Standard Chartered : 1Q 2021 - Presentation (29 April 2021, PDF)

1Q'21 Results Presentation

29 April 2021

Economic recovery advanced in many of our markets in 1Q'21

We are well positioned to support our clients, colleagues and communities

	•	We delivered a strong performance in 1Q'21	→ Introduction
		o Record quarter in Wealth Management1; Financial Markets ex-DVA up 7%	Income
		Expenses
			Risk
		o Loans and advances to customers up 4% QoQ	Capital
1Q'21		Conclusion
	o PBT up 19%2 driven by business momentum and lower impairments
summary	• Areas of strategic focus continue to develop well
	• The pace of global recovery will be volatile and uneven…
	• … but the outlook is positive and we expect income to start growing again in 2H'213
	• Network: continued growth in digitally initiated transactions, up 3%pts in 1Q'21 to 44%
Strategic	•	Affluent: added over 400,000 new affluent clients in the last 12 months4, 2/3rd from Mass Retail
progress	•	Mass Retail: Mox client base in Hong Kong increased 50% year-to-date to 100,000 clients

• Sustainability: launched market-first sustainable trade finance proposition

2	Footnotes on pages 18-19; Glossary on page 20

The Group delivered a strong performance in 1Q'21

Positive business momentum and low impairment more than offset NII headwinds

($bn)	1Q'20	1Q'21	YoY1	Ccy1
Net interest income	1.8	1.7	(10)%	(11)%
Other income (ex-DVA)	2.2	2.3	4%	3%
Operating Income (ex-DVA)	4.0	3.9	(2)%	(3)%
DVA	0.3	0.0	Nm1	Nm1
Operating income	4.3	3.9	(9)%	(10)%
Operating expenses	(2.4)	(2.5)	(6)%	(4)%
Pre-provision operating profit	2.0	1.4	(27)%	(27)%
Credit impairment	(1.0)	(0.0)	98%	98%
Other impairment	0.2	(0.0)	Nm1	Nm1
Profit from associates	0.1	0.0	(15)%	(15)%
Underlying profit before tax	1.2	1.4	18%	19%
Restructuring	(0.1)	(0.0)	64%	65%
Goodwill impairment	(0.2)	-	Nm1	Nm1
Other items	0.0	-	Nm1	Nm1
Statutory profit before tax	0.9	1.4	59%	61%
Risk-weighted assets	273	277	1%
Net interest margin (NIM) (%)	1.52	1.22	(30)bps
CET1 ratio (%)	13.4	14.0	60bps
Liquidity coverage ratio (LCR) (%)	142	150	8%pt
Underlying RoTE (%)	8.6	10.8	220bps

• Income momentum offset by low interest rates
  o NIM broadly stable at 122bps, down 30bps YoY

• • ~$380m headwind to NII vs 1Q'202 o Other income ex-DVA up 4%
• Expenses up 6%, down 5% QoQ
• 
  o Normalised performance-related pay accrual and investment
• Credit impairment $20m; exceptionally low
• 
  o Stage 1&2 net release of $(35)m; Stage 3 $55m o 'High risk' assets down $1.1bn QoQ
• Profit before tax up 19% at ccy
• Client demand drove growth
• 
  o Loan and advances to customers up $10bn / 4% o Risk-weighted assets up $8bn / 3%
• Capital is strong; CET1 at top of 13-14% range

• Introduction Income Expenses Risk Capital Conclusion

3	Footnotes on pages 18-19; Glossary on page 20

Record WM quarter and another good performance in FM

Benefits of product diversity outweighed for now by NII headwinds

Income 1Q'21 vs 1Q'20 ($m)		Introduction
	(3)%	→ Income
	Expenses

						Retail Products (113)				Risk
									Capital
						128		Transaction		Conclusion
				72	26			Banking (161)
			107				17
4,022	39	4,061					(241)
									(178)		3,929
			NIM						(64)
			Impact
			(380)1
							7%
			20%	5%	13%	26%	(51)%	7%	(33)%	(21)%
1Q'20 ex-DVA	Currency	1Q'20 ccy	Wealth	Financial	Lending &	Retail	Retail	Transaction	Transaction	Treasury	1Q'21 ex-DVA
	impact	ex-DVA	Management	Markets	Portfolio	Products	Products -	Banking -	Banking -	& Other
				ex-DVA	Management	- Other2	Deposits	Trade	Cash

4	Footnotes on pages 18-19; Glossary on page 20

NII significantly impacted by 30bps YoY reduction in NIM…

…however in 1Q'21 the NIM broadly stabilised and assets continued to grow

Gross yield	334	234	295				185
(bps)
Rate paid	192	112	157				69
(bps)
	1.62		1.52
Adjusted		1.31
			1.28
NIM1 (%)				1.23	1.24	1.22
	8,007		1,931
		6,921		1,688	1,626	1,676	1,670
2H	4,003	3,302
Adjusted
Net interest
income
(NII)1 ($m)
1H	4,004	3,619
	FY'19	FY'20	1Q'20	2Q'20	3Q'20	4Q'20	1Q'21
					+9%
							+3%
AIEA2	495	526	511	531	525	539	556
($bn)
AIBL2	445	478	465	479	478	491	510
($bn)

• AIEA up 3% QoQ and AIBL up 4%2
• Adjusted NII down 14% YoY o NIM down 30bps / 20% YoY
• • ~$380m headwind to NII vs 1Q'203

• 1. Up 3% QoQ adjusting for day-count and one-off interest credit in 4Q'20
• Adjusted NIM down 2bp QoQ
• 1. 2bps one-off interest credit in 4Q'20
• Expected drivers of NII in FY'21:
• 1. Broadly stable NIM over remainder of the year

1. Continued client demand

1. Further mix / pricing improvements o Treasury assets tenor extension

Introduction

• Income Expenses Risk Capital Conclusion

5	Footnotes on pages 18-19; Glossary on page 20