fed DFAST scenarios respectively and the
proportion of stage 2 exposures would increase from 3.9 per cent in
the base case to 4.3 per cent and 6.8 per cent
respectively.
For the WRB portfolios, most of the increase in
ECL came from the unsecured retail portfolios. The reduction in ECL
under the Fed DFAST scenario compared to RGTT reflects the impact
of interest rate cuts on the personal loan portfolios in Korea and
Taiwan, where interest rates are highly correlated to defaults.
Under the Fed DFAST scenario, interest rates have a peak-to-trough
range of 1.5% to 0.8% for Taiwan and 2.7% to 1.1% for Korea,
compared to 3.0% to 1.5% and 4.2% to 3.2% respectively
in the RGTT scenario. Under the RGTT and Fed DFAST scenarios,
credit card ECL would increase by $8 million and $15 million
respectively, largely in the Singapore and Hong Kong portfolios and
the proportion of stage 2 credit card exposures would increase from
1.6 per cent in the base case to 1.7 per cent and 1.9 per cent for
each scenario respectively, with the Singapore portfolio most
impacted. Mortgages ECL would increase by under $1 million in both
scenarios and the proportion of exposures would be broadly stable
around 1 per cent.
There was no material change in modelled stage 3
provisions as these primarily relate to unsecured WRB exposures for
which the LGD is not sensitive to changes in the macroeconomic
forecasts. There is also no material change for non-modelled stage
3 exposures as these are more sensitive to client specific factors
than to alternative macroeconomic scenarios.
Page
47
The actual outcome of any scenario may be
materially different due to, among other factors, the effect of
management actions to mitigate potential increases in risk and
changes in the underlying portfolio.
|
Gross as reported1
$ million
|
ECL as
reported2
$ million
|
ECL Base case
$ million
|
ECL RGTT
$ million
|
ECL Fed DFAST
$ million
|
Stage 1 modelled
|
|
|
|
|
|
Corporate & Investment Banking
|
357,660
|
144
|
139
|
165
|
215
|
Wealth & Retail Banking
|
175,444
|
358
|
351
|
400
|
354
|
Ventures
|
1,103
|
5
|
5
|
5
|
5
|
Central & Other items
|
181,839
|
48
|
47
|
52
|
57
|
Total stage 1 excluding management
judgements
|
716,046
|
555
|
543
|
622
|
631
|
Stage 2 modelled
|
|
|
|
|
|
Corporate & Investment Banking
|
14,565
|
173
|
130
|
149
|
211
|
Wealth & Retail Banking
|
2,005
|
148
|
141
|
165
|
147
|
Ventures
|
48
|
21
|
21
|
21
|
21
|
Central & Other items
|
1,924
|
10
|
10
|
9
|
10
|
Total excluding management overlays
|
18,542
|
352
|
302
|
345
|
389
|
Total Stage 1 & 2 modelled
|
|
|
|
|
|
Corporate & Investment Banking
|
372,225
|
317
|
269
|
315
|
426
|
Wealth & Retail Banking
|
177,449
|
506
|
492
|
565
|
501
|
Ventures
|
1,151
|
26
|
26
|
26
|
26
|
Central & Other items
|
183,763
|
58
|
57
|
61
|
67
|
Total excluding management overlays
|
734,588
|
907
|
845
|
967
|
1,020
|
|
|
|
|
|
|
Stage 3 exposures excluding management
overlays
|
7,805
|
4,319
|
|
|
|
Other financial assets3
|
109,690
|
95
|
|
|
|
ECL from management overlays
|
|
84
|
|
|
|
Total financial assets reported at 30 June
2024
|
852,083
|
5,405
|
|
|
|
1 Gross balances includes both on- and
off- balance sheet instruments; allocation between stage 1 and 2
will differ by scenario
2 Includes ECL for both on- and off-
balance sheet instruments
3 Includes cash and balances at central
banks, Accrued income, Other financial assets; and Assets held for
sale
Traded Risk
Traded Risk is the potential for loss resulting
from activities undertaken by the Group in financial markets. Under
the Enterprise Risk Management Framework, the Traded Risk Framework
brings together Market Risk, Counterparty Credit Risk and
Algorithmic Trading. Traded Risk Management is the core risk
management function supporting market-facing businesses,
predominantly Trading and Treasury.
Market Risk (reviewed)
Market Risk is the potential for fair value loss
due to adverse moves in financial markets. The Group's exposure to
Market Risk arises predominantly from the following
sources:
• Trading
book:
- The Group provides clients with access
to financial markets, facilitation of which entails the Group
taking moderate Market Risk positions. All trading teams support
client activity. There are no proprietary trading teams. Hence,
income earned from Market Risk-related activities is primarily
driven by the volume of client activity.
• Non-trading
book:
- The Treasury Markets desk is required
to hold a liquid assets buffer, much of which is held in
high-quality marketable debt securities.
- The Group has capital invested and
related income streams denominated in currencies other than US
dollars. To the extent that these income streams are not hedged,
the Group is subject to Structural Foreign Exchange Risk which is
reflected in reserves.
A summary of our current policies and practices
regarding Market Risk management is provided in the Principal Risks
section.
Page
48
The primary categories of Market Risk for the
Group are:
• Interest Rate Risk:
arising from changes in yield curves and implied volatilities on
interest rate options.
• Foreign Exchange
Rate Risk: arising from changes in currency exchange rates and
implied volatilities on foreign
exchange options.
• Commodity Risk:
arising from changes in commodity prices and implied volatilities
on commodity options
• Credit Spread Risk:
arising from changes in the price of debt instruments and
credit-linked derivatives and driven by factors other than the
level of risk-free interest rates.
• Equity Risk:
arising from changes in the prices of equities and implied
volatilities on equity options.
Market Risk movements (reviewed)
Value at Risk (VaR) allows the Group to manage
Market Risk across the trading book and most of the fair valued
non-trading books.
The average level of total trading and
non-trading VaR in H1 2024 was $42.9 million, 20 per cent lower
than H2 2023 ($53.4 million) and 19 per cent lower than H1
2023 ($53.1 million). The half year-end level of total trading and
non-trading VaR in H1 2024 was $42.3 million, 5 per cent lower than
H2 2023 ($44.5 million) and 16 per cent lower than H1 2023 ($50.2
million). The decrease in trading and non-trading average VaR was
driven by a reduction in market volatility.
The average trading VaR remained relatively
unchanged in H1 2024 at $21.5 million, 9 per cent lower than H2
2023 ($23.5 million) and 11 per cent higher than H1 2023
($19.4 million).
Daily value at risk (VaR at 97.5%, one day)
(reviewed)
Trading1 and
non-trading2
|
6 months ended 30.06.24
|
6 months ended 31.12.23
|
6 months ended 30.06.23
|
Average
$million
|
High
$million
|
Low
$million
|
Half Year
$million
|
Average
$million
|
High
$million
|
Low
$million
|
Half Year
$million
|
Average
$million
|
High
$million
|
Low
$million
|
Half Year
$million
|
Interest Rate Risk
|
35.5
|
43.9
|
26.3
|
34.9
|
45.0
|
54.1
|
29.2
|
30.5
|
34.2
|
47.3
|
23.2
|
46.0
|
Credit Spread Risk
|
21.9
|
31.3
|
12.8
|
20.2
|
30.0
|
34.1
|
25.0
|
31.7
|
37.5
|
48.0
|
31.9
|
34.9
|
Foreign Exchange Risk
|
8.9
|
14.5
|
5.2
|
9.1
|
7.9
|
12.2
|
5.3
|
7.4
|
6.1
|
9.7
|
4.2
|
5.1
|
Commodity Risk
|
5.6
|
10.0
|
2.9
|
6.4
|
5.2
|
8.6
|
3.7
|
4.3
|
6.4
|
9.7
|
3.7
|
5.3
|
Equity Risk
|
0.4
|
0.9
|
-
|
0.1
|
-
|
0.1
|
-
|
-
|
0.1
|
0.4
|
-
|
0.1
|
Diversification effect3
|
(29.4)
|
NA
|
NA
|
(28.4)
|
(34.7)
|
NA
|
NA
|
(29.4)
|
(31.2)
|
NA
|
NA
|
(41.2)
|
Total
|
42.9
|
53.1
|
37.0
|
42.3
|
53.4
|
65.4
|
44.4
|
44.5
|
53.1
|
65.5
|
44.2
|
50.2
|
Trading1
|
6 months ended 30.06.24
|
6 months ended 31.12.23
|
6 months ended 30.06.23
|
Average
$million
|
High
$million
|
Low
$million
|
Half Year
$million
|
Average
$million
|
High
$million
|
Low
$million
|
Half Year
$million
|
Average
$million
|
High
$million
|
Low
$million
|
Half Year
$million
|
Interest Rate Risk
|
13.2
|
22.0
|
9.1
|
10.6
|
14.7
|
20.4
|
8.7
|
11.6
|
11.5
|
16.9
|
7.7
|
13.0
|
Credit Spread Risk
|
7.2
|
9.6
|
4.8
|
6.0
|
9.3
|
10.6
|
7.9
|
9.4
|
9.6
|
12.4
|
7.4
|
10.2
|
Foreign Exchange Risk
|
8.9
|
14.5
|
5.2
|
9.1
|
7.9
|
12.2
|
5.3
|
7.4
|
6.1
|
9.7
|
4.2
|
5.1
|
Commodity Risk
|
5.2
|
10.0
|
2.4
|
5.7
|
5.2
|
8.6
|
3.7
|
4.4
|
6.4
|
9.7
|
3.7
|
5.3
|
Equity Risk
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Diversification effect3
|
(13.0)
|
NA
|
NA
|
(15.9)
|
(13.6)
|
NA
|
NA
|
(11.5)
|
(14.2)
|
NA
|
NA
|
(13.7)
|
Total
|
21.5
|
33.1
|
13.0
|
15.5
|
23.5
|
30.6
|
16.3
|
21.3
|
19.4
|
24.0
|
14.7
|
19.9
|
Non-trading2
|
6 months ended 30.06.24
|
6 months ended 31.12.23
|
6 months ended 30.06.23
|
Average
$million
|
High
$million
|
Low
$million
|
Half Year
$million
|
Average
$million
|
High
$million
|
Low
$million
|
Half Year
$million
|
Average
$million
|
High
$million
|
Low
$million
|
Half Year
$million
|
Interest Rate Risk
|
30.8
|
35.5
|
26.4
|
32.4
|
38.0
|
43.6
|
23.7
|
23.9
|
30.4
|
43.1
|
19.7
|
37.7
|
Credit Spread Risk
|
17.7
|
24.8
|
10.0
|
17.8
|
24.7
|
28.9
|
21.5
|
24.4
|
31.8
|
40.1
|
26.5
|
28.5
|
Foreign Exchange Risk
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Commodity Risk
|
1.3
|
1.8
|
0.6
|
1.5
|
0.1
|
0.5
|
-
|
0.5
|
-
|
-
|
-
|
-
|
Equity Risk
|
0.4
|
0.9
|
-
|
0.1
|
-
|
0.1
|
-
|
-
|
0.1
|
0.4
|
-
|
0.1
|
Diversification effect3
|
(16.3)
|
NA
|
NA
|
(11.0)
|
(21.6)
|
NA
|
NA
|
(13.2)
|
(15.5)
|
NA
|
NA
|
(22.0)
|
Total
|
33.9
|
44.1
|
29.2
|
40.8
|
41.2
|
46.0
|
32.0
|
35.6
|
46.8
|
53.4
|
41.7
|
44.3
|
1 The trading book for Market Risk is
defined in the Trading Book (CRR) section of the PRA Rulebook which
transposes the requirements of the Capital Requirements Regulation
Part 3 Title I Chapter 3. This restricts the positions permitted in
the trading book.
2 The non-trading book VaR does not
include syndicated loans
3 The total VaR is non-additive
across risk types due to diversification effects, which is measured
as the difference between the sum of the VaR by individual risk
type
or business and the combined total VaR. As the maximum and minimum
occur on different days for different risk types or businesses, it
is not meaningful to calculate
a portfolio diversification benefit for these measures
Page
49
Risks not in VaR
In H1 2024, the main market risks not reflected
in VaR were:
• Basis risks for
which the historical market price data is limited and is therefore
proxied, giving rise to potential proxy basis risk that is not
captured in VaR
• Potential depeg risk
from currencies currently pegged or managed, where the historical
one-year VaR observation period may not reflect the possibility of
a change in the currency regime or a sudden depegging
• Potential
understatement of VaR when abrupt increases in market volatility
are not adequately captured by the VaR model
Additional capital is set aside to cover such
'risks not in VaR'.
Backtesting
In H1 2024, there were no regulatory backtesting
exceptions. In the one year period to 28 June 2024, there have been
two Group level backtesting exceptions:
• 1 November and 3
November: After the Nigerian government announced on 30 October
that it planned to target an exchange rate of 750 Naira per dollar,
the onshore spot market became more volatile on low
volumes.
An enhancement to the VaR model has been
approved by the PRA and once implemented is expected to increase
its responsiveness to abrupt upturns in market
volatility.
Average daily income earned from Market Risk-related
activities1 (reviewed)
Trading: The average level of total trading
daily income in H1 2024 was $14.3 million, 33.6 per cent higher
than H2 2023 ($10.7million) and 7.5 per cent higher than H1 2023
($13.3 million). The increase in 2024 is largely attributable to
double-digit growth from higher flow income in Credit Trading &
Commodities, offsetting with lower income in FX & Rates
business.
Non-trading: The average level of non-trading
daily income in H1 2024 was $2.1 million, largely attributable to a
one-off FX revaluation gain in Treasury due to the devaluation
of the Egyptian Pound against the US Dollar, and FX Revaluation
gains across currencies in Credit Trading.
Trading
|
6 months ended 30.06.24
$milion
|
6 months ended 31.12.23
$million
|
6 months ended 30.06.23
$million
|
Interest Rate Risk
|
5.5
|
4.5
|
4.6
|
Credit Spread Risk
|
1.9
|
0.9
|
1.5
|
Foreign Exchange Risk
|
5.8
|
4.4
|
6.4
|
Commodity Risk
|
1.1
|
0.9
|
0.8
|
Equity Risk
|
-
|
-
|
-
|
Total
|
14.3
|
10.7
|
13.3
|
Non-trading
|
6 months ended 30.06.24
$million
|
6 months ended 31.12.23
$million
|
6 months ended 30.06.23
$million
|
Interest Rate Risk
|
1.3
|
(0.1)
|
-
|
Credit Spread Risk
|
0.8
|
(0.6)
|
(0.8)
|
Equity Risk
|
-
|
0.1
|
0.1
|
Total
|
2.1
|
(0.6)
|
(0.7)
|
1 Reflects total product income which is
the sum of client income and own account income. Includes elements
of trading income, interest income and non funded income which are
generated from Market Risk-related activities. Rates, XVA and
Treasury income are included under Interest Rate Risk whilst Credit
Trading income is included under Credit Spread Risk
Page
50
Counterparty Credit Risk
Counterparty Credit Risk is the potential for
loss in the event of the default of a derivative counterparty,
after taking into account the value of eligible collaterals and
risk mitigation techniques. The Group's counterparty credit
exposures are included in the Credit Risk section.
Derivative financial instruments Credit Risk
mitigation
The Group enters into master netting agreements,
which in the event of default result in a single amount owed by or
to the counterparty through netting the sum of the positive and
negative mark-to-market values of applicable derivative
transactions.
In addition, the Group enters into credit
support annexes (CSAs) with counterparties where collateral is
deemed a necessary or desirable mitigant to the exposure. Cash
collateral includes collateral called under a variation margin
process from counterparties if total uncollateralised
mark-to-market exposure exceeds the threshold and minimum transfer
amount specified in the CSA. With certain counterparties, the CSA
is reciprocal and requires us to post collateral if the overall
mark-to-market values of positions are in the counterparty's favour
and exceed an agreed threshold.
Liquidity and Funding Risk
Liquidity and Funding Risk is the risk that the
Group may not have sufficient stable or diverse sources of funding
to meet its obligations as they fall due.
The Group's Liquidity and Funding Risk framework
requires each country to ensure that it operates within predefined
liquidity limits and remains in compliance with Group liquidity
policies and practices, as well as local regulatory
requirements.
The Group achieves this through a combination of
setting Risk Appetite and associated limits, policy formation, risk
measurement and monitoring, prudential and internal stress testing,
governance and review.
The Group has maintained resilience and retained
a robust liquidity position. The Group continues to focus on
improving the quality and diversification of its funding mix and
remains committed to supporting its clients.
Liquidity and Funding Risk metrics
The Group continually monitors key liquidity
metrics, both on a country basis and consolidated across the
Group.
The following liquidity and funding Board Risk
Appetite metrics define the maximum amount and type of risk that
the Group is willing to assume in pursuit of its strategy:
liquidity coverage ratio (LCR), liquidity stress survival horizons,
recovery capacity and net stable funding ratio (NSFR). In addition
to the Board Risk Appetite, there are further limits that apply at
Group and country level such as external wholesale borrowing (WBE)
and advances-to-deposit-ratio (ADR).
Liquidity coverage ratio (LCR)
The LCR is a regulatory requirement set to
ensure the Group has sufficient unencumbered high-quality liquid
assets to meet its liquidity needs in a 30-calendar-day liquidity
stress scenario.
The Group monitors and reports its liquidity
positions under the Liquidity Coverage Ratio per PRA rulebook and
has maintained its LCR above the prudential requirement.
At the reporting date, the Group LCR was 148 per
cent (31 December 2023: 145 per cent), with a surplus to both
Board-approved Risk Appetite and regulatory
requirements.
Adequate liquidity was held across our footprint
to meet all local prudential LCR requirements where
applicable.
|
30.06.24
$million
|
31.12.23
$million
|
Liquidity buffer
|
173,493
|
185,643
|
Total net cash outflows
|
116,884
|
128,111
|
Liquidity coverage ratio
|
148%
|
145%
|
Page
51
Stress coverage
The Group intends to maintain a prudent and
sustainable funding and liquidity position, in all countries and
currencies, such that it can withstand a severe but plausible
liquidity stress.
Our approach to managing liquidity and funding
is reflected in the Board-level Risk Appetite Statement which
includes the following:
"The Group should have sufficient stable and
diverse sources of funding to meet its contractual and contingent
obligations as they fall due."
The Group's internal liquidity stress testing
framework covers the following stress scenarios:
• Standard
Chartered-specific - Captures the liquidity impact from an
idiosyncratic event affecting Standard Chartered only with the rest
of the market assumed to be operating normally.
• Market wide -
Captures the liquidity impact from a market-wide crisis affecting
all participants in a country, region
or globally.
• Combined - Assumes
both Standard Chartered-specific and market-wide events affect the
Group simultaneously and hence is the most severe
scenario.
All scenarios include, but are not limited to,
modelled outflows for retail and wholesale funding, off-balance
sheet funding risk, cross-currency funding risk, intraday risk,
franchise risk, risks associated with a deterioration of a firm's
credit rating and concentration risk from single name and
industry concentration.
Stress testing results show that a positive
surplus was maintained under all scenarios at 30 June 2024, and
respective countries were able to survive for a period of time as
defined under each scenario. The results take into account currency
convertibility and portability constraints while calculating the
liquidity surplus at Group level.
Standard Chartered Bank's credit ratings as at
30 June 2024 were A+ with stable outlook (Fitch), A+ with stable
outlook (S&P) and A1 with stable outlook (Moody's). As of 30
June 2024, the estimated contractual outflow of a three-notch
long-term ratings downgrade is $1.1 billion.
External wholesale borrowing
A risk limit is set to prevent excessive
reliance on wholesale borrowing. Within the definition of wholesale
borrowing, limits are applied to all branches and operating
subsidiaries in the Group and as at the reporting date, the Group
remained within the limit.
Advances-to-deposits ratio
This is defined as the ratio of total loans and
advances to customers relative to total customer deposits,
excluding approved balances held with central banks, confirmed as
repayable at the point of stress. An advances-to-deposits ratio
below 100 per cent demonstrates that customer deposits exceed
customer loans as a result of the emphasis placed on generating a
high level of stable funding from customers.
The Group's advances-to-deposits ratio has
decreased by 0.8 per cent to 52.6 per cent during H1 2024, driven
by an increase in customer deposits of 1 per cent and with a
reduction of 3 per cent in customer loans and advances. Deposits
from customers as at 30 June 2024 are $488,007 million (31 December
2023: $486,666 million).
|
30.06.24
$million
|
31.12.23
$million
|
Total loans and advances to
customers1,2
|
256,566
|
259,481
|
Total customer accounts3
|
488,007
|
486,666
|
Advances-to-deposits ratio
|
52.6%
|
53.3%
|
1 Excludes reverse repurchase agreement
and other similar secured lending of $7,788 million and includes
loans and advances to customers held at fair value through profit
and loss of $6,877 million
2 Loans and advances to customers for
the purpose of the advances-to-deposits ratio excludes $18,419
million of approved balances held with central banks, confirmed as
repayable at the point of stress (31 December 2023: $20,710
million)
3 Includes customer accounts held at
fair value through profit or loss of $19,850 million (31 December
2023: $17,248 million)
Page
52
Net stable funding ratio (NSFR)
The NSFR is a PRA regulatory requirement that
stipulates institutions to maintain a stable funding profile in
relation to an assumed duration of their assets and off-balance
sheet activities over a one-year horizon. It is the ratio between
the amount of available stable funding (ASF) and the amount of
required stable funding (RSF). ASF factors are applied to balance
sheet liabilities and capital, based on the tenor and/or their
perceived stability to quantify the amount of stable funding they
provide. Likewise, RSF factors are applied to assets and
off-balance sheet exposures according to the amount of stable
funding they require. The regulatory requirements for NSFR are to
maintain a ratio of at least 100 per cent. The average ratio for
the past four quarters is 136 per cent.
Liquidity pool
The liquidity value of the Group's LCR eligible
liquidity pool at the reporting date was $173 billion. The figures
in the table below account for haircuts, currency convertibility
and portability constraints per PRA rules for transfer
restrictions, and therefore are not directly comparable with the
consolidated balance sheet. A liquidity pool is held to offset
stress outflows as defined in the LCR per PRA rulebook.
|
30.06.24
$million
|
31.12.23
$million
|
Level 1 securities
|
|
|
Cash and balances at central banks
|
74,141
|
81,675
|
Central banks, governments/public sector
entities
|
74,632
|
71,768
|
Multilateral development banks and international
organisations
|
15,789
|
16,917
|
Other
|
1,240
|
1,291
|
Total Level 1 securities
|
165,802
|
171,651
|
Level 2 A securities
|
6,165
|
13,268
|
Level 2 B securities
|
1,526
|
724
|
Total LCR eligible assets
|
173,493
|
185,643
|
Liquidity analysis of the Group's balance sheet
(reviewed)
Contractual maturity of assets and
liabilities
The following table presents assets and
liabilities by maturity groupings based on the remaining period to
the contractual maturity date as at the balance sheet date on a
discounted basis. Contractual maturities do not necessarily reflect
actual repayments or cash flows.
Within the tables below, cash and balances with
central banks, interbank placements and investment securities that
are fair valued through other comprehensive income are used by the
Group principally for liquidity management purposes.
As at the reporting date, assets remain
predominantly short-dated, with 60 per cent maturing in less than
one year.
Page
53
|
30.06.24
|
One month
or less
$million
|
Between one month and three months
$million
|
Between three months and
six months
$million
|
Between
six months and nine months
$million
|
Between nine months and one year
$million
|
Between one year and
two years
$million
|
Between two years and
five years
$million
|
More than
five years and undated
$million
|
Total
$million
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and balances at
central banks
|
54,216
|
-
|
-
|
-
|
-
|
-
|
-
|
9,870
|
64,086
|
Derivative financial instruments
|
10,026
|
6,008
|
7,662
|
5,234
|
2,818
|
5,261
|
6,924
|
4,714
|
48,647
|
Loans and advances to banks1,2
|
31,438
|
21,293
|
12,292
|
5,050
|
4,579
|
8,414
|
3,424
|
1,202
|
87,692
|
Loans and advances
to customers1,2
|
83,116
|
51,429
|
21,244
|
15,126
|
11,686
|
33,798
|
25,855
|
93,453
|
335,707
|
Investment securities1
|
11,746
|
23,660
|
23,513
|
20,820
|
18,813
|
26,188
|
48,845
|
58,270
|
231,855
|
Other assets1
|
22,827
|
30,911
|
1,457
|
335
|
619
|
129
|
44
|
11,118
|
67,440
|
Total assets
|
213,369
|
133,301
|
66,168
|
46,565
|
38,515
|
73,790
|
85,092
|
178,627
|
835,427
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Deposits by banks1,3
|
27,480
|
3,237
|
1,938
|
913
|
465
|
3,794
|
2,647
|
4
|
40,478
|
Customer accounts1,4
|
379,475
|
46,011
|
28,154
|
9,360
|
11,613
|
9,805
|
45,223
|
2,621
|
532,262
|
Derivative financial instruments
|
8,837
|
8,975
|
7,076
|
5,436
|
3,201
|
5,216
|
6,874
|
4,969
|
50,584
|
Senior debt5
|
1,180
|
910
|
1,249
|
1,584
|
4,031
|
9,049
|
19,481
|
16,575
|
54,059
|
Other debt securities in issue1
|
1,944
|
5,123
|
8,107
|
4,206
|
2,989
|
907
|
264
|
415
|
23,955
|
Other liabilities
|
17,794
|
39,284
|
2,983
|
1,870
|
762
|
1,225
|
2,044
|
5,944
|
71,906
|
Subordinated liabilities and other borrowed
funds
|
10
|
72
|
508
|
160
|
43
|
358
|
1,954
|
7,751
|
10,856
|
Total liabilities
|
436,720
|
103,612
|
50,015
|
23,529
|
23,104
|
30,354
|
78,487
|
38,279
|
784,100
|
Net liquidity gap
|
(223,351)
|
29,689
|
16,153
|
23,036
|
15,411
|
43,436
|
6,605
|
140,348
|
51,327
|
1 Loans and advances, investment
securities, other assets, deposits by banks, customer accounts and
debt securities in issue include financial instruments held at fair
value through profit or loss, see Note 13 Financial
instruments
2 Loans and advances include reverse
repurchase agreements and other similar secured lending of $105.0
billion
3 Deposits by banks include repurchase
agreements and other similar secured borrowing of $10.3
billion
4 Customer accounts include repurchase
agreements and other similar secured borrowing of $44.3
billion
5 Senior debt maturity profiles are
based upon contractual maturity, which may be later than call
options over the debt held by the Group
Page
54
|
31.12.23
|
One month
or less
$million
|
Between one month and three months
$million
|
Between three months and
six months
$million
|
Between
six months and nine months
$million
|
Between nine months and one year
$million
|
Between one year and
two years
$million
|
Between two years and
five years
$million
|
More than
five years and undated
$million
|
Total
$million
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and balances at
central banks
|
63,752
|
-
|
-
|
-
|
-
|
-
|
-
|
6,153
|
69,905
|
Derivative financial instruments
|
12,269
|
10,632
|
6,910
|
3,611
|
2,921
|
4,650
|
6,038
|
3,403
|
50,434
|
Loans and advances to banks1,2
|
28,814
|
23,384
|
10,086
|
4,929
|
5,504
|
1,583
|
2,392
|
1,098
|
77,790
|
Loans and advances
to customers1,2
|
86,695
|
55,009
|
25,492
|
15,392
|
14,537
|
25,987
|
26,545
|
95,829
|
345,486
|
Investment securities1
|
12,187
|
28,999
|
17,131
|
18,993
|
20,590
|
24,244
|
44,835
|
50,168
|
217,147
|
Other assets1
|
17,611
|
31,729
|
1,286
|
409
|
587
|
67
|
93
|
10,300
|
62,082
|
Total assets
|
221,328
|
149,753
|
60,905
|
43,334
|
44,139
|
56,531
|
79,903
|
166,951
|
822,844
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Deposits by banks1,3
|
26,745
|
1,909
|
1,398
|
503
|
778
|
1,326
|
2,848
|
2
|
35,509
|
Customer accounts1,4
|
384,444
|
47,723
|
28,288
|
13,647
|
11,806
|
7,787
|
38,578
|
2,349
|
534,622
|
Derivative financial instruments
|
13,111
|
12,472
|
6,655
|
4,001
|
3,433
|
5,142
|
6,932
|
4,315
|
56,061
|
Senior debt5
|
130
|
1,111
|
1,537
|
1,389
|
624
|
11,507
|
20,127
|
14,443
|
50,868
|
Other debt securities in
issue1
|
3,123
|
5,822
|
6,109
|
3,235
|
3,037
|
492
|
482
|
195
|
22,495
|
Other liabilities
|
14,929
|
26,447
|
1,695
|
544
|
883
|
1,830
|
1,809
|
12,763
|
60,900
|
Subordinated liabilities and other borrowed
funds
|
980
|
68
|
19
|
172
|
453
|
312
|
1,936
|
8,096
|
12,036
|
Total liabilities
|
443,462
|
95,552
|
45,701
|
23,491
|
21,014
|
28,396
|
72,712
|
42,163
|
772,491
|
Net liquidity gap
|
(222,134)
|
54,201
|
15,204
|
19,843
|
23,125
|
28,135
|
7,191
|
124,788
|
50,353
|
1 Loans and advances, investment
securities, other assets, deposits by banks, customer accounts and
debt securities in issue include financial instruments held at fair
value through profit or loss, see Note 13 Financial
instruments
2 Loans and advances include reverse
repurchase agreements and other similar secured lending of $97.6
billion
3 Deposits by banks include repurchase
agreements and other similar secured borrowing of $5.6
billion
4 Customer accounts include repurchase
agreements and other similar secured borrowing of $48
billion
5 Senior debt maturity profiles are
based upon contractual maturity, which may be later than call
options over the debt held by the Group
Page
55
Behavioural maturity of financial assets and
liabilities
The cash flows presented in the previous section
reflect the cash flows that will be contractually payable over the
residual maturity of the instruments. However, contractual
maturities do not necessarily reflect the timing of actual
repayments or cash flow. In practice, certain assets and
liabilities behave differently from their contractual terms,
especially for short-term customer accounts, credit card balances
and overdrafts, which extend to a longer period than their
contractual maturity. On the other hand, mortgage balances tend to
have a shorter repayment period than their contractual maturity
date. Expected customer behaviour is assessed and managed on a
country basis using qualitative and quantitative techniques,
including analysis of observed customer behaviour over
time.
Maturity of financial liabilities on an undiscounted
basis (reviewed)
The following table analyses the contractual
cash flows payable for the Group's financial liabilities by
remaining contractual maturities on an undiscounted basis. The
financial liability balances in the table below will not agree with
the balances reported in the consolidated balance sheet as the
table incorporates all contractual cash flows, on an undiscounted
basis, relating to both principal and interest payments.
Derivatives not treated as hedging derivatives are included in the
'On demand' time bucket and not by contractual maturity.
Within the 'More than five years and undated'
maturity band are undated financial liabilities, the majority of
which relate to subordinated debt, on which interest payments are
not included as this information would not be meaningful, given the
instruments are undated. Interest payments on these instruments are
included within the relevant maturities up to five
years.
|
30.06.24
|
One month
or less
$million
|
Between one month and three months
$million
|
Between three months and
six months
$million
|
Between
six months and nine months
$million
|
Between nine months and one year
$million
|
Between one year and
two years
$million
|
Between two years and
five years
$million
|
More than
five years and undated
$million
|
Total
$million
|
Deposits by banks
|
27,493
|
3,257
|
1,974
|
919
|
480
|
3,794
|
2,647
|
4
|
40,568
|
Customer accounts
|
380,360
|
46,413
|
28,652
|
9,584
|
12,017
|
10,147
|
45,513
|
3,379
|
536,065
|
Derivative financial instruments
|
48,345
|
4
|
37
|
83
|
44
|
184
|
760
|
1,127
|
50,584
|
Debt securities in issue
|
3,403
|
6,062
|
9,706
|
6,210
|
7,478
|
11,444
|
22,754
|
19,967
|
87,024
|
Subordinated liabilities and other borrowed
funds
|
15
|
174
|
558
|
167
|
48
|
185
|
2,355
|
16,017
|
19,519
|
Other liabilities
|
17,365
|
39,101
|
2,900
|
1,852
|
753
|
1,227
|
2,044
|
5,787
|
71,029
|
Total liabilities
|
476,981
|
95,011
|
43,827
|
18,815
|
20,820
|
26,981
|
76,073
|
46,281
|
804,789
|
|
31.12.23
|
One month
or less
$million
|
Between one month and three months
$million
|
Between three months and
six months
$million
|
Between six months and nine months
$million
|
Between nine months and one year
$million
|
Between one year and
two years
$million
|
Between two years and
five years
$million
|
More than
five years and undated
$million
|
Total
$million
|
Deposits by banks
|
26,759
|
1,921
|
1,417
|
513
|
790
|
1,328
|
2,848
|
4
|
35,580
|
Customer accounts
|
385,361
|
48,140
|
28,763
|
14,049
|
12,190
|
8,118
|
39,000
|
3,036
|
538,657
|
Derivative financial instruments
|
53,054
|
517
|
46
|
44
|
103
|
202
|
887
|
1,208
|
56,061
|
Debt securities in issue
|
3,507
|
6,995
|
8,015
|
5,070
|
4,002
|
13,663
|
23,413
|
16,396
|
81,061
|
Subordinated liabilities and other borrowed
funds
|
1,043
|
134
|
46
|
208
|
570
|
395
|
2,389
|
14,367
|
19,152
|
Other liabilities
|
12,200
|
26,291
|
1,560
|
515
|
884
|
1,832
|
1,810
|
11,513
|
56,605
|
Total liabilities
|
481,924
|
83,998
|
39,847
|
20,399
|
18,539
|
25,538
|
70,347
|
46,524
|
787,116
|
Interest Rate Risk in the Banking Book
(reviewed)
The following table provides the estimated
impact to a hypothetical base case projection of the Group's
earnings under the following scenarios:
• A 50 basis point
parallel interest rate shock (up and down) to the current
market-implied path of rates, across all
yield curves
• A 100 basis point
parallel interest rate shock (up and down) to the current
market-implied path of rates, across all
yield curves
These interest rate shock scenarios assume all
other economic variables remain constant. The sensitivities shown
represent the estimated change to a hypothetical base case
projected net interest income (NII), plus the change in interest
rate implied income and expense from FX swaps used to manage
banking book currency positions, under the different interest rate
shock scenarios.
Page
56
The base case projected NII is based on the
current market-implied path of rates and forward rate expectations.
The NII sensitivities below stress this base case by a further 50
or 100bps. Actual observed interest rate changes will likely differ
from market expectation. Accordingly, the shocked NII sensitivity
does not represent a forecast of the Group's net interest
income.
The interest rate sensitivities are indicative
stress tests and based on simplified scenarios, estimating the
aggregate
impact of an unanticipated, instantaneous parallel shock across all
yield curves over a one-year horizon, including the time taken to
implement changes to pricing before becoming effective. The
assessment assumes that the size and mix of the balance sheet
remain constant and that there are no specific management actions
in response to the change in rates. No assumptions are made in
relation to the impact on credit spreads in a changing rate
environment.
Significant modelling and behavioural
assumptions are made regarding scenario simplification, market
competition, pass-through rates, asset and liability re-pricing
tenors, and price flooring. In particular, the assumption that
interest rates of all currencies and maturities shift by the same
amount concurrently, and that no actions are taken to mitigate the
impacts arising from this are considered unlikely. Reported
sensitivities will vary over time due to a number of factors
including changes in balance sheet composition, market conditions,
customer behaviour and risk management strategy. Therefore, while
the NII sensitivities are a relevant measure of the Group's
interest rate exposure, they should not be considered an income or
profit forecast.
Estimated one-year impact to earnings from a
parallel shift in yield curves
at the beginning of the period of:
|
30.06.24
|
USD bloc $million
|
HKD bloc $million
|
SGD bloc $million
|
CNY bloc $million
|
Other currency bloc
¹ $million
|
Total
$million
|
+ 50 basis points
|
50
|
20
|
10
|
20
|
110
|
210
|
- 50 basis points
|
(100)
|
(30)
|
(20)
|
(40)
|
(140)
|
(330)
|
+ 100 basis points
|
100
|
30
|
20
|
50
|
200
|
400
|
- 100 basis points
|
(210)
|
(60)
|
(40)
|
(70)
|
(270)
|
(650)
|
Estimated one-year impact to earnings from a
parallel shift in yield curves
at the beginning of the period of:
|
31.12.23
|
USD bloc
$million
|
HKD bloc
$million
|
SGD bloc
$million
|
CNY bloc
$million
|
Other currency bloc
$million
|
Total
$million
|
+ 50 basis points
|
90
|
10
|
50
|
30
|
170
|
350
|
- 50 basis points
|
(150)
|
(30)
|
(50)
|
(40)
|
(200)
|
(470)
|
+ 100 basis points
|
180
|
10
|
100
|
60
|
340
|
690
|
- 100 basis points
|
(280)
|
(40)
|
(100)
|
(80)
|
(390)
|
(890)
|
1 The currency blocs broken out in the
table are not necessarily the most material at the reporting date
as this can change year to year. The majority of the
Other currency bloc sensitivity relates to the currencies EUR, GBP,
INR, KRW, MYR, TWD
As at 30 June 2024, the Group estimates the
one-year impact of an instantaneous, parallel increase across all
yield curves of 50 basis points to increase projected NII by $210
million. The equivalent impact from a parallel decrease of 50 basis
points would result in a reduction in projected NII of $330
million. The Group estimates the one-year impact of an
instantaneous, parallel increase across all yield curves of 100
basis points to increase projected NII by $400 million. The
equivalent impact from a parallel decrease of 100 basis points
would result in a reduction in projected NII of $650
million.
The benefit from rising interest rates is
primarily from reinvesting at higher yields and from assets
re-pricing faster and to a greater extent than deposits. NII
sensitivity in falling rate scenarios has decreased versus 31
December 2023, due to an increase in programmatic hedging as well
as actions taken in discretionary portfolios to increase asset
duration. Over the course of 2024 the notional of interest rate
swaps and HTC-accounted bond portfolios used to reduce NII
sensitivity through the cycle increased from $47 billion to $51
billion. As at 30 June 2024, the portfolios had a weighted average
maturity of 3.1 years, which reflects the behaviouralised
lives of the rate-insensitive deposit and equity balances that they
hedge, and a yield of 3.4 per cent.
Operational and Technology Risk
The Group defines Operational and Technology
Risk as the potential for loss from inadequate or failed internal
processes, technology events, human error, or from the impact of
external events (including legal risks). Operational and Technology
risk may occur anywhere in the Group, including third-party
processes.
Page
57
Operational and Technology Risk profile
Risk management practices help the business grow
safely and ensure governance and management of Operational and
Technology risk through the delivery and embedding of effective
frameworks and policies, together with continuous oversight and
assurance. Managing Operational and Technology risk makes the Group
more efficient and enables it to offer better, sustainable service
to its customers. The Group's Operational and Technology Risk Type
Framework (O&T RTF) enable the Group to govern, identify,
measure, monitor and test, manage and report on its Operational and
Technology risk. The Group continues to ensure the O&T RTF
supports the business and functions in effectively managing risk
and controls within Risk Appetite to meet their strategic
objectives.
The Group has demonstrated progress on ensuring
visibility of risks and risk management through implementation of a
standardised risk taxonomy. Standardising the risk taxonomy enables
improved risk aggregation and reporting and provides opportunities
for simplifying the process of risk identification and assessment.
A revised Process Universe along with taxonomies for causes and
controls have been designed and are being implemented in 2024, with
control categories supporting the streamlining and removal of
duplicate controls, reducing complexity, and improving risk and
control management. Macro processes will provide a client-centric
view and enable clearer accountability for delivery as well as
management of risks in line with business objectives.
The Group's Operational and Technology risk
profile remained stable with improvements to the quality of risk
understanding and identification in a fast-changing technology
landscape. Operational and Technology risk is elevated in areas
such as Information and Cyber Security, Data Management and
Transaction Processing, which are subject to ongoing control
enhancement programmes. Other key areas of focus are Change,
Systems Health/Technology risk, Third Party risk, Resilience and
Regulatory Compliance. Management has focused on addressing these
areas, improving the sustainable operating environment, and
initiated several programmes to enhance the control environment.
The Group continues to monitor and manage Operational and
Technology risks associated with the external environment such as
geopolitical factors and the increasing risk of cyber attacks.
Digitalisation and inappropriate use of Artificial Intelligence,
various regulatory expectations across our footprint and the
changing technology landscape remain key emerging areas to manage,
allowing the Group to keep pace with new business developments,
whilst ensuring that risk and control frameworks evolve
accordingly. The Group continues to strengthen its risk management
to understand the full spectrum of risks in the operating
environment, enhance its defences and improve
resilience.
Other principal risks
Losses arising from operational failures for
other principal and integrated risks are reported as operational
losses. Operational losses do not include operational risk-related
credit impairments.
Page
58
Capital review
The Capital review provides an analysis of the
Group's capital and leverage position, and requirements.
Capital summary
The Group's capital, leverage and minimum
requirements for own funds and eligible liabilities (MREL) position
is managed within the Board-approved risk appetite. The Group is
well capitalised with low leverage and high levels of
loss-absorbing capacity.
|
30.06.24
|
31.12.23
|
CET1 capital
|
14.6%
|
14.1%
|
Tier 1 capital
|
17.3%
|
16.3%
|
Total capital
|
22.1%
|
21.2%
|
Leverage ratio
|
4.8%
|
4.7%
|
MREL ratio
|
35.4%
|
33.3%
|
Risk-weighted assets (RWA) $million
|
241,926
|
244,151
|
The Group's capital, leverage and MREL
positions were all above current requirements and Board-approved
risk appetite. For further detail see the Capital section in the
Standard Chartered PLC Pillar 3 Disclosures for H1 2024. The
Group's CET1 capital increased 59 basis points to 14.6 percent of
RWA since FY2023. Profits, movements in FVOCI, lower regulatory
deductions and RWA optimisations were partly offset by
distributions (including ordinary share buybacks of $1.0 billion
during the year) and FX translation reserves.
As at 30 June 2024 the Group's Pillar 2A was 3.8
percent of RWA, of which at least 2.1 per cent must be held in CET1
capital. The Group's minimum CET1 capital requirement was 10.6 per
cent at H1 2024. The Korea countercyclical buffer increased to
1.0 per cent in the second quarter which impacts the Group's
CET1 minimum requirement by approximately 7 basis points from
December 2023.
The Group CET1 capital ratio at H1 2024 reflects
the share buybacks of $1.0 billion completed during the year. The
CET1 capital ratio also includes an accrual for the FY 2024 interim
dividend. The Board has recommended an interim dividend for H1 2024
of $230 million or 9 cents per share representing a third of the
total 2023 dividend. In addition, the Board has announced a further
share buyback of $1.5 billion, the impact of this will reduce the
Group's CET1 capital by around 60 basis points in the third
quarter of 2024.
The Group expects to manage CET1 capital
dynamically within our 13-14 per cent target range, in support of
our aim of delivering future sustainable shareholder
distributions.
The Group's MREL requirement as at H1 2024 was
equivalent to 28.4 per cent of RWA. This is composed of a minimum
requirement of 24.5 per cent of RWA and the Group's combined buffer
(comprising the capital conservation buffer, the G-SII buffer and
the countercyclical buffer). The Group's MREL ratio was 35.4 per
cent of RWA and 9.8 per cent of leverage exposure at H1
2024.
During the period, the Group successfully raised
$7.0 billion of MREL eligible securities from its holding company,
Standard Chartered PLC. Issuance include $1.0 billion of Additional
Tier1 and $6.0 billion of callable senior debt.
The Group is a G-SII, with a 1.0 per cent G-SII
CET1 capital buffer. The Standard Chartered PLC G-SII disclosure is
published at: sc.com/en/investors/financial-results.
Page
59
Capital base1
(reviewed)
|
30.06.24
$million
|
31.12.23
$million
|
CET1 capital instruments and
reserves
|
|
|
Capital instruments and the related share
premium accounts
|
5,264
|
5,321
|
Of which: share premium accounts
|
3,989
|
3,989
|
Retained earnings
|
27,017
|
24,930
|
Accumulated other comprehensive income (and
other reserves)
|
8,274
|
9,171
|
Non-controlling interests (amount allowed in
consolidated CET1)
|
236
|
217
|
Independently reviewed interim and year-end
profits
|
2,409
|
3,542
|
Foreseeable dividends
|
(478)
|
(768)
|
CET1 capital before regulatory
adjustments
|
42,722
|
42,413
|
CET1 regulatory adjustments
|
|
|
Additional value adjustments (prudential
valuation adjustments)
|
(678)
|
(730)
|
Intangible assets (net of related tax
liability)
|
(6,006)
|
(6,128)
|
Deferred tax assets that rely on future
profitability (excludes those arising from temporary
differences)
|
(44)
|
(41)
|
Fair value reserves related to net losses on
cash flow hedges
|
56
|
(91)
|
Deduction of amounts resulting from the
calculation of excess expected loss
|
(653)
|
(754)
|
Net gains on liabilities at fair value resulting
from changes in own credit risk
|
260
|
(100)
|
Defined-benefit pension fund assets
|
(110)
|
(95)
|
Fair value gains arising from the institution's
own credit risk related to derivative liabilities
|
(90)
|
(116)
|
Exposure amounts which could qualify for risk
weighting of 1250%
|
(39)
|
(44)
|
Other regulatory adjustments to CET1
capital
|
-
|
-
|
Total regulatory adjustments to CET1
|
(7,304)
|
(8,099)
|
CET1 capital
|
35,418
|
34,314
|
Additional Tier 1 capital (AT1)
instruments
|
6,504
|
5,512
|
AT1 regulatory adjustments
|
(20)
|
(20)
|
Tier 1 capital
|
41,902
|
39,806
|
|
|
|
Tier 2 capital instruments
|
11,697
|
11,965
|
Tier 2 regulatory adjustments
|
(30)
|
(30)
|
Tier 2 capital
|
11,667
|
11,935
|
Total capital
|
53,569
|
51,741
|
Total risk-weighted
assets2
|
241,926
|
244,151
|
1 Capital base is prepared on the
regulatory scope of consolidation
2 Total risk-weighted assets are not in
scope of EY's review
Page
60
Movement in total capital (reviewed)
|
30.06.24
$million
|
31.12.23
$million
|
CET1 at 1 January/1 July
|
34,314
|
34,896
|
Ordinary shares issued in the period and share
premium
|
-
|
-
|
Share buyback
|
(1,000)
|
(1,000)
|
Profit for the period/year
|
2,409
|
1,156
|
Foreseeable dividends deducted from
CET1
|
(478)
|
(391)
|
Difference between dividends paid and
foreseeable dividends
|
8
|
(376)
|
Movement in goodwill and other intangible
assets
|
122
|
(303)
|
Foreign currency translation
differences
|
(510)
|
164
|
Non-controlling interests
|
19
|
27
|
Movement in eligible other comprehensive
income
|
368
|
54
|
Deferred tax assets that rely on future
profitability
|
(3)
|
45
|
Decrease/(increase) in excess expected
loss
|
101
|
33
|
Additional value adjustments (prudential
valuation adjustment)
|
52
|
(37)
|
IFRS 9 transitional impact on regulatory
reserves including day one
|
-
|
-
|
Exposure amounts which could qualify for risk
weighting
|
5
|
8
|
Fair value gains arising from the institution's
own Credit Risk related to derivative liabilities
|
26
|
(52)
|
Others
|
(15)
|
90
|
CET1 at 30 June/31 December
|
35,418
|
34,314
|
|
|
|
AT1 at 1 January/1 July
|
5,492
|
5,492
|
Net issuances (redemptions)
|
992
|
-
|
Foreign currency translation
difference
|
-
|
-
|
Excess on AT1 grandfathered limit
(ineligible)
|
-
|
-
|
AT1 at 30 June/31 December
|
6,484
|
5,492
|
|
|
|
Tier 2 capital at 1 January/1 July
|
11,935
|
12,281
|
Regulatory amortisation
|
822
|
(287)
|
Net issuances (redemptions)
|
(1,000)
|
(118)
|
Foreign currency translation
difference
|
(91)
|
36
|
Tier 2 ineligible minority interest
|
(2)
|
22
|
Recognition of ineligible AT1
|
-
|
-
|
Others
|
3
|
1
|
Tier 2 capital at 30 June/31
December
|
11,667
|
11,935
|
Total capital at 30 June/31 December
|
53,569
|
51,741
|
The main movements in capital in the period
were:
• CET1 capital
increased by $1.1 billion as retained profits of $2.4 billion,
movement in FVOCI of $0.2bn and decrease in regulatory deductions
and other movements of $0.5 billion were partly offset by share
buybacks of $1.0 billion, distributions paid and foreseeable of
$0.5 billion and foreign currency translation impact of $0.5
billion.
• AT1 capital
increased by $1.0 billion following the issuance of $1.0 billion of
7.875 per cent securities.
• Tier 2 capital
decreased by $0.3 billion due to the redemption of $1.0 billion of
Tier 2 during the period partly offset by the reversal of
regulatory amortisation and foreign currency translation
impact.
Page
61
Risk-weighted assets by business
|
30.06.24
|
Credit risk
$million
|
Operational risk
$million
|
Market risk
$million
|
Total risk
$million
|
Corporate & Investment Banking
|
105,356
|
19,987
|
23,790
|
149,133
|
Wealth & Retail Banking
|
42,936
|
9,523
|
-
|
52,459
|
Ventures
|
1,981
|
142
|
6
|
2,129
|
Central & Other items
|
34,731
|
(173)
|
3,647
|
38,205
|
Total risk-weighted assets
|
185,004
|
29,479
|
27,443
|
241,926
|
|
31.12.23
|
Credit risk
$million
|
Operational risk
$million
|
Market risk
$million
|
Total risk
$million
|
Corporate & Investment Banking
|
102,675
|
18,083
|
21,221
|
141,979
|
Wealth & Retail Banking
|
42,559
|
8,783
|
-
|
51,342
|
Ventures
|
1,885
|
35
|
3
|
1,923
|
Central & Other items
|
44,304
|
960
|
3,643
|
48,907
|
Total risk-weighted assets
|
191,423
|
27,861
|
24,867
|
244,151
|
Movement in risk-weighted assets
|
Credit risk
|
Operational risk
$million
|
Market risk
$million
|
Total risk
$million
|
Corporate & Investment Banking
$million
|
Wealth & Retail Banking
$million
|
Ventures
$million
|
Central & Other items
$million
|
Total
$million
|
At 31 December 2022
|
110,103
|
42,091
|
1,350
|
43,311
|
196,855
|
27,177
|
20,679
|
244,711
|
At 1 January 2023
|
110,103
|
42,091
|
1,350
|
43,311
|
196,855
|
27,177
|
20,679
|
244,711
|
Assets growth & mix
|
(726)
|
693
|
538
|
2,000
|
2,505
|
-
|
-
|
2,505
|
Asset quality
|
(157)
|
(125)
|
-
|
420
|
138
|
-
|
-
|
138
|
Risk-weighted assets efficiencies
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Model Updates
|
800
|
-
|
-
|
-
|
800
|
-
|
700
|
1,500
|
Methodology and policy changes
|
-
|
(200)
|
-
|
-
|
(200)
|
-
|
-
|
(200)
|
Acquisitions and disposals
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Foreign currency translation
|
(677)
|
(578)
|
-
|
(1,692)
|
(2,947)
|
-
|
-
|
(2,947)
|
Other, Including non-credit risk
movements
|
-
|
-
|
-
|
-
|
-
|
684
|
2,726
|
3,410
|
At 30 June 2023
|
109,343
|
41,881
|
1,888
|
44,039
|
197,151
|
27,861
|
24,105
|
249,117
|
Assets growth & mix
|
(3,698)
|
35
|
(3)
|
(817)
|
(4,483)
|
-
|
-
|
(4,483)
|
Asset quality
|
(234)
|
515
|
-
|
2,264
|
2,545
|
-
|
-
|
2,545
|
Risk-weighted assets efficiencies
|
-
|
-
|
-
|
(688)
|
(688)
|
-
|
-
|
(688)
|
Model Updates
|
(1,397)
|
(151)
|
-
|
(151)
|
(1,699)
|
-
|
(200)
|
(1,899)
|
Methodology and policy changes
|
-
|
4
|
-
|
-
|
4
|
-
|
(800)
|
(796)
|
Acquisitions and disposals
|
(1,630)
|
-
|
-
|
-
|
(1,630)
|
-
|
-
|
(1,630)
|
Foreign currency translation
|
291
|
275
|
-
|
(343)
|
223
|
-
|
-
|
223
|
Other, Including non-credit risk
movements
|
-
|
-
|
-
|
-
|
-
|
-
|
1,762
|
1,762
|
At 31 December 2023
|
102,675
|
42,559
|
1,885
|
44,304
|
191,423
|
27,861
|
24,867
|
244,151
|
Assets growth & mix
|
4,273
|
53
|
96
|
(5,051)
|
(629)
|
-
|
-
|
(629)
|
Asset quality
|
(741)
|
401
|
-
|
(2,334)
|
(2,674)
|
-
|
-
|
(2,674)
|
Risk-weighted assets efficiencies
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Model Updates
|
462
|
818
|
-
|
-
|
1,280
|
-
|
-
|
1,280
|
Methodology and policy changes
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,300)
|
(1,300)
|
Acquisitions and disposals
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Foreign currency translation
|
(1,313)
|
(895)
|
-
|
(954)
|
(3,162)
|
-
|
-
|
(3,162)
|
Other, Including non-credit risk
movements
|
-
|
-
|
-
|
(1,234)
|
(1,234)
|
1,618
|
3,876
|
4,260
|
At 30 June 2024
|
105,356
|
42,936
|
1,981
|
34,731
|
185,004
|
29,479
|
27,443
|
241,926
|
Page
62
Movements in risk-weighted assets
RWA decreased by $2.2 billion, or 0.9 per cent
from 31 December 2023 to $241.9 billion. This was mainly due to a
decrease in Credit Risk RWA of $6.4 billion, partially offset by
increases in Market Risk RWA of $2.6 billion and Operational Risk
RWA of $1.6 billion.
Corporate & Investment Banking
Credit Risk RWA increased by $2.7 billion, or
2.6 per cent from 31 December 2023 to $105.4 billion mainly due
to:
• $4.3 billion
increase from changes in asset growth & mix, of
which:
- $5.1 billion increase from asset
balance growth
- $0.8 billion decrease from optimisation
activities
• $0.5 billion
increase from industry-wide regulatory changes to align IRB model
performance
• $1.3 billion
decrease from foreign currency translation
• $0.7 billion
decrease mainly due to an improvement in asset quality reflecting
client upgrades
Wealth & Retail Banking
Credit Risk RWA increased by $0.4 billion, or
0.9 per cent from 31 December 2023 to $42.9 billion mainly due
to:
• $0.8 billion
increase from industry-wide regulatory changes to align IRB model
performance
• $0.4 billion
increase mainly due to deterioration in asset quality mainly in
Asia
• $0.1 billion
increase from changes in asset growth & mix
• $0.9 billion
decrease from foreign currency translation
Ventures
Ventures is comprised of Mox Bank Limited, Trust
Bank and SC Ventures. Credit Risk RWA increased by $0.1 billion,
or
5.1 per cent from 31 December 2023 to $2.0 billion from asset
balance growth, mainly from SC Ventures.
Central & Other items
Central & Other items RWA mainly relate to
the Treasury Markets liquidity portfolio, equity investments and
current & deferred tax assets.
Credit Risk RWA decreased by $9.6 billion, or
21.6 per cent from 31 December 2023 to $34.7 billion mainly due
to:
• $5.1 billion
decrease from changes in asset growth & mix primarily from
optimisation activities
• $2.3 billion
decrease due to improvement in asset quality mainly from sovereign
upgrades in Asia
• $1.2 billion
decrease due to reporting enhancements
• $1.0 billion
decrease from foreign currency translation
Market Risk
Total Market Risk RWA increased by $2.6 billion,
or 10 per cent from 31 December 2023 to $27.4 billion due primarily
to:
• $2.5 billion
increase in Standardised Approach (SA) Specific Interest Rate Risk
RWA due primarily to increases in the
Trading Book government bond portfolio
• $1.1 billion
increase in Internal Models Approach (IMA) stressed VaR RWA due to
increased IMA positions attributable mainly to interest rate
exposures, offset by a reduction of VaR RWA due to lower FX market
volatility, and a reduction of addons for Risks not in
VaR
• $1.3 billion
decrease in the first quarter due to a reduction in the IMA RWA
multiplier resulting from fewer back-testing exceptions
Operational Risk
• Operational Risk RWA
increased by $1.6 billion, or 5.8 per cent from 31 December 2023 to
$29.5 billion, mainly due to an increase in average income as
measured over a rolling three-year time horizon for certain
products.
Page
63
Leverage ratio
The Group's leverage ratio, which excludes
qualifying claims on central banks, was 4.8 per cent at H1 2024,
which was above the current minimum requirement of 3.8 per cent.
The leverage ratio was 7 basis points higher than FY2023. Tier1
capital increased by $2.1 billion as CET1 capital increased by $1.1
billion and AT1 capital increased following the issuance of $1.0
billion of 7.875 percent securities in February 2024. Leverage
exposure increased by $30.6 billion predominantly due to growth in
on balance sheet assets, decrease in eligible central bank claims
deduction forming part of regulatory adjustments, and decrease in
derivative netting adjustments.
Leverage ratio
|
30.06.24
$million
|
31.12.23
$million
|
Tier 1 capital (end point)
|
41,902
|
39,806
|
Derivative financial instruments
|
48,647
|
50,434
|
Derivative cash collateral
|
8,099
|
10,337
|
Securities financing transactions
(SFTs)
|
104,981
|
97,581
|
Loans and advances and other assets
|
673,700
|
664,492
|
Total on-balance sheet assets
|
835,427
|
822,844
|
Regulatory consolidation adjustments1
|
(82,607)
|
(92,709)
|
Derivatives adjustments
|
|
|
Derivatives netting
|
(36,580)
|
(39,031)
|
Adjustments to cash collateral
|
(6,876)
|
(9,833)
|
Net written credit protection
|
1,316
|
1,359
|
Potential future exposure on
derivatives
|
45,488
|
42,184
|
Total derivatives adjustments
|
3,348
|
(5,321)
|
Counterparty risk leverage exposure measure for
SFTs
|
3,885
|
6,639
|
Off-balance sheet items
|
125,194
|
123,572
|
Regulatory deductions from Tier 1
capital
|
(7,474)
|
(7,883)
|
Total exposure measure excluding claims on
central banks
|
877,773
|
847,142
|
Leverage ratio excluding claims on central
banks (%)
|
4.8%
|
4.7%
|
Average leverage exposure measure excluding
claims on central banks
|
870,657
|
853,968
|
Average leverage ratio excluding claims on
central banks (%)
|
4.7%
|
4.6%
|
Countercyclical leverage ratio
buffer
|
0.2%
|
0.1%
|
G-SII additional leverage ratio
buffer
|
0.4%
|
0.4%
|
1 Includes adjustment for qualifying
central bank claims and unsettled regular way trades
Page
64
Statement of directors'
responsibilities
We confirm that to the best of our
knowledge:
• The condensed
consolidated interim financial statements have been prepared in
accordance with UK-adopted IAS 34 Interim Financial Reporting and
IAS 34 as adopted by the EU.
• The interim
management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure and
Transparency Rules, being an indication of important events that
have occurred during the six months ended 30 June 2024 and their
impact on the condensed consolidated interim financial statements;
and a description of the principal risks and uncertainties for the
remaining six months of the year
(b) DTR 4.2.8R of the Disclosure and
Transparency Rules, being related party transactions that have
taken place during the six months ended 30 June 2024 that have
materially affected the financial position or performance of the
entity during that period; and any changes in the related party
transactions described in the last annual report that could have
materially affected the financial position or performance of the
entity during that period
By order of the Board
Diego De Giorgi
Group Chief Financial Officer
30 July 2024
Standard Chartered PLC Board of Directors
Chairman
Executive
Directors
Non-Executive Directors
José
Viñals
Bill
Winters
Shirish Apte
Diego De
Giorgi
David Conner
Jackie Hunt
Diane Jurgens
Robin Lawther
Maria Ramos
Phil Rivett
David Tang
Linda Yueh
Page
65
Independent review report to Standard Chartered
PLC
Conclusion
We have been engaged by Standard Chartered PLC
(the 'Company' or, together with its subsidiaries, the 'Group') to
review the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2024 which
comprises the condensed consolidated interim income statement, the
condensed consolidated interim statement of comprehensive income,
the condensed consolidated interim balance sheet, the condensed
consolidated interim statement of changes in equity, the condensed
consolidated interim cash flow statement, the related notes 1 to
31, and the risk and capital disclosures marked as 'reviewed'
(together the 'condensed consolidated interim financial
statements'). We have read the other information contained in the
half yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial
statements.
Based on our review, nothing has come to our
attention that causes us to believe that the condensed consolidated
interim financial statements in the half-yearly financial report
for the six months ended 30 June 2024 are not prepared, in all
material respects, in accordance with United Kingdom (UK) adopted
International Accounting Standard 34 (IAS 34), IAS 34 as adopted by
the European Union (EU), and the Disclosure Guidance and
Transparency Rules (DTR) of the UK's Financial Conduct Authority
(FCA).
Basis for Conclusion
We conducted our review in accordance with
International Standard on Review Engagements 2410 (UK) 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' (ISRE) issued by the Financial Reporting Council
(FRC). A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 1, the annual financial
statements of the Group are prepared in accordance with UK adopted
international accounting standards and international financial
reporting standard as adopted by the EU. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with UK adopted IAS 34 and IAS 34
as adopted by the EU, and the DTR of the UK's FCA.
Conclusions Relating to Going Concern
Based on our review procedures, which are less
extensive than those performed in an audit as described in the
Basis of Conclusion section of this report, nothing has come to our
attention to suggest that management have inappropriately adopted
the going concern basis of accounting or that management have
identified material uncertainties relating to going concern that
are not appropriately disclosed.
This conclusion is based on the review
procedures performed in accordance with this ISRE, however future
events or conditions may cause the entity to cease to continue as a
going concern.
Responsibilities of the directors
The directors are responsible for preparing the
half-yearly financial report in accordance with UK adopted IAS 34
and IAS 34 as adopted by the EU, and the DTR of the UK's
FCA.
In preparing the half-yearly financial report,
the directors are responsible for assessing the company's ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the
financial information
In reviewing the half-yearly report, we are
responsible for expressing to the Company a conclusion on the
condensed set of financial statements in the half-yearly financial
report. Our conclusion, including our Conclusions Relating to Going
Concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Page
66
Use of our report
This report is made solely to the company in
accordance with guidance contained in ISRE 2410 (UK) 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the FRC. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other
than the Company, for our work, for this report, or for the
conclusions we have formed.
Ernst & Young LLP
London
30 July 2024
Page
67
Condensed consolidated interim income
statement
For the six months ended 30 June 2024
|
Notes
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
Interest income
|
|
14,194
|
12,826
|
Interest expense
|
|
(11,019)
|
(8,842)
|
Net interest income
|
3
|
3,175
|
3,984
|
Fees and commission income
|
|
2,363
|
2,079
|
Fees and commission expense
|
|
(442)
|
(434)
|
Net fee and commission income
|
4
|
1,921
|
1,645
|
Net trading income
|
5
|
4,749
|
3,233
|
Other operating income
|
6
|
(54)
|
265
|
Operating income
|
|
9,791
|
9,127
|
Staff costs
|
|
(4,336)
|
(4,158)
|
Premises costs
|
|
(177)
|
(208)
|
General administrative expenses
|
|
(1,027)
|
(741)
|
Depreciation and amortisation
|
|
(516)
|
(561)
|
Operating expenses
|
7
|
(6,056)
|
(5,668)
|
Operating profit before impairment losses and
taxation
|
|
3,735
|
3,459
|
Credit impairment
|
8
|
(240)
|
(161)
|
Goodwill, property, plant and equipment and
other impairment
|
9
|
(147)
|
(77)
|
Profit from associates and joint
ventures
|
19
|
144
|
102
|
Profit before taxation
|
|
3,492
|
3,323
|
Taxation
|
10
|
(1,123)
|
(938)
|
Profit for the period
|
|
2,369
|
2,385
|
|
|
|
|
Profit attributable to:
|
|
|
|
Non-controlling interests
|
|
(9)
|
(3)
|
Parent company shareholders
|
|
2,378
|
2,388
|
Profit for the period
|
|
2,369
|
2,385
|
|
|
|
|
Basic earnings per ordinary share
|
12
|
83.3
|
75.6
|
Diluted earnings per ordinary share
|
12
|
81.3
|
73.9
|
The notes form an integral part of these
financial statements.
Page
68
Condensed consolidated interim statement of
comprehensive income
For the six months ended 30 June 2024
|
Notes
|
6 months ended 30.06.2024
$million
|
6 months ended 30.06.2023
$million
|
Profit for the period
|
|
2,369
|
2,385
|
Other comprehensive loss
|
|
|
|
Items that will not be reclassified to income
statement:
|
|
(265)
|
(53)
|
Own credit losses on financial liabilities
designated at fair value through profit or loss
|
|
(410)
|
(141)
|
Equity instruments at fair value through other
comprehensive (loss)/income
|
|
(25)
|
67
|
Actuarial gains on retirement benefit
obligations
|
26
|
31
|
35
|
Revaluation Surplus
|
|
15
|
-
|
Taxation relating to components of other
comprehensive income
|
|
124
|
(14)
|
Items that may be reclassified subsequently to
income statement:
|
|
(649)
|
(233)
|
Exchange differences on translation
of foreign operations:
|
|
|
|
Net loss taken to equity
|
|
(1,017)
|
(979)
|
Net gains on net investment hedges
|
|
377
|
294
|
Share of other comprehensive income/(loss) from
associates and joint ventures
|
|
9
|
(11)
|
Debt instruments at fair value
through other comprehensive income:
|
|
|
|
Net valuation gains taken to equity
|
|
56
|
167
|
Reclassified to income statement
|
|
90
|
84
|
Net impact of expected credit losses
|
|
(19)
|
(41)
|
Cash flow hedges:
|
|
|
|
Net movements in cash flow hedge
reserve
|
|
(171)
|
271
|
Taxation relating to components of other
comprehensive income
|
|
26
|
(18)
|
Other comprehensive loss for the period, net of
taxation
|
|
(914)
|
(286)
|
Total comprehensive income for the
period
|
|
1,455
|
2,099
|
|
|
|
|
Total comprehensive income attributable
to:
|
|
|
|
Non-controlling interests
|
|
(16)
|
(31)
|
Parent company shareholders
|
|
1,471
|
2,130
|
Total comprehensive income for the
period
|
|
1,455
|
2,099
|
Page
69
Condensed consolidated interim balance
sheet
As at 30 June 2024
|
Notes
|
30.06.24
$million
|
31.12.23
$million
|
Assets
|
|
|
|
Cash and balances at central banks
|
|
64,086
|
69,905
|
Financial assets held at fair value through
profit or loss
|
13
|
181,725
|
147,222
|
Derivative financial instruments
|
13,14
|
48,647
|
50,434
|
Loans and advances to banks
|
13
|
45,231
|
44,977
|
Loans and advances to customers
|
13
|
275,896
|
286,975
|
Investment securities
|
13
|
152,403
|
161,255
|
Other assets
|
18
|
53,016
|
47,594
|
Current tax assets
|
|
491
|
484
|
Prepayments and accrued income
|
|
3,224
|
3,033
|
Interests in associates and joint
ventures
|
19
|
1,088
|
966
|
Goodwill and intangible assets
|
16
|
6,103
|
6,214
|
Property, plant and equipment
|
17
|
2,202
|
2,274
|
Deferred tax assets
|
10
|
593
|
702
|
Retirement benefit schemes in surplus
|
26
|
111
|
-
|
Assets classified as held for sale
|
20
|
611
|
809
|
Total assets
|
|
835,427
|
822,844
|
|
|
|
|
Liabilities
|
|
|
|
Deposits by banks
|
13
|
28,087
|
28,030
|
Customer accounts
|
13
|
468,157
|
469,418
|
Repurchase agreements and other similar secured
borrowing
|
13,15
|
7,539
|
12,258
|
Financial liabilities held at fair value through
profit or loss
|
13
|
96,882
|
83,096
|
Derivative financial instruments
|
13,14
|
50,584
|
56,061
|
Debt securities in issue
|
13
|
65,199
|
62,546
|
Other liabilities
|
21
|
47,440
|
39,221
|
Current tax liabilities
|
|
1,061
|
811
|
Accruals and deferred income
|
|
6,491
|
6,975
|
Subordinated liabilities and other borrowed
funds
|
13,24
|
10,856
|
12,036
|
Deferred tax liabilities
|
10
|
558
|
770
|
Provisions for liabilities and
charges
|
|
401
|
299
|
Retirement benefit schemes in deficit
|
26
|
268
|
183
|
Liabilities included in disposal groups held for
sale
|
20
|
577
|
787
|
Total liabilities
|
|
784,100
|
772,491
|
|
|
|
|
Equity
|
|
|
|
Share capital and share premium
account
|
25
|
6,758
|
6,815
|
Other reserves
|
|
8,274
|
9,171
|
Retained earnings
|
|
29,381
|
28,459
|
Total parent company shareholders'
equity
|
|
44,413
|
44,445
|
Other equity instruments
|
25
|
6,504
|
5,512
|
Total equity excluding non-controlling
interests
|
|
50,917
|
49,957
|
Non-controlling interests
|
|
410
|
396
|
Total equity
|
|
51,327
|
50,353
|
Total equity and liabilities
|
|
835,427
|
822,844
|
The notes form an integral part of these
financial statements.
These financial statements were approved by the
Board of directors and authorised for issue on 30 July 2024 and
signed on its behalf by:
Diego De Giorgi
Group Chief Financial Officer
Page
70
Condensed consolidated interim statement of
changes in equity
For the six months ended 30 June 2024
|
Ordinary share capital and share premium
account
$million
|
Preference share capital and share premium
account
$million
|
Capital and merger reserves1
$million
|
Own credit adjustment reserve
$million
|
Fair value through other compre-hensive income
reserve - debt
$million
|
Fair value through other compre-hensive income
reserve - equity
$million
|
Cash flow hedge reserve
$million
|
Translation reserve
$million
|
Retained earnings
$million
|
Parent company share-holders' equity
$million
|
Other equity instru-ments
$million
|
Non-controlling interests
$million
|
Total
$million
|
As at 01 January 2023
|
5,436
|
1,494
|
17,338
|
(63)
|
(1,116)
|
206
|
(564)
|
(7,636)
|
28,067
|
43,162
|
6,504
|
350
|
50,016
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,388
|
2,388
|
-
|
(3)
|
2,385
|
Other comprehensive
(loss)/income7
|
-
|
-
|
-
|
(140)
|
204
|
50
|
247
|
(666)
|
47²
|
(258)
|
-
|
(28)
|
(286)
|
Distributions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(17)
|
(17)
|
Redemption of other equity
instruments
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,000)
|
-
|
(1,000)
|
Treasury shares net
movement
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
23
|
23
|
-
|
-
|
23
|
Share option expense, net of
taxation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
90
|
90
|
-
|
-
|
90
|
Dividends on ordinary
shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(401)
|
(401)
|
-
|
-
|
(401)
|
Dividends on preference shares
and
AT1 securities
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(243)
|
(243)
|
-
|
-
|
(243)
|
Share buyback3
|
(47)
|
-
|
47
|
-
|
-
|
-
|
-
|
-
|
(1,000)
|
(1,000)
|
-
|
-
|
(1,000)
|
Other movements
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
25⁴
|
17
|
42
|
8⁴
|
64⁵
|
114
|
As at 30 June 2023
|
5,389
|
1,494
|
17,385
|
(203)
|
(912)
|
256
|
(317)
|
(8,277)
|
28,988
|
43,803
|
5,512
|
366
|
49,681
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,081
|
1,081
|
-
|
(4)
|
1,077
|
Other comprehensive
income/(loss)7
|
-
|
-
|
-
|
303
|
222
|
74
|
408
|
177
|
(94)²
|
1,090
|
-
|
(3)
|
1,087
|
Distributions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(9)
|
(9)
|
Treasury shares net
movement
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(212)
|
(212)
|
-
|
-
|
(212)
|
Share option expense, net of
taxation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
83
|
83
|
-
|
-
|
83
|
Dividends on ordinary
shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(167)
|
(167)
|
-
|
-
|
(167)
|
Dividends on preference shares
and
AT1 securities
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(209)
|
(209)
|
-
|
-
|
(209)
|
Share buyback3,6
|
(68)
|
-
|
68
|
-
|
-
|
-
|
-
|
-
|
(1,000)
|
(1,000)
|
-
|
-
|
(1,000)
|
Other movements
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(13)⁴
|
(11)⁴
|
(24)
|
-
|
46⁵
|
22
|
As at 31 December 2023
|
5,321
|
1,494
|
17,453
|
100
|
(690)
|
330
|
91
|
(8,113)
|
28,459
|
44,445
|
5,512
|
396
|
50,353
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,378
|
2,378
|
-
|
(9)
|
2,369
|
Other comprehensive
(loss)/income7
|
-
|
-
|
-
|
(360)
|
137
|
(81)¹¹
|
(147)
|
(644)
|
1882,12
|
(907)
|
-
|
(7)
|
(914)
|
Distributions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(25)
|
(25)
|
Other equity instruments issued,
net of expenses
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
992
|
-
|
992
|
Treasury shares net
movement
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
29
|
29
|
-
|
-
|
29
|
Share option expense, net of
taxation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
148
|
148
|
-
|
-
|
148
|
Dividends on ordinary
shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(551)
|
(551)
|
-
|
-
|
(551)
|
Dividends on preference shares
and
AT1 securities
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(209)
|
(209)
|
-
|
-
|
(209)
|
Share buyback8
|
(57)
|
-
|
57
|
-
|
-
|
-
|
-
|
-
|
(1,000)
|
(1,000)
|
-
|
-
|
(1,000)
|
Other movements
|
-
|
-
|
-
|
-
|
7
|
-
|
-
|
134⁴
|
(61)⁹
|
80
|
-
|
55¹⁰
|
135
|
As at 30 June 2024
|
5,264
|
1,494
|
17,510
|
(260)
|
(546)
|
249
|
(56)
|
(8,623)
|
29,381
|
44,413
|
6,504
|
410
|
51,327
|
1 Includes
capital reserve of $5 million, capital redemption reserve of $394
million and merger reserve of $17,111 million
2 Comprises
actuarial gain, net of taxation on Group defined benefit
schemes
3 On 16 February
2023, the Group announced an additional buyback programme for a
share buyback of its ordinary shares of $0.50 each. Nominal value
of share purchases was $58 million (June 2023: $47 million) of
which $11m were purchased following 30 June 2023 in the period to
29 September 2023 when the programme was completed. Total
consideration paid was $1,000 million (June 2023: $732 million).
The total number of shares purchased was 116,710,492 (June 2023:
93,894,706) representing 4.03 per cent (June 2023: 3.24 per cent)
of the ordinary shares in issue. The nominal value of the shares
were transferred from the share capital to the capital redemption
reserve account
4 Movement
related to Translation adjustment and AT1 Securities charges (June
2023). June 2024 balance includes $190 million translation
adjustment loss from sale of SCB Zimbabwe Limited transferred to
other operating income
5 Movements
primarily related to non-controlling interest from Zodia Custody
Limited ($27 million), Mox Bank Limited ($17 million) and Trust
Bank Singapore Ltd ($17 million) pertaining to half year ending
June 2023. Further movement in NCI from Mox Bank Limited ($31
million), Trust Bank Singapore Ltd ($17 million) and Zodia Custody
Limited ($1 million)
6 On 28 July
2023, the Group announced the buyback programme for a share buyback
of its ordinary shares of $0.50 each. Nominal value of share
purchases was $57 million, and the total consideration paid was
$1,000 million and the buyback completed on 6 November 2023. The
total number of shares purchased was 112,982,802, representing 3.90
per cent of the ordinary shares in issue as at the commencement of
the buyback. The nominal value of the shares was transferred from
the share capital to the capital redemption reserve
account
7 All the amounts
are net of tax
8 On 23 February
2024, the Group announced the buyback programme for a share buyback
of its ordinary shares of $0.50 each. Nominal value of share
purchases was $57 million, the total consideration paid was $1,000
million, and the buyback completed on 25 June 2024. The total
number of shares purchased was 113,266,516, representing 4.25 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
9 Includes $77
million loss to retained earnings related to Ghana
hyperinflation
10 Movements primarily
related to non-controlling interest from Mox Bank Limited ($8
million) and Trust Bank Singapore Ltd ($47 million)
11 Includes $147 million gain
on sale of equity investment transferred to retained earnings
partly offset by $76 million reversal of deferred tax
liability
12 Includes $147 million gain
on sale of equity investment in other comprehensive income reserve
transferred to retained earnings partly offset by $13 million
capital gain tax
Note 25 includes a description of each
reserve.
The notes form an integral part of these
financial statements.
Page
71
Condensed consolidated interim cash flow
statement
For the six months ended 30 June 2024
|
Notes
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23 (Restated)
$million
|
Cash flows from operating
activities:
|
|
|
|
Profit before taxation
|
|
3,492
|
3,323
|
Adjustments for non-cash items and other
adjustments included within income statement
|
31
|
1,730
|
1,518
|
Change in operating assets
|
31
|
(41,582)
|
(8,306)
|
Change in operating liabilities
|
31
|
20,466
|
26,466
|
Contributions to defined benefit
schemes
|
|
(19)
|
(19)
|
UK and overseas taxes paid
|
|
(793)
|
(633)
|
Net cash (used in)/from operating
activities
|
|
(16,706)
|
22,349
|
Cash flows from investing
activities:
|
|
|
|
Internally generated Capitalised
Software
|
16
|
(474)
|
(513)
|
Disposal of Internally generated Capitalised
Software
|
16
|
5
|
-
|
Purchase of property, plant and
equipment
|
17
|
(76)
|
(205)
|
Disposal of property, plant and
equipment
|
17
|
31
|
68
|
Disposal of held for sale property, plant and
equipment
|
20
|
-
|
136
|
Acquisition of investment associates, and joint
ventures, net of cash acquired
|
19
|
(4)
|
(23)
|
Disposal of investment in subsidiaries,
associates and joint ventures, net of cash acquired
|
|
41
|
26
|
Purchase of investment securities
|
|
(120,307)
|
(140,689)
|
Disposal and maturity of investment
securities
|
|
125,925
|
150,779
|
Net cash from investing activities
|
|
5,141
|
9,579
|
Cash flows from financing
activities:
|
|
|
|
Treasury share sale
|
|
29
|
23
|
Cancellation of shares through share
buyback
|
|
(1,000)
|
(736)
|
Premises and equipment lease liability
principal payment
|
|
(105)
|
(120)
|
Issue of Additional Tier 1 capital, net of
expenses
|
|
992
|
-
|
Redemption of Tier 1 Capital
|
25
|
-
|
(1,000)
|
Interest paid on subordinated
liabilities
|
31
|
(252)
|
(300)
|
Repayment of subordinated
liabilities
|
31
|
(1,000)
|
(2,000)
|
Proceeds from issue of senior debts
|
31
|
7,698
|
7,072
|
Repayment of senior debts
|
31
|
(7,191)
|
(2,715)
|
Interest paid on senior debts
|
31
|
(548)
|
(561)
|
Net cash inflow from Non-controlling
interest
|
|
47
|
70
|
Distributions and dividends paid to
non-controlling interests, preference shareholders and AT1
securities
|
|
(234)
|
(260)
|
Dividends paid to ordinary
shareholders
|
|
(551)
|
(401)
|
Net cash used in financing
activities
|
|
(2,115)
|
(928)
|
Net (decrease)/increase in cash and cash
equivalents
|
|
(13,680)
|
31,000
|
Cash and cash equivalents at beginning of the
period
|
|
107,635
|
97,595
|
Effect of exchange rate movements on cash and
cash equivalents
|
|
(1,740)
|
(1,452)
|
Cash and cash equivalents at end of the
period1,2
|
|
92,215
|
127,143
|
1 Comprises cash and balances at central
banks $64,086 million (30 June 2023: $86,339 million), treasury
bills and other eligible bills $3,873 million (30 June 2023:
$6,063 million), loans and advances to banks $12,691 million
(30 June 2023: $13,650 million), loans and advances to customers
$20,611 million (30 June 2023 $27,680 million) investments
$824 million (30 June 2023: $1,307 million) less restricted
balances $9870 million (30 June 2023: $7,896 million)
2 Refer to note 31 for details on
restatement
Interest received was $14,575 million (30.06.23:
$13,068 million), interest paid was $10,948 million (30.06.23:
$7,898 million).
Page
72
Contents - Notes to the financial
statements
Section
|
Note
|
|
Basis of preparation
|
1
|
Accounting policies
|
Performance/return
|
2
|
Segmental information
|
|
3
|
Net interest income
|
|
4
|
Net fees and commission
|
|
5
|
Net trading income
|
|
6
|
Other operating income
|
|
7
|
Operating expenses
|
|
8
|
Credit impairment
|
|
9
|
Goodwill, property, plant and equipment and
other impairment
|
|
10
|
Taxation
|
|
11
|
Dividends
|
|
12
|
Earnings per ordinary share
|
Assets and liabilities held at fair
value
|
13
|
Financial instruments
|
|
14
|
Derivative financial instruments
|
Financial instruments held at amortised
cost
|
15
|
Reverse repurchase and repurchase agreements
including other similar lending and borrowing
|
Other assets and investments
|
16
|
Goodwill and intangible assets
|
|
17
|
Property, plant and equipment
|
|
18
|
Other assets
|
|
19
|
Investments in associates and joint
ventures
|
|
20
|
Assets held for sale and associated
liabilities
|
Funding, accruals, provisions, contingent
liabilities and legal proceedings
|
21
|
Other liabilities
|
22
|
Contingent liabilities and
commitments
|
23
|
Legal and regulatory matters
|
Capital instruments, equity and
reserves
|
24
|
Subordinated liabilities and other borrowed
funds
|
|
25
|
Share capital, other equity instruments and
reserves
|
Employee benefits
|
26
|
Retirement benefit obligations
|
Other disclosure matters
|
27
|
Related party transactions
|
|
28
|
Post balance sheet events
|
|
29
|
Corporate governance
|
|
30
|
Statutory accounts
|
|
31
|
Cash flow statement
|
Page
73
Notes to the financial statements
1. Accounting policies
Statement of compliance
The Group's condensed consolidated interim
financial statements consolidate those of Standard Chartered PLC
(the Company) and its subsidiaries (together referred to as the
Group) and equity account the Group's interests in associates and
jointly controlled entities.
These interim financial statements have been
prepared in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority (FCA) and with UK-adopted IAS 34 Interim Financial
Reporting and IAS 34 as adopted by the European Union (EU).
They should be read in conjunction with the 2023 Annual Report,
which was prepared in accordance with UK-adopted international
accounting standards and International Financial Reporting
Standards (IFRS) as adopted by the EU (EU IFRS).
The following parts of the Risk review and
Capital review form part of these financial statements:
a) Risk review: Disclosures marked as 'reviewed'
from the start of the Credit Risk section to the end of Other
principal risks in the same section.
b) Capital review: Tables marked as 'reviewed'
from the start of 'CRD Capital base' to the end of 'Movement in
total capital', excluding 'Total risk-weighted assets'.
There were no new accounting standards or
interpretations that had a material effect on these condensed
consolidated interim financial statements
Basis of preparation
The condensed consolidated financial statements
have been prepared on a going concern basis and under the
historical cost convention, as modified by the revaluation of
cash-settled share-based payments, fair value through other
comprehensive income, and financial assets and liabilities
(including derivatives) at fair value through profit or
loss.
The condensed consolidated financial statements
are presented in United States dollars ($), being the presentation
and functional currency of the Group, and all values are rounded to
the nearest million dollars, except when otherwise indicated. The
accounting policies that we applied for these interim condensed
consolidated financial statements are consistent with those
described on pages 367 to 460 of the Annual Report and Accounts
2023, as are the methods of computation.
Significant accounting estimates and
judgements
In determining the carrying amounts of certain
assets and liabilities, the Group makes assumptions of the effects
of uncertain future events on those assets and liabilities at the
balance sheet date. The Group's estimates and assumptions are based
on historical experience and expectation of future events and are
reviewed periodically. The significant judgements made by
management in applying the Group's accounting policies and key
sources of uncertainty were the same as those applied to the
consolidated financial statements as at, and for, the year ended 31
December 2023.
IFRS and Hong Kong accounting requirements
As required by the Hong Kong Listing Rules, an
explanation of the differences in accounting practices between
UK-adopted IFRS and Hong Kong Financial Reporting Standards is
required to be disclosed. There would be no significant differences
had these accounts been prepared in accordance with Hong Kong
Financial Reporting Standards.
Standard Chartered PLC has fully complied with
the new treasury share regime introduced under the revised Hong
Kong Listing Rules from 11 June 2024 onwards and will continue to
comply with the new regime.
Comparatives
Certain comparatives have been restated in line
with current year disclosures. Details of these changes are set out
in the relevant sections and notes below:
• Condensed
consolidated interim Cash flow statement
• Note 4 Net fees and
commissions
• Note 31 Cash flow
statement
Page
74
Going concern
These financial statements were approved by the
Board of directors on 30 July 2024. The directors have made an
assessment of the Group's ability to continue as a going concern.
This assessment has been made having considered the current
macroeconomic and geopolitical headwinds, including:
• Review of the Group
Strategy and Corporate Plan
• An assessment of the
actual performance to date, loan book quality, credit impairment,
legal, regulatory and compliance matters, and the updated annual
budget
• Consideration of
stress testing performed, including the Group Recovery Plan (RP)
which include the application of stressed scenarios. Under the
tests and through the range of scenarios, the results of these
exercises and the RP demonstrate that the Group has sufficient
capital and liquidity to continue as a going concern and meet
minimum regulatory capital and liquidity requirements
1. Accounting policies continued
• Analysis of the
capital, funding and liquidity position of the Group, including the
capital and leverage ratios, and ICAAP which summarises the Group's
capital and risk assessment processes, assesses its capital
requirements and the adequacy of resources to meet them. Further,
funding and liquidity was considered in the context of the risk
appetite metrics, including the LCR ratio and survival horizon and
wholesale borrowing (external).
• The Group's Internal
Liquidity Adequacy Assessment Process (ILAAP), which considers the
Group's liquidity position,
its framework and whether sufficient liquidity resources are being
maintained to meet liabilities as they fall due, was
also reviewed
• 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 topical/emerging risks
Based on the analysis performed, the directors
confirm they are satisfied that the Group has adequate resources to
continue in business for a period of at least 12 months from 30
July 2024. For this reason, the Group continues to adopt the going
concern basis of accounting for preparing the financial
statements.
2. Segmental information
Basis of preparation
The analysis reflects how the client segments
and geographic regions are managed internally. This is described as
the Management View (on an underlying basis) and is principally the
location from which a client relationship is managed, which may
differ from where it is financially booked and may be shared
between businesses and/or regions. In certain instances this
approach is not appropriate and a Financial View is disclosed, that
is, the location in which the transaction or balance was booked.
Typically, the Financial View is used in areas such as the Market
and Liquidity Risk reviews where actual booking location is more
important for an assessment. Segmental information is therefore on
a Management View unless otherwise stated.
Client segments
The Group's segmental reporting is in accordance
with IFRS 8 Operating Segments and is reported consistently with
the internal performance framework and as presented to the Group's
Management Team.
Restructuring and other items excluded from underlying
results
The Group's reported IFRS performance is
adjusted for certain items to arrive at alternative performance
measures. These items include 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
consistent performance period by period. The alternative
performance measures are not within the scope of IFRS and not a
substitute for IFRS measures. These adjustments are set out
below.
Net loss on businesses disposed of/ held for
sale $189 million include $174 million, the sale of Zimbabwe
primarily from the recycling of FX translation losses and $15
million loss in relation to a sale of a portfolio of Aviation
loans. The Group is also reclassifying the movements in the Debit
Valuation Adjustment (DVA) into restructuring and other
items.
Page
75
Reconciliations between underlying and reported
results are set out in the tables below:
|
6 months ended 30.06.24
|
Underlying
$million
|
Restructuring
$million
|
Net loss on businesses
disposed of/
held for sale¹
$million
|
Other items
$million
|
DVA
$million
|
Reported
$million
|
Operating income
|
9,958
|
48
|
(189)
|
-
|
(26)
|
9,791
|
Operating expenses
|
(5,673)
|
(283)
|
-
|
(100)
|
-
|
(6,056)
|
Operating profit/(loss) before impairment losses
and taxation
|
4,285
|
(235)
|
(189)
|
(100)
|
(26)
|
3,735
|
Credit impairment
|
(249)
|
9
|
-
|
-
|
-
|
(240)
|
Other impairment
|
(143)
|
(4)
|
-
|
-
|
-
|
(147)
|
Profit from associates and joint
ventures
|
64
|
80
|
-
|
-
|
-
|
144
|
Profit/(loss) before taxation
|
3,957
|
(150)
|
(189)
|
(100)
|
(26)
|
3,492
|
1 Net loss on businesses disposal
includes loss of $174million relating to Zimbabwe exit
.
|
6 months ended 30.06.23
|
Underlying
$million
|
Restructuring
$million
|
Net gain on businesses
disposed of/
held for sale
$million
|
Other items
$million
|
DVA
$million
|
Reported
$million
|
Operating income
|
8,951
|
215
|
-
|
-
|
(39)
|
9,127
|
Operating expenses
|
(5,504)
|
(164)
|
-
|
-
|
-
|
(5,668)
|
Operating profit/(loss) before impairment losses
and taxation
|
3,447
|
51
|
-
|
-
|
(39)
|
3,459
|
Credit impairment
|
(172)
|
11
|
-
|
-
|
-
|
(161)
|
Other impairment
|
(63)
|
(14)
|
-
|
-
|
-
|
(77)
|
Profit from associates and joint
ventures
|
94
|
8
|
-
|
-
|
-
|
102
|
Profit/(loss) before taxation
|
3,306
|
56
|
-
|
-
|
(39)
|
3,323
|
Underlying performance by client
segment
|
6 months ended 30.06.24
|
Corporate & Investment Banking
$million
|
Wealth &
Retail Banking
$million
|
Ventures
$million
|
Central &
other items
$million
|
Total
$million
|
Operating income
|
5,991
|
3,872
|
80
|
15
|
9,958
|
External
|
5,018
|
1,749
|
80
|
3,111
|
9,958
|
Inter-segment
|
973
|
2,123
|
-
|
(3,096)
|
-
|
Operating expenses
|
(2,921)
|
(2,156)
|
(230)
|
(366)
|
(5,673)
|
Operating profit/(loss) before impairment
losses and taxation
|
3,070
|
1,716
|
(150)
|
(351)
|
4,285
|
Credit impairment
|
35
|
(282)
|
(43)
|
41
|
(249)
|
Other impairment
|
(104)
|
(27)
|
-
|
(12)
|
(143)
|
Profit from associates and joint
ventures
|
-
|
-
|
(6)
|
70
|
64
|
Underlying profit/(loss) before
taxation
|
3,001
|
1,407
|
(199)
|
(252)
|
3,957
|
Restructuring
|
(59)
|
(51)
|
(1)
|
(39)
|
(150)
|
DVA
|
(26)
|
-
|
-
|
-
|
(26)
|
Other items
|
-
|
(100)
|
-
|
(189)
|
(289)
|
Reported profit/(loss) before
taxation
|
2,916
|
1,256
|
(200)
|
(480)
|
3,492
|
Total assets
|
443,442
|
122,846
|
5,280
|
263,859
|
835,427
|
Of which: loans and advances to
customers
|
190,298
|
120,277
|
1,110
|
24,022
|
335,707
|
loans and advances to customers
|
130,496
|
120,268
|
1,110
|
24,022
|
275,896
|
loans held at fair value through profit or loss
(FVTPL)1
|
59,802
|
9
|
-
|
-
|
59,811
|
Total liabilities
|
467,875
|
208,565
|
4,347
|
103,313
|
784,100
|
Of which: customer accounts1
|
315,767
|
204,154
|
4,046
|
8,295
|
532,262
|
1 Loans and advances to customers
includes FVTPL and customer accounts includes FVTPL and repurchase
agreements
Page
76
|
6 months ended 30.06.23
|
Corporate & Investment Banking
$million
|
Wealth &
Retail Banking
$million
|
Ventures
$million
|
Central &
other items
$million
|
Total
$million
|
Operating income
|
5,823
|
3,556
|
89
|
(517)
|
8,951
|
External
|
4,569
|
2,154
|
89
|
2,139
|
8,951
|
Inter-segment
|
1,254
|
1,402
|
-
|
(2,656)
|
-
|
Operating expenses
|
(2,818)
|
(2,075)
|
(211)
|
(400)
|
(5,504)
|
Operating profit/(loss) before impairment
losses
and taxation
|
3,005
|
1,481
|
(122)
|
(917)
|
3,447
|
Credit impairment
|
(69)
|
(108)
|
(23)
|
28
|
(172)
|
Other impairment
|
(21)
|
-
|
-
|
(42)
|
(63)
|
Profit from associates and joint
ventures
|
-
|
-
|
(13)
|
107
|
94
|
Underlying profit/(loss) before
taxation
|
2,915
|
1,373
|
(158)
|
(824)
|
3,306
|
Restructuring
|
73
|
(16)
|
(1)
|
-
|
56
|
DVA
|
(39)
|
-
|
-
|
-
|
(39)
|
Reported profit/(loss) before
taxation
|
2,949
|
1,357
|
(159)
|
(824)
|
3,323
|
Total assets
|
401,001
|
129,660
|
3,076
|
304,974
|
838,711
|
Of which: loans and advances to
customers
|
174,214
|
127,039
|
947
|
33,623
|
335,823
|
loans and advances to customers
|
128,548
|
127,020
|
947
|
33,622
|
290,137
|
loans held at fair value through profit or loss
(FVTPL)1
|
45,666
|
19
|
-
|
1
|
45,686
|
Total liabilities
|
490,697
|
190,690
|
2,317
|
105,326
|
789,030
|
Of which: customer accounts1
|
333,584
|
185,741
|
2,072
|
8,394
|
529,791
|
1 Loans and advances to customers
includes FVTPL and customer accounts includes FVTPL and repurchase
agreements
Operating income by client segment
|
6 months ended 30.06.24
|
Corporate & Investment Banking
$million
|
Wealth &
Retail Banking
$million
|
Ventures
$million
|
Central &
other items
$million
|
Total
$million
|
Underlying versus reported:
|
|
|
|
|
|
Underlying operating income
|
5,991
|
3,872
|
80
|
15
|
9,958
|
Restructuring
|
28
|
14
|
-
|
6
|
48
|
DVA
|
(26)
|
-
|
-
|
-
|
(26)
|
Other items 1
|
-
|
-
|
-
|
(189)
|
(189)
|
Reported operating income
|
5,993
|
3,886
|
80
|
(168)
|
9,791
|
Additional segmental income:
|
|
|
|
|
|
Net interest income
|
1,272
|
2,539
|
45
|
(681)
|
3,175
|
Net fees and commission income
|
993
|
955
|
19
|
(46)
|
1,921
|
Net trading and other
income1
|
3,728
|
392
|
16
|
5591
|
4,695
|
Reported operating income
|
5,993
|
3,886
|
80
|
(168)
|
9,791
|
1 Other items includes loss of
$174million relating to Zimbabwe exit
|
6 months ended 30.06.23
|
Corporate & Investment Banking
$million
|
Wealth &
Retail Banking
$million
|
Ventures
$million
|
Central &
other items
$million
|
Total
$million
|
Underlying versus reported:
|
|
|
|
|
|
Underlying operating income
|
5,823
|
3,556
|
89
|
(517)
|
8,951
|
Restructuring
|
187
|
23
|
-
|
5
|
215
|
DVA
|
(39)
|
-
|
-
|
-
|
(39)
|
Reported operating income
|
5,971
|
3,579
|
89
|
(512)
|
9,127
|
Additional segmental income:
|
|
|
|
|
|
Net interest income
|
2,272
|
2,451
|
31
|
(770)
|
3,984
|
Net fees and commission income
|
861
|
816
|
26
|
(58)
|
1,645
|
Net trading and other income
|
2,838
|
312
|
32
|
316
|
3,498
|
Reported operating income
|
5,971
|
3,579
|
89
|
(512)
|
9,127
|
Page
77
|
6 months ended 30.06.24
|
Hong Kong
$million
|
Korea
$million
|
China
$million
|
Taiwan
$million
|
Singapore
$million
|
India
$million
|
UAE
$million
|
UK
$million
|
US
$million
|
Other
$million
|
Group
$million
|
Net interest income
|
350
|
342
|
201
|
81
|
277
|
309
|
187
|
(503)
|
205
|
1,726
|
3,175
|
Net fees and
commission income
|
364
|
104
|
102
|
106
|
347
|
151
|
60
|
54
|
229
|
404
|
1,921
|
Net trading and
other income
|
1,589
|
105
|
361
|
111
|
678
|
192
|
201
|
557
|
162
|
739
|
4,695
|
Operating income
|
2,303
|
551
|
664
|
298
|
1,302
|
652
|
448
|
108
|
596
|
2,869
|
9,791
|
|
6 months ended 30.06.23
|
Hong Kong
$million
|
Korea
$million
|
China
$million
|
Taiwan
$million
|
Singapore
$million
|
India
$million
|
UAE
$million
|
UK
$million
|
US
$million
|
Other
$million
|
Group
$million
|
Net interest income
|
1,103
|
366
|
271
|
73
|
547
|
331
|
201
|
(506)
|
100
|
1,498
|
3,984
|
Net fees and
commission income
|
322
|
88
|
93
|
94
|
274
|
116
|
37
|
15
|
213
|
393
|
1,645
|
Net trading and
other income
|
777
|
123
|
228
|
122
|
441
|
174
|
181
|
664
|
138
|
650
|
3,498
|
Operating income
|
2,202
|
577
|
592
|
289
|
1,262
|
621
|
419
|
173
|
451
|
2,541
|
9,127
|
3. Net interest income
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
Balances at central banks
|
1,360
|
1,211
|
Loans and advances to banks
|
1,052
|
958
|
Loans and advances to customers
|
8,190
|
7,407
|
Debt securities
|
2,716
|
2,344
|
Other eligible bills
|
807
|
809
|
Accrued on impaired assets (discount
unwind)
|
69
|
97
|
Interest income
|
14,194
|
12,826
|
Of which: financial instruments held at fair
value through other comprehensive income
|
1,707
|
1,767
|
|
|
|
Deposits by banks
|
441
|
374
|
Customer accounts
|
8,361
|
6,489
|
Debt securities in issue
|
1,794
|
1,538
|
Subordinated liabilities and other borrowed
funds
|
394
|
415
|
Interest expense on IFRS 16 lease
liabilities
|
29
|
26
|
Interest expense
|
11,019
|
8,842
|
Net interest income
|
3,175
|
3,984
|
4. Net fees and commission
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
Fees and commissions income
|
2,363
|
2,079
|
Of which:
|
|
|
Financial instruments that are not fair valued
through profit or loss
|
722
|
687
|
Trust and other fiduciary activities
|
305
|
265
|
|
|
|
Fees and commissions expense
|
(442)
|
(434)
|
Of which:
|
|
|
Financial instruments that are not fair valued
through profit or loss
|
(125)
|
(145)
|
Trust and other fiduciary activities
|
(25)
|
(25)
|
|
|
|
Net fees and commission
|
1,921
|
1,645
|
Page
78
|
6 months ended 30.06.24
|
Corporate & Investment Banking
$million
|
Wealth &
Retail Banking
$million
|
Ventures
$million
|
Central &
other Items
$million
|
Total
$million
|
Transaction Services
|
704
|
13
|
-
|
-
|
717
|
Payments and Liquidity
|
290
|
-
|
-
|
-
|
290
|
Securities & Prime Services
|
127
|
-
|
-
|
-
|
127
|
Trade & Working Capital
|
287
|
13
|
-
|
-
|
300
|
Global Banking
|
504
|
-
|
-
|
-
|
504
|
Lending & Financial Solutions
|
336
|
-
|
-
|
-
|
336
|
Capital Market & Advisory
|
168
|
-
|
-
|
-
|
168
|
Global Markets
|
24
|
-
|
-
|
-
|
24
|
Macro Trading
|
7
|
-
|
-
|
-
|
7
|
Credit Trading
|
17
|
-
|
-
|
-
|
17
|
Valuation & Other Adj
|
-
|
-
|
-
|
-
|
-
|
Wealth solutions
|
-
|
822
|
-
|
-
|
822
|
Investment products
|
-
|
456
|
-
|
-
|
456
|
Bancassurance
|
-
|
366
|
-
|
-
|
366
|
CCPL & Other Unsecured Lending
|
-
|
161
|
18
|
-
|
179
|
Deposits
|
-
|
75
|
-
|
-
|
75
|
Mortgages & Other Secured Lending
|
-
|
46
|
-
|
-
|
46
|
Treasury
|
-
|
-
|
-
|
(12)
|
(12)
|
Other Products
|
-
|
-
|
12
|
(4)
|
8
|
Fees and commission income
|
1,232
|
1,117
|
30
|
(16)
|
2,363
|
Fees and commission expense
|
(239)
|
(162)
|
(11)
|
(30)
|
(442)
|
Net fees and commission
|
993
|
955
|
19
|
(46)
|
1,921
|
|
6 months ended 30.06.23¹
|
Corporate & Investment Banking
$million
|
Wealth &
Retail Banking
$million
|
Ventures
$million
|
Central &
other Items
$million
|
Total
$million
|
Transaction Services
|
722
|
12
|
-
|
-
|
734
|
Payments and Liquidity
|
278
|
-
|
-
|
-
|
278
|
Securities & Prime Services
|
148
|
-
|
-
|
-
|
148
|
Trade & Working Capital
|
296
|
12
|
-
|
-
|
308
|
Global Banking
|
331
|
(1)
|
-
|
-
|
330
|
Lending & Financial Solutions
|
243
|
(1)
|
-
|
-
|
242
|
Capital Market & Advisory
|
88
|
-
|
-
|
-
|
88
|
Global Markets
|
28
|
-
|
-
|
-
|
28
|
Macro Trading
|
(7)
|
-
|
-
|
-
|
(7)
|
Credit Trading
|
34
|
-
|
-
|
-
|
34
|
Valuation & Other Adj
|
1
|
-
|
-
|
-
|
1
|
Wealth solutions
|
-
|
644
|
-
|
-
|
644
|
Investment products
|
-
|
332
|
-
|
-
|
332
|
Bancassurance
|
-
|
312
|
-
|
-
|
312
|
CCPL & Other Unsecured Lending
|
-
|
192
|
14
|
-
|
206
|
Deposits
|
-
|
84
|
-
|
-
|
84
|
Mortgages & Other Secured Lending
|
-
|
30
|
-
|
-
|
30
|
Treasury
|
-
|
-
|
-
|
(6)
|
(6)
|
Other Products
|
-
|
1
|
24
|
4
|
29
|
Fees and commission income
|
1,081
|
962
|
38
|
(2)
|
2,079
|
Fees and commission expense
|
(220)
|
(146)
|
(12)
|
(56)
|
(434)
|
Net fees and commission
|
861
|
816
|
26
|
(58)
|
1,645
|
1 Products are now presented to reflect
the RNS on Presentation of Financial Information issued on 2 April
2024. Prior periods have been restated and there is no change in
total income
Page
79
Upfront bancassurance consideration amounts are
amortised on a straight-line basis over the contractual period to
which the consideration relates. Deferred income on the
balance sheet in respect of these activities is $446 million (30
June 2023: $507 million). Following renegotiation of the
contract in 2023, the life of the contract was extended for a
further 3 years. Accordingly, the income will be earned
evenly over a longer period for the next 8 years (30 June 2023: 6
years). For the six months ended 30 June 2024, $28 million of
fee income was released from deferred income (30 June 2023: $42
million).
For the bancassurance contract with the annual
performance bonus, based on progress so far and expectation of
meeting the performance targets by year-end with a high
probability, a pro-rata portion of the total performance fee, equal
to $116 million of the fee has been recognised as fee income
in the period.
5. Net trading income
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
Net trading income
|
4,749
|
3,233
|
Significant items within net trading income
include:
|
|
|
Gains on instruments held for
trading1
|
3,717
|
2,876
|
Gains on financial assets mandatorily at fair
value through profit or loss
|
2,499
|
1,914
|
(Losses)/gains on financial assets designated at
fair value through profit or loss
|
(1)
|
4
|
Losses on financial liabilities designated at
fair value through profit or loss
|
(1,595)
|
(1,642)
|
1 Includes $110 million gain (30.06.23:
$29 million loss) from the translation of foreign currency monetary
assets and liabilities
6. Other operating income
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
Other operating income includes:
|
|
|
Rental income from operating lease
assets
|
20
|
246
|
Net loss on disposal of fair value through other
comprehensive income debt instruments
|
(90)
|
(85)
|
Net gain/(loss) on amortised cost financial
assets
|
4
|
(20)
|
Net (loss)/gain on sale of businesses
|
(169)¹
|
28
|
Dividend income
|
4
|
10
|
Other
|
177²
|
86
|
Other operating income
|
(54)
|
265
|
1 Includes loss of $174 million from
sale of subsidiary (SCB Zimbabwe Limited) of which $190 million
relates to CTA loss. loss of $15 million on disposal of
aviation business, offset by gain of $17 million on disposal of
Shoal and Autumn life Pte (subsidiary)
2 Includes IAS 29 adjustment Ghana
hyperinflationary impact ($106 million)
7. Operating expenses
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
Staff costs:
|
|
|
Wages and salaries
|
3,288
|
3,204
|
Social security costs
|
129
|
123
|
Other pension costs
|
223
|
214
|
Share-based payment costs
|
172
|
112
|
Other staff costs
|
524
|
505
|
|
4,336
|
4,158
|
Other staff costs include redundancy expenses
of $115 million (30.06.23: $25 million). Further costs in this
category include training, travel costs and other staff-related
costs.
Page
80
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
Premises and equipment expenses:
|
177
|
208
|
General administrative expenses:
|
1,027
|
741
|
Depreciation and amortisation:
|
|
|
Property, plant and equipment:
|
|
|
Premises
|
148
|
158
|
Equipment
|
39
|
54
|
Operating lease assets
|
-
|
27
|
Intangibles:
|
|
|
Software
|
329
|
322
|
|
516
|
561
|
Total operating expenses
|
6,056
|
5,668
|
Operating expenses include research expenditure
of $480 million (30.06.23: $472 million), which was recognised as
an expense in the year.
8. Credit impairment
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
Net credit impairment on loans and advances to
banks and customers
|
256
|
225
|
Net credit impairment on debt
securities¹
|
(41)
|
(37)
|
Net credit impairment relating to financial
guarantees and loan commitments
|
24
|
(37)
|
Net credit impairment relating to other
financial assets
|
1
|
10
|
Credit impairment charge/(release)1
|
240
|
161
|
1 Includes impairment release of $14
million (30.06.23: $1 million charge) on originated credit-impaired
debt securities
9. Goodwill, property, plant and equipment and other
impairment
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
Impairment of property, plant and equipment
(Note 17)
|
-
|
2
|
Impairment of other intangible assets (Note
16)
|
148
|
67
|
Other
|
(1)
|
8
|
Goodwill, property, plant and equipment and
other impairment
|
147
|
77
|
10. Taxation
The following table provides analysis of
taxation charge in the period:
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
The charge for taxation based upon the profit
for the period comprises:
|
|
|
Current tax:
|
|
|
United Kingdom corporation tax at 25 per cent
(2023: 23.5 per cent):
|
|
|
Current tax charge on income for the
period
|
10
|
2
|
Adjustments in respect of prior periods
(including double tax relief)
|
2
|
-
|
Foreign tax:
|
|
|
Current tax charge on income for the
period
|
993
|
892
|
Adjustments in respect of prior periods
(including double tax relief)
|
27
|
(3)
|
|
1,032
|
891
|
Deferred tax:
|
|
|
Origination/reversal of temporary
differences
|
89
|
33
|
Adjustments in respect of prior periods
(including double tax relief)
|
2
|
14
|
|
91
|
47
|
Tax on profits on ordinary
activities
|
1,123
|
938
|
Effective tax rate
|
32.2%
|
28.2%
|
Page
81
The tax charge for the period has been
calculated by applying the effective rate of tax which is expected
to apply for
the year ending 31 December 2024 using rates substantively enacted
at 30 June 2024. The rate has been calculated by estimating and
applying an average annual effective income tax rate to each tax
jurisdiction individually.
The tax charge for the period of $1,123 million
(30 June 2023: $938 million) on a profit before tax of $3,492
million (30 June 2023: $3,323 million) reflects the impact of
non-deductible expenses, tax losses for which no deferred tax
assets are recognised, non-creditable withholding taxes offset by
countries with tax rates lower than the UK, the most significant of
which includes Hong Kong and Singapore.
Foreign tax includes current tax of $131 million
(30 June 2023: $98 million) on the profits assessable in Hong Kong.
Deferred tax includes origination or reversal of temporary
differences of $27 million (30 June 2023: $29 million) provided at
a rate of 16.5 per cent (30 June 2023: 16.5 per cent) on the
profits assessable in Hong Kong.
The Group falls within the Pillar Two global
minimum tax rules which apply in the UK from 1 January 2024. The
IAS 12 exception to recognise and disclose information about
deferred tax assets and liabilities related to Pillar Two income
taxes has been applied. The current tax charge for the period ended
30 June 2024 includes $10m in respect of Pillar Two income taxes
(30 June 2023: $nil).
Deferred tax comprised assets and liabilities as
follows:
|
30.06.24
|
31.12.23
|
Total
$million
|
Asset
$million
|
Liability
$million
|
Total
$million
|
Asset
$million
|
Liability
$million
|
Deferred tax comprises:
|
|
|
|
|
|
|
Accelerated tax depreciation
|
(395)
|
15
|
(410)
|
(424)
|
3
|
(427)
|
Impairment provisions on loans and
advances
|
282
|
239
|
43
|
286
|
282
|
4
|
Tax losses carried forward
|
71
|
53
|
18
|
97
|
49
|
48
|
Equity instruments at fair value through other
comprehensive income assets
|
(49)
|
(7)
|
(42)
|
(144)
|
(1)
|
(143)
|
Debt instruments at fair value through other
comprehensive income assets
|
15
|
19
|
(4)
|
27
|
29
|
(2)
|
Cash flow hedges
|
3
|
7
|
(4)
|
(25)
|
12
|
(37)
|
Own credit adjustment
|
6
|
6
|
-
|
(71)
|
(1)
|
(70)
|
Retirement benefit obligations
|
2
|
14
|
(12)
|
4
|
13
|
(9)
|
Share-based payments
|
39
|
11
|
28
|
43
|
9
|
34
|
Other temporary differences
|
61
|
236
|
(175)
|
139
|
307
|
(168)
|
|
35
|
593
|
(558)
|
(68)
|
702
|
(770)
|
11. Dividends
Ordinary equity shares
|
6 months ended 30.06.24
|
6 months ended 31.12.23
|
6 months ended 30.06.23
|
Cents per share
|
$million
|
Cents per share
|
$million
|
Cents per share
|
$million
|
2022 final dividend declared and paid during the
period
|
-
|
-
|
|
|
14
|
401
|
2023 interim dividend declared and paid during
the year
|
-
|
-
|
6
|
167
|
-
|
-
|
2023 final dividend declared and paid during the
period
|
21
|
551
|
-
|
-
|
-
|
-
|
The 2023 final dividend per share of 21 cents
per ordinary share ($551 million) was paid to eligible shareholders
on 17 May 2024, and is recognised in these interim
accounts.
Interim dividends on ordinary equity shares are
recorded in the period in which they are declared and, in respect
of the final dividend, have been approved by the
shareholders
2024 recommended interim ordinary share
dividend
The 2024 interim dividend of 9 cents per
ordinary share will be paid in pounds sterling, Hong Kong dollars
or US dollars on 10 October 2024 to shareholders on the UK register
of members at the close of business in the UK on 9 August
2024.
Page
82
Preference shares and Additional Tier 1
securities
Dividends on these preference shares and
securities classified as equity are recorded in the period in which
they are declared.
|
6 months ended 30.06.24
$million
|
6 months ended 31.12.23
$million
|
6 months ended 30.06.23
$million
|
Non-cumulative redeemable preference
shares:
|
|
|
|
7.014 per cent preference shares of $5
each
|
26
|
27
|
26
|
Floating rate preference shares of $5
each¹
|
27
|
27
|
23
|
|
53
|
54
|
49
|
Additional Tier 1 securities: fixed rate
resetting perpetual subordinated contingent
convertible securities
|
156
|
155
|
194
|
|
209
|
209
|
243
|
1. Floating rate is based on Secured Overnight
Financing Rate (SOFR), average rate paid for floating preference
shares is 7.24% (2023: 6.62%)
12. Earnings per ordinary share
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
Profit for the period attributable to equity
holders
|
2,369
|
2,385
|
Non-controlling interest
|
9
|
3
|
Dividend payable on preference shares and AT1
classified as equity
|
(209)
|
(243)
|
Profit for the period attributable to ordinary
shareholders
|
2,169
|
2,145
|
|
|
|
Items normalised:
|
|
|
Restructuring
|
150
|
(56)
|
Net loss on sale of businesses (Note
6)
|
189
|
-
|
DVA
|
26
|
39
|
Other items¹
|
100
|
-
|
Tax on normalised items
|
(67)
|
-
|
Underlying profit
|
2,567
|
2,128
|
|
|
|
Basic - Weighted average number of shares
(millions)
|
2,605
|
2,839
|
Diluted - Weighted average number of shares
(millions)
|
2,669
|
2,902
|
|
|
|
Basic earnings per ordinary share
(cents)
|
83.3
|
75.6
|
Diluted earnings per ordinary share
(cents)
|
81.3
|
73.9
|
Underlying basic earnings per ordinary share
(cents)
|
98.5
|
75.0
|
Underlying diluted earnings per ordinary share
(cents)
|
96.2
|
73.3
|
1. Charge relating to Korea ELS
The calculation of basic earnings per share is
based on the profit attributable to equity holders of the parent
and the basic weighted average number of shares excluding treasury
shares held in employees benefit trust. When calculating diluted
earnings per share, the weighted average number of shares in issue
is adjusted for the effects of all expected dilutive potential
ordinary shares held in respect of Standard Chartered PLC totalling
59 million (30.06.23: 56 million). The total number of share
options outstanding, under schemes considered to be potentially
dilutive, was 5 million (30.06.23: 7 million). These options have
strike prices ranging from $3.96 to $7.43 of the total number of
employee share options and share awards at 30 June 2024 there were
nil share options and awards which were anti dilutive.
The 234 million decrease (30.06.23: 175 million
decrease) in the basic weighted average number of shares is
primarily due to the impact of the share buyback programmes
completed in the year.
Page
83
13. Financial instruments
Classification and measurement
Assets
|
Notes
|
Assets at fair value
|
Assets
held at amortised cost
$million
|
Total
$million
|
Trading
$million
|
Derivatives held for hedging
$million
|
Non-trading mandatorily
at fair value through
profit or loss
$million
|
Designated
at fair value through profit or loss
$million
|
Fair value through other comprehensive
income
$million
|
Total financial assets at
fair value
$million
|
Cash and balances at central banks¹
|
|
-
|
-
|
-
|
-
|
-
|
-
|
64,086
|
64,086
|
Financial assets held at fair value through
profit or loss
|
|
|
|
|
|
|
|
|
|
Loans and advances to banks2
|
|
2,188
|
-
|
5
|
-
|
-
|
2,193
|
-
|
2,193
|
Loans and advances to customers2
|
|
6,657
|
-
|
220
|
-
|
-
|
6,877
|
-
|
6,877
|
Reverse repurchase agreements and other similar
secured lending
|
15
|
8,704
|
-
|
84,498
|
-
|
-
|
93,202
|
-
|
93,202
|
Debt securities, additional tier one and other
eligible bills
|
|
73,991
|
-
|
123
|
74
|
-
|
74,188
|
-
|
74,188
|
Equity shares
|
|
5,046
|
-
|
218
|
-
|
-
|
5,264
|
-
|
5,264
|
Other assets
|
18
|
-
|
-
|
1
|
-
|
-
|
1
|
-
|
1
|
|
|
96,586
|
-
|
85,065
|
74
|
-
|
181,725
|
-
|
181,725
|
Derivative financial instruments
|
14
|
46,166
|
2,481
|
-
|
-
|
-
|
48,647
|
-
|
48,647
|
Loans and advances to banks2,3
|
|
-
|
-
|
-
|
-
|
-
|
-
|
45,231
|
45,231
|
of which - reverse repurchase agreements and
other similar secured lending
|
15
|
-
|
-
|
-
|
-
|
-
|
-
|
3,991
|
3,991
|
Loans and advances to customers2
|
|
-
|
-
|
-
|
-
|
-
|
-
|
275,896
|
275,896
|
of which - reverse repurchase agreements and
other similar secured lending
|
15
|
-
|
-
|
-
|
-
|
-
|
-
|
7,788
|
7,788
|
Investment securities
|
|
|
|
|
|
|
|
|
|
Debt securities, additional tier one and other
eligible bills
|
|
-
|
-
|
-
|
-
|
95,177
|
95,177
|
56,403
|
151,580
|
Equity shares
|
|
-
|
-
|
-
|
-
|
823
|
823
|
-
|
823
|
|
|
-
|
-
|
-
|
-
|
96,000
|
96,000
|
56,403
|
152,403
|
Other assets
|
18
|
-
|
-
|
-
|
-
|
-
|
-
|
42,206
|
42,206
|
Assets held for sale
|
20
|
-
|
-
|
-
|
-
|
-
|
-
|
517
|
517
|
Total at 30 June 2024
|
|
142,752
|
2,481
|
85,065
|
74
|
96,000
|
326,372
|
484,339
|
810,711
|
1 Comprises cash held at central banks
in restricted accounts of $9,870 million, or on demand, or
placements which are contractually due to mature over-night only.
Other placements with central banks are reported as part of Loans
and advances to customers
2 Further analysed in Risk review and
Capital review
3 Loans and advances to banks
include amounts due on demand from banks other than central
banks
Page
84
Assets
|
Notes
|
Assets at fair value
|
Assets
held at amortised cost
$million
|
Total
$million
|
Trading
$million
|
Derivatives held for hedging
$million
|
Non-trading mandatorily
at fair value through
profit or loss
$million
|
Designated
at fair value through profit or loss
$million
|
Fair value through other comprehensive
income
$million
|
Total financial assets at
fair value
$million
|
Cash and balances at central banks1
|
|
-
|
-
|
-
|
-
|
-
|
-
|
69,905
|
69,905
|
Financial assets held at fair value through
profit or loss
|
|
|
|
|
|
|
|
|
|
Loans and advances to banks2
|
|
2,265
|
-
|
-
|
-
|
-
|
2,265
|
-
|
2,265
|
Loans and advances to customers2
|
|
6,930
|
-
|
282
|
-
|
-
|
7,212
|
-
|
7,212
|
Reverse repurchase agreements and other similar
secured lending
|
15
|
9,997
|
-
|
71,850
|
-
|
-
|
81,847
|
-
|
81,847
|
Debt securities, additional tier one and other
eligible bills
|
|
52,776
|
-
|
98
|
78
|
-
|
52,952
|
-
|
52,952
|
Equity shares
|
|
2,721
|
-
|
219
|
-
|
-
|
2,940
|
-
|
2,940
|
Other assets
|
18
|
-
|
-
|
6
|
-
|
-
|
6
|
-
|
6
|
|
|
74,689
|
-
|
72,455
|
78
|
-
|
147,222
|
-
|
147,222
|
Derivative financial instruments
|
14
|
48,333
|
2,101
|
-
|
-
|
-
|
50,434
|
-
|
50,434
|
Loans and advances to banks2,3
|
|
-
|
-
|
-
|
-
|
-
|
-
|
44,977
|
44,977
|
of which - reverse repurchase agreements and
other similar secured lending
|
15
|
-
|
-
|
-
|
-
|
-
|
-
|
1,738
|
1,738
|
Loans and advances to customers2
|
|
-
|
-
|
-
|
-
|
-
|
-
|
286,975
|
286,975
|
of which - reverse repurchase agreements and
other similar secured lending
|
15
|
-
|
-
|
-
|
-
|
-
|
-
|
13,996
|
13,996
|
Investment securities
|
|
|
|
|
|
|
|
|
|
Debt securities, additional tier one and other
eligible bills
|
|
-
|
-
|
-
|
-
|
103,328
|
103,328
|
56,935
|
160,263
|
Equity shares
|
|
-
|
-
|
-
|
-
|
992
|
992
|
-
|
992
|
|
|
-
|
-
|
-
|
-
|
104,320
|
104,320
|
56,935
|
161,255
|
Other assets
|
18
|
-
|
-
|
-
|
-
|
-
|
-
|
38,140
|
38,140
|
Assets held for sale
|
20
|
-
|
-
|
-
|
-
|
-
|
-
|
701
|
701
|
Total at 31 December 2023
|
|
123,022
|
2,101
|
72,455
|
78
|
104,320
|
301,976
|
497,633
|
799,609
|
1 Comprises cash held at central banks
in restricted accounts of $6,153 million, or on demand, or
placements which are contractually due to mature over-night only.
Other placements with central banks are reported as part of Loans
and advances to customers
2 Further analysed in Risk review and
Capital review
3 Loans and advances to banks
include amounts due on demand from banks other than central
banks
Page
85
Liabilities
|
Notes
|
Liabilities at fair value
|
Amortised
cost
$million
|
Total
$million
|
Trading
$million
|
Derivatives held for hedging
$million
|
Designated
at fair value through
profit or loss
$million
|
Total financial liabilities at
fair value
$million
|
Deposits by banks
|
|
-
|
-
|
-
|
-
|
28,087
|
28,087
|
Customer accounts
|
|
-
|
-
|
-
|
-
|
468,157
|
468,157
|
Financial liabilities held at fair value
through profit or loss
|
|
|
|
|
|
|
|
Deposits by banks
|
|
-
|
-
|
2,059
|
2,059
|
-
|
2,059
|
Customer accounts
|
|
12
|
-
|
19,838
|
19,850
|
-
|
19,850
|
Repurchase agreements and other similar secured
borrowing
|
15
|
551
|
-
|
46,497
|
47,048
|
-
|
47,048
|
Debt securities in issue
|
|
-
|
-
|
12,815
|
12,815
|
-
|
12,815
|
Short positions
|
|
15,109
|
-
|
-
|
15,109
|
-
|
15,109
|
Other liabilities
|
|
-
|
-
|
1
|
1
|
-
|
1
|
|
|
15,672
|
-
|
81,210
|
96,882
|
-
|
96,882
|
Derivative financial instruments
|
14
|
48,338
|
2,246
|
-
|
50,584
|
-
|
50,584
|
Repurchase agreements and other similar secured
borrowing
|
15
|
-
|
-
|
-
|
-
|
7,539
|
7,539
|
Debt securities in issue
|
|
-
|
-
|
-
|
-
|
65,199
|
65,199
|
Other liabilities
|
21
|
-
|
-
|
-
|
-
|
46,901
|
46,901
|
Subordinated liabilities and other borrowed
funds
|
24
|
-
|
-
|
-
|
-
|
10,856
|
10,856
|
Liabilities included in disposal groups held for
sale
|
20
|
-
|
-
|
-
|
-
|
535
|
535
|
Total at 30 June 2024
|
|
64,010
|
2,246
|
81,210
|
147,466
|
627,274
|
774,740
|
Liabilities
|
Notes
|
Liabilities at fair value
|
Amortised
cost
$million
|
Total
$million
|
Trading
$million
|
Derivatives held for hedging
$million
|
Designated
at fair value through
profit or loss
$million
|
Total financial liabilities at
fair value
$million
|
Deposits by banks
|
|
-
|
-
|
-
|
-
|
28,030
|
28,030
|
Customer accounts
|
|
-
|
-
|
-
|
-
|
469,418
|
469,418
|
Financial liabilities held at fair value
through profit or loss
|
|
|
|
|
|
|
|
Deposits by banks
|
|
-
|
-
|
1,894
|
1,894
|
-
|
1,894
|
Customer accounts
|
|
39
|
-
|
17,209
|
17,248
|
-
|
17,248
|
Repurchase agreements and other similar secured
borrowing
|
15
|
1,660
|
-
|
39,623
|
41,283
|
-
|
41,283
|
Debt securities in issue
|
|
-
|
-
|
10,817
|
10,817
|
-
|
10,817
|
Short positions
|
|
11,846
|
-
|
-
|
11,846
|
-
|
11,846
|
Other liabilities
|
|
-
|
-
|
8
|
8
|
-
|
8
|
|
|
13,545
|
-
|
69,551
|
83,096
|
-
|
83,096
|
Derivative financial instruments
|
14
|
52,747
|
3,314
|
-
|
56,061
|
-
|
56,061
|
Repurchase agreements and other similar secured
borrowing
|
15
|
-
|
-
|
-
|
-
|
12,258
|
12,258
|
Debt securities in issue
|
|
-
|
-
|
-
|
-
|
62,546
|
62,546
|
Other liabilities
|
21
|
-
|
-
|
-
|
-
|
38,663
|
38,663
|
Subordinated liabilities and other borrowed
funds
|
24
|
-
|
-
|
-
|
-
|
12,036
|
12,036
|
Liabilities included in disposal groups held for
sale
|
20
|
-
|
-
|
-
|
-
|
726
|
726
|
Total at 31 December 2023
|
|
66,292
|
3,314
|
69,551
|
139,157
|
623,677
|
762,834
|
Financial liabilities designated at fair value
through profit or loss
|
30.06.24
$million
|
31.12.23
$million
|
Carrying balance aggregate fair value
|
81,211
|
69,551
|
Amount contractually obliged to repay at
maturity
|
82,278
|
71,240
|
Difference between aggregate fair value and
contractually obliged to repay at maturity
|
(1,067)
|
(1,689)
|
Cumulative change in fair value accredited to
credit risk difference
|
(262)
|
156
|
The net fair value loss on financial
liabilities designated at fair value through profit or loss was
$1,595 million for the year (31 December 2023: net loss of
$2,649 million).
Further details of the Group's own credit
adjustment (OCA) valuation technique is described later in this
Note.
Page
86
Valuation of financial instruments
The Valuation Methodology function is
responsible for independent price verification, oversight of fair
value and appropriate value adjustments and escalation of valuation
issues. Independent price verification is the process of
determining that the valuations incorporated into the financial
statements are validated independent of the business area
responsible for the product. The Valuation Methodology function has
oversight of the fair value adjustments to ensure the financial
instruments are priced to exit. These are key controls in ensuring
the material accuracy of the valuations incorporated in the
financial statements. The market data used for independent price
verification (IPV) may include data sourced from recent trade data
involving external counterparties or third parties such as
Bloomberg, Reuters, brokers and consensus pricing providers. The
Valuation Methodology function performs an ongoing review of the
market data sources that are used as part of the IPV and fair value
processes which are formally documented on a semi-annual basis
detailing the suitability of the market data used for price
testing. IPV uses independently sourced data that is deemed most
representative of the market the instruments trade in. To determine
the quality of the market data inputs, factors such as
independence, relevance, reliability, availability of multiple data
sources and methodology employed by the pricing provider are taken
into consideration.
The Valuation and Benchmarks Committee (VBC) is
the valuation governance forum consisting of representatives from
Group Market Risk, Product Control, Valuation Methodology and the
business, which meets monthly to discuss and approve the
independent valuations of the inventory. For Principal Finance, the
Investment Committee meeting is held on a quarterly basis to review
investments and valuations.
Significant accounting estimates and
judgements
The Group evaluates the significance of
financial instruments and material accuracy of the valuations
incorporated in the financial statements as they involve a high
degree of judgement and estimation uncertainty in determining the
carrying values of financial assets and liabilities at the balance
sheet date.
• Fair value of
financial instruments is determined using valuation techniques and
estimates (see below) which, to the extent possible, use market
observable inputs, but in some cases use non-market observable
inputs. Changes in the observability of significant valuation
inputs can materially affect the fair values of financial
instruments
• When establishing
the exit price of a financial instrument using a valuation
technique, the Group estimates valuation adjustments in determining
the fair value
• In determining the
valuation of financial instruments, the Group makes judgements on
the amounts reserved to cater for model and valuation risks, which
cover both Level 2 and Level 3 assets, and the significant
valuation judgements in respect of Level 3 instruments
Where the estimated measurement of fair value is
more judgemental in respect of Level 3 assets, these are valued
based on models that use a significant degree of non-market-based
unobservable inputs.
Valuation techniques
Refer to the fair value hierarchy explanation -
Level 1, 2 and 3
•
Financial instruments held at fair value
- Debt securities - asset-backed
securities: Asset-backed securities are valued based on external
prices obtained from consensus pricing providers, broker quotes,
recent trades, arrangers' quotes, etc. Where an observable price is
available for a given security, it is classified as Level 2. In
instances where third-party prices are not available or reliable,
the security is classified as Level 3. The fair value of Level 3
securities is estimated using market standard cash flow models with
input parameter assumptions which include prepayment speeds,
default rates, discount margins derived from comparable securities
with similar vintage, collateral type, and credit
ratings.
- Debt securities in issue: These debt
securities relate to structured notes issued by the Group. Where
independent market data is available through pricing vendors and
broker sources these positions are classified as Level 2. Where
such liquid external prices are not available, valuations of these
debt securities are implied using input parameters such as bond
spreads and credit spreads, and are classified as Level 3. These
input parameters are determined with reference to the same issuer
(if available) or proxies from comparable issuers or
assets.
Page
87
- Derivatives: Derivative products are
classified as Level 2 if the valuation of the product is based on
input parameters which are observable from independent and reliable
market data sources. Derivative products are classified as Level 3
if there are significant valuation input parameters which are
unobservable in the market, such as products where the performance
is linked to more than one underlying variable. Examples are
foreign exchange basket options, equity options based on the
performance of two or more underlying indices and interest rate
products with quanto payouts. In most cases these unobservable
correlation parameters cannot be implied from the market, and
methods such as historical analysis and comparison with historical
levels or other benchmark data must be employed
- Equity shares - private equity: The
majority of private equity unlisted investments are valued based on
earning multiples - Price-to-Earnings (P/E) or enterprise value to
earnings before income tax, depreciation and amortisation
(EV/EBITDA) ratios - of comparable listed companies. The two
primary inputs for the valuation of these investments are the
actual or forecast earnings of the investee companies and earning
multiples for the comparable listed companies. To ensure
comparability between these unquoted investments and the comparable
listed companies, appropriate adjustments are also applied (for
example, liquidity and size) in the valuation. In circumstances
where an investment does not have direct comparables or where the
multiples for the comparable companies cannot be sourced from
reliable external sources, alternative valuation techniques (for
example, discounted cash flow model or net asset value (NAV) or
option pricing model), which use predominantly unobservable inputs
or Level 3 inputs, may be applied. Even though earning multiples
for the comparable listed companies can be sourced from third-party
sources (for example, Bloomberg), and those inputs can be deemed
Level 2 inputs, all unlisted investments (excluding those where
observable inputs are available, for example, over-the-counter
(OTC) prices) are classified as Level 3 on the basis that the
valuation methods involve judgements ranging from determining
comparable companies to discount rates where the discounted cash
flow method is applied
- Loans and advances: These primarily
include loans in the Bond and Loan Syndication business which were
not fully syndicated as of the balance sheet date and other
financing transactions, and loans and advances including reverse
repurchase agreements that do not have SPPI cashflows or are
managed on a fair value basis. These loans are generally bilateral
in nature and, where available, their valuation is based on
observable clean sales transactions prices or market observable
spreads. If observable credit spreads are not available, proxy
spreads based on comparables with similar credit grade, sector and
region, are used. Where observable transaction prices, credit
spreads and market standard proxy methods are available, these
loans are classified as Level 2. Where there are no recent
transactions or comparables, these loans are classified as Level
3
- Other debt securities: These debt
securities include convertible bonds, corporate bonds, credit and
structured notes. Where quoted prices are available through pricing
vendors, brokers or observable trading activities from liquid
markets, these are classified as Level 2 and valued using such
quotes. Where there are significant valuation inputs which are
unobservable in the market, due to illiquid trading or the
complexity of the product, these are classified as Level 3. The
valuations of these debt securities are implied using input
parameters such as bond spreads and credit spreads. These input
parameters are determined with reference to the same issuer (if
available) or proxied from comparable issuers or assets
•
Financial instruments held at amortised
cost
The following sets out the Group's basis for
establishing fair values of amortised cost financial instruments
and their classification between Levels 1, 2 and 3. As certain
categories of financial instruments are not actively traded, there
is
a significant level of management judgement involved in calculating
the fair values:
- Cash and balances at central banks: The
fair value of cash and balances at central banks is their carrying
amounts
- Debt securities in issue, subordinated
liabilities and other borrowed funds: The aggregate fair values are
calculated based on quoted market prices. For those notes where
quoted market prices are not available, a discounted cash flow
model is used based on a current market related yield curve
appropriate for the remaining term to maturity
- Deposits and borrowings: The estimated
fair value of deposits with no stated maturity is the amount
repayable on demand. The estimated fair value of fixed
interest-bearing deposits and other borrowings without quoted
market prices is based on discounted cash flows using the
prevailing market rates for debts with a similar Credit Risk and
remaining maturity
Page
88
- Investment securities: For investment
securities that do not have directly observable market values, the
Group utilises a number of valuation techniques to determine fair
value. Where available, securities are valued using input proxies
from the same or closely related underlying (for example, bond
spreads from the same or closely related issuer) or input proxies
from a different underlying (for example, a similar bond but using
spreads for a particular sector and rating). Certain instruments
cannot be proxies as set out above, and in such cases the positions
are valued using non-market observable inputs. This includes those
instruments held at amortised cost and predominantly relates to
asset-backed securities. The fair value for such instruments is
usually proxies from internal assessments of the underlying cash
flows
- Loans and advances to banks and
customers: For loans and advances to banks, the fair value of
floating rate placements and overnight deposits is their carrying
amounts. The estimated fair value of fixed interest-bearing
deposits is based on discounted cash flows using the prevailing
money market rates for debts with a similar Credit Risk and
remaining maturity. The Group's loans and advances to customers'
portfolio is well diversified by geography and industry.
Approximately a quarter of the portfolio re-prices within one
month, and approximately half re-prices within 12 months. Loans and
advances are presented net of provisions for impairment. The fair
value of loans and advances to customers with a residual maturity
of less than one year generally approximates the carrying value.
The estimated fair value of loans and advances with a residual
maturity of more than one year represents the discounted amount of
future cash flows expected to be received, including assumptions
relating to prepayment rates and Credit Risk. Expected cash flows
are discounted at current market rates to determine fair value. The
Group has a wide range of individual instruments within its loans
and advances portfolio and as a result providing quantification of
the key assumptions used to value such instruments is
impractical
- Other assets: Other assets comprise
primarily cash collateral and trades pending settlement. The
carrying amount of these financial instruments is considered to be
a reasonable approximation of fair value as they are either
short-term in nature or re-price to current market rates
frequently
Fair value adjustments
When establishing the exit price of a financial
instrument using a valuation technique, the Group considers
adjustments to the modelled price which market participants would
make when pricing that instrument. The main valuation adjustments
(described further below) in determining fair value for financial
assets and financial liabilities are as follows:
|
01.01.24
$million
|
Movement
during the year
$million
|
30.06.24
$million
|
01.01.23
$million
|
Movement
during the year
$million
|
31.12.23
$million
|
Bid-offer valuation adjustment
|
115
|
3
|
118
|
118
|
(3)
|
115
|
Credit valuation adjustment
|
119
|
5
|
124
|
171
|
(52)
|
119
|
Debit valuation adjustment
|
(129)
|
27
|
(102)
|
(112)
|
(17)
|
(129)
|
Model valuation adjustment
|
4
|
1
|
5
|
3
|
1
|
4
|
Funding valuation adjustment
|
33
|
(8)
|
25
|
46
|
(13)
|
33
|
Other fair value adjustments
|
25
|
3
|
28
|
23
|
2
|
25
|
Total
|
167
|
31
|
198
|
249
|
(82)
|
167
|
|
|
|
|
|
|
|
Income deferrals
|
|
|
|
|
|
|
Day 1 and other deferrals
|
109
|
27
|
136
|
186
|
(77)
|
109
|
Total
|
109
|
27
|
136
|
186
|
(77)
|
109
|
Note: Brackets represent an asset and credit to
the income statement
• Bid-offer
valuation adjustment: Generally, market parameters are
marked on a mid-market basis in the revaluation systems, and a
bid-offer valuation adjustment is required to quantify the expected
cost of neutralising the business' positions through dealing away
in the market, thereby bringing long positions to bid and short
positions to offer. The methodology to calculate the bid-offer
adjustment for a derivative portfolio involves netting between long
and short positions and the grouping of risk by strike and tenor
based on the hedging strategy where long positions are marked to
bid and short positions marked to offer in the systems
Page
89
• Credit
valuation adjustment (CVA): The Group accounts for CVA
against the fair value of derivative products. CVA is an adjustment
to the fair value of the transactions to reflect the possibility
that our counterparties may default and we may not receive the full
market value of the outstanding transactions. It represents an
estimate of the adjustment a market participant would include when
deriving a purchase price to acquire our exposures. CVA is
calculated for each subsidiary, and within each entity for each
counterparty to which the entity has exposure and takes account of
any collateral we may hold. The Group calculates the CVA by using
estimates of future positive exposure, market-implied probability
of default (PD) and recovery rates. Where market-implied data is
not readily available, we use market-based proxies to estimate the
PD. Wrong-way risk occurs when the exposure to a counterparty is
adversely correlated with the credit quality of that counterparty,
and the Group has implemented a model to capture this impact for
key wrong-way exposures. The Group also captures the uncertainties
associated with wrong-way risk in the Group's Prudential Valuation
Adjustments framework
• Debit
valuation adjustment (DVA): The Group calculates DVA
adjustments on its derivative liabilities to reflect changes in its
own credit standing. The Group's DVA adjustments will increase if
its credit standing worsens and conversely, decrease if its credit
standing improves. For derivative liabilities, a DVA adjustment is
determined by applying the Group's probability of default to the
Group's negative expected exposure against the counterparty. The
Group's probability of default and loss expected in the event of
default is derived based on bond and CDS spreads associated with
the Group's issuances and market standard recovery levels. The
expected exposure is modelled based on the simulation of the
underlying risk factors over the expected life of the deal. This
simulation methodology incorporates the collateral posted by the
Group and the effects of master netting agreements
• Model
valuation adjustment: Valuation models may have
pricing deficiencies or limitations that require a valuation
adjustment. These pricing deficiencies or limitations arise due to
the choice, implementation and calibration of the
pricing model
• Funding
valuation adjustment (FVA): The Group makes FVA
adjustments against derivative products, including
embedded derivatives. FVA reflects an estimate of the adjustment to
its fair value that a market participant would make to incorporate
funding costs or benefits that could arise in relation to the
exposure. FVA is calculated by determining the net expected
exposure at a counterparty level and then applying a funding rate
to those exposures that reflect the market cost of funding. The FVA
for uncollateralised (including partially collateralised)
derivatives incorporates the estimated present value of the market
funding cost or benefit associated with funding these
transactions
• Other
fair value adjustments: The Group calculates the fair
value on the interest rate callable products by calibrating to a
set of market prices with differing maturity, expiry and strike of
the trades
• Day one
and other deferrals: In certain circumstances the
initial fair value is based on a valuation technique which differs
to the transaction price at the time of initial recognition.
However, these gains can only be recognised when the valuation
technique used is based primarily on observable market data. In
those cases where the initially recognised fair value is based on a
valuation model that uses inputs which are not observable in the
market, the difference between the transaction price and the
valuation model is not recognised immediately in the income
statement. The difference is amortised to the income statement
until the inputs become observable, or the transaction matures or
is terminated. Other deferrals primarily represent adjustments
taken to reflect the specific terms and conditions of certain
derivative contracts which affect the termination value at the
measurement date
In addition, the Group calculates own credit
adjustment (OCA) on its issued debt designated at fair value,
including structured notes, in order to reflect changes in its own
credit standing. Issued debt is discounted utilising the spread at
which similar instruments would be issued or bought back at the
measurement date as this reflects the value from the perspective of
a market participant who holds the identical item as an asset. OCA
measures the difference between the fair value of issued debt as of
reporting date and theoretical fair values of issued debt adjusted
up or down for changes in own credit spreads from inception date to
the measurement date. Under IFRS 9 the change in the OCA component
is reported under other comprehensive income. The Group's OCA
reserve will increase if its credit standing worsens in comparison
with the inception of the trade and, conversely, decrease if its
credit standing improves. The Group's OCA reserve will reverse over
time as its liabilities mature.
Page
90
Fair value hierarchy - financial instruments held at fair
value
The fair values of quoted financial assets and
liabilities in active markets are based on current prices. A market
is regarded as active if transactions for the asset or liability
take place with sufficient frequency and volume to provide pricing
information on an ongoing basis. Wherever possible, fair values
have been calculated using unadjusted quoted market prices in
active markets for identical instruments held by the Group. Where
quoted market prices are not available, or are unreliable because
of poor liquidity, fair values have been determined using valuation
techniques which, to the extent possible, use market observable
inputs, but in some cases use non-market observable inputs.
Valuation techniques used include discounted cash flow analysis and
pricing models and, where appropriate, comparison with instruments
that have characteristics similar to those of the instruments held
by the Group.
Assets and liabilities carried at fair value or
for which fair values are disclosed have been classified into three
levels according to the observability of the significant inputs
used to determine the fair values. Changes in the observability of
significant valuation inputs during the reporting period may result
in a transfer of assets and liabilities within the fair value
hierarchy. The Group recognises transfers between levels of the
fair value hierarchy when there is a significant change in either
its principal market or the level of observability of the inputs to
the valuation techniques as at the end of the reporting
period.
• Level
1: Fair value measurements are those derived from
unadjusted quoted prices in active markets for identical assets or
liabilities
• Level
2: Fair value measurements are those with quoted
prices for similar instruments in active markets or quoted prices
for identical or similar instruments in inactive markets and
financial instruments valued using models where all significant
inputs are observable
• Level
3: Fair value measurements are those where inputs
which could have a significant effect on the instrument's valuation
are not based on observable market data
Page
91
The following tables show the classification of
financial instruments held at fair value into the valuation
hierarchy:
Assets
|
Level 1
$million
|
Level 2
$million
|
Level 3
$million
|
Total
$million
|
Financial instruments held at fair value
through profit or loss
|
|
|
|
|
Loans and advances to banks
|
-
|
2,157
|
36
|
2,193
|
Loans and advances to customers
|
-
|
4,942
|
1,935
|
6,877
|
Reverse repurchase agreements and other similar
secured lending
|
-
|
90,592
|
2,610
|
93,202
|
Debt securities, additional tier one and other
eligible bills
|
33,883
|
39,218
|
1,087
|
74,188
|
Of which:
|
|
|
|
|
Issued by central banks &
governments
|
28,083
|
12,425
|
-
|
40,508
|
Issued by corporates other than financial
institutions1
|
12
|
4,146
|
260
|
4,418
|
Issued by financial institutions1
|
5,788
|
22,647
|
827
|
29,262
|
|
|
|
|
|
Equity shares
|
4,927
|
148
|
189
|
5,264
|
Derivative financial instruments
|
325
|
48,205
|
117
|
48,647
|
Of which:
|
|
|
|
|
Foreign exchange
|
124
|
40,915
|
25
|
41,064
|
Interest rate
|
53
|
6,028
|
80
|
6,161
|
Credit
|
-
|
386
|
9
|
395
|
Equity and stock index options
|
-
|
180
|
3
|
183
|
Commodity
|
148
|
696
|
-
|
844
|
|
|
|
|
|
Investment securities
|
|
|
|
|
Debt securities, additional tier one and other
eligible bills
|
51,197
|
43,980
|
-
|
95,177
|
Of which:
|
|
|
|
|
Issued by Central banks &
Governments
|
41,648
|
19,484
|
-
|
61,132
|
Issued by corporates other than financial
institutions¹
|
-
|
500
|
-
|
500
|
Issued by financial institutions¹
|
9,549
|
23,996
|
-
|
33,545
|
|
|
|
|
|
Equity shares
|
47
|
1
|
775
|
823
|
Other Assets
|
-
|
-
|
1
|
1
|
Total financial assets at 30 June
2024
|
90,379
|
229,243
|
6,750
|
326,372
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Financial instruments held at fair value
through profit or loss
|
|
|
|
|
Deposits by banks
|
-
|
1,660
|
399
|
2,059
|
Customer accounts
|
-
|
18,121
|
1,729
|
19,850
|
Repurchase agreements and other similar secured
borrowing
|
-
|
47,048
|
-
|
47,048
|
Debt securities in issue
|
-
|
10,676
|
2,139
|
12,815
|
Short positions
|
5,089
|
10,020
|
-
|
15,109
|
|
|
|
|
|
Derivative financial instruments
|
352
|
50,023
|
209
|
50,584
|
Of which:
|
|
|
|
|
Foreign exchange
|
161
|
38,468
|
9
|
38,638
|
Interest rate
|
65
|
8,538
|
2
|
8,605
|
Credit
|
-
|
1,660
|
178
|
1,838
|
Equity and stock index options
|
-
|
163
|
20
|
183
|
Commodity
|
126
|
1,194
|
-
|
1,320
|
Other Liabilities
|
-
|
-
|
1
|
1
|
Total financial liabilities at 30 June
2024
|
5,441
|
137,548
|
4,477
|
147,466
|
1
Includes covered bonds of $5,062 million, securities issued by
Multilateral Development Banks/International Organisations of
$11,339 million and State-owned agencies and development banks of
$16,878 million
The fair value of financial assets and financial
liabilities classified as Level 2 in the fair value hierarchy that
are subject to complex modelling techniques is $802 million and
$405 million respectively.
There were no significant changes to valuation
or levelling approaches during the period ended 30 June
2024.
There were no significant transfers of financial
assets and liabilities measured at fair value between Level 1 and
Level 2 during the period ended 30 June 2024.
Page
92
Assets
|
Level 1
$million
|
Level 2
$million
|
Level 3
$million
|
Total
$million
|
Financial instruments held at fair value
through profit or loss
|
|
|
|
|
Loans and advances to banks
|
-
|
2,265
|
-
|
2,265
|
Loans and advances to customers
|
-
|
5,252
|
1,960
|
7,212
|
Reverse repurchase agreements and other similar
secured lending
|
-
|
79,484
|
2,363
|
81,847
|
Debt securities, additional tier one and other
eligible bills
|
27,055
|
24,635
|
1,262
|
52,952
|
Of which:
|
|
|
|
|
Issued by central Banks &
governments
|
23,465
|
6,557
|
-
|
30,022
|
Issued by corporates other than financial
institutions1
|
4
|
4,062
|
346
|
4,412
|
Issued by financial institutions1
|
3,586
|
14,016
|
916
|
18,518
|
|
|
|
|
|
Equity shares
|
2,386
|
370
|
184
|
2,940
|
Derivative financial instruments
|
954
|
49,400
|
80
|
50,434
|
Of which:
|
|
|
|
|
Foreign exchange
|
129
|
42,414
|
25
|
42,568
|
Interest rate
|
37
|
6,293
|
6
|
6,336
|
Credit
|
-
|
438
|
47
|
485
|
Equity and stock index options
|
-
|
73
|
2
|
75
|
Commodity
|
788
|
182
|
-
|
970
|
|
|
|
|
|
Investment securities
|
|
|
|
|
Debt securities, additional tier one and other
eligible bills
|
55,060
|
48,196
|
72
|
103,328
|
Of which:
|
|
|
|
|
Issued by Central Banks &
Governments
|
47,225
|
18,983
|
51
|
66,259
|
Issued by corporates other than financial
institutions1
|
820
|
3,236
|
-
|
4,056
|
Issued by financial institutions1
|
7,015
|
25,977
|
21
|
33,013
|
|
|
|
|
|
Equity shares
|
199
|
6
|
787
|
992
|
Other Assets
|
-
|
-
|
6
|
6
|
Total financial assets at 31 December
2023
|
85,654
|
209,608
|
6,714
|
301,976
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Financial instruments held at fair value
through profit or loss
|
|
|
|
|
Deposits by banks
|
-
|
1,560
|
334
|
1,894
|
Customer accounts
|
-
|
15,970
|
1,278
|
17,248
|
Repurchase agreements and other similar secured
borrowing
|
-
|
41,283
|
-
|
41,283
|
Debt securities in issue
|
-
|
9,776
|
1,041
|
10,817
|
Short positions
|
7,152
|
4,591
|
103
|
11,846
|
|
|
|
|
|
Derivative financial instruments
|
749
|
55,116
|
196
|
56,061
|
Of which:
|
|
|
|
|
Foreign exchange
|
122
|
45,314
|
10
|
45,446
|
Interest rate
|
46
|
8,262
|
5
|
8,313
|
Credit
|
-
|
945
|
162
|
1,107
|
Equity and stock index options
|
-
|
147
|
19
|
166
|
Commodity
|
581
|
448
|
-
|
1,029
|
Other Liabilities
|
-
|
-
|
8
|
8
|
Total financial liabilities at 31 December
2023
|
7,901
|
128,296
|
2,960
|
139,157
|
1 Includes covered bonds of $7,509
million, securities issued by Multilateral Development
Banks/International Organisations of $24,192 million, and
State-owned agencies and development banks of $7,564
million
The fair value of financial assets and financial
liabilities classified as Level 2 in the fair value hierarchy that
are subject to complex modelling techniques is $940 million and
$288 million respectively.
Page
93
Fair value hierarchy - financial instruments measured at
amortised cost
The following table shows the carrying amounts
and incorporates the Group's estimate of fair values of those
financial assets and liabilities not presented on the Group's
balance sheet at fair value. These fair values may be different
from the actual amount that will be received or paid on the
settlement or maturity of the financial instrument. For certain
instruments, the fair value may be determined using assumptions for
which no observable prices are available.
|
Carrying value
$million
|
Fair value
|
Level 1
$million
|
Level 2
$million
|
Level 3
$million
|
Total
$million
|
Assets
|
|
|
|
|
|
Cash and balances at central banks¹
|
64,086
|
-
|
64,086
|
-
|
64,086
|
Loans and advances to banks
|
45,231
|
-
|
45,176
|
-
|
45,176
|
of which - reverse repurchase agreements and
other similar secured lending
|
3,991
|
-
|
3,992
|
-
|
3,992
|
Loans and advances to customers
|
275,896
|
-
|
42,180
|
228,595
|
270,775
|
of which - reverse repurchase agreements and
other similar secured lending
|
7,788
|
-
|
7,665
|
122
|
7,787
|
Investment securities²
|
56,403
|
-
|
53,422
|
-
|
53,422
|
Other assets¹
|
42,206
|
-
|
42,206
|
-
|
42,206
|
Assets held for sale
|
517
|
3
|
474
|
40
|
517
|
At 30 June 2024
|
484,339
|
3
|
247,544
|
228,635
|
476,182
|
Liabilities
|
|
|
|
|
|
Deposits by banks
|
28,087
|
-
|
28,140
|
-
|
28,140
|
Customer accounts
|
468,157
|
-
|
464,336
|
-
|
464,336
|
Repurchase agreements and other similar secured
borrowing
|
7,539
|
-
|
7,585
|
-
|
7,585
|
Debt securities in issue
|
65,199
|
32,960
|
31,839
|
-
|
64,799
|
Subordinated liabilities and other borrowed
funds
|
10,856
|
10,109
|
335
|
-
|
10,444
|
Other liabilities¹
|
46,901
|
-
|
46,901
|
-
|
46,901
|
Liabilities held for sale
|
535
|
51
|
484
|
-
|
535
|
At 30 June 2024
|
627,274
|
43,120
|
579,620
|
-
|
622,740
|
1 The carrying amount of these financial
instruments is considered to be a reasonable approximation of fair
value as they are short-term in nature or reprice to current market
rates frequently
2 Includes Government bonds and Treasury
bills of $21,475 million at 30 June 2024
|
Carrying value
$million
|
Fair value
|
Level 1
$million
|
Level 2
$million
|
Level 3
$million
|
Total
$million
|
Assets
|
|
|
|
|
|
Cash and balances at central banks¹
|
69,905
|
-
|
69,905
|
-
|
69,905
|
Loans and advances to banks
|
44,977
|
-
|
44,921
|
-
|
44,921
|
of which - reverse repurchase agreements and
other
similar secured lending
|
1,738
|
-
|
1,738
|
-
|
1,738
|
Loans and advances to customers
|
286,975
|
-
|
53,472
|
226,211
|
279,683
|
of which - reverse repurchase agreements and
other
similar secured lending
|
13,996
|
-
|
13,827
|
169
|
13,996
|
Investment securities²
|
56,935
|
-
|
54,419
|
33
|
54,452
|
Other assets¹
|
38,140
|
-
|
38,140
|
-
|
38,140
|
Assets held for sale
|
701
|
101
|
541
|
59
|
701
|
At 31 December 2023
|
497,633
|
101
|
261,398
|
226,303
|
487,802
|
Liabilities
|
|
|
|
|
|
Deposits by banks
|
28,030
|
-
|
28,086
|
-
|
28,086
|
Customer accounts
|
469,418
|
-
|
460,224
|
-
|
460,224
|
Repurchase agreements and other similar secured
borrowing
|
12,258
|
-
|
12,258
|
-
|
12,258
|
Debt securities in issue
|
62,546
|
31,255
|
30,859
|
-
|
62,114
|
Subordinated liabilities and other borrowed
funds
|
12,036
|
11,119
|
336
|
-
|
11,455
|
Other liabilities¹
|
38,663
|
-
|
38,663
|
-
|
38,663
|
Liabilities held for sale
|
726
|
54
|
672
|
-
|
726
|
At 31 December 2023
|
623,677
|
42,428
|
571,098
|
-
|
613,526
|
1 The carrying amount of these financial
instruments is considered to be a reasonable approximation of fair
value as they are short-term in nature or reprice to current market
rates frequently
2 Includes Government bonds and Treasury
bills $19,422 million at 31 December 2023
Page
94
Fair value of financial instruments
Level 3 Summary and significant unobservable
inputs
The following table presents the Group's primary
Level 3 financial instruments which are held at fair value. The
table also presents the valuation techniques used to measure the
fair value of those financial instruments, the significant
unobservable inputs, the range of values for those inputs and the
weighted average of those inputs:
Instrument
|
Value as at
30 June 2024
|
Principal valuation technique
|
Significant unobservable inputs
|
Range1
|
Weighted average2
|
Assets
$million
|
Liabilities
$million
|
Loans and advances to banks
|
36
|
-
|
Discounted cash flows
|
Price/yield
|
33.6% - 100%
|
64.7%
|
Loans and advances to customers
|
1,935
|
-
|
Discounted cash flows
|
Price/yield
|
0.1% - 100%
|
16.1%
|
Reverse repurchase agreements and other similar
secured lending
|
2,610
|
-
|
Discounted cash flows
|
Repo curve
|
2.7% - 7.7%
|
6.5%
|
|
|
|
Price/yield
|
1.7% - 99.2%
|
4.9%
|
Debt securities, additional tier one and other
eligible securities
|
1,087
|
-
|
Discounted cash flows
|
Price/yield
|
3.7% - 45.0%
|
10.4%
|
|
|
|
Recovery rate
|
0.01% - 16.8%
|
10.6%
|
Government bonds and treasury bills
|
-
|
-
|
Discounted cash flows
|
Price/yield
|
N/A
|
N/A
|
Equity shares (includes private equity
investments)
|
964
|
-
|
Comparable
pricing/ yield
|
EV/EBITDA multiples
|
13.0x-15.9x
|
14.3x
|
|
|
EV/Revenue multiples
|
7.5x-7.5x
|
7.5x
|
|
|
P/E multiples
|
13.3x- 44.6x
|
43.3x
|
|
|
P/B multiples
|
0.3x-2.6x
|
1.7x
|
|
|
P/S multiples
|
0.2x-1.3x
|
0.2x
|
|
|
Liquidity discount
|
0.0%-29.9%
|
18.3%
|
|
|
Discounted cash flows
|
Discount rates
|
9.5%-20.5%
|
11.2%
|
|
|
Option pricing model
|
Equity value based on
EV/Revenue multiples
|
6.3x-38.6x
|
24.2x
|
|
|
Equity value based on
EV/EBITDA multiples
|
2.6x-2.6x
|
2.6x
|
|
|
Equity value based on volatility
|
28.5%-50.0%
|
28.7%
|
Other Assets
|
1
|
-
|
NAV
|
N/A
|
N/A
|
N/A
|
Derivative financial instruments
of which:
|
|
|
|
|
|
|
Foreign exchange
|
25
|
9
|
Option pricing model
|
Foreign exchange option implied
volatility
|
13.9% - 44.3%
|
33.3%
|
|
|
Discounted cash flows
|
Interest rate curves
|
3.3% - 34.8%
|
5.6%
|
|
|
Foreign exchange curves
|
0.4% - 32.9%
|
6.3%
|
Interest rate
|
80
|
2
|
Discounted cash flows
|
Interest rate curves
|
3.3% - 6.81%
|
5.4%
|
|
|
|
Option pricing model
|
Bond option implied volatility
|
3.3% - 5.3%
|
4.6%
|
Credit
|
9
|
178
|
Discounted cash flows
|
Credit spreads
|
1.0% - 7.4%
|
1.2%
|
|
|
|
|
Price/yield
|
2.0% - 11.2%
|
8.1%
|
|
|
|
Option pricing model
|
Bond option implied volatility
|
3.3% - 5.3%
|
4.6%
|
Equity and stock index
|
3
|
20
|
Internal pricing model
|
Equity-Equity correlation
|
46.4% - 100%
|
82.2%
|
|
|
|
|
Equity-FX correlation
|
(37.3)% - 55.3%
|
12.1%
|
Deposits by banks
|
-
|
399
|
Discounted cash flows
|
Credit spreads
|
0.05% - 3.9%
|
1.4%
|
Customer accounts
|
-
|
1,729
|
Discounted cash flows
|
Credit spreads
|
0.05% - 1.8%
|
0.9%
|
|
|
Interest rate curves
|
2.2% - 5.3%
|
4.6%
|
|
|
Price/yield
|
4.2% - 13.0%
|
6.8%
|
|
|
Internal pricing model
|
Equity-Equity correlation
|
46.4% - 100%
|
82.2%
|
|
|
Equity-FX correlation
|
(37.3)% - 55.3%
|
12.1%
|
|
|
Option pricing model
|
Bond option implied volatility
|
3.3% - 5.3%
|
4.6%
|
Debt securities in issue
|
-
|
2,139
|
Discounted cash flows
|
Credit spreads
|
0.4% - 1.8%
|
1.4%
|
|
|
Price/yield
|
0.2% - 18.8%
|
6.2%
|
|
|
Interest rate curves
|
3.3% - 5.3%
|
4.6%
|
|
|
Internal pricing model
|
Equity-Equity correlation
|
46.4% - 100%
|
82.2%
|
|
|
Equity-FX correlation
|
(37.3)% - 55.3%
|
12.1%
|
|
|
Bond option implied volatility
|
3.3% - 23.0%
|
4.7%
|
Short positions
|
-
|
-
|
Discounted cash flows
|
N/A
|
N/A
|
N/A
|
Other Liabilities
|
-
|
1
|
Comparable
pricing/yield
|
EV/EBITDA multiples
|
5.5x - 6.2x
|
5.8x
|
Total
|
6,750
|
4,477
|
|
|
|
|
1 The ranges of values shown in the
above table represent the highest and lowest levels used in the
valuation of the Group's Level 3 financial instruments as at 30
June 2024. The ranges of values used are reflective of the
underlying characteristics of these Level 3 financial instruments
based on the market conditions at the balance sheet date. However,
these ranges of values may not represent the uncertainty in fair
value measurements of the Group's Level 3 financial
instruments
2 Weighted average for non-derivative
financial instruments has been calculated by weighting inputs by
the relative fair value. Weighted average for derivatives has been
provided by weighting inputs by the risk relevant to that variable.
N/A has been entered for the cases where weighted average is not a
meaningful indicator
Page
95
Instrument
|
Value as at
31 December 2023
|
Principal valuation technique
|
Significant unobservable inputs
|
Range1
|
Weighted average2
|
Assets
$million
|
Liabilities
$million
|
Loans and advances to customers
|
1,960
|
-
|
Discounted cash flows
|
Price/yield
|
1.7% - 100%
|
12.0%
|
|
|
|
|
Credit spreads
|
0.1% - 1.0%
|
0.6%
|
Reverse repurchase agreements and other similar
secured lending
|
2,363
|
-
|
Discounted cash flows
|
Repo curve
|
5.1% - 7.6%
|
6.3%
|
|
|
|
Price/yield
|
(2.7)% - 10.3%
|
6.0%
|
Debt securities, additional tier one and other
eligible securities
|
1,283
|
-
|
Discounted cash flows
|
Price/yield
|
(14.0)% - 25.8%
|
10.1%
|
|
|
|
Recovery rates
|
0.1% - 1.0%
|
0.2%
|
|
|
Internal pricing model
|
Equity-Equity correlation
|
44.1% - 100%
|
80.7%
|
|
|
|
Equity-FX correlation
|
(35.9)% - 45.5%
|
14.2%
|
Government bonds and treasury bills
|
51
|
-
|
Discounted cash flows
|
Price/yield
|
17.7% - 21.8%
|
20.6%
|
Equity shares (includes private equity
investments)
|
971
|
-
|
Comparable
pricing/yield
|
EV/EBITDA multiples
|
13.8x - 15.6x
|
14.9x
|
|
|
EV/Revenue multiples
|
9.3x - 30.9x
|
15.8x
|
|
|
P/E multiples
|
10.6x - 51.8x
|
45.7x
|
|
|
P/B multiples
|
0.3x - 2.7x
|
1.6x
|
|
|
P/S multiples
|
0.2x - 1.6x
|
0.3x
|
|
|
Liquidity discount
|
7.5% - 20.0%
|
15.1%
|
|
|
Discounted cash flows
|
Discount rates
|
9.2% - 35.6%
|
17.0%
|
|
|
Option pricing model
|
Equity value based on
EV/Revenue multiples
|
8.4x - 42.5x
|
27.5x
|
|
|
Equity value based on
EV/EBITDA multiples
|
3.1x - 3.1x
|
3.1x
|
|
|
Equity value based on volatility
|
21.0% - 65.0%
|
30.1%
|
Other Assets
|
6
|
-
|
NAV
|
N/A
|
N/A
|
N/A
|
Derivative financial instruments
of which:
|
|
|
|
|
|
|
Foreign exchange
|
25
|
10
|
Option pricing model
|
Foreign exchange option implied
volatility
|
0.5% - 51%
|
31.8%
|
|
|
Discounted cash flows
|
Interest rate curves
|
3.6% - 5.8%
|
3.8%
|
|
|
|
Foreign exchange curves
|
0.6% - 64.2%
|
12.8%
|
Interest rate
|
6
|
5
|
Discounted cash flows
|
Interest rate curves
|
3.6% - 8.6%
|
5.0%
|
Credit
|
47
|
162
|
Discounted cash flows
|
Credit spreads
|
1.0% - 1.0%
|
1.0%
|
|
|
|
|
Price/yield
|
1.7% - 16.3%
|
8.6%
|
Equity and stock index
|
2
|
19
|
Internal pricing model
|
Equity-Equity correlation
|
44.1% - 100%
|
80.7%
|
|
|
|
|
Equity-FX correlation
|
(35.9)% - 45.5%
|
14.2%
|
Deposits by banks
|
-
|
334
|
Discounted cash flows
|
Credit spreads
|
0.1% - 3.4%
|
1.9%
|
Customer accounts
|
-
|
1,278
|
Discounted cash flows
|
Credit spreads
|
1.0% - 2.0%
|
1.2%
|
|
|
|
Interest rate curves
|
2.9% - 8.6%
|
6.1%
|
|
|
|
Price/yield
|
4.8% - 15.2%
|
9.9%
|
|
|
Internal pricing model
|
Equity-Equity correlation
|
44.1% - 100%
|
80.7%
|
|
|
|
Equity-FX correlation
|
(35.9)% - 45.5%
|
14.2%
|
Debt securities in issue
|
-
|
1,041
|
Discounted cash flows
|
Credit spreads
|
0.3% - 1.6%
|
1.1%
|
|
|
|
Price/yield
|
6.6% - 20.9%
|
17.9%
|
|
|
|
Interest rate curves
|
2.9% - 5.3%
|
4.4%
|
|
|
Internal pricing model
|
Equity-Equity correlation
|
44.1% - 100%
|
80.7%
|
|
|
|
Equity-FX correlation
|
(35.9)% - 45.5%
|
14.2%
|
|
|
|
Bond option implied volatility
|
2.9% - 5.3%
|
4.4%
|
Short position
|
-
|
103
|
Discounted cash flows
|
Price/yield
|
7.1% - 7.1%
|
7.1%
|
Other Liabilities
|
-
|
8
|
Comparable pricing/yield
|
EV/EBITDA multiples
|
5.8x - 11.2x
|
8.5x
|
Total
|
6,714
|
2,960
|
|
|
|
|
1 The ranges of values shown in the
above table represent the highest and lowest levels used in the
valuation of the Group's Level 3 financial instruments as at
31 December 2023. The ranges of values used are reflective of
the underlying characteristics of these Level 3 financial
instruments based on the market conditions at
the balance sheet date. However, these ranges of values may not
represent the uncertainty in fair value measurements of the Group's
Level 3 financial instruments
2 Weighted average for non-derivative
financial instruments has been calculated by weighting inputs by
the relative fair value. Weighted average for derivatives has been
provided by weighting inputs by the risk relevant to that variable.
N/A has been entered for the cases where weighted average is not a
meaningful indicator
Page
96
The following section describes the significant
unobservable inputs identified in the valuation technique
table:
• Comparable price/yield is a valuation methodology
in which the price of a comparable instrument is used to estimate
the fair value where there are no direct observable prices. Yield
is the interest rate that is used to discount the future cash flows
in a discounted cash flow model. Valuation using comparable
instruments can be done by calculating an implied yield (or spread
over a liquid benchmark) from the price of a comparable instrument,
then adjusting that yield (or spread) to derive a value for the
instrument. The adjustment should account for relevant differences
in the financial instruments such as maturity and/or credit
quality. Alternatively, a price-to-price basis can be assumed
between the comparable instrument and the instrument being valued
in order to establish the value of the instrument (for example,
deriving a fair value for a junior unsecured bond from the price of
a senior secured bond). An increase in price, in isolation, would
result in a favourable movement in the fair value of the asset. An
increase in yield, in isolation, would result in an unfavourable
movement in the fair value of the asset
• Correlation is the measure of how movement in one
variable influences the movement in another variable. An equity
correlation is the correlation between two equity instruments while
an interest rate correlation refers to the correlation between two
swap rates
• Credit
spread represents the additional yield that a market
participant would demand for taking exposure to the Credit Risk of
an instrument
• Discount
rate refers to the rate of return used to convert
expected cash flows into present value
• Equity-FX
correlation is the correlation between equity
instrument and foreign exchange instrument
• EV/EBITDA
multiple is the ratio of Enterprise Value (EV) to
Earnings Before Interest, Taxes, Depreciation and Amortisation
(EBITDA). EV is the aggregate market capitalisation and debt minus
the cash and cash equivalents. An increase in EV/EBITDA multiple
will result in a favourable movement in the fair value of the
unlisted firm
• EV/Revenue multiple is the ratio of Enterprise
Value (EV) to Revenue. An increase in EV/Revenue multiple will
result in a favourable movement in the fair value of the unlisted
firm
• Foreign
exchange curves is the term structure for forward
rates and swap rates between currency pairs over a specified
period
• Net asset
value (NAV) is the value of an entity's assets after
deducting any liabilities
• Interest
rate curves is the term structure of interest rates
and measures of future interest rates at a particular point in
time
• Liquidity
discounts in the valuation of unlisted investments are
primarily applied to the valuation of unlisted firms' investments
to reflect the fact that these stocks are not actively traded. An
increase in liquidity discount will result in an unfavourable
movement in the fair value of the unlisted firm
• Price-Earnings (P/E) multiple is the ratio of the
market value of the equity to the net income after tax. An increase
in P/E multiple will result in a favourable movement in the
fair value of the unlisted firm
• Price-Book (P/B) multiple is the ratio of the
market value of equity to the book value of equity. An increase in
P/B multiple will result in a favourable movement in the fair value
of the unlisted firm
• Price-Sales (P/S) multiple is the ratio of the
market value of equity to sales. An increase in P/S multiple will
result in a favourable movement in the fair value of the unlisted
firm
• Recovery
rates is the expectation of the rate of return
resulting from the liquidation of a particular loan. As the
probability of default increases for a given instrument, the
valuation of that instrument will increasingly reflect its expected
recovery level assuming default. An increase in the recovery rate,
in isolation, would result in a favourable movement in the fair
value of the loan
• Repo
curve is the term structure of repo rates on repos and
reverse repos at a particular point in time
• Volatility represents an estimate of how much a
particular instrument, parameter or index will change in value over
time. Generally, the higher the volatility, the more expensive the
option will be
Page
97
Level 3 movement tables - financial assets
The table below analyses movements in Level 3
financial assets carried at fair value.
Assets
|
6 months ended 30.06.24
|
Held at fair value through profit or
loss
|
Derivative financial instruments
$million
|
Investment securities
|
Total
$million
|
Loans and advances
to banks
$million
|
Loans and advances to customers
$million
|
Reverse repurchase agreements and other similar
secured lending
$million
|
Debt
securities, additional
tier one
and other eligible bills
$million
|
Equity shares
$million
|
Other Assets
$million
|
Debt
securities, additional
tier one
and other eligible bills
$million
|
Equity shares
$million
|
At 01 January 2024
|
-
|
1,960
|
2,363
|
1,262
|
184
|
6
|
80
|
72
|
787
|
6,714
|
Total (losses)/gains recognised in
income statement
|
-
|
(18)
|
(85)
|
25
|
(1)
|
(1)
|
(36)
|
-
|
-
|
(116)
|
Net trading income
|
-
|
(18)
|
(85)
|
(6)
|
2
|
-
|
(36)
|
-
|
-
|
(143)
|
Other operating income
|
-
|
-
|
-
|
31
|
(3)
|
(1)
|
-
|
-
|
-
|
27
|
Total losses recognised in other comprehensive
income (OCI)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(13)
|
(31)
|
(44)
|
Fair value through
OCI reserve
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(18)
|
(18)
|
Exchange difference
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(13)
|
(13)
|
(26)
|
Purchases
|
18
|
2,538
|
2,725
|
468
|
3
|
-
|
166
|
13
|
37
|
5,968
|
Sales
|
(2)
|
(2,631)
|
(2,199)
|
(668)
|
(3)
|
(4)
|
(114)
|
-
|
(18)
|
(5,639)
|
Settlements
|
(7)
|
(14)
|
(329)
|
-
|
-
|
-
|
(15)
|
-
|
-
|
(365)
|
Transfers out1
|
(13)
|
(155)
|
(5)
|
-
|
-
|
-
|
(2)
|
(72)
|
(1)
|
(248)
|
Transfers in2
|
40
|
255
|
140
|
-
|
6
|
-
|
38
|
-
|
1
|
480
|
At 30 June 2024
|
36
|
1,935
|
2,610
|
1,087
|
189
|
1
|
117
|
-
|
775
|
6,750
|
Total unrealised gains/(losses) recognised in
the income statement, within net trading income, relating to change
in fair value
of assets held at
30 June 2024
|
-
|
1
|
1
|
11
|
12
|
-
|
(10)
|
-
|
-
|
15
|
1 Transfers out include loans and
advances, reverse repurchase agreements, derivative financial
instruments, debt securities, additional tier one and other
eligible bills and equity shares where the valuation parameters
became observable during the period and were transferred to Level 1
and Level 2
2 Transfers in primarily relate to loans
and advances, reverse repurchase agreements, equity shares and
derivative financial instruments where the valuation parameters
became unobservable during the period
Page
98
Assets
|
6 months ended 30.06.23
|
Held at fair value through profit or
loss
|
Derivative financial instruments
$million
|
Investment securities
|
Total
$million
|
Loans and advances to banks
$million
|
Loans and advances to customers
$million
|
Reverse repurchase agreements
and other
similar secured
lending
$million
|
Debt
securities, additional
tier one
and other eligible bills
$million
|
Equity shares
$million
|
Other Assets
$million
|
Debt
securities, additional
tier one
and other eligible bills
$million
|
Equity shares
$million
|
At 01 January 2023
|
21
|
1,805
|
1,998
|
1,153
|
182
|
7
|
44
|
-
|
655
|
5,865
|
Total (losses)/gains recognised in
income statement
|
-
|
(62)
|
(12)
|
(217)
|
1
|
-
|
13
|
-
|
-
|
(277)
|
Net trading income
|
-
|
(62)
|
(12)
|
(217)
|
-
|
-
|
13
|
-
|
-
|
(278)
|
Other operating income
|
-
|
-
|
-
|
-
|
1
|
-
|
-
|
-
|
-
|
1
|
Total gains recognised in other comprehensive
income (OCI)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
69
|
70
|
Fair value through OCI reserve
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
77
|
77
|
Exchange difference
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
(8)
|
(7)
|
Purchases
|
-
|
313
|
3,020
|
565
|
1
|
-
|
124
|
5
|
4
|
4,032
|
Sales
|
-
|
(481)
|
(3,156)
|
(282)
|
(9)
|
-
|
(56)
|
(10)
|
-
|
(3,994)
|
Settlements
|
-
|
(221)
|
(335)
|
(310)
|
-
|
-
|
(9)
|
-
|
-
|
(875)
|
Transfers out1
|
(21)
|
(206)
|
-
|
(6)
|
-
|
-
|
(3)
|
(4)
|
(39)
|
(279)
|
Transfers in2
|
-
|
75
|
-
|
-
|
-
|
-
|
-
|
59
|
1
|
135
|
At 30 June 2023
|
-
|
1,223
|
1,515
|
903
|
175
|
7
|
113
|
51
|
690
|
4,677
|
Total unrealised (losses)/gains recognised in
the income statement, within net trading income, relating to change
in fair value
of assets held at
30 June 2023
|
-
|
(10)
|
-
|
14
|
(1)
|
-
|
(10)
|
-
|
-
|
(7)
|
1 Transfers out include loans and
advances, debt securities, additional tier one and other eligible
bills, derivative financial instruments and equity shares where the
valuation parameters became observable during the period and were
transferred to Level 1 and Level 2
2 Transfers in primarily relate to loans
and advances, debt securities, additional tier one and other
eligible bills, and equity shares where the valuation parameters
became unobservable during the period
Page
99
Assets
|
6 months ended 31.12.23
|
Held at fair value through profit or
loss
|
Derivative financial instruments
$million
|
Investment securities
|
Total
$million
|
Loans and advances to banks
$million
|
Loans and advances to customers
$million
|
Reverse repurchase agreements and other similar
secured lending
$million
|
Debt
securities, additional
tier one
and other eligible bills
$million
|
Equity shares
$million
|
Other Assets
$million
|
Debt
securities, additional
tier one
and other eligible bills
$million
|
Equity shares
$million
|
At 01 July 2023
|
-
|
1,223
|
1,515
|
903
|
175
|
7
|
113
|
51
|
690
|
4,677
|
Total gains/(losses) recognised in
income statement
|
-
|
27
|
(95)
|
(75)
|
3
|
(1)
|
(1)
|
-
|
-
|
(142)
|
Net trading income
|
-
|
27
|
(95)
|
(87)
|
5
|
-
|
(1)
|
-
|
-
|
(151)
|
Other operating income
|
-
|
-
|
-
|
12
|
(2)
|
(1)
|
-
|
-
|
-
|
9
|
Total (losses)/gains recognised in other
comprehensive income (OCI)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(2)
|
32
|
30
|
Fair value through OCI reserve
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
31
|
31
|
Exchange difference
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(2)
|
1
|
(1)
|
Purchases
|
22
|
1,471
|
2,882
|
517
|
7
|
-
|
65
|
16
|
57
|
5,037
|
Sales
|
(22)
|
(652)
|
(786)
|
(236)
|
(1)
|
-
|
(59)
|
(13)
|
(5)
|
(1,774)
|
Settlements
|
-
|
(221)
|
(1,153)
|
5
|
-
|
-
|
(16)
|
-
|
-
|
(1,385)
|
Transfers out1
|
-
|
(19)
|
-
|
-
|
-
|
-
|
(24)
|
(12)
|
7
|
(48)
|
Transfers in2
|
-
|
131
|
-
|
148
|
-
|
-
|
2
|
32
|
6
|
319
|
At 31 December 2023
|
-
|
1,960
|
2,363
|
1,262
|
184
|
6
|
80
|
72
|
787
|
6,714
|
Total unrealised gains/(losses) recognised in
the income statement, within net trading income, relating to change
in fair value
of assets held at
31 December 2023
|
-
|
7
|
3
|
(15)
|
5
|
-
|
(2)
|
-
|
-
|
(2)
|
1 Transfers out include loans and
advances, debt securities, additional tier one and other eligible
bills, derivative financial instruments and equity shares where the
valuation parameters became observable during the period and were
transferred to Level 1 and Level 2
2 Transfers in primarily relate to loans
and advances, debt securities, additional tier one and other
eligible bills, , derivative financial instruments and equity
shares where the valuation parameters became unobservable during
the period
Page
100
Level 3 movement tables - financial
liabilities
Liabilities
|
6 months ended 30.06.24
|
Deposits
by banks
$million
|
Customer accounts
$million
|
Debt
securities
in issue
$million
|
Derivative financial instruments
$million
|
Short
positions
$million
|
Other
liabilities
$million
|
Total
$million
|
At 01 January 2024
|
334
|
1,278
|
1,041
|
196
|
103
|
8
|
2,960
|
Total losses/(gains) recognised in income
statement -
net trading income
|
37
|
(4)
|
16
|
(12)
|
-
|
(7)
|
30
|
Issues
|
218
|
1,427
|
2,334
|
240
|
-
|
-
|
4,219
|
Settlements
|
(190)
|
(990)
|
(1,127)
|
(217)
|
-
|
-
|
(2,524)
|
Transfers out1
|
-
|
(20)
|
(162)
|
(7)
|
(103)
|
-
|
(292)
|
Transfers in2
|
-
|
38
|
37
|
9
|
-
|
-
|
84
|
At 30 June 2024
|
399
|
1,729
|
2,139
|
209
|
-
|
1
|
4,477
|
Total unrealised losses/(gains) recognised in
the income statement, within net trading income, relating to change
in
fair value of liabilities held at 30 June 2024
|
24
|
3
|
5
|
(4)
|
-
|
-
|
28
|
1 Transfers out primarily relate to bank
deposits, debt securities in issue, short positions and derivative
financial instruments where the valuation parameters became
observable during the period and were transferred to Level 2
financial liabilities
2 Transfers in primarily relate to
derivative financial instruments, customer accounts and debt
securities in issue where the valuation parameters became
unobservable during the period
Liabilities
|
6 months ended 30.06.23
|
Deposits
by banks
$million
|
Customer accounts
$million
|
Debt
securities
in issue
$million
|
Derivative financial instruments
$million
|
Short
positions
$million
|
Other
liabilities
$million
|
Total
$million
|
At 01 January 2023
|
288
|
972
|
451
|
121
|
40
|
6
|
1,878
|
Total (gains)/losses recognised in income
statement -
net trading income
|
(9)
|
16
|
(5)
|
3
|
-
|
2
|
7
|
Issues
|
271
|
868
|
654
|
225
|
-
|
-
|
2,018
|
Settlements
|
(298)
|
(989)
|
(558)
|
(165)
|
(40)
|
-
|
(2,050)
|
Transfers out1
|
-
|
(5)
|
(21)
|
(13)
|
-
|
-
|
(39)
|
Transfers in2
|
-
|
18
|
-
|
2
|
-
|
-
|
20
|
At 30 June 2023
|
252
|
880
|
521
|
173
|
-
|
8
|
1,834
|
Total unrealised (gains)/losses recognised in
the income statement, within net trading income, relating to change
in
fair value of liabilities held at 30 June 2023
|
-
|
(6)
|
3
|
(12)
|
-
|
-
|
(15)
|
1 Transfers out primarily relate to
customer accounts, debt securities in issue and derivative
financial instruments where the valuation parameters became
observable during the period and were transferred to Level 2
financial liabilities
2 Transfers in primarily relate to
customer accounts and derivative financial instruments where the
valuation parameters became unobservable during the
period
Liabilities
|
6 months ended 31.12.23
|
Deposits
by banks
$million
|
Customer Accounts
$million
|
Debt
securities
in issue
$million
|
Derivative financial instruments
$million
|
Short
positions
$million
|
Other Liabilities
$million
|
Total
$million
|
At 01 July 2023
|
252
|
880
|
521
|
173
|
-
|
8
|
1,834
|
Total losses/(gains) recognised in income
statement -
net trading income
|
16
|
(22)
|
44
|
(55)
|
3
|
1
|
(13)
|
Issues
|
357
|
921
|
835
|
222
|
100
|
-
|
2,435
|
Settlements
|
(287)
|
(502)
|
(660)
|
(147)
|
-
|
-
|
(1,596)
|
Transfers out1
|
(4)
|
(4)
|
(64)
|
2
|
-
|
(1)
|
(71)
|
Transfers in2
|
-
|
5
|
365
|
1
|
-
|
-
|
371
|
At 31 December 2023
|
334
|
1,278
|
1,041
|
196
|
103
|
8
|
2,960
|
Total unrealised (gains)/losses recognised in
the income statement, within net trading income, relating to change
in
fair value of liabilities held at 31 December 2023
|
-
|
(15)
|
3
|
(35)
|
-
|
-
|
(47)
|
1 Transfers out primarily relate to bank
deposits, customer accounts, debt securities in issue, derivative
financial instruments and other liabilities where the valuation
parameters became observable during the period and were transferred
to Level 2 financial liabilities
2 Transfers in primarily relate to
customer accounts, debt securities in issue and derivative
financial instruments where the valuation parameters became
unobservable during the period
Page
101
Sensitivities in respect of the fair values of
Level 3 assets and liabilities
Sensitivity analysis is performed on products
with significant unobservable inputs. The Group applies a 10 per
cent increase or decrease on the values of these unobservable
inputs, to generate a range of reasonably possible alternative
valuations. The percentage shift is determined by statistical
analysis performed on a set of reference prices based on the
composition of the Group's Level 3 inventory at the measurement
date. Favourable and unfavourable changes (which show the balance
adjusted for input change) are determined on the basis of changes
in the value of the instrument as a result of varying the levels of
the unobservable parameters. The Level 3 sensitivity analysis
assumes a one-way market move and does not consider offsets for
hedges.
|
Fair value through profit or loss
|
Fair value through other comprehensive
income
|
Net exposure
$million
|
Favourable
changes
$million
|
Unfavourable
changes
$million
|
Net exposure
$million
|
Favourable
changes
$million
|
Unfavourable
changes
$million
|
Financial instruments held at fair
value
|
|
|
|
|
|
|
Loans and advances
|
1,971
|
2,008
|
1,915
|
-
|
-
|
-
|
Reverse repurchase agreements and other similar
secured lending
|
2,610
|
2,663
|
2,557
|
-
|
-
|
-
|
Debt securities, additional tier one and other
eligible bills
|
1,087
|
1,138
|
1,035
|
-
|
-
|
-
|
Equity shares
|
189
|
208
|
170
|
775
|
874
|
708
|
Other Assets
|
1
|
1
|
1
|
-
|
-
|
-
|
Derivative financial instruments
|
(92)
|
(72)
|
(113)
|
-
|
-
|
-
|
Customer accounts
|
(1,729)
|
(1,606)
|
(1,852)
|
-
|
-
|
-
|
Deposits by banks
|
(399)
|
(399)
|
(399)
|
-
|
-
|
-
|
Short positions
|
-
|
-
|
-
|
-
|
-
|
-
|
Debt securities in issue
|
(2,139)
|
(2,082)
|
(2,196)
|
-
|
-
|
-
|
Other Liabilities
|
(1)
|
(1)
|
(1)
|
-
|
-
|
-
|
At 30 June 2024
|
1,498
|
1,858
|
1,117
|
775
|
874
|
708
|
|
|
|
|
|
|
|
Financial instruments held at fair
value
|
|
|
|
|
|
|
Loans and advances
|
1,960
|
1,985
|
1,918
|
-
|
-
|
-
|
Reverse repurchase agreements and other similar
secured lending
|
2,363
|
2,390
|
2,336
|
-
|
-
|
-
|
Debt securities, additional tier one and other
eligible bills
|
1,262
|
1,309
|
1,193
|
72
|
78
|
66
|
Equity shares
|
184
|
202
|
166
|
787
|
866
|
708
|
Other Assets
|
6
|
7
|
5
|
-
|
-
|
-
|
Derivative financial instruments
|
(116)
|
(75)
|
(157)
|
-
|
-
|
-
|
Customer accounts
|
(1,278)
|
(1,191)
|
(1,365)
|
-
|
-
|
-
|
Deposits by banks
|
(334)
|
(334)
|
(334)
|
-
|
-
|
-
|
Short positions
|
(103)
|
(101)
|
(105)
|
-
|
-
|
-
|
Debt securities in issue
|
(1,041)
|
(966)
|
(1,115)
|
-
|
-
|
-
|
Other Liabilities
|
(8)
|
(7)
|
(9)
|
-
|
-
|
-
|
At 31 December 2023
|
2,895
|
3,219
|
2,533
|
859
|
944
|
774
|
The reasonably possible alternatives could have
increased or decreased the fair values of financial instruments
held at fair value through profit or loss and those classified as
fair value through other comprehensive income by the amounts
disclosed below.
Financial instruments
|
Fair value changes
|
30.06.24
$million
|
31.12.23
$million
|
Fair value through profit or loss
|
Possible increase
|
360
|
324
|
Possible decrease
|
(381)
|
(362)
|
Fair value through other comprehensive
income
|
Possible increase
|
99
|
85
|
Possible decrease
|
(67)
|
(85)
|
Page
102
14. Derivative financial instruments
The tables below analyse the notional principal
amounts and the positive and negative fair values of derivative
financial instruments. Notional principal amounts are the amounts
of principal underlying the contract at the reporting
date.
Derivatives
|
30.06.24
|
31.12.23
|
Notional
principal amounts
$million
|
Assets
$million
|
Liabilities
$million
|
Notional
principal amounts
$million
|
Assets
$million
|
Liabilities
$million
|
Foreign exchange derivative
contracts:
|
|
|
|
|
|
|
Forward foreign exchange contracts
|
4,438,922
|
28,145
|
25,301
|
3,628,067
|
30,897
|
32,601
|
Currency swaps and options
|
1,286,136
|
12,919
|
13,337
|
1,145,702
|
11,671
|
12,845
|
|
5,725,058
|
41,064
|
38,638
|
4,773,769
|
42,568
|
45,446
|
Interest rate derivative contracts:
|
|
|
|
|
|
|
Swaps
|
5,445,462
|
21,371
|
23,368
|
4,841,616
|
53,735
|
55,241
|
Forward rate agreements and options
|
319,883
|
2,216
|
2,650
|
313,253
|
2,057
|
2,520
|
|
5,765,345
|
23,587
|
26,018
|
5,154,869
|
55,792
|
57,761
|
Exchange traded futures and options
|
512,905
|
55
|
68
|
325,051
|
39
|
47
|
Credit derivative contracts
|
264,892
|
395
|
1,838
|
281,130
|
485
|
1,107
|
Equity and stock index options
|
11,889
|
183
|
183
|
8,671
|
75
|
166
|
Commodity derivative contracts
|
174,007
|
844
|
1,320
|
117,436
|
970
|
1,029
|
Gross total derivatives
|
12,454,096
|
66,128
|
68,065
|
10,660,926
|
99,929
|
105,556
|
Offset¹
|
-
|
(17,481)
|
(17,481)
|
-
|
(49,495)
|
(49,495)
|
Net total derivatives
|
12,454,096
|
48,647
|
50,584
|
10,660,926
|
50,434
|
56,061
|
1 In 2024, the Group migrated contracts
from Collateralized to Market (CTM) to Settled to Market (STM) for
house cleared contracts with London Clearing House
The Group limits exposure to credit losses in
the event of default by entering into master netting agreements
with certain market counterparties. As required by IAS 32,
exposures are only presented net in these accounts where they are
subject to legal right of offset and intended to be settled net in
the ordinary course of business.
The Group applies balance sheet offsetting only
in the instance where we are able to demonstrate legal
enforceability of the right to offset (e.g. via legal opinion) and
the ability and intention to settle on a net basis (e.g. via
operational practice).
The Group may enter into economic hedges that do
not qualify for IAS 39 hedge accounting treatment, including
derivatives such as interest rate swaps, interest rate futures and
cross currency swaps to manage interest rate and currency risks of
the Group. These derivatives are measured at fair value, with fair
value changes recognised in net trading income: refer to Market
Risk.
Derivatives held for hedging
The Group enters into derivative contracts for
the purpose of hedging interest rate, currency and structural
foreign exchange risks inherent in assets, liabilities and forecast
transactions. The table below summarises the notional principal
amounts and carrying values of derivatives designated in hedge
accounting relationships at the reporting date.
Included in the table above are derivatives held
for hedging purposes as follows:
|
30.06.24
|
31.12.23
|
Notional
principal amounts
$million
|
Assets
$million
|
Liabilities
$million
|
Notional
principal amounts
$million
|
Assets
$million
|
Liabilities
$million
|
Derivatives designated as fair value
hedges:
|
|
|
|
|
|
|
Interest rate swaps
|
68,043
|
890
|
1,997
|
69,347
|
1,264
|
2,397
|
Currency swaps
|
580
|
9
|
7
|
115
|
10
|
6
|
|
68,623
|
899
|
2,004
|
69,462
|
1,274
|
2,403
|
Derivatives designated as cash flow
hedges:
|
|
|
|
|
|
|
Interest rate swaps
|
33,962
|
66
|
212
|
41,834
|
184
|
537
|
Forward foreign exchange contracts
|
6,315
|
666
|
-
|
12,071
|
420
|
183
|
Currency swaps
|
13,365
|
591
|
22
|
14,321
|
191
|
150
|
|
53,642
|
1,323
|
234
|
68,226
|
795
|
870
|
Derivatives designated as net investment
hedges:
|
|
|
|
|
|
|
Forward foreign exchange contracts
|
15,061
|
259
|
8
|
15,436
|
32
|
41
|
Total derivatives held for hedging
|
137,326
|
2,481
|
2,246
|
153,124
|
2,101
|
3,314
|
Page
103
15. Reverse repurchase and repurchase agreements
including other similar lending and borrowing
Reverse repurchase agreements and other similar
secured lending
|
30.06.24
$million
|
31.12.23
$million
|
Banks
|
44,259
|
32,286
|
Customers
|
60,722
|
65,295
|
|
104,981
|
97,581
|
Of which:
|
|
|
Fair value through profit or loss
|
93,202
|
81,847
|
Banks
|
40,268
|
30,548
|
Customers
|
52,934
|
51,299
|
Held at amortised cost
|
11,779
|
15,734
|
Banks
|
3,991
|
1,738
|
Customers
|
7,788
|
13,996
|
|
|
|
Under reverse repurchase and securities
borrowing arrangements, the Group obtains securities on terms which
permit it to repledge or resell the securities to others. Amounts
on such terms are:
|
30.06.24
$million
|
31.12.23
$million
|
Securities and collateral received (at fair
value)
|
108,948
|
101,935
|
Securities and collateral which can be repledged
or sold (at fair value)
|
107,853
|
101,845
|
Amounts repledged/transferred to others for
financing activities, to satisfy liabilities under sale and
repurchase agreements (at fair value)
|
36,509
|
34,154
|
Repurchase agreements and other similar secured
borrowing
|
30.06.24
$million
|
31.12.23
$million
|
Banks
|
10,332
|
5,585
|
Customers
|
44,255
|
47,956
|
|
54,587
|
53,541
|
Of which:
|
|
|
Fair value through profit or loss
|
47,048
|
41,283
|
Banks
|
9,430
|
4,658
|
Customers
|
37,618
|
36,625
|
Held at amortised cost
|
7,539
|
12,258
|
Banks
|
902
|
927
|
Customers
|
6,637
|
11,331
|
|
|
|
The tables below set out the financial assets
provided as collateral for repurchase and other secured borrowing
transactions:
Collateral pledged against repurchase
agreements
|
30.06.24
|
Fair value through
profit or loss
$million
|
Fair value
through other comprehensive income
$million
|
Amortised cost
$million
|
Off-balance sheet
$million
|
Total
$million
|
On-balance sheet
|
|
|
|
|
|
Debt securities and other eligible
bills
|
3,822
|
3,216
|
12,179
|
-
|
19,217
|
Off-balance sheet
|
|
|
|
|
|
Repledged collateral received
|
-
|
-
|
-
|
36,509
|
36,509
|
At 30 June 2024
|
3,822
|
3,216
|
12,179
|
36,509
|
55,726
|
Page
104
Collateral pledged against repurchase
agreements
|
31.12.23
|
Fair value through
profit or loss
$million
|
Fair value
through other comprehensive income
$million
|
Amortised cost
$million
|
Off-balance sheet
$million
|
Total
$million
|
On-balance sheet
|
|
|
|
|
|
Debt securities and other eligible
bills
|
4,993
|
8,157
|
10,181
|
-
|
23,331
|
Off-balance sheet
|
|
|
|
|
|
Repledged collateral received
|
-
|
-
|
-
|
34,154
|
34,154
|
At 31 December 2023
|
4,993
|
8,157
|
10,181
|
34,154
|
57,485
|
16. Goodwill and intangible assets
|
30.06.24
|
31.12.23
|
Goodwill
$million
|
Acquired intangibles
$million
|
Computer software
$million
|
Total
$million
|
Goodwill
$million
|
Acquired intangibles
$million
|
Computer software
$million
|
Total
$million
|
Cost
|
|
|
|
|
|
|
|
|
At 1 January
|
2,429
|
278
|
6,168
|
8,875
|
2,471
|
295
|
5,178
|
7,944
|
Exchange translation differences
|
(35)
|
(4)
|
(95)
|
(134)
|
(24)
|
(12)
|
21
|
(15)
|
Additions
|
-
|
1
|
473
|
474
|
-
|
-
|
1,124
|
1,124
|
Disposals
|
-
|
-
|
(5)
|
(5)
|
-
|
-
|
-
|
-
|
Impairment
|
-
|
-
|
(149)²
|
(149)
|
-
|
-
|
(151)
|
(151)
|
Amounts written off
|
-
|
(9)
|
(15)
|
(24)
|
(18)¹
|
(5)¹
|
(4)
|
(27)
|
At 30 June/31 December
|
2,394
|
266
|
6,377
|
9,037
|
2,429
|
278
|
6,168
|
8,875
|
Provision for amortisation
|
|
|
|
|
|
|
|
|
At 1 January
|
-
|
265
|
2,396
|
2,661
|
-
|
276
|
1,799
|
2,075
|
Exchange translation differences
|
-
|
(5)
|
(35)
|
(40)
|
-
|
(12)
|
11
|
(1)
|
Amortisation
|
-
|
-
|
329
|
329
|
-
|
1
|
625
|
626
|
Impairment charge
|
-
|
-
|
(1)²
|
(1)
|
-
|
-
|
(39)
|
(39)
|
Amounts written off
|
-
|
-
|
(15)
|
(15)
|
-
|
-
|
-
|
-
|
At 30 June/31 December
|
-
|
260
|
2,674
|
2,934
|
-
|
265
|
2,396
|
2,661
|
Net book value
|
2,394
|
6
|
3,703
|
6,103
|
2,429
|
13
|
3,772
|
6,214
|
1 Includes disposal of goodwill and
other intangibles relating to aviation finance leasing business.
These were classified as held for sale during 2023 and sold during
the year
2 Includes $148 million impairment
relating to software capitalised in previous years
At 30 June 2024, accumulated goodwill
impairment losses incurred from 1 January 2005 amounted to $3,331
million (31 December 2023: $3,331 million), of which nil was
recognised in 2024 (31 December 2023: nil).
The Group assessed the goodwill assigned to each
of the Group's CGUs and determined that there are no indicators of
impairment; therefore, estimates of the recoverable amounts for the
CGUs were not calculated at 30 June 2024.
Page
105
17. Property, plant and equipment
|
30.06.24
|
Premises
$million
|
Equipment
$million
|
Operating
lease assets
$million
|
Leased
premises assets
$million
|
Leased
equipment assets
$million
|
Total
$million
|
Cost or valuation
|
|
|
|
|
|
|
At 1 January
|
1,741
|
810
|
-
|
1,864
|
18
|
4,433
|
Exchange translation differences
|
(37)
|
(25)
|
-
|
(24)
|
(1)
|
(87)
|
Additions1
|
31
|
45
|
-
|
96
|
-
|
172
|
Disposals and fully depreciated assets
written off2
|
(24)
|
(15)
|
-
|
(8)
|
(1)
|
(48)
|
Transfers to assets held for sale
|
(2)
|
3
|
-
|
-
|
-
|
1
|
As at 30 June
|
1,709
|
818
|
-
|
1,928
|
16
|
4,471
|
Depreciation
|
|
|
|
|
|
|
Accumulated at 1 January
|
692
|
535
|
-
|
914
|
18
|
2,159
|
Exchange translation differences
|
(19)
|
(6)
|
-
|
(18)
|
(7)
|
(50)
|
Charge for the year
|
39
|
37
|
-
|
109
|
2
|
187
|
Impairment charge
|
(4)
|
-
|
-
|
4
|
-
|
-
|
Attributable to assets sold, transferred or
written off2
|
(7)
|
(15)
|
-
|
(7)
|
-
|
(29)
|
Transfers to assets held for sale
|
(1)
|
3
|
-
|
-
|
-
|
2
|
Accumulated at 30 June
|
700
|
554
|
-
|
1,002
|
13
|
2,269
|
Net book amount at 30 June
|
1,009
|
264
|
-
|
926
|
3
|
2,202
|
1 Refer to the cash flow statement under
cash flows from investing activities section for the purchase of
property, plant and equipment during the year of $76
million
2 Disposals for property, plant and
equipment during the year of $31 million in the cash flow statement
would include the gains and losses incurred as part of other
operating income (Note 6) on disposal of assets during the year and
the net book value disposed.
|
31.12.23
|
Premises
$million
|
Equipment
$million
|
Operating
lease assets
$million
|
Leased
premises assets
$million
|
Leased
equipment assets
$million
|
Total
$million
|
Cost or valuation
|
|
|
|
|
|
|
At 1 January
|
1,773
|
840
|
4,420
|
1,652
|
29
|
8,714
|
Exchange translation differences
|
(27)
|
(22)
|
-
|
(5)
|
(3)
|
(57)
|
Additions
|
45
|
114
|
-
|
286
|
1
|
446
|
Disposals and fully depreciated assets
written off
|
(68)
|
(122)
|
(4,420)¹
|
(69)
|
(9)
|
(4,688)
|
Transfers to assets held for sale
|
18
|
-
|
-
|
-
|
-
|
18
|
As at 31 December
|
1,741
|
810
|
-
|
1,864
|
18
|
4,433
|
Depreciation
|
|
|
|
|
|
|
Accumulated at 1 January
|
678
|
575
|
1,185
|
730
|
24
|
3,192
|
Exchange translation differences
|
(21)
|
(17)
|
1
|
(25)
|
(1)
|
(63)
|
Charge for the year
|
77
|
99
|
27
|
238
|
4
|
445
|
Impairment charge
|
3
|
-
|
-
|
9
|
-
|
12
|
Attributable to assets sold, transferred or
written off
|
(47)
|
(122)
|
(1,213)¹
|
(38)
|
(9)
|
(1,429)
|
Transfers to assets held for sale
|
2
|
-
|
-
|
-
|
-
|
2
|
Accumulated at 31 December
|
692
|
535
|
-
|
914
|
18
|
2,159
|
Net book amount at 31 December
|
1,049
|
275
|
-
|
950
|
-
|
2,274
|
1. Includes disposal of assets from aviation
finance leasing business and sale of vessels.
Page
106
18. Other assets
Other assets include:
|
30.06.24
$million
|
31.12.23
$million
|
Financial assets held at amortized cost (Note
13):
|
|
|
Hong Kong SAR Government certificates of
indebtedness (Note 21)¹
|
6,529
|
6,568
|
Cash collateral2
|
8,099
|
10,337
|
Acceptances and endorsements
|
5,781
|
5,326
|
Unsettled trades and other financial
assets
|
21,797
|
15,909
|
|
42,206
|
38,140
|
Non-financial assets:
|
|
|
Commodities and emissions
certificates3
|
10,498
|
8,889
|
Other assets
|
312
|
565
|
|
53,016
|
47,594
|
1 The Hong Kong SAR Government
certificates of indebtedness are subordinated to the claims of
other parties in respect of bank notes issued
2 Cash collateral are margins placed to
collateralize net derivative mark-to-market (MTM)
positions
3 Physically held commodities and
emission certificates are inventory that is carried at fair value
less costs to sell, $5.7 billion (31 December 2023: $5.1 billion)
are classified as Level 1 and $4.7 billion are classified as Level
2 (31 December 2023: $3.7 billion). For commodities, the fair value
is derived from observable spot or short-term futures prices from
relevant exchanges.
19. Investments in associates and joint
ventures
Share of profit from investment in associates
and joint ventures comprises:
|
6 months ended 30.06.24
$million
|
6 months ended 30.06.23
$million
|
Loss from Investment in Joint
Ventures
|
(3)
|
(7)
|
Profit from Investment in Associates
|
147
|
109
|
Total
|
144
|
102
|
Interests in associates and joint
ventures
|
30.06.24
$million
|
31.12.23
$million
|
As at 1 January
|
966
|
1,631
|
Exchange translation difference
|
(17)
|
16
|
Additions1
|
14
|
64
|
Share of profits
|
144
|
141
|
Dividend received2
|
(30)
|
(11)
|
Impairment
|
-
|
(872)
|
Share of FVOCI and Other reserves
|
9
|
(7)
|
Other movements
|
2
|
4
|
As at 30 June/31 December
|
1,088
|
966
|
1 Includes non-cash consideration of
$6.4 million (disposal of Autumn Life) from Vault 22 Solutions
Holdings Ltd and $3.6 million (convertible notes) from
Verified Impacts Holdings Pte Ltd
2 Include capital distribution from
Ascenta IV
The Group's principal associate are:
Associate
|
Nature of activities
|
Main areas of operation
|
Group interest
in ordinary
share capital
%
|
China Bohai Bank
|
Banking
|
China
|
16.26
|
CurrencyFair Limited Exchange Ireland
|
Banking
|
Ireland
|
43.42
|
The Group's ownership percentage in China Bohai
Bank is 16.26%.
Although the Group's investment in China Bohai
Bank is less than 20 per cent, it is considered to be an associate
because of the significant influence the Group is able to exercise
over its management and financial and operating policies. This
influence is exercised through Board representation and the
provision of technical expertise to Bohai. The Group applies the
equity method of accounting for investments in
associates.
Page
107
Bohai publishes their results after the Group.
As it is impracticable for Bohai to prepare financial statements
sooner, the Group recognises its share of Bohai's earnings on a
three-month lag basis. Therefore, the Group recognised its share of
Bohai's profits and movements in other comprehensive from 1 October
2023 through 31 March 2024 (six months of earnings) in the Group's
consolidated statement of income and consolidated statement of
comprehensive income for the period ended 30 June 2024,
respectively.
There have been no material events after 31
March 2024 which would require adjustments in respect of the share
of Bohai's profits and movements in OCI recognised by the Group for
the period ended on 30 June 2024.
If the Group did not have significant influence
over Bohai, the investment would be measured at fair value rather
than the current carrying value, which is based on the application
of the equity method as described in the accounting policy
note.
Impairment testing
On 30 June 2024, the listed equity value of
Bohai is below the carrying amount of the Group's investment in
associate. As a result, the Group assessed the carrying value of
its investment in Bohai for impairment and concluded that no
impairment was required for the period ended 30 June 2024 ($nil for
the period ended 30 June 2023; $1,458million of accumulated
impairment as at 31 December 2023). The carrying value of the
Group's investment in Bohai of $766 million (2023: $700 million)
represents the higher of the value in use and fair value less costs
to dispose. The financial forecasts used in the VIU calculation
reflect Group management's best estimate of Bohai's future
earnings, in line with current economic conditions and latest
Bohai's reported results.
Bohai
|
30.06.24
$million
|
31.12.23
$million
|
VIU
|
766
|
700
|
Carrying amount1
|
766
|
700
|
Market capitalisation2
|
351
|
418
|
1 The Group's 16.26% share in the net
assets less other equity instruments which the Group does not
hold
2 Number of shares held by the Group
multiplied by the quoted share price at period end
Basis of recoverable amount
The impairment test was performed by comparing
the recoverable amount of Bohai, determined as the higher of VIU
and fair value less costs to dispose, with its carrying
amount.
The value in use ('VIU') is calculated using a
dividend discount model ('DDM'), which estimates the distributable
future cashflows to the equity holders, after adjusting for
regulatory capital requirements, for a 5-year period, after which
a
terminal value ('TV') is calculated based on the 'Gordon Growth'
model. The key assumptions in the VIU are as follows:
• Short to medium term
projections are based on Group management's best estimates of
future profits available to ordinary shareholders and have been
determined with reference to the latest published financial results
and historical performance of Bohai;
• The projections use
available information and include normalised performance over the
forecast period, inclusive of: (i) asset growth assumptions based
on the long-term GDP growth rate for Mainland China; (ii) ECL
assumptions using Bohai's historical reported ECL, based on the
proportion of ECL from loans and advances to customers and
financial investments measured at amortised cost and FVOCI. This
was further adjusted for banking industry challenges and property
market uncertainties; (iii) Net Interest Margin (NIM) increases
from 2025 with reference to third party market interest rate
forecasts in China; (iv) Non-interest income estimated according to
the latest available performance of Bohai and contribution of the
constituent parts; and (v) Statutory tax rate of 25% was applied to
the taxable profit of Bohai, after consideration of taxable and
non-taxable elements, consistent with historical reported
results;
• The discount rate
applied to these cash flows was estimated with reference to
transaction and broker data in the local Chinese market, cross
checked to the capital asset pricing model (CAPM), which includes a
long-term risk-free rate, beta and company risk premium assumptions
for Bohai;
• A long-term GDP
growth rate for Mainland China is used to extrapolate the expected
short to medium term earnings to perpetuity to derive a terminal
value; and
Page
108
• Capital maintenance
ratio consists of a capital haircut taken to estimate Bohai's
target regulatory capital requirements over the forecast period.
This haircut considers movements in risk weighted assets (RWA)
projected based on the historical proportion of RWA to total assets
and the total capital required (Core CET 1 and Minimum Core CET 1
ratios), including required retained earnings over time to meet the
target capital ratios. RWA projection is adjusted to reflect
management's best estimates for the impact of implementing Basel
3.1, effective 1 January 2024 in China.
The VIU model was refined during 2024 to include
a more granular forecasting assumptions for each period. While it
is impracticable for the Group to estimate the impact on future
periods, the key changes to the 2024 model are summarised
as follows:
• A statutory tax rate
of 25% was applied to the taxable profit of Bohai, after
consideration of taxable and non-taxable elements, consistent
with historical reported results. In previous model, the
calculation of the tax expenses was based on the reported effective
tax rate as per published financial statements of Bohai;
• Non-interest income
was calculated by applying the historical average return on the
respective components of the non-interest income, grown at
long-term GDP rate for Mainland China, over the forecasted period.
In the previous model, the non-interest income was projected based
on the latest actual results reported by Bohai and grown according
to long-term GDP rate.
The key assumptions used in the VIU
calculation:
|
30.06.24
per cent
|
31.12.23
per cent
|
Pre-tax discount rate¹
|
12.59
|
13.68
|
Long term GDP growth rate
|
3.60
|
4.00
|
Total assets growth rate
|
3.60
|
4.00
|
RWA as percentage of total assets
|
64.28-65.85
|
63.87-67.06
|
Net interest margin
|
1.14-1.41
|
1.21-1.48
|
Net fee income growth rate
|
3.60
|
4.00
|
Expected credit losses as a percentage of
customer loans
|
0.78-1.22
|
0.80-1.24
|
Expected credit losses as a percentage of
financial investments measured at amortised cost and
FVOCI
|
0.35
|
0.35-0.67
|
Tax expense²
|
13.00-16.00
|
N/A
|
Capital maintenance ratio3
|
8.34
|
8.28
|
1 Post-tax Discount rate of 11.0% was
used in 2024 and 2023 models. The difference in pre-tax discount
rates relates to changes in effective tax rate
2 The 30 June 2024
percentages represent the average of non-taxable income and
non-deductible expenses, consistent with historical reported
results. A statutory tax rate of 25% was applied to the taxable
profit of Bohai, after consideration of taxable and non-taxable
elements. For the 31 December 2023 VIU, the calculation of the tax
expenses was based on the reported effective tax rate as per
published financial statements of Bohai
3 Core CET 1 ratio reported by
Bohai
The table below discloses sensitivities to the
key assumptions of Bohai, according to management's judgement of
reasonably possible changes. Changes were applied to every cash
flow year on an individual basis. The percentage change to the
assumptions reflects the level at which management assess the
reasonableness of the assumptions used and their impact
on the Value in Use.
Sensitivities
|
key assumption change
|
basis points
|
Increase Headroom/
(Impairment)
$ million
|
Decrease Headroom/
(Impairment)
$ million
|
Discount Rate
|
100
|
(115)
|
160
|
Long term GDP growth rate1
|
100
|
125
|
(89)
|
Total assets growth rate
|
100
|
30
|
(22)
|
RWA as percentage of total assets
|
100
|
(35)
|
42
|
Net interest margin
|
10
|
405
|
(398)
|
Net fee income
|
100
|
70
|
(61)
|
Expected credit losses as a percentage of
customer loans
|
10
|
(228)
|
235
|
Expected credit losses as a percentage of
financial investments measured at amortised cost and
FVOCI
|
10
|
(114)
|
121
|
Tax expense²
|
300
|
45
|
(36)
|
Capital maintenance ratio
|
50
|
(179)
|
187
|
1 Changes in long term GDP growth rate
applied only to the calculation of the terminal value
2 Changes in tax expense applied
only to both average percentages of non-taxable income and
non-deductible expenses
Page
109
The following table sets out the summarised
financial statements of China Bohai Bank prior to the Group's share
of the associate's profit being applied:
|
31.03.24
$million
|
31.03.23
$million
|
Total assets
|
243,892
|
237,604
|
Total liabilities
|
227,393
|
221,897
|
|
|
|
Operating income1
|
1,862
|
1,942
|
Net profit1
|
441
|
638
|
Other comprehensive income1
|
49
|
(68)
|
1 This represents six months of earnings
(1 October to 31 March)
20. Assets held for sale and associated
liabilities
Assets held for sale
The financial assets reported below are
classified under Level 1 $3 million (31 December 2023: $101
million), Level 2 $474 million (31 December 2023: $541
million) and Level 3 $40 million (31 December 2023: $59
million).
Assets held for sale
|
30.06.24
$million
|
31.12.23
$million
|
Financial assets held at amortised
cost
|
517
|
701
|
Cash and balances at central banks
|
159
|
246
|
Loans and advances to banks
|
3
|
24
|
Loans and advances to customers
|
194
|
251
|
Debt securities held at amortised
cost
|
161
|
180
|
|
|
|
Property, plant and equipment
|
61
|
59
|
Vessels
|
43
|
43
|
Others
|
18
|
16
|
Others
|
33
|
49
|
|
611
|
809
|
Liabilities held for sale
The financial liabilities reported below are
classified under Level 1 $51 million (31 December 2023: $54
million) and Level 2 $484 million (31 December 2023: $672
million).
Liabilities held for sale
|
30.06.24
$million
|
31.12.23
$million
|
Financial liabilities held at amortised
cost
|
535
|
726
|
Deposits by banks
|
-
|
3
|
Customer accounts
|
535
|
723
|
|
|
|
Other liabilities
|
30
|
51
|
Provisions for liabilities and
charges
|
12
|
10
|
|
577
|
787
|
Page
110
21. Other liabilities
|
30.06.24
$million
|
31.12.23
$million
|
Financial liabilities held at amortised cost
(Note 13)
|
|
|
Notes in circulation1
|
6,529
|
6,568
|
Acceptances and endorsements
|
5,784
|
5,386
|
Cash collateral2
|
11,285
|
8,440
|
Property leases
|
1,028
|
1,054
|
Equipment leases
|
9
|
4
|
Unsettled trades and other financial
liabilities
|
22,266
|
17,211
|
|
46,901
|
38,663
|
Non-financial liabilities
|
|
|
Cash-settled share-based payments
|
94
|
102
|
Other liabilities
|
445
|
456
|
|
47,440
|
39,221
|
1 Hong Kong currency notes in
circulation of $6,529 million (31 December 2023: $6,568 million)
that are secured by the Government of Hong Kong SAR certificates of
indebtedness of the same amount included in other assets (Note
18)
2. Cash collateral are margins received against
collateralize net derivative mark-to-market (MTM)
positions
22. Contingent liabilities and commitments
The table below shows the contract or underlying
principal amounts of unmatured off-balance sheet transactions at
the balance sheet date. The contract or underlying principal
amounts indicate the volume of business outstanding and do not
represent amounts at risk.
|
30.06.24
$million
|
31.12.23
$million
|
Financial guarantees and other contingent
liabilities
|
|
|
Financial guarantees, trade credits and
irrevocable letters of credit
|
86,094
|
74,414
|
|
86,094
|
74,414
|
Commitments
|
|
|
Undrawn formal standby facilities, credit lines
and other commitments to lend
|
|
|
One year and over
|
75,382
|
78,356
|
Less than one year
|
29,950
|
33,092
|
Unconditionally cancellable
|
73,236
|
70,942
|
|
178,568
|
182,390
|
Capital Commitments
|
|
|
Contracted capital expenditure approved by the
directors but not provided for in these accounts
|
2
|
217
|
As set out in Note 23, the Group has contingent
liabilities in respect of certain legal and regulatory
matters.
23. Legal and regulatory matters
The Group receives legal claims against it in a
number of jurisdictions and is subject to regulatory and
enforcement investigations and proceedings from time to time. Apart
from the matters described below, the Group currently considers
none of the ongoing claims, investigations or proceedings to be
individually material. However, in light of the uncertainties
involved in such matters there can be no assurance that the outcome
of a particular matter or matters currently not considered to be
material may not ultimately be material to the Group's results in a
particular reporting period depending on, among other things, the
amount of the loss resulting from the matter(s) and the results
otherwise reported for such period.
Since 2014, the Group has been named as a
defendant in a series of lawsuits that have been filed in the
United States District Courts for the Southern and Eastern
Districts of New York against a number of banks on behalf of
plaintiffs who are, or are relatives of, victims of attacks in
Iraq, Afghanistan and Israel. The plaintiffs in each of these
lawsuits have alleged that the defendant banks aided and abetted
the unlawful conduct of parties with connections to terrorist
organisations in breach of the United States Anti-Terrorism Act.
None of these lawsuits specify the amount of damages claimed. The
Group continues to defend these lawsuits.
In January 2020, a shareholder derivative
complaint was filed by the City of Philadelphia in New York State
Court against 45 current and former directors and senior
officers of the Group. It is alleged that the individuals breached
their duties to the Group and caused a waste of corporate assets by
permitting the conduct that gave rise to the costs and losses to
the Group related to legacy conduct and control issues. In March
2021, an amended complaint was served in which Standard Chartered
Bank and seven individuals were removed from the case. Standard
Chartered PLC and Standard Chartered Holdings Limited remained as
named "nominal defendants" in the complaint. In May 2021, Standard
Chartered PLC filed a motion to dismiss the complaint. In February
2022, the New York State Court ruled in favour of Standard
Chartered PLC's motion to dismiss the complaint. The plaintiffs are
pursuing an appeal against the February 2022 ruling. A hearing date
for the plaintiffs' appeal is awaited.
Since October 2020, four lawsuits have been
filed in the English High Court against Standard Chartered PLC on
behalf of more than 200 shareholders in relation to alleged untrue
and/or misleading statements and/or omissions in information
published by Standard Chartered PLC in its rights issue
prospectuses of 2008, 2010 and 2015 and/or public statements
regarding the Group's historic sanctions, money laundering and
financial crime compliance issues. These lawsuits have been brought
under sections 90 and 90A of the Financial Services and Markets Act
2000. These lawsuits are at an early procedural stage and trial is
due to start in late 2026. The claimants have alleged that their
losses are in the region of £1.56 billion (excluding any
pre-judgment interest that may be awarded). In addition to having
denied any and all liability, Standard Chartered PLC will contest
claimants' alleged losses.
Bernard Madoff's 2008 confession to running a
Ponzi scheme through Bernard L. Madoff Investment Securities LLC
(BMIS) gave rise to a number of lawsuits against the Group. BMIS
and the Fairfield funds (which invested in BMIS) are in bankruptcy
and liquidation, respectively. Between 2010 and 2012, five lawsuits
were brought against the Group by the BMIS bankruptcy trustee and
the Fairfield funds' liquidators, in each case seeking to recover
funds paid to the Group's clients pursuant to redemption requests
made prior to BMIS' bankruptcy filing. The total amount sought in
these cases exceeds USD 300 million, excluding any pre-judgment
interest that may be awarded. The four lawsuits commenced by the
Fairfield funds' liquidators have been dismissed and the appeals of
those dismissals by the funds' liquidators are ongoing.
As has been reported in the press, a number of
Korean banks, including Standard Chartered Bank Korea, have sold
equity-linked securities ("ELS") to customers, the redemption
values of which are determined by the performance of various stock
indices. Standard Chartered Bank Korea sold relevant ELS to its
customers with a notional value of approximately USD900m. Due to
the performance of the Hang Seng China Enterprise Index, it is
anticipated that several thousand Standard Chartered Bank Korea
customers may redeem their ELS at a loss. The value of Standard
Chartered Bank Korea customers' anticipated losses is subject to
fluctuation as the ELS mature on various dates through 2026.
Standard Chartered Bank Korea may be faced with claims by customers
and its regulator, the Financial Supervisory Service, to cover part
or all of those anticipated losses and also may face regulatory
penalties. A provision is recorded on the balance sheet in respect
of this matter.
With the exception of the Korea ELS matter
described above, the Group has concluded that the threshold for
recording provisions pursuant to IAS 37 Provisions, Contingent
Liabilities and Contingent Assets is not met with respect to the
above matters; however, the outcomes of these matters are
inherently uncertain and difficult to predict.
Page
112
24. Subordinated liabilities and other borrowed
funds
|
30.06.24
|
31.12.23
|
USD
$million
|
EUR
$million
|
GBP
$million
|
NPR
$million
|
Total
$million
|
USD
$million
|
EUR
$million
|
GBP
$million
|
NPR
$million
|
Total
$million
|
Fixed rate subordinated debt
|
7,431
|
2,546
|
861
|
18
|
10,856
|
8,524
|
2,602
|
892
|
18
|
12,036
|
Redemptions and repurchases during the period
2024
Standard Chartered PLC exercised its right to
redeem USD 1 billion 5.2 per cent subordinated notes
2024.
Redemptions and repurchases during the year
2023
Standard Chartered PLC exercised its right to
redeem USD 2 billion 3.95 per cent subordinated notes 2023. Further
to that outstanding balances of floating rate undated subordinate
notes were redeemed during the year.
Issuance during the period 2024
There was no issuance during the
period.
Issuance during the year 2023
Standard Chartered Bank Nepal Limited issued NPR
2.4 billion 10.3 per cent fixed rate dated subordinated notes due
2028.
25. Share capital, other equity instruments and
reserves
|
Number of
ordinary shares
millions
|
Ordinary
share capital1 $million
|
Ordinary
Share premium
$million
|
Preference
Share premium2
$million
|
Total share capital and share premium
$million
|
Other equity instruments
$million
|
At 1 January 2023
|
2,895
|
1,447
|
3,989
|
1,494
|
6,930
|
6,504
|
Cancellation of shares including
share buyback
|
(94)
|
(47)
|
-
|
-
|
(47)
|
|
Additional Tier 1 equity redemption
|
-
|
-
|
-
|
-
|
-
|
(992)
|
At 30 June 2023
|
2,801
|
1,400
|
3,989
|
1,494
|
6,883
|
5,512
|
Cancellation of shares including
share buyback
|
(136)
|
(68)
|
-
|
-
|
(68)
|
-
|
At 31 December 2023
|
2,665
|
1,332
|
3,989
|
1,494
|
6,815
|
5,512
|
Cancellation of shares including share
buyback
|
(113)
|
(57)
|
-
|
-
|
(57)
|
|
Additional Tier 1 equity issuance
|
-
|
-
|
-
|
-
|
-
|
992
|
At 30 June 2024
|
2,552
|
1,275
|
3,989
|
1,494
|
6,758
|
6,504
|
1 Issued and fully paid ordinary shares
of 50 cents each
2 Includes preference share capital of
$75,000
Share buyback
On 23 February 2024, the Group announced the
buyback programme for a share buyback of its ordinary shares of
$0.50 each. Nominal value of share purchases was $57 million, the
total consideration paid was $1,000 million, and the buyback
completed on 25 June 2024. The total number of shares purchased was
113,266,516, representing 4.25 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. The shares
were purchased by Standard Chartered PLC on various exchanges not
including the Hong Kong Stock Exchange, by private
arrangement.
|
Number of
ordinary shares
|
Highest price Paid
£
|
Lowest price paid
£
|
Average price paid
per share
£
|
Aggregate
price paid
£
|
Aggregate
price paid
$
|
February 2024
|
6,418,285
|
6.6920
|
6.3700
|
6.5039
|
41,743,905
|
52,831,654
|
March 2024
|
45,113,015
|
7.0000
|
6.4400
|
6.6765
|
301,197,187
|
383,771,653
|
April 2024
|
24,716,649
|
7.1300
|
6.3800
|
6.7727
|
167,398,467
|
209,475,694
|
May 2024
|
19,525,751
|
7.9540
|
6.9080
|
7.6883
|
150,119,738
|
189,885,098
|
June 2024
|
17,492,816
|
7.8840
|
7.1220
|
7.3676
|
128,879,487
|
164,035,854
|
Ordinary share capital
In accordance with the Companies Act 2006 the
Company does not have authorised share capital. The nominal value
of each ordinary share is 50 cents.
During the period nil shares were issued under
employee share plans.
Preference share capital
At 30 June 2024, the Company has 15,000 $5
non-cumulative redeemable preference shares in issue, with a
premium of $99,995 making a paid up amount per preference share of
$100,000. The preference shares are redeemable at the option of the
Company and are classified in equity.
The available profits of the Company are
distributed to the holders of the issued preference shares in
priority to payments made to holders of the ordinary shares and in
priority to, or pari passu with, any payments to the holders of any
other class of shares in issue. On a winding up, the assets of the
Company are applied to the holders of the preference shares in
priority to any payment to the ordinary shareholders and in
priority to, or pari passu with, the holders of any other shares in
issue, for an amount equal to any dividends payable (on approval of
the Board) and the nominal value of the shares together with any
premium as determined by the Board. The redeemable preference
shares are redeemable at the paid up amount (which includes
premium) at the option of the Company in accordance with the terms
of the shares. The holders of the preference shares are not
entitled to attend or vote at any general meeting except where any
relevant dividend due is not paid in full or where a resolution is
proposed varying the rights of the preference shares.
Other equity instruments
The table provides details of outstanding Fixed
Rate Resetting Perpetual Subordinated Contingent Convertible AT1
securities issued by Standard Chartered PLC. The net proceeds from
the issue of the Securities will be used for the general business
purposes of the Group and to strengthen further the regulatory
capital base of the Group.
Issuance date
|
Nominal value
|
Proceeds net of
issue costs
|
Interest rate1
|
Coupon payment dates2
|
First reset dates3
|
Conversion
price per ordinary share4
|
3 July 2019
|
SGD 750 million
|
USD 552 million
|
5.375%
|
3 April, 3 October each year
|
3 October 2024
|
SGD 10.909
|
26 June 2020
|
USD 1,000 million
|
USD 992 million
|
6%
|
26 January, 26 July each year
|
26 January 2026
|
USD 5.331
|
14 January 2021
|
USD 1,250 million
|
USD 1,239 million
|
4.75%
|
14 January, 14 July each year
|
14 July 2031
|
USD 6.353
|
19 August 2021
|
USD 1,500 million
|
USD 1,489 million
|
4.30%
|
19 February, 19 August each year
|
19 August 2028
|
USD 6.382
|
15 August 2022
|
USD 1,250 million
|
USD 1,239 million
|
7.75%
|
15 February, 15 August each year
|
15 February 2028
|
USD 7.333
|
8 March 2024
|
USD 1,000 million
|
USD 992 million
|
7.875%
|
8 March, 8 September each year
|
8 September 2030
|
USD 8.216
|
1 Interest rates for the period from
(and including) the issue date to (but excluding) the first reset
date
2 Interest payable semi-annually in
arrears
3 Securities are resettable each date
falling five years, or an integral multiple of five years, after
the first reset date
4 Conversion price set at the time of
pricing with reference to closing share price and any applicable
discount
The AT1 issuances above are primarily purchased
by institutional investors.
The principal terms of the AT1 securities are
described below:
• The securities are
perpetual and redeemable, at the option of Standard Chartered PLC
in whole but not in part, on the first interest reset date and each
date falling five years after the first reset date
• The securities are
also redeemable for certain regulatory or tax reasons on any date
at 100 per cent of their principal amount together with any accrued
but unpaid interest up to (but excluding) the date fixed for
redemption. Any redemption is subject to Standard Chartered PLC
giving notice to the relevant regulator and the regulator granting
permission to redeem
• Interest payments on
these securities will be accounted for as a dividend.
• Interest on the
securities is due and payable only at the sole and absolute
discretion of Standard Chartered PLC, subject to certain additional
restrictions set out in the terms and conditions. Accordingly,
Standard Chartered PLC may at any time elect to cancel any interest
payment (or part thereof) which would otherwise be payable on any
interest payment date.
• The securities
convert into ordinary shares of Standard Chartered PLC, at a
pre-determined price detailed in the table above, should the fully
loaded Common Equity Tier 1 ratio of the Group fall below 7.0 per
cent. Approximately 859 million ordinary shares would be required
to satisfy the conversion of all the securities mentioned
above
The securities rank behind the claims against
Standard Chartered PLC of (a) unsubordinated creditors, (b) which
are expressed to be subordinated to the claims of unsubordinated
creditors of Standard Chartered PLC but not further or otherwise;
or (c) which are, or are expressed to be, junior to the claims of
other creditors of Standard Chartered PLC, whether subordinated or
unsubordinated, other than claims which rank, or are expressed to
rank, pari passu with, or junior to, the claims of holders of the
AT1 securities in a winding-up occurring prior to the conversion
trigger. The net proceeds from the issue of the Securities will be
used for the general business purposes of the Group and to
strengthen further the regulatory capital base of the
Group.
Page
114
Reserves
The constituents of the reserves are summarised
as follows:
• The capital reserve
represents the exchange difference on redenomination of share
capital and share premium from sterling to US dollars in 2001. The
capital redemption reserve represents the nominal value of
preference shares redeemed
• The amounts in the
"Capital and Merger Reserve" represents the premium arising on
shares issued using a cash box financing structure, which required
the Company to create a merger reserve under section 612 of the
Companies Act
2006. Shares were issued using this structure in 2005 and 2006 to
assist in the funding of Korea ($1.9 billion) and Taiwan
($1.2 billion) acquisitions, in 2008, 2010 and 2015 for the
shares issued by way of a rights issue, primarily for capital
maintenance requirements and for the shares issued in 2009 by way
of an accelerated book build, the proceeds of which were used in
the ordinary course of business of the Group. The funding raised by
the 2008, 2010 and 2015 rights issues and 2009 share issue was
fully retained within the Company. Of the 2015 funding, $1.5
billion was used to subscribe to additional equity in Standard
Chartered Bank, a wholly owned subsidiary of the Company. Apart
from the Korea, Taiwan and Standard Chartered Bank funding, the
merger reserve is considered realised and distributable.
• Own credit
adjustment reserve represents the cumulative gains and losses on
financial liabilities designated at fair value through profit or
loss relating to own credit. Gains and losses on financial
liabilities designated at fair value through profit or loss
relating to own credit in the year have been taken through other
comprehensive income into this reserve. On derecognition of
applicable instruments the balance of any OCA will not be recycled
to the income statement, but will be transferred within equity to
retained earnings
• Fair value through
other comprehensive income (FVOCI) debt reserve represents the
unrealised fair value gains and
losses in respect of financial assets classified as FVOCI, net of
expected credit losses and taxation. Gains and losses
are deferred in this reserve and are reclassified to the income
statement when the underlying asset is sold, matures or becomes
impaired.
• FVOCI equity reserve
represents unrealised fair value gains and losses in respect of
financial assets classified as FVOCI, net of taxation. Gains and
losses are recorded in this reserve and never recycled to the
income statement
• Cash flow hedge
reserve represents the effective portion of the gains and losses on
derivatives that meet the criteria for these types of hedges. Gains
and losses are deferred in this reserve and are reclassified to the
income statement when the underlying hedged item affects profit and
loss or when a forecast transaction is no longer expected to
occur
• Translation reserve
represents the cumulative foreign exchange gains and losses on
translation of the net investment of the Group in foreign
operations. Since 1 January 2004, gains and losses are deferred to
this reserve and are reclassified to the income statement when the
underlying foreign operation is disposed. Gains and losses arising
from derivatives used as hedges of net investments are netted
against the foreign exchange gains and losses on translation of the
net investment of the foreign operations
• Retained earnings
represents profits and other comprehensive income earned by the
Group and Company in the current and prior periods, together with
the after tax increase relating to equity-settled share options,
less dividend distributions, own shares held (treasury shares) and
share buybacks
A substantial part of the Group's reserves is
held in overseas subsidiary undertakings and branches, principally
to support local operations or to comply with local regulations.
The maintenance of local regulatory capital ratios could
potentially restrict the amount of reserves which can be remitted.
In addition, if these overseas reserves were to be remitted,
further unprovided taxation liabilities might arise.
As at 30 June 2024, the distributable reserves
of Standard Chartered PLC (the Company) were $15.1 billion (31
December 2023: $14.7 billion). Distributable reserves of SC PLC
were $15.1 billion, which are calculated from the Merger reserve
and Retained Earnings with consideration for restricted items in
line with sections 830 and 831 of the Companies Act
2006.
Own shares
The 2004 Employee Benefit Trust (2004 Trust) is
used in conjunction with the Group's employee share schemes and
other employee share-based payments (such as upfront shares and
salary shares). Computershare Trustees (Jersey) Limited is the
trustee of the 2004 Trust. Group companies fund the 2004 Trust from
time to time to enable the trustee to acquire ordinary shares in
Standard Chartered PLC to satisfy these arrangements.
Details of the shares purchased and held by the
2004 Trust are set out below.
|
2004 Trust
|
30.06.24
|
31.12.23
|
30.06.23
|
Shares purchased during the period
|
40,707
|
29,069,539
|
-
|
Market price of shares purchased
($million)
|
0.35
|
237
|
-
|
Shares held at the end of the period
|
1,863,677
|
28,095,542
|
3,541,529
|
Maximum number of shares held during the
period
|
28,085,688
|
28,893,930
|
27,525,624
|
Except as disclosed, neither the Company nor
any of its subsidiaries has bought, sold or redeemed any securities
of the Company listed on The Stock Exchange of Hong Kong Limited
during the period.
Dividend waivers
The trustees of the 2004 Trust, which holds
ordinary shares in Standard Chartered PLC in connection with the
operation of its employee share plans, waive any dividend on the
balance of ordinary shares that have not been allocated to
employees, except for 0.01p per share.
26. Retirement benefit obligations
Retirement benefit obligations
comprise:
|
30.06.24
$million
|
31.12.23
$million
|
30.06.23
$million
|
Defined benefit plans obligation
|
(138)
|
(166)
|
(110)
|
Defined contribution plans obligation
|
(19)
|
(17)
|
(16)
|
Net obligation
|
(157)¹
|
(183)
|
(126)
|
1 Includes $268 million retirement
benefit schemes in deficit partly offset by $111 million retirement
benefit schemes in surplus
Retirement benefit charge comprises:
|
6 months ended 30.06.24
|
6 months ended 31.12.23
|
6 months ended 30.06.23
|
The pension cost for defined benefit plans
was:
|
|
|
|
Current service cost¹
|
24
|
27
|
23
|
Past service cost and curtailments
|
-
|
-
|
9
|
Gain on settlements
|
-
|
2
|
-
|
Interest income on pension plan
assets
|
(49)
|
(49)
|
(51)
|
Interest on pension plan liabilities
|
51
|
51
|
54
|
Total charge to profit before deduction of
tax
|
26
|
31
|
35
|
Losses/(returns) on plan assets excluding
interest income²
|
32
|
(82)
|
12
|
Losses/(gains) on liabilities
|
(63)
|
164
|
(47)
|
Total losses/(gains) recognised directly in
statement of comprehensive income before tax
|
(31)
|
82
|
(35)
|
Deferred taxation
|
6
|
(15)
|
4
|
Total losses/(gains) after tax
|
(25)
|
67
|
(31)
|
1 Includes administrative expenses paid
out of plan assets of $1 million
2 The actual return on assets was a gain
of $17 million
The Group operates over 60 defined benefit
plans across its geographies, many of which are closed to new
entrants who now join defined contribution arrangements. The aim of
all these plans is, as part of the Group's commitment to financial
wellbeing for employees, to give employees the opportunity to save
appropriately for retirement in a way that is consistent with local
regulations, taxation requirements and market conditions. The
defined benefit plans expose the Group to currency risk, interest
rate risk, investment risk and actuarial risks such as longevity
risk.
Material holdings of government and corporate
bonds partially hedge movements in the liabilities resulting from
interest rate and inflation changes. Setting aside movements from
other drivers such as currency fluctuation, the increases in
discount rates in most geographies over 2024 have led to lower
liabilities. These have been partly offset by decreases in the
value of bonds while H1 2024 has seen strong performance of growth
assets such as equities and property, leading to a fall in the
pension deficit reported. These movements are shown as actuarial
gains and losses in the tables above.
The disclosures required under IAS 19 have been
calculated by independent qualified actuaries based on the most
recent full actuarial valuations updated, where necessary, to 30
June 2024.
27. Related party transactions
Directors and officers
As at 30 June 2024, Standard Chartered Bank had
in place a charge over $67 million (31 December 2023: $68 million)
of cash assets in favour of the independent trustee of its employer
financed retirement benefit scheme.
There were no changes in the related party
transactions described in the Annual Report 2023 that could have or
have had a material effect on the financial position or performance
of the Group in the period ended 30 June 2024. All related party
transactions that have taken place in the period were similar in
nature to those disclosed in Annual Report 2023.
Associate and joint ventures
The following transactions with related parties
are on an arm's length basis:
|
30.06.24
$million
|
31.12.23
$million
|
Assets
|
|
|
Financial Assets held at FVTPL
|
-
|
14
|
Derivative assets
|
9
|
12
|
Total assets
|
9
|
26
|
Liabilities
|
|
|
Deposits
|
547
|
959
|
Other Liabilities
|
-
|
2
|
Total liabilities
|
547
|
961
|
Loan commitments and other
guarantees¹
|
14
|
113
|
1 The maximum loan commitments and other
guarantees during the period were $14 million (31 December 2023:
$113 million)
28. Post balance sheet events
A share buyback for up to a maximum
consideration of $1 .5billion has been declared by the directors
after 30 June 2024. This will reduce the number of ordinary shares
in issue by cancelling the repurchased shares
The Board has recommended an interim ordinary
dividend for the half year 2024 of 9 cents a share or $230
million
29. Corporate governance
The directors confirm that, throughout the
period, the Company has complied with the code provisions set out
in the Corporate Governance Code contained in Appendix C1 of the
Hong Kong Listing Rules. The directors also confirm that the
announcement of these results has been reviewed by the Company's
Audit Committee. The Company confirms that it has adopted a code of
conduct regarding securities transactions by directors on terms no
less exacting than the required standard set out in Appendix C3 of
the Hong Kong Listing Rules and that, having made specific enquiry
of all directors, the directors of the Company have complied with
the required standards of the adopted code of conduct throughout
the period. Details of the Group's corporate governance
arrangements are set out in the Directors' Report within the 2023
Annual Report.
As previously announced, the following changes
to the composition of the Board have taken place since 31 December
2023. On 2 January 2024, Andy Halford retired from the Board and
Diego De Giorgi was appointed as an Executive Director and Group
Chief Financial Officer with effect from 3 January 2024. On 29
February 2024, Gay Huey Evans retired from the Board and as a
member of the Board Risk Committee. Diane Jurgens was appointed to
the Board as an Independent Non-Executive Director (INED) on 1
March 2024 and became a member of the Culture and Sustainability
Committee. On 9 May 2024, Carlson Tong retired from the Board and
as member of the Audit and Board Risk Committees. Biographies for
each of the directors and a list of the committees' membership can
be found at www.sc.com/ourpeople.
Page
117
In compliance with Rule 13.51B(1) of the Hong
Kong Listing Rules, the Company confirms that Maria Ramos, INED,
retired from AngloGold Ashanti PLC as Chair of the board on 28 May
2024.
30. Statutory accounts
The information in this Half Year Report is
unaudited and does not constitute statutory accounts within the
meaning of section 434 of the Companies Act 2006. This document was
approved by the Board on 30 July 2024. The statutory accounts for
the year ended 31 December 2023 have been audited and delivered to
the Registrar of Companies in England and Wales. The report of the
auditors was (i) unqualified, (ii) did not include a reference to
any matters to which the auditors drew attention by way of emphasis
without qualifying their report, and (iii) did not contain a
statement under sections 498(2) and 498(3) of the Companies Act
2006.
31. Cash flow statement
Adjustment for non-cash items and other
adjustments included within income statement
|
30.06.24
$million
|
30.06.23
$million
|
Amortisation of discounts and premiums of
investment securities
|
249
|
(219)
|
Interest expense on subordinated
liabilities
|
394
|
415
|
Interest expense on senior debt securities in
issue
|
1,291
|
959
|
Other non-cash items
|
(91)
|
(168)
|
Pension costs for defined benefit
schemes
|
27
|
35
|
Share-based payment costs
|
172
|
112
|
Impairment losses on loans and advances and
other credit risk provisions
|
240
|
161
|
Other impairment
|
147
|
77
|
Gain on disposal of property, plant and
equipment
|
(13)
|
(32)
|
Loss on disposal of FVOCI and AMCST financial
assets
|
86
|
105
|
Depreciation and amortisation
|
516
|
561
|
Fair value changes taken to income
statement
|
(1,034)
|
(357)
|
Foreign Currency revaluation
|
(110)
|
(29)
|
Profit from associates and joint
ventures
|
(144)
|
(102)
|
Total
|
1,730
|
1,518
|
Change in operating assets
|
30.06.24
$million
|
30.06.23
(Restated)
$million
|
Net decrease in derivative financial
instruments
|
1,370
|
2,893
|
Net increase in debt securities, treasury bills
and equity shares held at fair value through profit or
loss1
|
(25,183)
|
(11,254)
|
Net (increase)/decrease in loans and advances to
banks and customers1
|
(9,614)
|
7,043
|
Net increase in prepayments and accrued
income
|
(227)
|
(205)
|
Net increase in other assets
|
(7,928)
|
(6,783)
|
Total
|
(41,582)
|
(8,306)
|
1 Increase in debt securities, treasury
bills and equity shares held at fair value through profit or loss
for 30.06.2023 has been restated by $28 million and the increase in
loans and advances to banks and customers for 30.06.2023 has been
restated by $(6,273) million
Change in operating liabilities
|
30.06.24
$million
|
30.06.23
$million
|
Net decrease in derivative financial
instruments
|
(5,059)
|
(6,511)
|
Net increase in deposits from banks, customer
accounts, debt securities in issue, Hong Kong notes in circulation
and short positions
|
17,512
|
23,238
|
(Decrease)/increase in accruals and deferred
income
|
(380)
|
437
|
Net increase in other liabilities
|
8,393
|
9,302
|
Total
|
20,466
|
26,466
|
Page
118
Changes in financing activities - subordinated
& senior debts
|
30.06.24
$million
|
30.06.23
$million
|
Subordinated debt (including accrued
interest):
|
|
|
Opening balance
|
12,216
|
13,929
|
Interest paid
|
(252)
|
(300)
|
Repayment
|
(1,000)
|
(2,000)
|
Foreign exchange movements
|
(91)
|
109
|
Fair value changes
|
(92)
|
38
|
Accrued Interest and Others
|
244
|
282
|
Closing balance
|
11,025
|
12,058
|
|
|
|
Senior debt (including accrued
interest):
|
|
|
Opening balance
|
41,350
|
32,288
|
Proceeds from the issue
|
7,698
|
7,072
|
Interest paid
|
(548)
|
(561)
|
Repayment
|
(7,191)
|
(2,715)
|
Foreign exchange movements
|
(292)
|
(158)
|
Fair value changes
|
(92)
|
(98)
|
Accrued Interest and Others
|
1,612
|
390
|
Closing balance
|
42,537
|
36,218
|
Cash and cash
equivalents
The Group's cash and cash equivalents balance
for 30 June 2023 has been restated to increase the balance by
$2,631 million as balances with central banks that met the cash and
cash equivalents definition were originally included in loans and
advances to customers ($27,680 million) but not included in cash
and cash equivalents and there were balances included in cash and
cash equivalents related to loans and advances to banks ($19,781
million), treasury bills and other eligible bills ($3,919 million)
as well as Investments ($1,349 million) that did not meet the cash
and cash equivalents definition. On the 30 June 2023 cash flow
statement for Group, the change in operating assets has also been
restated by $(6,245) million as a result of these
changes.
Page
119
Other supplementary information
Supplementary financial
information
Insured and uninsured deposits
SCB operates and provides services to customers
across many countries and insured deposit is determined on the
basis of limits enacted within local regulations
|
30.06.24
|
31.12.23
|
Bank deposits
$million
|
Customer accounts
$million
|
Bank deposits
$million
|
Customer accounts $million
|
Insured deposits
|
23
|
67,611
|
10
|
66,753
|
Current accounts
|
9
|
15,237
|
9
|
15,767
|
Savings deposits
|
-
|
27,472
|
-
|
27,376
|
Time deposits
|
14
|
24,799
|
1
|
23,517
|
Other deposits
|
-
|
103
|
-
|
93
|
Uninsured deposits
|
40,455
|
464,651
|
35,500
|
467,868
|
Current accounts
|
21,613
|
147,169
|
20,969
|
150,559
|
Savings deposits
|
-
|
88,097
|
-
|
91,425
|
Time deposits
|
7,775
|
184,152
|
8,295
|
176,977
|
Other deposits
|
11,067
|
45,233
|
6,236
|
48,907
|
Total
|
40,478
|
532,262
|
35,510
|
534,621
|
UK and non-UK deposits
The following table summarises the split of Bank
and Customer deposits into UK and Non-UK deposits for respective
account lines based on the domicile or residence of the
clients.
|
30.06.24
|
31.12.23
|
Bank deposits
$million
|
Customer accounts
$million
|
Bank deposits
$million
|
Customer accounts
$million
|
UK deposits
|
4,688
|
20,655
|
2,918
|
29,318
|
Current accounts
|
1,156
|
8,619
|
925
|
7,062
|
Savings deposits
|
-
|
193
|
-
|
330
|
Time deposits
|
427
|
6,533
|
310
|
5,412
|
Other deposits
|
3,105
|
5,310
|
1,683
|
16,514
|
Non-UK deposits
|
35,790
|
511,607
|
32,592
|
505,303
|
Current accounts
|
20,466
|
153,787
|
20,053
|
159,264
|
Savings deposits
|
-
|
115,376
|
-
|
118,471
|
Time deposits
|
7,362
|
202,418
|
7,986
|
195,082
|
Other deposits
|
7,962
|
40,026
|
4,553
|
32,486
|
Total
|
40,478
|
532,262
|
35,510
|
534,621
|
Contractual maturity of Loans, Investment
securities and Deposits
|
30.06.2024
|
Loans and advances
to banks
$million
|
Loans and advances
to customers
$million
|
Investment securities - Treasury
and other eligible Bills
$million
|
Investment securities - Debt securities
$million
|
Investment securities - Equity shares
$million
|
Bank deposits
$million
|
Customer accounts
$million
|
One year or less
|
74,652
|
182,601
|
40,572
|
57,980
|
-
|
34,033
|
474,613
|
Between one and five years
|
11,838
|
59,653
|
36
|
74,997
|
-
|
6,441
|
55,028
|
Between five and ten years
|
891
|
19,825
|
-
|
23,215
|
-
|
4
|
806
|
Between ten years and fifteen years
|
70
|
13,178
|
-
|
7,514
|
-
|
-
|
1,287
|
More than fifteen years and undated
|
241
|
60,450
|
-
|
21,453
|
6,088
|
-
|
528
|
Total
|
87,692
|
335,707
|
40,608
|
185,159
|
6,088
|
40,478
|
532,262
|
|
|
|
|
|
|
|
|
Total Amortised cost and FVOCI
exposures
|
45,231
|
275,896
|
|
|
|
|
|
Of which: Fixed interest rate
exposures
|
37,835
|
155,260
|
|
|
|
|
|
Of which: Floating interest rate
exposures
|
7,396
|
120,636
|
|
|
|
|
|
Page
120
|
31.12.2023
|
Loans and advances
to banks
$million
|
Loans and advances
to customers
$million
|
Investment securities - Treasury
and other eligible Bills
$million
|
Investment securities - Debt securities
$million
|
Investment securities - Equity shares
$million
|
Bank deposits
$million
|
Customer accounts
$million
|
One year or less
|
72,717
|
197,125
|
38,877
|
59,023
|
-
|
31,333
|
485,909
|
Between one and five years
|
3,975
|
52,532
|
4
|
69,075
|
-
|
4,174
|
46,364
|
Between five and ten years
|
837
|
19,184
|
1
|
18,804
|
-
|
2
|
567
|
Between ten years and fifteen years
|
35
|
14,084
|
-
|
9,276
|
-
|
-
|
1,341
|
More than fifteen years and undated
|
226
|
62,561
|
-
|
18,155
|
3,932
|
-
|
441
|
Total
|
77,790
|
345,486
|
38,882
|
174,333
|
3,932
|
35,509
|
534,622
|
|
|
|
|
|
|
|
|
Total Amortised cost and FVOCI
exposures
|
44,977
|
286,975
|
|
|
|
|
|
Of which: Fixed interest rate
exposures
|
38,505
|
168,697
|
|
|
|
|
|
Of which: Floating interest rate
exposures
|
6,472
|
118,278
|
|
|
|
|
|
Maturity and yield of Debt securities,
additional tier one and other eligible bills held at
amortised
|
One year or less
|
Between one and
five years
|
Between five and
ten years
|
More than ten years
|
Total
|
$million
|
Yield
%
|
$million
|
Yield
%
|
$million
|
Yield
%
|
$million
|
Yield
%
|
$million
|
Yield
%
|
Central and other government agencies
|
|
|
|
|
|
|
|
|
|
|
- US
|
2,441
|
1.75
|
9,519
|
1.67
|
5,950
|
1.77
|
4,430
|
3.87
|
22,340
|
2.14
|
- UK
|
286
|
1.62
|
673
|
1.91
|
55
|
1.25
|
-
|
-
|
1,014
|
1.79
|
- Other
|
4,244
|
2.69
|
10,575
|
2.71
|
1,954
|
3.33
|
24
|
7.39
|
16,797
|
2.78
|
Other debt securities
|
1,534
|
6.06
|
2,320
|
5.94
|
3,791
|
5.05
|
8,607
|
5.12
|
16,252
|
5.31
|
As at 30 June 2024
|
8,505
|
2.99
|
23,087
|
2.58
|
11,750
|
3.08
|
13,061
|
4.70
|
56,403
|
3.23
|
|
One year or less
|
Between one and
five years
|
Between five and
ten years
|
More than ten years
|
Total
|
$million
|
Yield
%
|
$million
|
Yield
%
|
$million
|
Yield
%
|
$million
|
Yield
%
|
$million
|
Yield
%
|
Central and other government agencies
|
|
|
|
|
|
|
|
|
|
|
- US
|
1,861
|
1.39
|
9,171
|
1.61
|
5,799
|
1.67
|
4,524
|
3.89
|
21,355
|
2.09
|
- UK
|
39
|
2.75
|
85
|
1.06
|
101
|
0.67
|
-
|
-
|
225
|
1.18
|
- Other
|
5,045
|
2.72
|
9,560
|
2.80
|
2,289
|
3.12
|
81
|
4.74
|
16,975
|
2.84
|
Other debt securities
|
2,487
|
6.45
|
2,658
|
5.37
|
2,262
|
5.44
|
10,973
|
5.13
|
18,380
|
5.38
|
As at 31 December 2023
|
9,432
|
3.44
|
21,474
|
2.61
|
10,451
|
2.79
|
15,578
|
4.77
|
56,935
|
3.37
|
The maturity distributions are presented in the
above table on the basis of contractual maturity dates. The
weighted average yield for each range of maturities is calculated
by dividing the annualised interest income for the year by the book
amount of debt securities at that date.
Average balance sheets and yields
Average balance sheets and yields
For the purposes of calculating net interest
margin the following adjustments are made:
• Statutory net
interest income is adjusted to remove interest expense on amortised
cost liabilities used to provide funding to the Global Markets
business
• Financial
instruments measured at fair value through profit or loss are
classified as non-interest earning
• Premiums on
financial guarantees purchased to manage interest earning assets
are treated as interest expense In the Group's view this results in
a net interest margin that is more reflective of banking book
performance.
Page
121
The following tables set out the average
balances and yields for the Group's assets and liabilities for the
periods ended 30 June 2024 31 December 2023 and 30 June 2023
under the revised definition of net interest margin. For the
purpose of these tables, average balances have been determined on
the basis of daily balances, except for certain categories, for
which balances have been determined less frequently. The Group does
not believe that the information presented in these tables would be
significantly different had such balances been determined on a
daily basis.
Average assets
|
6 months ended 30.06.24
|
Average non-interest earning
balance
$million
|
Average
interest earning
balance
$million
|
Interest income
$million
|
Gross yield
interest earning
balance
%
|
Gross yield
total balance
%
|
Cash and balances at central banks
|
10,244
|
59,865
|
1,360
|
4.57
|
3.90
|
Gross loans and advances to banks
|
39,425
|
41,801
|
1,052
|
5.06
|
2.60
|
Gross loans and advances to customers
|
56,445
|
285,940
|
8,259
|
5.81
|
4.85
|
Impairment provisions against loans and advances
to banks
and customers
|
-
|
(5,501)
|
-
|
-
|
-
|
Investment securities - Treasury and Other
Eligible Bills
|
13,364
|
28,990
|
807
|
5.60
|
3.83
|
Investment securities - Debt
Securities
|
53,058
|
132,693
|
2,716
|
4.12
|
2.94
|
Investment securities - Equity Shares
|
4,545
|
-
|
-
|
-
|
-
|
Property, plant and equipment and intangible
assets
|
6,263
|
-
|
-
|
-
|
-
|
Prepayments, accrued income and other
assets
|
120,866
|
-
|
-
|
-
|
-
|
Investment associates and joint
ventures
|
1,052
|
-
|
-
|
-
|
-
|
Total average assets
|
305,262
|
543,788
|
14,194
|
5.25
|
3.36
|
|
6 months ended 31.12.23
|
Average non-interest earning
balance
$million
|
Average
interest earning
balance
$million
|
Interest income
$million
|
Gross yield
interest earning
balance
%
|
Gross yield
total balance
%
|
Cash and balances at central banks
|
10,138
|
72,136
|
1,622
|
4.46
|
3.96
|
Gross loans and advances to banks
|
36,110
|
45,606
|
1,136
|
4.94
|
2.80
|
Gross loans and advances to customers
|
53,180
|
297,757
|
8,194
|
5.46
|
4.70
|
Impairment provisions against loans and advances
to banks
and customers
|
-
|
(5,793)
|
-
|
-
|
-
|
Investment securities - Treasury and Other
Eligible Bills
|
9,041
|
28,621
|
787
|
5.45
|
4.20
|
Investment securities - Debt
Securities
|
33,551
|
130,622
|
2,661
|
4.04
|
3.26
|
Investment securities - Equity Shares
|
3,151
|
-
|
-
|
-
|
-
|
Property, plant and equipment and intangible
assets
|
6,142
|
-
|
-
|
-
|
-
|
Prepayments, accrued income and other
assets
|
129,624
|
-
|
-
|
-
|
-
|
Investment associates and joint
ventures
|
1,466
|
-
|
-
|
-
|
-
|
Total average assets
|
282,403
|
568,949
|
14,400
|
5.02
|
3.40
|
|
6 months ended 30.06.23
|
Average non-interest earning
balance
$million
|
Average
interest earning
balance
$million
|
Interest income
$million
|
Gross yield
interest earning
balance
%
|
Gross yield
total balance
%
|
Cash and balances at central banks
|
10,799
|
63,057
|
1,211
|
3.87
|
3.31
|
Gross loans and advances to banks
|
33,352
|
42,692
|
958
|
4.53
|
2.54
|
Gross loans and advances to customers
|
57,325
|
305,444
|
7,504
|
4.95
|
4.17
|
Impairment provisions against loans and advances
to banks
and customers
|
-
|
(5,996)
|
-
|
-
|
-
|
Investment securities - Treasury and Other
Eligible Bills
|
6,851
|
35,488
|
809
|
4.60
|
3.85
|
Investment securities - Debt
Securities
|
26,211
|
135,464
|
2,344
|
3.49
|
2.92
|
Investment securities - Equity Shares
|
3,230
|
-
|
-
|
-
|
-
|
Property, plant and equipment and intangible
assets
|
9,278
|
-
|
-
|
-
|
-
|
Prepayments, accrued income and other
assets
|
125,751
|
-
|
-
|
-
|
-
|
Investment associates and joint
ventures
|
1,781
|
-
|
-
|
-
|
-
|
Total average assets
|
274,578
|
576,149
|
12,826
|
4.49
|
3.04
|
Page
122
Average liabilities
|
6 months ended 30.06.24
|
Average non-interest bearing
balance
$million
|
Average
interest bearing
balance
$million
|
Interest expense
$million
|
Rate paid
interest bearing
balance
%
|
Rate paid
total balance
%
|
Deposits by banks
|
15,374
|
21,300
|
441
|
4.16
|
2.42
|
Customer accounts:
|
-
|
-
|
-
|
|
|
Current accounts
|
39,666
|
128,079
|
2,245
|
3.52
|
2.69
|
Savings deposits
|
-
|
113,627
|
1,204
|
2.13
|
2.13
|
Time deposits
|
19,131
|
186,811
|
4,642
|
5.00
|
4.53
|
Other deposits
|
36,403
|
11,734
|
299
|
5.12
|
1.25
|
Debt securities in issue
|
11,642
|
64,678
|
1,794
|
5.58
|
4.73
|
Accruals, deferred income and other
liabilities
|
138,564
|
-
|
-
|
-
|
-
|
Subordinated liabilities and other borrowed
funds
|
-
|
11,379
|
394
|
6.96
|
6.96
|
Non-controlling interests
|
389
|
-
|
-
|
-
|
-
|
Shareholders' funds
|
50,272
|
-
|
-
|
-
|
-
|
|
311,442
|
537,608
|
11,019
|
4.12
|
1.30
|
|
|
|
|
|
|
Adjustment for trading book funding cost and
others
|
|
|
(1,816)
|
|
|
Total average liabilities and shareholders'
funds
|
311,442
|
537,608
|
9,203
|
3.44
|
1.08
|
|
6 months ended 31.12.23
|
Average non-interest bearing
balance
$million
|
Average
interest bearing
balance
$million
|
Interest expense
$million
|
Rate paid
interest bearing
balance
%
|
Rate paid
total balance
%
|
Deposits by banks
|
14,075
|
22,975
|
420
|
3.63
|
2.25
|
Customer accounts:
|
|
|
|
|
|
Current accounts
|
39,993
|
123,011
|
2,044
|
3.30
|
2.49
|
Savings deposits
|
-
|
111,593
|
1,087
|
1.93
|
1.93
|
Time deposits
|
16,188
|
185,482
|
4,276
|
4.57
|
4.21
|
Other deposits
|
39,148
|
10,018
|
424
|
8.40
|
1.71
|
Debt securities in issue
|
13,945
|
64,968
|
1,829
|
5.58
|
4.60
|
Accruals, deferred income and other
liabilities
|
135,882
|
12,612
|
-
|
-
|
-
|
Subordinated liabilities and other borrowed
funds
|
-
|
12,447
|
535
|
8.53
|
8.53
|
Non-controlling interests
|
370
|
-
|
-
|
-
|
-
|
Shareholders' funds
|
48,644
|
-
|
-
|
-
|
-
|
|
308,246
|
543,106
|
10,615
|
3.88
|
2.47
|
|
|
|
|
|
|
Adjustment for trading book funding cost and
others
|
|
|
(992)
|
|
|
Total average liabilities and shareholders'
funds
|
308,246
|
543,106
|
9,623
|
3.51
|
2.24
|
Page
123
|
6 months ended 30.06.23
|
Average non-interest bearing
balance
$million
|
Average
interest bearing
balance
$million
|
Interest expense
$million
|
Rate paid
interest bearing
balance
%
|
Rate paid
total balance
%
|
Deposits by banks
|
14,395
|
25,176
|
374
|
3.00
|
1.91
|
Customer accounts:
|
|
|
|
|
|
Current accounts
|
43,861
|
130,405
|
1,705
|
2.64
|
1.97
|
Savings deposits
|
-
|
112,506
|
892
|
1.60
|
1.60
|
Time deposits
|
14,489
|
187,106
|
3,830
|
4.13
|
3.83
|
Other deposits
|
49,348
|
2,978
|
62
|
4.20
|
0.24
|
Debt securities in issue
|
10,546
|
66,201
|
1,538
|
4.68
|
4.04
|
Accruals, deferred income and other
liabilities
|
130,519
|
1,029
|
26
|
5.10
|
0.04
|
Subordinated liabilities and other borrowed
funds
|
-
|
12,148
|
415
|
6.89
|
6.89
|
Non-controlling interests
|
320
|
-
|
-
|
-
|
-
|
Shareholders' funds
|
49,700
|
-
|
-
|
-
|
-
|
|
313,178
|
537,549
|
8,842
|
3.32
|
1.04
|
|
|
|
|
|
|
Adjustment for trading book funding cost and
others
|
-
|
-
|
(786)
|
-
|
-
|
Total average liabilities and shareholders'
funds
|
313,178
|
537,549
|
8,056
|
3.02
|
0.95
|
Net interest margin
|
6 months ended 30.06.24
$million
|
6 months ended 31.12.23
$million
|
6 months ended 30.06.23
$million
|
Interest income (reported)
|
14,194
|
14,400
|
12,826
|
Average interest earning assets
|
543,788
|
568,949
|
576,149
|
Gross yield (%)
|
5.25
|
5.02
|
4.49
|
|
|
|
|
Interest expense (reported)
|
11,019
|
10,615
|
8,842
|
Adjustment for trading book funding cost and
others
|
(1,816)
|
(992)
|
(786)
|
Interest expense adjusted for trading book
funding cost and others
|
9,203
|
9,623
|
8,056
|
Average interest-bearing liabilities
|
537,608
|
543,106
|
537,549
|
Rate paid (%)
|
3.44
|
3.51
|
3.02
|
Net yield (%)
|
1.81
|
1.51
|
1.47
|
|
|
|
|
Net interest income adjusted for trading book
funding cost and others
|
4,991
|
4,777
|
4,770
|
Net interest margin (%)
|
1.85
|
1.67
|
1.67
|
Page
124
Additional items
A. Our Fair Pay Charter
Our Fair Pay Charter, introduced in 2018, sets
out the principles we use to make remuneration decisions across the
Group that are fair, transparent and competitive to support us in
embedding a performance-oriented, inclusive and innovative culture
and in delivering a differentiated employee experience. In 2023, we
reviewed and refined our Fair Pay Charter to a set of four
principles set out in the Group's Diversity, Equality and Inclusion
Impact Report 2023. This report, available on our Group website,
explains each principle and summarises how we are implementing them
across the Group.
B. Group share plans
Discretionary share plans
The 2021 Standard Chartered Share Plan (the
'2021 Plan') was approved by shareholders in May 2021 and is the
Group's main share plan, replacing the 2011 Standard Chartered
Share Plan (the '2011 Plan') for new awards from June 2021. It is
used to deliver various types of share awards to employees and
former employees of the Group, including directors and former
executive directors:
• Long-term incentive
plan (LTIP) awards are granted with vesting subject to performance
measures that have previously included: relative total shareholder
return (TSR); Return on Tangible Equity (RoTE) (with a Common
Equity Tier 1 (CET1) underpin); and strategic and sustainability
measures. Each measure is assessed independently over a three-year
period. LTIP awards have an individual conduct gateway requirement
that results in the award lapsing if not met.
• Deferred shares are
used to deliver:
- the deferred portion of variable
remuneration. These awards vest in instalments on anniversaries of
the award date specified at the time of grant. This enables the
Group to meet regulatory requirements relating to deferral levels,
and is in line with market practice.
- replacement buy-out awards to new
joiners who forfeit awards on leaving their previous employers.
These vest in the quarter following the date when the award would
have vested at the previous employer. This enables the Group to
meet regulatory requirements relating to buy-outs, and is in line
with market practice.
Under the 2021 Plan and 2011 Plan, no grant
price is payable to receive an award. The remaining life of the
2021 Plan during which new awards can be made is seven years. The
2011 Plan has expired and no further awards can be granted under
this plan.
All-employee share plans
The Standard Chartered 2023 Sharesave Plan was
approved by shareholders in May 2023, replacing the Standard
Chartered 2013 Sharesave Plan. Under the 2023 Sharesave Plan,
employees may open a savings contract. Within a maturity period of
six months after the third anniversary, employees may purchase
ordinary shares in the Company at a discount of up to 20 per cent
on the share price at the date of invitation. There are no
performance measures attached to options granted under the 2023
Sharesave Plan and no grant price is payable to receive an
option.
In some countries in which the Group operates,
it is not possible to deliver shares under the 2023 Sharesave Plan,
typically due to securities laws and regulatory restrictions. In
these countries, where possible, the Group offers an equivalent
cash-based plan to its employees.
Valuation of share awards
Details of the valuation models used in
determining the fair values of share awards granted under the
Group's share plans are detailed in the Group's 2023 Annual
Report.
Page
125
Reconciliation of share award movements for the year to
30 June 2024
|
Discretonary1
|
Sharesave⁴
|
Weighted average Sharesave exercise price
(£)
|
LTIP
|
Deferred shares
|
Outstanding on 1 January 2024
|
10,947,382
|
47,068,204
|
16,902,217
|
4.49
|
Granted2, 3
|
2,320,481
|
25,075,381
|
-
|
-
|
Lapsed
|
(1,730,292)
|
(471,265)
|
(613,810)
|
4.68
|
Vested/exercised
|
(901,531)
|
(18,131,269)
|
(2,441,150)
|
3.16
|
Outstanding on 30 June 2024⁵
|
10,636,040
|
53,541,051
|
13,847,257
|
4.72
|
Total number of securities available for issue
under the plan
|
10,636,040
|
53,541,051
|
13,847,257
|
4.72
|
Percentage of the issued shares this represents
as of 30 June 2024⁶
|
0.42
|
2.10
|
0.54
|
|
Exercisable as of 30 June 2024
|
-
|
361,802
|
91,880
|
4.65
|
Range of exercise prices (£)
|
-
|
-
|
3.14 - 5.88
|
-
|
Intrinsic value of vested but not exercised
options ($ million)
|
0.00
|
3.27
|
0.29
|
-
|
Weighted average contractual remaining life
(years)
|
7.89
|
8.64
|
2.11
|
-
|
Weighted average share price for awards
exercised during the period (£)
|
6.57
|
6.57
|
6.76
|
-
|
1. Employees do not contribute towards
the cost of these awards, which are covered under the rules of the
2011 Standard Chartered Share Plan for grants prior to May 2021,
and under the rules of the 2021 Standard Chartered Share Plan for
grants from June 2021
2. 2,315,422 (LTIP) granted on 12 March
2024; 5,059 (LTIP) granted as a notional dividend on 1 March 2024;
24,381,791 (deferred shares) granted on 11 March 2024; 229,896
(deferred shares) granted as a notional dividend on 1 March 2024;
463,694 (deferred shares) granted on 17 June 2024
3. No discretionary awards (LTIP or
deferred/buy-out awards) have been granted in the form of options
since June 2015. For historic awards granted as options and
exercised in the period to 30 June 2024, the exercise price of
deferred shares options was nil
4. All Sharesave awards are in the form
of options. The exercise price of Sharesave options exercised was
£5.88 for options granted in 2023, £4.23 for options granted in
2022, £3.67 for options granted in 2021 and £3.14 for options
granted in 2020
5. No options or awards were cancelled in
the period
6. The number of shares granted during
this period, under all Standard Chartered PLC share plans, as a
percentage of the average number of shares in issue during the
period is 1.04 per cent
C. Group Chairman and independent non-executive
directors' interests in ordinary shares as at 30 June
2024¹,²
|
Shares beneficially
held as of
31 December 2023
|
Shares beneficially
held as of
30 June 2024
|
Chairman
|
|
|
J Viñals
|
45,000
|
45,000
|
Independent non-executive directors
|
|
|
S M Apte
|
2,000
|
2,000
|
D P Conner
|
10,000
|
10,000
|
G Huey Evans, CBE3
|
2,615
|
-
|
J Hunt
|
2,000
|
2,000
|
D E Jurgens4
|
-
|
8,888
|
R A Lawther, CBE
|
2,000
|
2,000
|
M Ramos
|
2,000
|
2,000
|
P G Rivett
|
2,128
|
2,128
|
D Tang
|
2,000
|
2,000
|
C Tong5
|
2,000
|
-
|
L Y Yueh
|
2,000
|
2,000
|
1. Independent non-executive directors
are required to hold shares with a nominal value of $1,000. All the
directors have met this requirement
2. The beneficial interests of directors
and their related parties in the ordinary shares of the Company are
set out above. The directors do not have any non-beneficial
interests in the Company's shares. None of the directors used
ordinary shares as collateral for any loans. No director had either
i) an interest in the Company's preference shares or loan stocks of
any subsidiary or associated undertaking of the Group or ii) any
corporate interests in the Company's ordinary shares. All figures
as of 30 June 2024
3. Gay Huey Evans, CBE, retired from the
Board on 29 February 2024
4. Diane Jurgens was appointed to the
Board on 1 March 2024
5. Carlson Tong retired from the Board on
9 May 2024
Page
126
D. Executive directors' interests in ordinary shares as
at 30 June 2024
Scheme interests awarded, exercised and lapsed during the
period
Employees, including executive directors, are
not permitted to engage in any personal investment strategies with
regards to their Company shares, including hedging against the
share price of Company shares. The main features of the outstanding
shares and awards are summarised below:
Award1
|
Performance measures
|
Performance outcome
|
Accrues notional dividends?2
|
2017-19
|
33% RoE
33% TSR
33% Strategic
|
38%
|
Yes
|
2018-20
|
26%
|
No
|
2019-21
|
33% RoTE
33% TSR
33% Strategic
|
23%
|
2020-22
|
36.8%
|
2021-23
|
30% RoTE
30% TSR
15% Sustainability
25% Strategic
|
57%
|
2022-24
|
To be assessed at the end of 2024
|
2023-25
|
To be assessed at the end of 2025
|
2024-26
|
30% RoTE
30% TSR
25% ESG
15% Other strategic
|
To be assessed at the end of 2026
|
1. Awards are delivered in five equal
tranches
2. 2017-19 LTIP award may receive
dividend equivalent shares based on dividends declared between
grant and vest. From 1 January 2017 remuneration regulations for
European banks prohibited the award of dividend equivalent shares.
Therefore, the number of shares awarded in respect of the LTIP
awards granted after this date took into account the lack of
dividend equivalents (calculated by reference to market consensus
dividend yield) such that the overall value of the award was
maintained
The following table shows the changes in share
interests.
|
Date of grant
|
Changes in interests from 1 January to 30 June
2024
|
Share award price (£)
|
As at
1 January
|
Awarded1
|
Dividends awarded2
|
Vested/
exercised3,4
|
Lapsed
|
As at
30 June
|
Performance
period end
|
Vesting date
|
Bill Winters5
|
|
|
|
|
|
|
|
|
|
|
2017-19 LTIP
|
13 Mar 2017
|
7.450
|
45,049
|
-
|
6,127
|
51,176
|
-
|
-
|
13 Mar 2020
|
13 Mar 2024
|
2018-20 LTIP
|
9 Mar 2018
|
7.782
|
28,178
|
-
|
-
|
28,178
|
-
|
-
|
9 Mar 2021
|
9 Mar 2024
|
|
|
|
28,179
|
-
|
-
|
-
|
-
|
28,179
|
|
9 Mar 2025
|
2019-21 LTIP
|
11 Mar 2019
|
6.105
|
30,604
|
-
|
-
|
30,604
|
-
|
-
|
11 Mar 2022
|
11 Mar 2024
|
|
|
|
30,604
|
-
|
-
|
-
|
-
|
30,604
|
|
11 Mar 2025
|
|
|
|
30,605
|
-
|
-
|
-
|
-
|
30,605
|
|
11 Mar 2026
|
2020-22 LTIP
|
9 Mar 2020
|
5.196
|
59,282
|
-
|
-
|
59,282
|
-
|
-
|
9 Mar 2023
|
9 Mar 2024
|
|
|
|
59,282
|
-
|
-
|
-
|
-
|
59,282
|
|
9 Mar 2025
|
|
|
|
59,282
|
-
|
-
|
-
|
-
|
59,282
|
|
9 Mar 2026
|
|
|
|
59,282
|
-
|
-
|
-
|
-
|
59,282
|
|
9 Mar 2027
|
2021-23 LTIP
|
15 Mar 2021
|
4.901
|
150,621
|
-
|
-
|
85,853
|
64,768
|
-
|
15 Mar 2024
|
15 Mar 2024
|
|
|
|
150,621
|
-
|
-
|
-
|
64,768
|
85,853
|
|
15 Mar 2025
|
|
|
|
150,621
|
-
|
-
|
-
|
64,768
|
85,853
|
|
15 Mar 2026
|
|
|
|
150,621
|
-
|
-
|
-
|
64,768
|
85,853
|
|
15 Mar 2027
|
|
|
|
150,621
|
-
|
-
|
-
|
64,768
|
85,853
|
|
15 Mar 2028
|
2022-24 LTIP
|
14 Mar 2022
|
4.876
|
151,386
|
-
|
-
|
-
|
-
|
151,386
|
14 Mar 2025
|
14 Mar 2025
|
|
|
|
151,386
|
-
|
-
|
-
|
-
|
151,386
|
|
14 Mar 2026
|
|
|
|
151,386
|
-
|
-
|
-
|
-
|
151,386
|
|
14 Mar 2027
|
|
|
|
151,386
|
-
|
-
|
-
|
-
|
151,386
|
|
14 Mar 2028
|
|
|
|
151,388
|
-
|
-
|
-
|
-
|
151,388
|
|
14 Mar 2029
|
2023-25 LTIP
|
13 Mar 2023
|
7.398
|
101,209
|
-
|
-
|
-
|
-
|
101,209
|
13 Mar 2026
|
13 Mar 2026
|
|
|
|
101,209
|
-
|
-
|
-
|
-
|
101,209
|
|
13 Mar 2027
|
|
|
|
101,209
|
-
|
-
|
-
|
-
|
101,209
|
|
13 Mar 2028
|
|
|
|
101,209
|
-
|
-
|
-
|
-
|
101,209
|
|
13 Mar 2029
|
|
|
|
101,209
|
-
|
-
|
-
|
-
|
101,209
|
|
13 Mar 2030
|
2024-26 LTIP
|
12 Mar 2024
|
6.600
|
-
|
123,275
|
-
|
-
|
-
|
123,275
|
12 Mar 2027
|
12 Mar 2027
|
|
|
|
-
|
123,275
|
-
|
-
|
-
|
123,275
|
|
12 Mar 2028
|
|
|
|
-
|
123,275
|
-
|
-
|
-
|
123,275
|
|
12 Mar 2029
|
|
|
|
-
|
123,275
|
-
|
-
|
-
|
123,275
|
|
12 Mar 2030
|
|
|
|
-
|
123,278
|
-
|
-
|
-
|
123,278
|
|
12 Mar 2031
|
Page
127
|
Date of grant
|
Changes in interests from 1 January to 30 June
2024
|
Share award price (£)
|
As at
1 January
|
Awarded1
|
Dividends awarded2
|
Vested/
exercised3,4
|
Lapsed
|
As at
30 June
|
Performance
period end
|
Vesting date
|
Andy Halford5
|
|
|
|
|
|
|
|
|
|
|
2017-19 LTIP
|
13 Mar 2017
|
7.450
|
27,890
|
-
|
3,796
|
31,686
|
-
|
-
|
13 Mar 2020
|
13 Mar 2024
|
2018-20 LTIP
|
9 Mar 2018
|
7.782
|
17,448
|
-
|
-
|
17,448
|
-
|
-
|
9 Mar 2021
|
9 Mar 2024
|
|
|
|
17,448
|
-
|
-
|
-
|
-
|
17,448
|
|
9 Mar 2025
|
2019-21 LTIP
|
11 Mar 2019
|
6.105
|
19,571
|
-
|
-
|
19,571
|
-
|
-
|
11 Mar 2022
|
11 Mar 2024
|
|
|
|
19,571
|
-
|
-
|
-
|
-
|
19,571
|
|
11 Mar 2025
|
|
|
|
19,572
|
-
|
-
|
-
|
-
|
19,572
|
|
11 Mar 2026
|
2020-22 LTIP
|
9 Mar 2020
|
5.196
|
36,791
|
-
|
-
|
36,791
|
-
|
-
|
9 Mar 2023
|
9 Mar 2024
|
|
|
|
36,791
|
-
|
-
|
-
|
-
|
36,791
|
|
9 Mar 2025
|
|
|
|
36,791
|
-
|
-
|
-
|
-
|
36,791
|
|
9 Mar 2026
|
|
|
|
36,791
|
-
|
-
|
-
|
-
|
36,791
|
|
9 Mar 2027
|
2021-23 LTIP
|
15 Mar 2021
|
4.901
|
96,283
|
-
|
-
|
54,881
|
41,402
|
-
|
15 Mar 2024
|
15 Mar 2024
|
|
|
|
96,283
|
-
|
-
|
-
|
41,402
|
54,881
|
|
15 Mar 2025
|
|
|
|
96,283
|
-
|
-
|
-
|
41,402
|
54,881
|
|
15 Mar 2026
|
|
|
|
96,283
|
-
|
-
|
-
|
41,402
|
54,881
|
|
15 Mar 2027
|
|
|
|
96,283
|
-
|
-
|
-
|
41,402
|
54,881
|
|
15 Mar 2028
|
2022-24 LTIP
|
14 Mar 2022
|
4.876
|
96,772
|
-
|
-
|
-
|
-
|
96,772
|
14 Mar 2025
|
14 Mar 2025
|
|
|
|
96,772
|
-
|
-
|
-
|
-
|
96,772
|
|
14 Mar 2026
|
|
|
|
96,772
|
-
|
-
|
-
|
-
|
96,772
|
|
14 Mar 2027
|
|
|
|
96,772
|
-
|
-
|
-
|
-
|
96,772
|
|
14 Mar 2028
|
|
|
|
96,773
|
-
|
-
|
-
|
-
|
96,773
|
|
14 Mar 2029
|
2023-25 LTIP
|
13 Mar 2023
|
7.398
|
64,700
|
-
|
-
|
-
|
-
|
64,700
|
13 Mar 2026
|
13 Mar 2026
|
64,700
|
-
|
-
|
-
|
-
|
64,700
|
|
13 Mar 2027
|
64,700
|
-
|
-
|
-
|
-
|
64,700
|
|
13 Mar 2028
|
64,700
|
-
|
-
|
-
|
-
|
64,700
|
|
13 Mar 2029
|
64,702
|
-
|
-
|
-
|
-
|
64,702
|
|
13 Mar 2030
|
2023 Deferred Shares6
|
11 Mar 2024
|
6.558
|
-
|
10,315
|
-
|
-
|
-
|
10,315
|
N/A
|
11 Mar 2027
|
|
|
-
|
10,315
|
-
|
-
|
-
|
10,315
|
|
11 Mar 2028
|
|
|
-
|
10,315
|
-
|
-
|
-
|
10,315
|
|
11 Mar 2029
|
|
|
-
|
10,315
|
-
|
-
|
-
|
10,315
|
|
11 Mar 2030
|
|
|
-
|
10,319
|
-
|
-
|
-
|
10,319
|
|
11 Mar 2031
|
2022 Sharesave7,8
|
|
4.230
|
2,127
|
-
|
-
|
-
|
-
|
2,127
|
N/A
|
1 Feb 2026
|
Diego De Giorgi5
|
|
|
|
|
|
|
|
|
|
|
2024-26 LTIP
|
12 Mar 2024
|
6.600
|
-
|
80,812
|
-
|
-
|
-
|
80,812
|
12 Mar 2027
|
12 Mar 2027
|
|
|
|
-
|
80,812
|
-
|
-
|
-
|
80,812
|
|
12 Mar 2028
|
|
|
|
-
|
80,812
|
-
|
-
|
-
|
80,812
|
|
12 Mar 2029
|
|
|
|
-
|
80,812
|
-
|
-
|
-
|
80,812
|
|
12 Mar 2030
|
|
|
|
-
|
80,814
|
-
|
-
|
-
|
80,814
|
|
12 Mar 2031
|
1. For the 2024-26 LTIP awards granted
to Bill and Diego on 12 March 2024, the values granted were: Bill:
£3.3 million; Diego: £2.2 million. The number of shares awarded in
respect of the LTIP took into account the lack of dividend
equivalents (calculated by reference to market consensus dividend
yield) such that the overall value of the award was maintained.
Performance measures apply to 2024-26 LTIP awards. The closing
price on the day before grant was £6.600.
2. Dividend equivalent shares may be
awarded on vesting for awards granted prior to 1 January 2018. On
31 March 2020, Standard Chartered announced that in response to the
request from the PRA and as a consequence of the unprecedented
challenges facing the world due to the COVID-19 pandemic, the Board
decided to withdraw the recommendation to pay a final dividend for
2019. Dividend equivalent shares allocated to the 2017-19 awards
vesting in 2024 did not include any shares relating to the
cancelled dividend.
3. Shares (before tax) were delivered to
Bill and Andy from the vesting element of LTIP awards. The closing
share price on the day before the shares were delivered were as
follows:
• 13 March 2024: Shares in respect of
the 2017-19 LTIP. Previous day closing share price:
£6.698
• 11 March 2024: Shares in respect of
the 2018-20 LTIP, 2019-21 LTIP and 2020-22 LTIP. Previous day
closing share price: £6.558
• 19 March 2024: Shares in respect of
the 2021-23 LTIP. Previous day closing share price:
£6.502
4. The weighted average closing price
for awards exercised during the period were: Bill: £6.567; Andy:
£6.566
5. The unvested LTIP awards held by
Bill, Andy and Diego are conditional rights. They do not have to
pay towards these awards. Under these awards, shares are delivered
on vesting or as soon as practicable thereafter.
6. As detailed in our 2023 Annual Report
and Accounts, due to Andy Halford's upcoming retirement he did not
receive an LTIP award in 2024 and therefore, to meet regulatory
deferral requirements in respect of 2023, part of his annual
incentive was delivered in deferred shares.
7. Andy chose to participate in the 2022
Sharesave invitation. This unvested option was granted on 28
November 2022 under the 2013 Plan - to exercise this option, Andy
has to pay an exercise price of £4.23 per share, which has been
discounted by 20 per cent.
8. The vesting date relates to the end
of the savings contract and the start of the six-month exercise
window.
As at 30 June 2024, none of the directors had
registered an interest or short position in the shares, underlying
shares or debentures of the Company or any of its associated
corporations that was required to be recorded pursuant to section
352 of the Securities and Futures Ordinance, or as otherwise
notified to the Company and The Stock Exchange of Hong Kong Limited
pursuant to the Model Code for Securities Transactions by Directors
of Listed Issuers.
Page
128
Shareholdings and share interests
The following table summarises the executive
directors' shareholdings and share interests.
|
Shares held beneficially1,2,3
|
Unvested share awards not subject to performance
measures
(net of tax)4,5
|
Total shares counting towards shareholding
requirement
|
Shareholding requirement
|
Salary3
|
Value of shares counting towards shareholding
requirement as a percentage
of salary1
|
Unvested share awards subject to performance
measures
(before tax)
|
Bill Winters
|
2,911,070
|
323,640
|
3,234,710
|
250% salary
|
£2,517,000
|
920%
|
1,879,355
|
Andy Halford
|
981,249
|
232,172
|
1,213,421
|
200% salary
|
£1,609,000
|
540%
|
807,363
|
Diego De Giorgi
|
70,445
|
-
|
70,445
|
200% salary
|
£1,650,000
|
31%
|
404,062
|
1. All figures are as of 30 June 2024
unless stated otherwise. The closing share price on 30 June 2024
was £7.16. No director had either: (i) an interest in Standard
Chartered PLC's preference shares or loan stocks of any subsidiary
or associated undertaking of the Group; or (ii) any corporate
interested in Standard Chartered PLC's ordinary shares
2. The beneficial interests of directors
and connected persons in the ordinary shares of the Company are set
out above. The executive directors do not have any non-beneficial
interest in the Company's shares. Neither of the executive
directors used ordinary shares as collateral for any
loans
3. The salary and shares held
beneficially include shares awarded to deliver the executive
directors' salary shares
4. 57 per cent of the 2021-23 LTIP award
is no longer subject to performance measures due to achievement
against RoTE and strategic measures
5. As Bill , Andy and Diego are UK
taxpayers: zero per cent tax is assumed to apply to Sharesave (as
Sharesave is a UK tax qualified share plan) and 47 per cent tax is
assumed to apply to other unvested share awards (marginal combined
PAYE rate of income tax at 45 per cent and employee National
Insurance contributions at
2 per cent) - rates may change
E. Share price information
The middle market price of an ordinary share at
the close of business on 30 June 2024 was 716.0 pence. The share
price range during the first half of 2024 was 573.9 pence to 785.9
pence (based on the closing middle market prices).
F. Substantial shareholders
The Company and its shareholders have been
granted partial exemption from the disclosure requirements under
Part XV of the Securities and Futures Ordinance (SFO). As a result
of this exemption, shareholders no longer have an obligation under
Part XV of the SFO (other than Divisions 5, 11 and 12 thereof) to
notify the Company of substantial shareholding interests, and the
Company is no longer required to maintain a register of interests
of substantial shareholders under section 336 of the SFO. The
Company is, however, required to file with The Stock Exchange of
Hong Kong Limited any disclosure of interests made in the
UK.
G. Code for Financial Reporting Disclosures
The UK Finance Code for Financial Reporting
Disclosure sets out five disclosure principles together with
supporting guidance. The principles are that UK banks will: provide
high-quality, meaningful and decision-useful disclosures; review
and enhance their financial instrument disclosures for key areas of
interest; keep under review and commit to ongoing re-evaluation and
enhancement of financial instrument disclosures for key areas of
interest, acknowledging the importance of good practice
recommendations and similar guidance issued from time to time by
relevant regulators and standard-setters and assessing the
applicability and relevance of such guidance to disclosures; seek
to enhance the comparability of financial statement disclosures
across the UK banking sector; and clearly differentiate in their
annual reports between information that is audited and information
that is unaudited.
The Group's interim financial statements for the
six months ended 30 June 2024 have been prepared in accordance with
the code's principles.
H. Employees
The details regarding our remuneration policies,
bonus schemes and training schemes have not materially changed from
our 2023 Annual Report and Accounts and we will be updating on
these in our 2024 Annual Report.
I. Employee headcount
The following table summarises the number of
employees within the Group:
|
Business1
|
Support services2
|
Total3,4
|
At 30 June 2024
|
29,811
|
53,635
|
83,446
|
At 31 December 2023
|
29,929
|
55,078
|
85,007
|
1. Business is defined as employees directly
under the remit of the businesses
2. Support services include employees who
support businesses' operations or investments where costs are fully
recharged to the businesses. Decrease in support services in H1
2024 is mainly due to decrease in technology and operations support
resources, as tighter hiring controls are in place and we continue
to review our workforce composition and skills.
3. Excludes 811 employees (headcount) from
Digital Ventures entities (TasConnect, Zodia Markets, Zodia
Custody, Appro, Audax, Solv India, Solv Kenya, Solv Ghana, Solv
Malaysia, Letsbloom, MyZoi and TAWIFresh)
4. Includes employees operating in
discontinued/restructured businesses
Page
129
Shareholder information
Dividend and interest payment dates
Ordinary shares
|
2024 interim dividend (cash only)
|
Results and dividend announced
|
30 July 2024
|
Ex-dividend date
|
8 (UK) 7 (HK) August 2024
|
Record date
|
9 August 2024
|
Last date to amend currency election
instructions for cash dividend*
|
16 September 2024
|
Dividend payment date
|
10 October 2024
|
* in either US dollars, sterling or
Hong Kong dollars
|
2024 final dividend (provisional
only)
|
Results and dividend announcement
date
|
21 February 2025
|
Preference shares
|
Second half-yearly dividend
|
7 3/8 per cent non-cumulative irredeemable preference
shares of £1 each
|
1 October 2024
|
8 ¼ per cent non-cumulative irredeemable
preference shares of £1 each
|
1 October 2024
|
6.409 per cent non-cumulative preference shares
of $5 each
|
30 July 2024 and 30 October 2024
|
7.014 per cent non-cumulative preference shares
of $5 each
|
30 July 2024
|
Previous dividend payments (unadjusted for the
impact of the 2015/2010/2008 Rights Issues)
Dividend and financial year
|
Payment date
|
Dividend per ordinary share
|
Cost of one new ordinary share under
share dividend scheme
|
Interim 2008
|
9 October 2008
|
25.67c/13.96133p/HK$1.995046
|
£14.00/$26.0148
|
Final 2008
|
15 May 2009
|
42.32c/28.4693p/HK$3.279597
|
£8.342/$11.7405
|
Interim 2009
|
8 October 2009
|
21.23c/13.25177p/HK$1.645304
|
£13.876/$22.799
|
Final 2009
|
13 May 2010
|
44.80c/29.54233p/HK$3.478306
|
£17.351/$26.252
|
Interim 2010
|
5 October 2010
|
23.35c/14.71618p/HK$1.811274/INR0.9841241
|
£17.394/$27.190
|
Final 2010
|
11 May 2011
|
46.65c/28.272513p/HK$3.623404/INR1.99751701
|
£15.994/$25.649
|
Interim 2011
|
7 October 2011
|
24.75c/15.81958125p/HK$1.928909813/INR1.137971251
|
£14.127/$23.140
|
Final 2011
|
15 May 2012
|
51.25c/31.63032125p/HK$3.9776083375/INR2.66670151
|
£15.723/$24.634
|
Interim 2012
|
11 October 2012
|
27.23c/16.799630190p/HK$2.111362463/INR1.3498039501
|
£13.417/$21.041
|
Final 2012
|
14 May 2013
|
56.77c/36.5649893p/HK$4.4048756997/INR2.9762835751
|
£17.40/$26.28792
|
Interim 2013
|
17 October 2013
|
28.80c/17.8880256p/HK$2.233204992/INR1.68131
|
£15.362/$24.07379
|
Final 2013
|
14 May 2014
|
57.20c/33.9211444p/HK$4.43464736/INR3.3546261
|
£11.949/$19.815
|
Interim 2014
|
20 October 2014
|
28.80c/17.891107200p/HK$2.2340016000/INR1.6718425601
|
£12.151/$20.207
|
Final 2014
|
14 May 2015
|
57.20c/37.16485p/HK$4.43329/INR3.5140591
|
£9.797/$14.374
|
Interim 2015
|
19 October 2015
|
14.40c/9.3979152p/HK$1.115985456/INR0.861393721
|
£8.5226/$13.34383
|
Final 2015
|
No dividend declared
|
N/A
|
N/A
|
Interim 2016
|
No dividend declared
|
N/A
|
N/A
|
Final 2016
|
No dividend declared
|
N/A
|
N/A
|
Interim 2017
|
No dividend declared
|
N/A
|
N/A
|
Final 2017
|
17 May 2018
|
11.00c/7.88046p/HK$0.86293/INR0.6536433401
|
£7.7600/$10.83451
|
Interim 2018
|
22 October 2018
|
6.00c/4.59747p/HK$0.46978/INR0.36961751
|
£6.7104/$8.51952
|
Final 2018
|
16 May 2019
|
15.00c/11.569905p/HK$1.176260/INR0.9576916501
|
N/A
|
Interim 2019
|
21 October 2019
|
7.00c/5.676776p/HK$0.548723/INR0.4250286001
|
N/A
|
Final 2019
|
Dividend withdrawn
|
N/A
|
N/A
|
Interim 2020
|
No dividend declared
|
N/A
|
N/A
|
Final 2020
|
25 February 2021
|
9.00c/6.472413p/HK$0.698501
|
N/A
|
Interim 2021
|
22 October 2021
|
3.00c/2.204877p/HK$0.233592
|
N/A
|
Final 2021
|
12 May 2022
|
9.00c/6.894144p/HK$0.705772
|
N/A
|
Interim 2022
|
14 October 2022
|
4.00c/3.675912p/HK$0.313887
|
N/A
|
Final 2022
|
11 May 2023
|
14.00c/11.249168p/HK$1.09803
|
N/A
|
Interim 2023
|
13 October 2023
|
6.00c/4.910412p/HK$0.469085
|
N/A
|
Final 2023
|
17 May 2024
|
21.00c/16.773519p/HK$1.641434
|
N/A
|
1 The INR dividend was per Indian
Depository Receipt. In March 2020, the Group announced the
termination of the IDR programme. The IDR programme was formally
delisted from the BSE Limited (formerly the Bombay Stock Exchange)
and National Stock Exchange of India Limited with effect from 22
July 2020
Further details regarding dividends can be found
on our website at www.sc.com/shareholders
Page
130
ShareCare
ShareCare is available to shareholders on the
Company's UK register who have a UK address and bank account. It
allows you to hold your Standard Chartered PLC shares in a nominee
account. Your shares will be held in electronic form so you will no
longer have to worry about keeping your share certificates safe. If
you join ShareCare, you will still be invited to attend the
Company's AGM and you will receive any dividend paid at the same
time as everyone else. ShareCare is free to join and there are no
annual fees to pay. If you would like to receive more information,
please visit our website at www.sc.com/shareholders or contact the
shareholder helpline on 0370 702 0138.
Donating shares to ShareGift
Shareholders who have a small number of shares
often find it uneconomical to sell them. An alternative is to
consider donating them to the charity ShareGift (registered charity
1052686), which collects donations of unwanted shares until
there are enough to sell and uses the proceeds to support UK
charities. There is no implication for capital gains tax (no gain
or loss) when you donate shares to charity, and UK taxpayers may be
able to claim income tax relief on the value of their donation.
Further information can be obtained from the Company's registrars
or from ShareGift on 020 7930 3737 or from www.sharegift.org.
Bankers' Automated Clearing System (BACS)
Dividends can be paid straight into your bank or
building society account. Please register online at www.investorcentre.co.uk or contact
our registrar for a mandate form.
Registrars and shareholder enquiries
If you have any enquiries relating to your
shareholding and you hold your shares on the UK register, please
contact our registrar at www.investorcentre.co.uk and click
on the 'ASK A QUESTION' link at the bottom of the page.
Alternatively, please contact Computershare Investor Services PLC,
The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ or call the
shareholder helpline number on 0370 702 0138.
If you hold your shares on the Hong Kong branch
register and you have enquiries, please contact Computershare Hong
Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183
Queen's Road East, Wan Chai, Hong Kong. You can check your
shareholding at: www.computershare.com/hk/investors.
Chinese translation
If you would like a Chinese version of this Half
Year Report, please contact: Computershare Hong Kong Investor
Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road
East, Wan Chai, Hong Kong.
本半年報告之中文譯本可向香港中央證券登記有限公司索取,地址:香港灣仔皇后大道東183號合和中心17M樓。
Shareholders on the Hong Kong branch register
who have asked to receive corporate communications in either
Chinese or English can change this election by contacting
Computershare. If there is a dispute between any translation and
the English version of this Half Year Report, the English text
shall prevail.
Electronic communications
If you hold your shares on the UK register and
in future you would like to receive the Half Year Report
electronically rather than by post, please register online at:
www.investorcentre.co.uk.
Then click on 'register now' and follow the instructions. You will
need to have your shareholder or ShareCare reference number to
hand. You can find this on your share certificate or ShareCare
statement. Once you have registered and confirmed your email
communication preference, you will receive future notifications via
email enabling you to submit your proxy vote online. In addition,
as a member of Investor Centre, you will be able to manage your
shareholding online and change your bank mandate or address
information.
Page
131
Important notices
Forward-looking statements
This document may contain 'forward-looking
statements' that are based upon current expectations or beliefs, as
well as statements formulated with assumptions about future events.
These forward-looking statements can be identified by the fact 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', 'aim', '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. Readers
should not place reliance on, and are cautioned about relying on,
any forward-looking statements.
There are several factors that 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 forces or conditions, or in future exchange and interest
rates; changes in environmental, geopolitical, social or physical
risks; legislative, regulatory and policy developments; the
development of standards and interpretations; the ability of the
Group, together with governments and other stakeholders, to
measure, manage, and mitigate the impacts of climate change and
broader sustainability-related issues effectively; risks arising
out of health crises and pandemics; risks of cyberattacks, data,
information or security breaches or technology failures involving
the Group; changes in tax rates, future business combinations or
dispositions; and other factors specific to the Group, including
those identified in the financial statements of the Group. Any
forward-looking statements contained in this document are 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,
nor should be interpreted as, 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 Annual Report, this
document, and the financial statements of the Group for a
discussion of certain of the risks and factors that could adversely
impact the Group's actual results, and its plans and objectives, to
differ materially from those expressed or implied in any
forward-looking statements.
Financial instruments
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.
Caution regarding climate and environment-related
information
Some of the climate and environment-related
information in this document is subject to certain limitations, and
therefore the reader should treat the information provided, as well
as conclusions, projections and assumptions drawn from such
information, with caution. The information may be limited due to a
number of factors, which include (but are not limited to): a lack
of reliable data; a lack of standardisation of data; and future
uncertainty. The information includes externally sourced data that
may not have been verified. Furthermore, some of the data, models
and methodologies used to create the information are subject to
adjustment that is beyond our control, and the information is
subject to change without notice. This disclaimer does not apply to
the Group's condensed consolidated interim financial statements and
notes as set out in Note 1 - Statement of compliance.
Page
132
Glossary
Absolute financed emissions
A measurement of our attributed share of our
clients greenhouse gas emissions.
AT1 or Additional Tier 1 capital
Additional Tier 1 capital consists of
instruments other than Common Equity Tier 1 that meet the Capital
Requirements Regulation (as it forms part of UK domestic law)
criteria for inclusion in Tier 1 capital.
Additional value adjustment
See Prudent valuation adjustment.
Advanced Internal Rating Based (AIRB)
approach
The AIRB approach under the Basel framework is
used to calculate credit risk capital based on the Group's own
estimates of prudential parameters.
Alternative performance measures
A financial measure of historical or future
financial performance, financial position, or cash flows, other
than a financial measure defined or specified in the applicable
financial reporting framework.
ASEAN
Association of South East Asian Nations (ASEAN)
which includes the Group's operations in Brunei, Indonesia,
Malaysia, Philippines, Singapore, Thailand and Vietnam.
AUM or Assets under management
Total market value of assets such as deposits,
securities and funds held by the Group on behalf of the
clients.
Basel II
The capital adequacy framework issued by the
Basel Committee on Banking Supervision (BCBS) in June 2006 in the
form of the International Convergence of Capital Measurement and
Capital Standards.
Basel III
The global regulatory standards on bank capital
adequacy and liquidity, originally issued in December 2010 and
updated in June 2011. In December 2017, the BCBS published a
document setting out the finalisation of the Basel III framework.
The latest requirements issued in December 2017 will be implemented
from 2022.
BCBS or Basel Committee on Banking
Supervision
A forum on banking supervisory matters which
develops global supervisory standards for the banking industry. Its
members are officials from 45 central banks or prudential
supervisors from 27 countries and territories.
Basic earnings per share (EPS)
Represents earnings divided by the basic
weighted average number of shares.
Basis point (bps)
One hundredth of a per cent (0.01 per cent); 100
basis points is 1 per cent.
CRD or Capital Requirements Directive
A capital adequacy legislative package adopted
by the PRA. CRD comprises the Capital Requirements Directive and
the UK onshored Capital Requirements Regulation (CRR). The package
implements the Basel III framework together with transitional
arrangements for some of its requirements. CRD IV came into force
on 1 January 2014. The EU CRR II and CRD V amending
the existing package came into force in June 2019 with most changes
starting to apply from 28 June 2021. Only those parts of the EU CRR
II that applied on or before 31 December 2020, when the UK was a
member of the EU, have been implemented. The PRA recently finalised
the UK's version of the CRR II for implementation on 1 January
2022.
Page
133
Capital-lite income
Income derived from products with low RWA
consumption or products which are non-funding in nature.
Capital resources
Sum of Tier 1 and Tier 2 capital after
regulatory adjustments.
CGU or Cash-generating unit
The smallest identifiable group of assets that
generates cash inflows that are largely independent of the cash
inflows from other assets or groups of assets.
Cash shortfall
The difference between the cash flows that are
due in accordance with the contractual terms of the instrument and
the cash flows that the Group expects to receive over the
contractual life of the instrument.
Clawback
An amount an individual is required to pay back
to the Group, which has to be returned to the Group under certain
circumstances.
Commercial real estate
Includes office buildings, industrial property,
medical centres, hotels, malls, retail stores, shopping centres,
farm land, multi-family housing buildings, warehouses, garages, and
industrial properties. Commercial real estate loans are those
backed by
a package of commercial real estate assets.
CET1 or Common Equity Tier 1 capital
Common Equity Tier 1 capital consists of the
common shares issued by the Group and related share premium,
retained earnings, accumulated other comprehensive income and other
disclosed reserves, eligible non-controlling interests and
regulatory adjustments required in the calculation of Common Equity
Tier 1.
CET1 ratio
A measure of the Group's CET1 capital as a
percentage of risk-weighted assets.
Contractual maturity
Contractual maturity refers to the final payment
date of a loan or other financial instrument, at which point all
the remaining outstanding principal and interest is due to be
paid.
Countercyclical capital buffer
The countercyclical capital buffer (CCyB) is
part of a set of macroprudential instruments, designed to help
counter procyclicality in the financial system. CCyB as defined in
the Basel III standard provides for an additional capital
requirement of up to 2.5 per cent of risk-weighted assets in a
given jurisdiction. The Bank of England's Financial Policy
Committee has the power to set the CCyB rate for the United
Kingdom. Each bank must calculate its 'institution-specific' CCyB
rate, defined as the weighted average of the CCyB rates in effect
across the jurisdictions in which it has credit exposures. The
institution-specific CCyB rate is then applied to a bank's total
risk-weighted assets.
Counterparty credit risk
The risk that a counterparty defaults before
satisfying its obligations under a derivative, a securities
financing transaction (SFT) or a similar contract.
CCF or Credit conversion factor
An estimate of the amount the Group expects a
customer to have drawn further on a facility limit at the point of
default.
This is either prescribed by CRR or modelled by the
bank.
Page
134
CDS or Credit default swaps
A credit derivative is an arrangement whereby
the credit risk of an asset (the reference asset) is transferred
from the buyer to the seller of protection. A credit default swap
is a contract where the protection seller receives premium or
interest-related payments in return for contracting to make
payments to the protection buyer upon a defined credit event.
Credit events normally include bankruptcy, payment default on a
reference asset or assets, or downgrades by a rating
agency.
Credit institutions
An institution whose business is to receive
deposits or other repayable funds from the public and to grant
credits for its own account.
Credit risk mitigation
Credit risk mitigation is a process to mitigate
potential credit losses from any given account, customer or
portfolio by using a range of tools such as collateral, netting
agreements, credit insurance, credit derivatives and
guarantees.
CVA or Credit valuation adjustments
An adjustment to the fair value of derivative
contracts that reflects the possibility that the counterparty may
default such that the Group would not receive the full market value
of the contracts.
Customer accounts
Money deposited by all individuals and companies
which are not credit institutions including securities sold
under
repurchase agreement (see repo/reverse repo). Such funds are
recorded as liabilities in the Group's balance sheet under customer
accounts.
Days past due
One or more days that interest and/or principal
payments are overdue based on the contractual terms.
DVA or Debit valuation adjustment
An adjustment to the fair value of derivative
contracts that reflects the possibility that the Group may default
and not pay the full market value of contracts.
Debt securities
Debt securities are assets on the Group's
balance sheet and represent certificates of indebtedness of credit
institutions, public bodies or other undertakings excluding those
issued by central banks.
Debt securities in issue
Debt securities in issue are transferable
certificates of indebtedness of the Group to the bearer of the
certificate. These are liabilities of the Group and include
certificates of deposits.
Deferred tax asset
Income taxes recoverable in future periods in
respect of deductible temporary differences between the accounting
and tax base of an asset or liability that will result in tax
deductible amounts in future periods, the carry-forward of tax
losses or the carry-forward of unused tax credits.
Deferred tax liability
Income taxes payable in future periods in
respect of taxable temporary differences between the accounting and
tax base of an asset or liability that will result in taxable
amounts in future periods.
Default
Financial assets in default represent those that
are at least 90 days past due in respect of principal or interest
and/or where the assets are otherwise considered to be unlikely to
pay, including those that are credit-impaired.
Defined benefit obligation
The present value of expected future payments
required to settle the obligations of a defined benefit scheme
resulting from employee service.
Page
135
Defined benefit scheme
Pension or other post-retirement benefit scheme
other than a defined contribution scheme.
Defined contribution scheme
A pension or other post-retirement benefit
scheme where the employer's obligation is limited to its
contributions to the fund.
Delinquency
A debt or other financial obligation is
considered to be in a state of delinquency when payments are
overdue. Loans and advances are considered to be delinquent when
consecutive payments are missed. Also known as arrears.
Deposits by banks
Deposits by banks comprise amounts owed to other
domestic or foreign credit institutions by the Group including
securities sold under repo.
Diluted earnings per share (EPS)
Represents earnings divided by the weighted
average number of shares that would have been outstanding assuming
the conversion of all dilutive potential ordinary
shares.
Dividend per share
Represents the entitlement of each shareholder
in the share of the profits of the Company. Calculated in the
lowest unit of currency in which the shares are quoted.
Early alert, purely and non-purely
precautionary
A borrower's account which exhibits risks or
potential weaknesses of a material nature requiring closer
monitoring, supervision, or attention by management. Weaknesses in
such a borrower's account, if left uncorrected, could result in
deterioration of repayment prospects and the likelihood of being
downgraded to credit grade 12 or worse. When an account is on early
alert, it is classified as either purely precautionary or
non-purely precautionary. A purely precautionary account is one
that exhibits early alert characteristics, but these do not present
any imminent credit concern. If the symptoms present an imminent
credit concern, an account will be considered for classification as
non-purely precautionary.
Effective tax rate
The tax on profit/ (losses) on ordinary
activities as a percentage of profit/ (loss) on ordinary activities
before taxation.
Encumbered assets
On-balance sheet assets pledged or used as
collateral in respect of certain of the Group's
liabilities.
EU or European Union
The European Union (EU) is a political and
economic union of 27 member states that are located primarily in
Europe.
Eurozone
Represents the 19 EU countries that have adopted
the euro as their common currency.
ECL or Expected credit loss
Represents the present value of expected cash
shortfalls over the residual term of a financial asset, undrawn
commitment or financial guarantee.
Expected loss
The Group measure of anticipated loss for
exposures captured under an internal ratings-based credit risk
approach for capital adequacy calculations. It is measured as the
Group-modelled view of anticipated loss based on probability of
default, loss given default and exposure at default, with a
one-year time horizon.
Exposures
Credit exposures represent the amount lent to a
customer, together with any undrawn commitments.
Page
136
EAD or Exposure at default
The estimation of the extent to which the Group
may be exposed to a customer or counterparty in the event of, and
at the time of, that counterparty's default. At default, the
customer may not have drawn the loan fully or may already have
repaid some of the principal, so that exposure is typically less
than the approved loan limit.
ECAI or External Credit Assessment
Institution
External credit ratings are used to assign
risk-weights under the standardised approach for sovereigns,
corporates and institutions. The external ratings are from credit
rating agencies that are registered or certified in accordance with
the credit rating agencies regulation or from a central bank
issuing credit ratings which is exempt from the application of this
regulation.
ESG
Environmental, Social and Governance.
FCA or Financial Conduct Authority
The Financial Conduct Authority regulates the
conduct of financial firms and, for certain firms, prudential
standards in the UK. It has a strategic objective to ensure that
the relevant markets function well.
Forbearance
Forbearance takes place when a concession is
made to the contractual terms of a loan in response to an obligor's
financial difficulties. The Group classifies such modified loans as
either 'Forborne - not impaired loans' or 'Loans subject to
forbearance - impaired'. Once a loan is categorised as either of
these, it will remain in one of these two categories until the loan
matures or satisfies the 'curing' conditions described in Note 8 to
the financial statements.
Forborne - not impaired loans
Loans where the contractual terms have been
modified due to financial difficulties of the borrower, but the
loan is not considered to be impaired. See
'Forbearance'.
Funded/unfunded exposures
Exposures where the notional amount of the
transaction is funded or unfunded. Represents exposures where a
commitment to provide future funding is made but funds have been
released/ not released.
FVA or Funding valuation adjustments
FVA reflects an adjustment to fair value in
respect of derivative contracts that reflects the funding costs
that the market participant would incorporate when determining an
exit price.
G-SIBs or Global Systemically Important Banks
Global banking financial institutions whose
size, complexity and systemic interconnectedness mean that their
distress or failure would cause significant disruption to the wider
financial system and economic activity. The list of G-SIBs is
assessed under a framework established by the FSB and the BCBS. In
the UK, the G-SIB framework is implemented via the CRD and G-SIBs
are referred to as Global Systemically Important Institutions
(G-SIIs).
G-SIB buffer
A CET1 capital buffer which results from
designation as a G-SIB. The G-SIB buffer is between 1 per cent and
3.5 per cent, depending on the allocation to one of five
buckets based on the annual scoring. In the UK, the G-SIB buffer is
implemented via the CRD as Global Systemically Important
Institutions (G-SII) buffer requirement.
Green and Sustainable Product Framework
Sets out underlying eligible qualifying themes
and activities that may be considered ESG .This has been developed
with the support of external experts, has been informed by industry
and supervisory principles and standards such as the Green Bond
Principles and EU Taxonomy for sustainable activities.
Page
137
Hong Kong regional hub
Standard Chartered Bank (Hong Kong) Limited and
its subsidiaries including the primary operating entities in China,
Korea and Taiwan. Standard Chartered PLC is the ultimate parent
company of Standard Chartered Bank (Hong Kong) Limited.
Interest rate risk
The risk of an adverse impact on the Group's
income statement due to changes in interest rates.
IRB or internal ratings-based approach
Risk-weighting methodology in accordance with
the Basel Capital Accord where capital requirements are based on a
firm's own estimates of prudential parameters.
Internal model approach
The approach used to calculate market risk
capital and RWA with an internal market risk model approved by the
PRA under the terms of CRD/CRR.
IAS or International Accounting Standard
A standard that forms part of the International
Financial Reporting Standards framework.
IASB or International Accounting Standards
Board
An independent standard-setting body responsible
for the development and publication of IFRS, and approving
interpretations of IFRS standards that are recommended by the IFRS
Interpretations Committee (IFRIC).
IFRS or International Financial Reporting
Standards
A set of international accounting standards
developed and issued by the International Accounting Standards
Board, consisting of principles-based guidance contained within
IFRSs and IASs. All companies that have issued publicly traded
securities in the EU are required to prepare annual and interim
reports under IFRS and IAS standards that have been endorsed by the
EU.
IFRIC
The IFRS Interpretations Committee supports the
IASB in providing authoritative guidance on the accounting
treatment of issues not specifically dealt with by existing IFRSs
and IASs.
Investment grade
A debt security, treasury bill or similar
instrument with a credit rating measured by external agencies of
AAA to BBB.
Leverage ratio
A ratio introduced under CRD IV that compares
Tier 1 capital to total exposures, including certain exposures held
off-balance sheet as adjusted by stipulated credit conversion
factors. Intended to be a simple, non-risk-based backstop
measure.
Liquidation portfolio
A portfolio of assets which is beyond our
current risk appetite metrics and is held for
liquidation.
LCR or Liquidity coverage ratio
The ratio of the stock of high-quality liquid
assets to expected net cash outflows over the following 30 days.
High-quality liquid assets should be unencumbered, liquid in
markets during a time of stress and, ideally, be central bank
eligible.
Loan exposure
Loans and advances to customers reported on the
balance sheet held at amortised cost or FVOCI, non-cancellable
credit commitments and cancellable credit commitments for credit
cards and overdraft facilities.
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Loans and advances to customers
This represents lending made under bilateral
agreements with customers entered into in the normal course of
business and is based on the legal form of the
instrument.
Loans and advances to banks
Amounts loaned to credit institutions including
securities bought under Reverse repo.
LTV or loan-to-value ratio
A calculation which expresses the amount of a
first mortgage lien as a percentage of the total appraised value of
real property. The loan-to-value ratio is used in determining the
appropriate level of risk for the loan and therefore the correct
price of the loan to the borrower.
Loans past due
Loans on which payments have been due for up to
a maximum of 90 days including those on which partial payments are
being made.
Loans subject to forbearance - impaired
Loans where the terms have been renegotiated on
terms not consistent with current market levels due to financial
difficulties of the borrower. Loans in this category are
necessarily impaired. See 'Forbearance'.
Loss rate
Uses an adjusted gross charge-off rate,
developed using monthly write-off and recoveries over the preceding
12 months and total outstanding balances.
LGD or Loss given default
The percentage of an exposure that a lender
expects to lose in the event of obligor default.
Low returning clients
See 'Perennial sub-optimal clients'.
Malus
An arrangement that permits the Group to prevent
vesting of all or part of the amount of an unvested variable
remuneration award, due to a specific crystallised risk, behaviour,
conduct or adverse performance outcome.
Master netting agreement
An agreement between two counterparties that
have multiple derivative contracts with each other that provides
for the net settlement of all contracts through a single payment,
in a single currency, in the event of default on, or termination
of, any one contract.
Mezzanine capital
Financing that combines debt and equity
characteristics. For example, a loan that also confers some profit
participation to the lender.
MREL or minimum requirement for own funds and eligible
liabilities
A requirement under the Bank Recovery and
Resolution Directive for EU resolution authorities to set a minimum
requirement for own funds and eligible liabilities for banks,
implementing the FSB's Total Loss Absorbing Capacity (TLAC)
standard. MREL is intended to ensure that there is sufficient
equity and specific types of liabilities to facilitate an orderly
resolution that minimises any impact on financial stability and
ensures the continuity of critical functions and avoids exposing
taxpayers to loss.
Net asset value (NAV) per share
Ratio of net assets (total assets less total
liabilities) to the number of ordinary shares outstanding at the
end of a reporting period.
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Net nominal
The aggregate of loans and advances to
customers/loans and advances to banks after impairment provisions,
restricted balances with central banks, derivatives (net of master
netting agreements), investment debt and equity securities, and
letters of credit and guarantees.
Net zero
The commitment to reaching net zero carbon
emissions from our operations by 2025 and from our financing by
2050.
NII or Net interest income
The difference between interest received on
assets and interest paid on liabilities.
NSFR or Net stable funding ratio
The ratio of available stable funding to
required stable funding over a one-year time horizon, assuming a
stressed scenario. It is a longer-term liquidity measure designed
to restrain the amount of wholesale borrowing and encourage stable
funding over a one-year time horizon.
NPLs or non-performing loans
An NPL is any loan that is more than 90 days
past due or is otherwise individually impaired. This excludes
Retail loans renegotiated at or after 90 days past due, but on
which there has been no default in interest or principal payments
for more than 180 days since renegotiation, and against which no
loss of principal is expected.
Non-linearity
Non-linearity of expected credit loss occurs
when the average of expected credit loss for a portfolio is higher
than the base case (median) due to the fact that bad economic
environment could have a larger impact on ECL calculation than good
economic environment.
Normalised items
See 'Underlying/Normalised'.
Operating expenses
Staff and premises costs, general and
administrative expenses, depreciation and amortisation. Underlying
operating expenses exclude expenses as described in 'Underlying
earnings'. A reconciliation between underlying and statutory
earnings is contained in Note 2 to the financial
statements.
Operating income or operating profit
Net interest, net fee and net trading income, as
well as other operating income. Underlying operating income
represents the income line items above, on an underlying basis. See
'Underlying earnings'.
OTC or Over-the-counter derivatives
A bilateral transaction (e.g. derivatives) that
is not exchange traded and that is valued using valuation
models.
OCA or Own credit adjustment
An adjustment to the Group's issued debt
designated at fair value through profit or loss that reflects the
possibility that the Group may default and not pay the full market
value of the contracts.
Perennial sub-optimal clients
Clients that have returned below 3% return on
risk-weighted assets for the last three years
Physical risks
The risk of increased extreme weather events
including flood, drought and sea level rise.
Pillar 1
The first pillar of the three pillars of the
Basel framework which provides the approach to calculation of the
minimum
capital requirements for credit, market and operational risk.
Minimum capital requirements are 8 per cent of the Group's
risk-weighted assets.
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Pillar 2
The second pillar of the three pillars of the
Basel framework which requires banks to undertake a comprehensive
assessment of their risks and to determine the appropriate amounts
of capital to be held against these risks where other suitable
mitigants are not available.
Pillar 3
The third pillar of the three pillars of the
Basel framework which aims to provide a consistent and
comprehensive disclosure framework that enhances comparability
between banks and further promotes improvements in risk
practices.
Priority Banking
Priority Banking customers are individuals who
have met certain criteria for deposits, AUM, mortgage loans or
monthly payroll. Criteria varies by country.
Private equity investments
Equity securities in operating companies
generally not quoted on a public exchange. Investment in private
equity often involves the investment of capital in private
companies. Capital for private equity investment is raised by
retail or institutional investors and used to fund investment
strategies such as leveraged buyouts, venture capital, growth
capital, distressed investments and mezzanine capital.
PD or Probability of default
PD is an internal estimate for each borrower
grade of the likelihood that an obligor will default on an
obligation over a given time horizon.
Probability weighted
Obtained by considering the values the metric
can assume, weighted by the probability of each value
occurring.
Profit (loss) attributable to ordinary
shareholders
Profit (loss) for the year after non-controlling
interests and dividends declared in respect of preference shares
classified as equity.
PVA or Prudent valuation adjustment
An adjustment to CET1 capital to reflect the
difference between fair value and prudent value positions, where
the application of prudence results in a lower absolute carrying
value than recognised in the financial statements.
PRA or Prudential Regulation Authority
The Prudential Regulation Authority is the
statutory body responsible for the prudential supervision of banks,
building societies, credit unions, insurers and a small number of
significant investment firms in the UK. The PRA is a part of the
Bank of England.
Revenue-based carbon intensity
A measurement of the quantity of greenhouse
gases emitted by our clients per USD of their revenue.
Regulatory consolidation
The regulatory consolidation of Standard
Chartered PLC differs from the statutory consolidation in that it
includes Ascenta IV, Olea Global group, Partior Pte. Ltd., SBI
Zodia Custody Co. Ltd, Seychelles International Mercantile Banking
Corporation Limited., and all of the legal entities in the
CurrencyFair group on a proportionate consolidation basis. These
entities are considered associates for statutory accounting
purposes.
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The regulatory consolidation further excludes
the following entities, which are consolidated for statutory
accounting purposes; Audax Financial Technology Pte. Ltd, Furaha
Finserve Uganda Limited, Huma.Eco Pte. Ltd., Inveco Pte. Ltd.,
Karstenza B.V, Letsbloom Pte. Ltd, Letsbloom India Private Limited,
Pegasus Dealmaking Pte. Ltd., SCV Research and Development Pte.
Ltd., SCV Research and Development Pvt. Ltd., Solv Sdn. Bhd., Solv
Vietnam Company Limited, Solvezy Technology Kenya Ltd, Standard
Chartered Assurance Limited, Standard Chartered Isle of Man
Limited, Standard Chartered Botswana Education Trust, Standard
Chartered Bancassurance Intermediary Limited, Standard Chartered
Bank Insurance Agency (Proprietary) Limited, Standard Chartered
Research and Technology India Private Limited, Standard Chartered
Trading (Shanghai) Limited, TASConnect (Hong Kong) Private Limited,
Tawi Fresh Kenya Limited.
Repo/reverse repo
A repurchase agreement or repo is a short-term
funding agreement, which allows a borrower to sell a financial
asset, such as asset-backed securities or government bonds as
collateral for cash. As part of the agreement the borrower agrees
to repurchase the security at some later date, usually less than 30
days, repaying the proceeds of the loan. For the party on the other
end of the transaction (buying the security and agreeing to sell in
the future), it is a reverse repurchase agreement or reverse
repo.
Residential mortgage
A loan to purchase a residential property which
is then used as collateral to guarantee repayment of the loan. The
borrower gives the lender a lien against the property, and the
lender can foreclose on the property if the borrower does not repay
the loan per the agreed terms. Also known as a home
loan.
RoRWA or Return on risk-weighted assets
Profit before tax for year as a percentage of
RWA. Profit may be statutory or underlying and is specified where
used.
See 'RWA' and 'Underlying earnings'.
RWA or Risk-weighted assets
A measure of a bank's assets adjusted for their
associated risks, expressed as a percentage of an exposure value in
accordance with the applicable standardised or IRB approach
provisions.
Risks-not-in-VaR (RNIV)
A framework for identifying and quantifying
marginal types of market risk that are not captured in the Value at
Risk (VaR) measure for any reason, such as being a far-tail risk or
the necessary historical market data not being
available.
Roll rate
Uses a matrix that gives average loan migration
rate from delinquency states from period to period. A matrix
multiplication
is then performed to generate the final PDs by delinquency bucket
over different time horizons.
Scope 1 emissions
Arise from the consumption of energy from direct
sources during the use of property occupied by the Group. On-site
combustion of fuels such as diesel, liquefied petroleum gas and
natural gas is recorded using meters or, where metering is not
available, collated from fuel vendor invoices. Emissions from the
combustion of fuel in Group-operated transportation devices, as
well as fugitive emissions, are excluded as being
immaterial.
Scope 2 emissions
Arise from the consumption of indirect sources
of energy during the use of property occupied by the Group. Energy
generated off-site in the form of purchased electricity, heat,
steam or cooling is collected as kilowatt hours consumed using
meters or, where metering is not available, collated from vendor
invoices. For leased properties we include all indirect and direct
sources of energy consumed by building services (amongst other
activities) within the space occupied by the Group. This can
include base building services under landlord control but over
which we typically hold a reasonable degree of influence. All data
centre facilities with conditioning systems and hardware remaining
under the operational control of the Group are included in the
reporting. This does not include energy used at outsourced data
centre facilities which are captured under Scope 3.
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Scope 3 emissions
Occur as a consequence of the Group's activities
but arising from sources not controlled by the Group. Business air
travel data is collected as person kilometres travelled by seating
class by employees of the Group. Data are drawn from country
operations that have processes in place to gather accurate employee
air travel data from travel management companies. Flights are
categorised as short, medium or long haul trips. Emissions from
other potential Scope 3 sources such as electricity transmission
and distribution line losses are not currently accounted for on the
basis that they cannot be calculated with an acceptable level of
reliability or consistency. The Group does however capture Scope 3
emissions from outsourced data centres managed by third
parties.
Secured (fully and partially)
A secured loan is a loan in which the borrower
pledges an asset as collateral for a loan which, in the event that
the borrower defaults, the Group is able to take possession of. All
secured loans are considered fully secured if the fair value of the
collateral is equal to or greater than the loan at the time of
origination. All other secured loans are considered to be partly
secured.
Securitisation
Securitisation is a process by which credit
exposures are aggregated into a pool, which is used to back new
securities.
Under traditional securitisation transactions, assets are sold to a
structured entity which then issues new securities to investors at
different levels of seniority (credit tranching). This allows the
credit quality of the assets to be separated from the credit rating
of the originating institution and transfers risk to external
investors in a way that meets their risk appetite. Under synthetic
securitisation transactions, the transfer of risk is achieved by
the use of credit derivatives or guarantees, and the exposures
being securitised remain exposures of the originating
institution.
Senior debt
Debt that takes priority over other unsecured or
otherwise more 'junior' debt owed by the issuer. Senior debt has
greater seniority in the issuer's capital structure than
subordinated debt. In the event the issuer goes bankrupt, senior
debt theoretically must be repaid before other creditors receive
any payment.
SICR or Significant increase in credit risk
Assessed by comparing the risk of default of an
exposure at the reporting date to the risk of default at
origination (after considering the passage of time).
Solo
The solo regulatory group as defined in the
Prudential Regulation Authority waiver letter dated 10 August 2020
differs from Standard Chartered Bank Company in that it includes
the full consolidation of nine subsidiaries, namely Standard
Chartered Holdings (International) B.V., Standard Chartered MB
Holdings B.V., Standard Chartered UK Holdings Limited, Standard
Chartered Grindlays PTY Limited, SCMB Overseas Limited, Standard
Chartered Capital Management (Jersey) LLC, Cerulean Investments
L.P., SC Ventures Innovation Investment L.P. and SC Ventures G.P.
Limited.
Sovereign exposures
Exposures to central governments and central
government departments, central banks and entities owned or
guaranteed by the aforementioned. Sovereign exposures, as defined
by the European Banking Authority, include only exposures to
central governments.
Stage 1
Assets have not experienced a significant
increase in credit risk since origination and impairment recognised
on the basis of 12 months expected credit losses.
Stage 2
Assets have experienced a significant increase
in credit risk since origination and impairment is recognised on
the basis of lifetime expected credit losses.
Stage 3
Assets that are in default and considered
credit-impaired (non-performing loans).
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Standardised approach
In relation to credit risk, a method for
calculating credit risk capital requirements using External Credit
Assessment
Institutions (ECAI) ratings and supervisory risk weights. In
relation to operational risk, a method of calculating the
operational capital requirement by the application of a supervisory
defined percentage charge to the gross income
of eight specified business lines.
Structured note
An investment tool which pays a return linked to
the value or level of a specified asset or index and sometimes
offers capital protection if the value declines. Structured notes
can be linked to equities, interest rates, funds, commodities and
foreign currency.
Subordinated liabilities
Liabilities which, in the event of insolvency or
liquidation of the issuer, are subordinated to the claims of
depositors and other creditors of the issuer.
Sustainability Aspirations
A series of targets and metrics by which we aim
to promote social and economic development, and deliver sustainable
outcomes in the areas in which we can make the most material
contribution to the delivery of the UN Sustainable Development
Goals.
Sustainable Finance assets
Assets from clients whose activities are aligned
with the Green and Sustainable Product Framework and/or from
transactions for which the use of proceeds will be utilised
directly to contribute towards eligible themes and activities set
out within the Green and Sustainable Product Framework.
Sustainable Finance revenue
Revenue from clients whose activities are
aligned with the Green and Sustainable Product Framework and/or
from transactions for which proceeds will be utilised directly to
contribute towards eligible themes and activities set out within
the Green and Sustainable Product Framework and/or from approved
'labelled' transactions such as any transaction referred to as
"green", "social", "sustainable", "SDG (sustainable development
goal) aligned", "ESG", "transition", "COVID-19 facility" or
"COVID-19 response" which have been approved by the Sustainable
Finance Governance Committee.
Tier 1 capital
The sum of Common Equity Tier 1 capital and
Additional Tier 1 capital.
Tier 1 capital ratio
Tier 1 capital as a percentage of risk-weighted
assets.
Tier 2 capital
Tier 2 capital comprises qualifying subordinated
liabilities and related share premium accounts.
TLAC or Total loss absorbing capacity
An international standard for TLAC issued by the
FSB, which requires G-SIBs to have sufficient loss-absorbing and
recapitalisation capacity available in resolution, to minimise
impacts on financial stability, maintain the continuity of
critical functions and avoid exposing public funds to
loss.
Transition risks
The risk of changes to market dynamics or
sectoral economics due to governments' response to climate
change.
UK bank levy
A levy that applies to certain UK banks and the
UK operations of foreign banks. The levy is payable each year based
on a percentage of the chargeable equities and liabilities on the
Group's UK tax resident entities' balance sheets. Key exclusions
from chargeable equities and liabilities include Tier 1 capital,
insured or guaranteed retail deposits, repos secured on certain
sovereign debt and liabilities subject to netting.
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Unbiased
Not overly optimistic or pessimistic, represents
information that is not slanted, weighted, emphasised,
de-emphasised or otherwise manipulated to increase the probability
that the financial information will be received favourably or
unfavourably by users.
Unlikely to pay
Indications of unlikeliness to pay shall include
placing the credit obligation on non-accrued status; the
recognition of a specific credit adjustment resulting from a
significant perceived decline in credit quality subsequent to the
Group taking on the exposure; selling the credit obligation at a
material credit-related economic loss; the Group consenting to a
distressed restructuring of the credit obligation where this is
likely to result in a diminished financial obligation caused by the
material forgiveness, or postponement, of principal, interest or,
where relevant fees; filing for the obligor's bankruptcy or a
similar order in respect of an obligor's credit obligation to the
Group; the obligor has sought or has been placed in bankruptcy or
similar protection where this would avoid or delay repayment of a
credit obligation to the Group.
VaR or Value at Risk
A quantitative measure of market risk estimating
the potential loss that will not be exceeded in a set time period
at a set statistical confidence level.
ViU or Value-in-Use
The present value of the future expected cash
flows expected to be derived from an asset or CGU.
Write-downs
After an advance has been identified as impaired
and is subject to an impairment provision, the stage may be reached
whereby it is concluded that there is no realistic prospect of
further recovery. Write-downs will occur when, and to the extent
that, the whole or part of a debt is considered
irrecoverable.
XVA
The term used to incorporate credit, debit and
funding valuation adjustments to the fair value of derivative
financial instruments. See 'CVA', 'DVA' and 'FVA'.
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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:
Manus Costello, Global Head of
Investor Relations
+44 (0) 20 7885 0017
LSE Stock code: STAN.LN
HKSE Stock code: 02888
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146
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