3Q'20

Results Presentation

29 October 2020

Please see page 26 for an explanation of some of the technical and abbreviated terms used in this document

Our ongoing transformation is enabling us to weather the macroeconomic storm

We are pursuing exciting initiatives in dynamic markets, with a higher quality and lower risk business

Strategic progress

Performance

  • We are creating a single pan-Asia region to more effectively deliver our Network there
  • We will combine our operations that serve individuals to grow our Affluent business …
  • … and sharpen the focus on our Digital plans, with our virtual bank now live in Hong Kong
  • These organisation changes will also support initiatives to improve Productivity
  • Profit in our four large Optimisation Markets improved 16% YTD1
  • Providing Sustainable Finance where it matters most: 86% in least developed markets
  • Underlying growth in focus areas offset by lower interest rates: income down 10%2
  • Cost discipline created capacity for investment with operating expenses broadly flat2
  • Credit impairment up $74m YoY, but down $258m QoQ (2nd consecutive quarter decline)
  • Underlying profit fell 40% driven by the more challenging external conditions
  • We face continued uncertainty with stronger CET1 and substantial ECL provisions
  1. YTD: year-to-date at constant currency (aggregate underlying profit before tax growth in India, Korea, UAE and Indonesia)
  2. 3Q'20 year-on-year change, at constant currency and - for income - excluding debit valuation adjustment

1

3Q'20 Results

Financial performance

Our capital remains very strong, despite profitability impacted as expected by the external environment

($bn)

3Q'19

3Q'20

YoY1

Ccy1

Operating income ex-DVA

4.0

3.5

(11)%

(10)%

DVA

0.0

(0.0)

Nm3

Nm3

Operating income

4.0

3.5

(12)%

(11)%

Operating expenses

(2.5)

(2.5)

1%

(0)%

Pre-provision operating profit

1.5

1.0

(30)%

(30)%

Credit impairment

(0.3)

(0.4)

(27)%

(32)%

Other impairment

(0.0)

(0.0)

Nm3

Nm3

Profit from associates

0.0

0.1

64%

61%

Underlying profit before tax

1.2

0.7

(40)%

(41)%

Goodwill impairment, restructuring &

(0.1)

(0.3)

Nm3

other items

Statutory profit before tax

1.1

0.4

(61)%

(62)%

Risk-weighted assets

269

267

(1)%

Net interest margin (NIM) (%)

1.61

1.23

(38)bps

CET1 ratio (%)

13.5

14.4

90bps

Liquidity coverage ratio (LCR) (%)

133

142

9%pt

Underlying RoTE (%)

8.9

4.4

(450)bps

  • Income down due to interest rates, as previously guided
    • Down 10%2 having absorbed 38bps reduction in NIM
  • Expenses flat ccy, despite continued investment
  • Impairment $74m (27%) higher YoY; down $258m QoQ
    • Stage 1 & 2 down $108m QoQ
    • Stage 3 down $150m QoQ
  • $231m goodwill impairment in UAE and Indonesia
  • Risk-weightedassets increased slightly QoQ, as guided
    • Up $4bn / 2% in 3Q'20: credit migration and FX
  • Balance sheet is very strong
    • CET1% 14.4% above the top of 13-14% range
    • The Board will consider resuming shareholder returns at the time of FY'20 results, subject to regulatory consultation
    • LCR up 9%pt YoY at 142%
  • Return on tangible equity down 450bps to 4.4%
  1. YoY: year-on-year variance is better/(worse) other than for risk-weighted assets, common equity tier 1 (CET1) and liquidity coverage ratio, which is increase/(decrease) / Ccy: constant currency
  2. At constant currency and excluding debit valuation adjustment (DVA)

3. Nm: Not meaningful

3

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Standard Chartered plc published this content on 29 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2020 04:24:00 UTC