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Standard Chartered : Full-Year and Fourth Quarter 2020 Results

February 24, 2021 at 11:18 pm EST

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.

STANDARD CHARTERED PLC 渣打集團有限公司

(Incorporated as a public limited company in England and Wales with limited liability)

(Registered Number: 966425)

(Stock Code: 02888)

Full-Year and Fourth Quarter 2020 Results

Performance highlights

All figures are presented on an underlying basis and comparisons are made to 2019 on a reported currency basis, unless otherwise stated. A reconciliation of restructuring and other items excluded from underlying results is set out on pages 46-51.

Bill Winters, Group Chief Executive, said:

"We are weathering the health crisis and geopolitical tensions very well, our strategic transformation continues to progress and our outlook is bright. We remain strong and profitable, although returns in 2020 were clearly impacted by higher provisions, reduced economic activity and low interest rates, in each case the result of COVID-19. I am proud of the way our colleagues around the world have responded to the challenges of the pandemic by supporting each other, our communities and our clients. Looking ahead, our unique exposure to the most dynamic markets in the world puts us in a great position to benefit from the clear signs of recovery there."

Refreshed strategic priorities support our commitment to reaching 10% RoTE in the medium term

We have refreshed our strategic priorities to reflect the evolving macroeconomic outlook. We will continue to focus on our differentiated and high returning Network corporate and Affluent personal businesses and through our recently augmented digital capabilities we can now selectively extend our reach into the Mass Retail segment. We will also lead with a differentiated Sustainability offering because we know we can make a difference in the world where it matters most, and do so profitably.

The progress we were making up to the onset of the COVID-19 pandemic in every key financial and strategic metric gives us confidence that we can achieve our ambition to deliver a double-digit RoTE. By 2023 we expect to deliver at least 7% RoTE, higher if interest rates normalise earlier than anticipated, through strong operating leverage and disciplined capital management.

Selected information concerning financial performance (FY'20 unless otherwise stated)

• Income down 3% to $14.8bn, down 2% at constant currency (ccy)
- Net interest margin down 31bps to a FY'20 average of 1.31%; 1bp higher QoQ in 4Q'20 at 1.24%
• Expenses (excluding the UK bank levy) reduced 2% to $9.8bn; down 1% ccy - Preparing for anticipated economic recovery: investment P&L charge increased $100m QoQ in 4Q'20
• Credit impairment of $2.3bn up $1.4bn YoY; $374m in 4Q'20 up slightly QoQ but flat YoY
- - $827m stage 1 and 2 charge, four-fifths booked in 1H'20; 4Q'20 charge of $50m includes $41m overlay release
- - Stage 3 up $823m YoY, 1/3 from unconnected fraud-related losses in 1Q'20; no significant new exposures in 4Q'20
- - High risk assets reduced for the second consecutive quarter in 4Q'20; down $2.7bn (14%) in 2H'20
• Return on tangible equity down 340bps to 3.0% due to the impact of COVID-19
- - Pre-provision operating profit down 4% ccy: diversified income streams and cost control largely offset impact of lower interest rates
- - Underlying profit before tax down 40% to $2.5bn driven by COVID-related elevated impairments and lower interest rates
- - Statutory profit before tax down 57% to $1.6bn, includes $489m goodwill impairment in India, UAE and Indonesia
• Tax charge of $862m: underlying effective tax rate of 38%, up 8%pts with lower profits increasing impact of non-deductible items - Statutory effective tax rate of 53% elevated by non-deductible items including goodwill impairment
• The Group's balance sheet remains strong, liquid and well diversified - Asset-to-deposit ratio down from 64.2% to 61.1%; liquidity coverage ratio broadly stable YoY despite 1H'20 disruption - Customer loans and advances up 5%; customer accounts up 8% with a higher proportion of CASA and OPAC balances
• Risk-weighted assets of $269bn up $2.2bn since 30.09.20 and up $4.7bn since 31.12.19 - $15bn credit migration inflation in the year partly offset by $9bn Permata stake disposal benefit
• The Group remains strongly capitalised and highly liquid; returning the maximum capital currently allowed by the Group's regulator
- - Common equity tier 1 (CET1) ratio 14.4% above the top of the 13-14% target range (3Q'20: 14.4%)
- - CET1 ratio includes accrual for proposed final 2020 ordinary dividend of $284m or 9c per share
- - $254m share buy-back starting imminently will reduce the CET1 ratio at 31.03.21 by ~10bps
• Earnings per share reduced 52% to 36.1c

Outlook

Improving prospects for COVID-19 vaccines should enable the global economy to transition back to growth through 2021, with pre-pandemic growth rates re-emerging in most of our markets from 2022. We believe that our decision to continue investing in the transformation of our business throughout the crisis will enable us to disproportionately benefit from that recovery over time, not least because it will most likely be led by large markets in Asia where we generate two-thirds of our income.

Our performance in the opening weeks of this year gives us the confidence that we are on the right track with strong performances in our less interest rate-sensitive Financial Markets and Wealth Management businesses. We expect income to return to 5-7% growth per annum from 2022.

We expect pressure on credit impairments to reduce this year compared with 2020. Expenses are likely to increase slightly in FY'21 as we continue to invest in our digital capabilities but should remain below $10 billion at constant currency and excluding the UK bank levy, supported in part by restructuring actions in 4Q'20 and through FY'21.

We will continue to manage our balance sheet prudently, particularly throughout the remainder of the pandemic. Our intent is to operate within our 13-14% target CET1 range and we will seek approval to return to shareholders capital that cannot be deployed profitably within the business through a mixture of dividends and share buy-backs.

Statement of Results

Standard Chartered PLC - Statement of Results

2020	2019	Change1
$million	$million	%
Underlying performance
Operating income	14,765	15,271	(3)
Operating expenses (including UK bank levy)	(10,142)	(10,409)	3
Credit impairment	(2,294)	(906)	(153)
Other impairment	15	(38)	139
Profit from associates and joint ventures	164	254	(35)
Profit before taxation	2,508	4,172	(40)
Profit attributable to ordinary shareholders²	1,141	2,466	(54)
Return on ordinary shareholders' tangible equity (%)	3.0	6.4	(340)bps
Cost to income ratio (excluding UK bank levy) (%)	66.4	65.9	50bps
Statutory performance
Operating income	14,754	15,417	(4)
Operating expenses	(10,380)	(10,933)	5
Credit impairment	(2,325)	(908)	(156)
Goodwill impairment	(489)	(27)	nm3
Other impairment	(98)	(136)	28
Profit from associates and joint ventures	151	300	(50)
Profit before taxation	1,613	3,713	(57)
Taxation	(862)	(1,373)	37
Profit for the year	751	2,340	(68)
Profit attributable to parent company shareholders	724	2,303	(69)
Profit attributable to ordinary shareholders2	329	1,855	(82)
Return on ordinary shareholders' tangible equity (%)	0.9	4.8	(390)bps
Cost to income ratio (%)	70.4	70.9	(50)bps
Balance sheet and capital
Total assets	789,050	720,398	10
Total equity	50,729	50,661	-
Average tangible equity attributable to ordinary shareholders2	38,590	38,574	-
Loans and advances to customers	281,699	268,523	5
Customer accounts	439,339	405,357	8
Risk weighted assets	268,834	264,090	2
Total capital	57,048	55,965	2
Total capital (%)	21.2	21.2	0bps
Common Equity Tier 1	38,779	36,513	6
Common Equity Tier 1 ratio (%)	14.4	13.8	60bps
Net Interest Margin (%) (adjusted)	1.31	1.62	(31)bps
Advances-to-deposits ratio (%)4	61.1	64.2	(3.1)
Liquidity coverage ratio (%)	143.0	144.0	(1)
UK leverage ratio (%)	5.2	5.2	(0)bps
Information per ordinary share	Cents	Cents	Cents1
Earnings per share - underlying5	36.1	75.7	(39.6)
10.4	57.0	(46.6)
Net asset value per share6	1,409	1,358	51
Tangible net asset value per share6	1,249	1,192	57
Number of ordinary shares at period end (millions)	3,150	3,191	(1)

- statutory5

1 Variance is better/(worse) other than assets, liabilities and risk-weighted assets. Change is percentage points difference between two points rather than percentage change for total capital (%), common equity tier 1 ratio (%), net interest margin (%), advances-to-deposits ratio (%), liquidity coverage ratio (%), UK leverage ratio (%). Change is cents difference between two points rather than percentage change for earnings per share, net asset value per share and tangible net asset value per share
2 Profit attributable to ordinary shareholders is after the deduction of dividends payable to the holders of non-cumulative redeemable preference shares and Additional Tier 1 securities classified as equity
3 Not meaningful
4 When calculating this ratio, total loans and advances to customers excludes reverse repurchase agreements and other similar secured lending, excludes approved balances held with central banks, confirmed as repayable at the point of stress and includes loans and advances to customers held at fair value through profit and loss. Total customer accounts include customer accounts held at fair value through profit or loss

5 Represents the underlying or statutory earnings divided by the basic weighted average number of shares
6 Calculated on period end net asset value, tangible net asset value and number of shares

Table of contents

Performance highlights 1

Statement of results 3

Group Chairman's statement 5

Group Chief Executive's review 8

Group Chief Financial Officer's review 10

Supplementary financial information 20

Underlying versus statutory results reconciliations 46

Group Chief Risk Officer's review 52

Risk review 59

Capital review 64

Financial statements 69

Other supplementary financial information 74

Shareholder information 78

Forward-looking statements

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

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

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

Please refer to the Group's 2019 Annual Report and the 2020 Half-Year Report for a discussion of certain risks and factors that could cause actual results, and the

Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

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

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

The information within this report is unaudited. The information in this results announcement, which was approved by the Board of Directors on 25 February 2021, does not constitute statutory accounts as defined in Section 435 of the UK Companies Act 2006. The financial statements for the year ended 31 December 2019 were filed with the Registrar of Companies, and the audit report was unqualified and contained no statements in respect of Sections 498(2) and 498(3) of the UK Companies Act 2006. The financial statements for the year ended 31 December 2020 will be filed with the Registrar of Companies in due course. In accordance with the Listing Rules of the

UK Listing Authority, these results have been agreed with the Company's auditors, Ernst & Young LLP, and the Directors have not been made aware of any likely modification to the auditor's report to be included in the Group's Annual Report for the year ended 31 December 2020. The results have been prepared on a basis consistent with the accounting policies set out in the Group's Annual Report for the year ended 31 December 2020.

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. Greater China & North Asia (GCNA) includes Mainland China, Hong Kong, Japan, Korea, Macau and Taiwan; ASEAN & South Asia (ASA) includes Australia, Bangladesh, Brunei, Cambodia, India, Indonesia, Laos, Malaysia, Myanmar, Nepal, Philippines, Singapore, Sri Lanka, Thailand and Vietnam; Africa & Middle East (AME) includes Angola, Bahrain,

Botswana, Cameroon, Cote d'Ivoire, Egypt, The Gambia, Ghana, Iraq, Jordan, Kenya, Lebanon, Mauritius, Nigeria, Oman, Pakistan, Qatar, Saudi Arabia, Sierra Leone, South Africa, Tanzania, the United Arab Emirates (UAE),

Uganda, Zambia and Zimbabwe; and Europe & Americas (EA) includes Argentina, Brazil, Colombia, Falkland Islands, France, Germany, Ireland, Jersey, Poland, Sweden, Turkey, the UK and the US. Within the tables in this report, blank spaces indicate that the number is not disclosed, dashes indicate that the number is zero and nm stands for not meaningful.

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

Group Chairman's statement

Leading with our purpose to drive sustainable growth

2020 was a year of extraordinary global turbulence, and COVID-19 in particular had a profound impact on all of us. The world is a very different place from this time last year and we all must continue to adjust and adapt. We have very sadly lost colleagues and some of you will have also lost friends and loved ones, so I would like to extend my deepest sympathy to everyone who has suffered during the pandemic.

Throughout this tumultuous period, our 89,000 colleagues around the world - led by our Chief Executive Bill Winters and colleagues in the Management Team - have focused on protecting the interests of shareholders, while ensuring the wellbeing of colleagues, supporting our customers and clients, and showing solidarity with our communities. All of this while preserving our operational and financial resilience.

They have done this demonstrating exemplary character and with great humanity, something that I have always said is a distinctive characteristic of this Group.

Repayment holidays, fee waivers and loan extensions were offered to individual and small business customers, and we made $1 billion of financing available at cost to those providing critical goods and services in the fight against the virus. We also established a $50 million Global Charitable Fund to help those affected within our communities. So far, we have donated $28 million across 59 markets, with a comparable sum contributed by colleagues and the Group to support and stimulate economic recovery.

A resilient financial performance, enabling a return to capital distributions

Bill and Andy Halford, our Chief Financial Officer, will explain in more detail later in this report how our financial performance was impacted in some respects by the effects of the pandemic. But those results also show evidence of great resilience - certainly far greater resilience than I suspect would have been the case if the pandemic had occurred a few years ago.

Our profit reduced despite lower costs due to a combination of lower interest rates that affected income and higher impairments driven in part by the reserves that we built to absorb possible future credit losses as the pandemic unfolds. But we remained highly liquid and our capital position actually strengthened further, which means that with better visibility over the near-term economic outlook the Board is recommending the payment of a full-year ordinary dividend of $284 million or 9 cents per share.

And with our common equity tier 1 capital ratio above the top end of our 13-14 per cent target range, even after accruing for the recommended ordinary dividend, we have decided to complete the share buy-back programme that was suspended in April 2020, meaning we will shortly start purchasing and then cancelling up to $254 million worth of ordinary shares.

The proposed full-year dividend and share buy-back programme together is the maximum we are authorised by our regulator to return to shareholders at this stage, being 0.2 per cent of our risk-weighted assets as at 31 December 2020.

The Board's position on capital returns remains essentially the same as it was before our regulator requested us to withdraw the recommended 2019 final dividend. Having now resumed it, we expect to be able to increase the full-year dividend per share over time as we execute our strategy and progress towards a 10 per cent return on tangible equity. To the extent additional capital generated over that period is not needed to fund further business growth, we will continue to find optimal ways of returning the excess to our owners.

Governance

I am delighted to welcome Maria Ramos to our Board as an independent non-executive director. She brings considerable experience as a chief executive, significant understanding of the global financial services industry, an in-depth understanding of the regulatory landscape, as well as experience of operating across many of our markets, especially in the Africa region.

We welcome the appointment of Dr Ngozi Okonjo-Iweala as the new Director-General of the World Trade Organisation, as a result of which she will shortly step down from the Board. I would like to thank Dr Ngozi for her valuable contributions to the Group over the last three years.

We recently announced several changes to our Board Committee composition, details of which can be found in the Directors' report in the Annual Report. We also recently announced that Robert Zoellick is taking over as chair of our International Advisory Council, a diverse, multidisciplinary panel of experts whose role is to provide insight on global trends and opportunities that may affect the Group and our clients. Robert served as president of the World Bank from 2007 to 2012, where he led the effort to assist developing economies during the Global Financial Crisis and held various posts in the US Government over three administrations.

What it means to us to be purpose-led

Standard Chartered has a history of being bold and finding new opportunities in times of change. For over 160 years we have been pioneers of international trade and investment, facilitating the flow of capital to where it is needed most to drive commerce and prosperity.

And yet, in today's complex, fast-moving and unstable world, it is clear that markets, trade and capital flows are failing to address some of the key socio-economic and environmental challenges of our time. It doesn't need to be this way; we believe commerce and prosperity can be driven without people being left behind, without the planet being negatively impacted, and without creating divisions that diminish our sense of community. Never has finance and commerce been more important in fuelling positive change where it matters most - and especially in the world's emerging economic powerhouses.

This is why now, more than ever before, we must lead with our purpose. This is the moment to use our unique capacity to work across boundaries, connecting capital, people, ideas and best practices, both locally and globally. Our conviction is that we can accelerate our strategy and its wider impact by connecting it to the big issues facing our world. We will take a stand on those issues, reshape our Group where necessary to meet them and grow by playing an active role.

The refreshed strategic priorities that Bill describes separately are fully aligned with this objective. This is not just about social responsibility. This is fundamentally about doing great business, transforming our franchise and taking our promise of being Here for good to a whole new level. We're determined to unleash a new dynamic in the Group - powered by our purpose. We are building on who we are and what we are good at, and that is why I am confident we can step forward and make a real difference.

Outlook

So, what does 2021 hold? I hope and expect it will be a better year overall for the world and for us, even if uncertainties continue on several fronts. First, despite the recent positive news on vaccines, we will be coping with the health and economic impact of COVID-19 for some time. Yet I envisage that the global economic recovery will strengthen as the year progresses and confidence returns, led by the performance of markets in Asia where we have large and entrenched positions.

Second, geopolitical uncertainty will not disappear under the new US administration, albeit I expect the US to take a more systematic, predictable and multilateral approach to foreign relations.

Finally, the pace of change required by these new times means things are accelerating faster, not just in the digital space, but also many other parts of the business ecosystem and the world. I expect that this will ultimately result in advances in productivity growth.

There remain plenty of reasons to be confident in this evolving environment. We have shown that we are getting much better at converting the undoubted dynamism of our home markets across Asia, Africa and the Middle East into profitable growth. We grew income between four and eight per cent on a like-for-like basis every quarter between the end of 2018 and the end of the first half of 2020 when the impact of COVID-19 hit, and this was while generating positive income-to-cost jaws in every period. I have always been very clear that strong growth is no good if it isn't safe and sustainable, which is why I am pleased to see the risk framework that the

Management Team worked so hard to implement from 2015 perform so well last year.

The Board will continue to oversee the execution of the Group's strategy. Our goal is to provide a best-in-class experience for our clients, be that through our unique network, personalised affluent banking or attractive digital offerings in mass retail, including through key strategic partnerships. And to do this with a world-class workforce and an agile and innovative organisation which makes us simpler, faster and better. In doing so, we also aspire to become a leader in the sustainability space. As a Group with a large and long-standing emerging markets footprint, we feel we have the responsibility and a great opportunity to channel financing to where it is most needed to make the planet more sustainable.

I said in last year's report that instability and rapid change are becoming the new normal, and that adaptation is a skill I saw as being core to the Group's DNA. I am humbled by some of the stories I have heard of how my colleagues are ensuring exceptional continuity of

service to our clients in often difficult circumstances, and I have no doubt that they will continue to go the extra mile to make a positive difference.

José Viñals Group Chairman 25 February 2021

Group Chief Executive's review "Our outlook is bright"

We are weathering the health crisis and geopolitical tensions very well. We remain strong and profitable, although clearly impacted by credit challenges and low interest rates. Our strategic transformation continues to progress well, and our outlook is bright.

Our relative strength derives from actions we have taken over the past five years, the first phase of which was to secure our foundations. Our efforts during that time were not always obvious externally, but the benefits became clear last year when we came through an extraordinary real-life stress test with financial and operational resilience. We were open for business for our customers and communities throughout the crisis and, as Andy will describe later in this report, we remained profitable while preserving very strong liquidity and capital positions.

Since 2018, we have been executing the second phase, building on those stronger foundations. We have delivered our differentiated network and affluent businesses, optimised returns in India, Korea, the UAE and Indonesia - profits in those markets in aggregate rose 34 per cent - and invested heavily in what we expect to be transformational digital initiatives that are now live and winning business across our footprint.

We are ready now to start the next phase.

Our refreshed strategic priorities

José has already described what it means for us to be a purpose-led organisation, and how that will guide us in the years ahead. The refreshed strategic priorities which we share today link directly to our purpose to drive commerce and prosperity with our unique diversity and we have geared up to develop the skills, mindset and capabilities to deliver both. They will take us beyond what we currently do, how we currently think and extend our existing scale and impact.

• Network: we will continue to unlock the power of our unique physical footprint by digitally delivering to our clients best-in-class emerging and developed markets capabilities, insights and solutions
• Affluent: we will reinforce our strong credentials in the affluent segment by building loyalty and trust through offering our clients personalised wealth advice based on superior insight
• Mass retail: we now have a range of proven digital capabilities and our remodelled risk framework has been thoroughly stress-tested, which means we can substantially and economically scale up our mass market retail presence. We will do this with enhanced data analytics and a superior end-to-end digital experience, developing opportunities on our own and with partners
• Sustainability: we will lead with a differentiated sustainability offering, including reflecting net-zero climate goals in everything we do. This is not to score points on ESG indices, but because we know we can make a difference in the world where it matters most, and do so profitably

These strategic priorities will be supported by three critical enablers. We are investing heavily in our people, giving colleagues the skills they need to succeed, bringing in expertise in critical areas and evolving to a more innovative and agile operating model. We are fundamentally changing the way we work, accelerating our time-to-market and increasing productivity with cross-functional teams driving agreed client and productivity outcomes. And we are driving innovation to improve our clients' experience, increase our operational efficiency and tap new sources of income, creating opportunities that I can foresee over time representing the majority of our income.

Re-committing to delivering return on tangible equity above 10 per cent

Our strategic progress continues apace despite the challenges related to COVID-19. Our returns have suffered though as the resulting severe economic dislocations and low interest rates impacted our financial performance. The progress we made up to the onset of the pandemic, however, in every key financial and strategic metric, gives us confidence that we can return to that trajectory as economies recover over the coming year.

Our refreshed strategic priorities, together with the financial framework that is laid out in the presentation that accompanies this report, should allow us to improve our return on tangible equity from the 3 per cent we delivered in 2020 to more than 7 per cent by 2023 as we progressively advance to our target of more than 10 per cent. We will hit those targets sooner if interest rates start to normalise earlier than anticipated, but in any event we expect to generate significant surplus capital over this period that will be returned to shareholders if not deployed to fund additional growth. We are starting as we mean to go on, by completing the share buy-back programme that was suspended in April 2020.

Group Chief Executive's review continued

Resilience at our core

It has been an extraordinary year in many respects. But we have a long history of resilience to economic shocks and geopolitical tussles, and the opportunities and even the challenges have not fundamentally changed.

• The negative impacts of COVID-19 should be largely transitory, and indeed have provided powerful lessons that will help us to accelerate our pursuit of better productivity and may even lead to a better world. The almost overnight shift to more flexible working should benefit us over time both financially and in terms of fostering greater diversity and inclusion, and also caused us to add to our extraordinary focus on keeping pace with escalating cyber, fraud and other threats. And while we will likely live with very low interest rates for several years, even that won't last forever as economies start to reflate
• As an international bank with a unique emerging market footprint straddling the East and the West, we have always had to deal with political turbulence, both within and between our markets. This was unusually visible in 2020 but we are hopeful that a spirit of engagement will help avoid further escalation. We will comply with all laws that affect us and our clients and hope for a more diplomatic and multilateral solution to the world's challenges
• Global trade was slowing before COVID-19 and slumped when it hit, as markets around the world went into various forms of lockdown. The pace of growth comes and goes but we don't believe global trade has permanently gone into reverse. And while some trade corridors such as those between the US and China may decline from the very high levels of recent years, they will be replaced by others, in particular within the Asia and Africa regions, which play perfectly to our strengths

One thing remains clear: we can win through a relentless focus on improving the experience of our customers while working hard to attract new ones, and while keeping a tight grip on costs. The underlying macroeconomic and demographic growth drivers in our footprint remain strong and we remain well positioned to benefit from them. With our virtual bank Mox launched in Hong Kong, our banking-as-a-service venture 'nexus' preparing to launch with partners in Indonesia and digital banking now firmly embedded across our

Africa franchise, we are better able to capture and create opportunities in markets that are likely to remain the most dynamic in the world for the foreseeable future.

Concluding remarks

While COVID-19 caused the quickest and sharpest economic collapse any of us has ever seen, recovery expectations have also surpassed prior recessions in both speed and magnitude. We are in a great position to benefit from that.

In the coming years, we aim not just to be a larger, leaner, more profitable and strongly capitalised bank, but a better one. Better for our customers, our communities, our colleagues and our shareholders.

• We have a non-replicable business. We intend to utilise that unique diversity for the benefit of our customers and shareholders
• We are already admired for our specialist servicing of the fast-growing trade and investment corridors across Asia, Africa and the Middle East and we are doubling-down on that differentiation
• We are driving a culture of innovation, that we believe will create sustainable opportunities in the world's fastest growing markets

And last but certainly not least, I wholeheartedly support José's comments concerning the remarkable efforts of our 89,000 colleagues around the world this year, frequently in difficult personal circumstances. These efforts enabled us to protect shareholders' interests in an exceptionally challenging year and maintain our steadfast support for the communities in the 59 markets we call home.

Bill Winters

Group Chief Executive 25 February 2021

Group Chief Financial Officer's review

"A resilient performance in extremely challenging conditions"

Summary of financial performance

We were making strong progress delivering our financial framework until the onset of COVID-19 but the challenging conditions caused by the pandemic resulted in a reduced, but nonetheless resilient, financial performance for the year as a whole. Our focus over recent years on diversifying our sources of income was not quite sufficient to offset the effect of the significant reductions in global interest rates that occurred mid-year and hence overall income declined slightly as did our pre-provision operating profit, notwithstanding tight control of expenses. The actions taken in recent years to improve the quality of our balance sheet sheltered us from some of the worst effects of COVID-19 but we nonetheless incurred credit impairment charges more than double that of the prior year, albeit the majority were booked in the first half of the year with a noticeably lower level of charges in the second half. Overall this resulted in underlying operating profit decreasing by 40 per cent but we ended the year with our key capital ratio, CET1, at 14.4 per cent including the benefit of selling our stake in Permata earlier in the year. This is not only above the top of our target range of 13 to 14 per cent but also the highest level it has been for many years. The Group also retained a highly liquid balance sheet and consequently we believe we enter 2021 well equipped to see through the remaining challenges of COVID-19 and, importantly, well positioned to benefit from the subsequent upturn in the global economy.

All commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2019 on a reported currency basis, unless otherwise stated.

• Operating income declined 3 per cent and was down 2 per cent on a constant currency basis
• Net interest income decreased 11 per cent with increased volumes more than offset by a 19 per cent or 31 basis point reduction in net interest margin
• Other income increased 4 per cent, or 3 per cent excluding the positive impact in DVA, with a particularly strong performance in Financial Markets
• Operating expenses excluding the UK bank levy reduced 2 per cent or 1 per cent on a constant currency basis, with the impact of COVID-19 resulting in lower bonus accruals reflecting underlying performance, including lower profits, and reduced spend on travel and entertainment, partly offset by the continued focus on investing in new digital capabilities. Operating expenses in
4Q'20 increased 6 per cent compared to 3Q'20 due to a $100 million increase in investment P&L charge as the Group started to position itself to capitalise on the expected economic recovery in its markets. The cost-to-income ratio (excluding the UK bank levy and DVA) increased 1 percentage point to 67 per cent. The UK bank levy decreased by $16 million to $331 million; in 2021 it will be chargeable on only the Group's UK balance sheet with the current expectation being that it will reduce to around $100 million at that time
• Credit impairment increased by $1,388 million to $2,294 million. This was mainly driven by a $823 million increase in Stage 3 impairments across all client segments to $1,467 million, around one-third of which related to three unconnected Corporate &
Institutional Banking client exposures that were reported in 1Q'20. Stage 1 and 2 impairments increased by $565 million to $827 million and included a net increase in the judgemental management overlay of $337 million as the Group proactively reserved for forward-looking risks. Total credit impairment of $2,294 million represents a loan-loss rate of 66 basis points (2019: 27 basis points) with the management overlay contributing 11 basis points. This compares to a loan-loss rate of 143 basis points in 2015 reflecting the benefit of the work done in the intervening period to secure the Group's foundations including tightening the Group's risk management framework
• Other impairment was a net $15 million release, primarily driven by a reversal of previously impaired assets partially offset by a $132 million charge relating to impairment of aircraft
• Profit from associates and joint ventures decreased by 35 per cent to $164 million. The Group could only recognise its share of the profits of its associate China Bohai Bank for ten months due to the timing of its recently completed initial public offering in
July 2020. The Group's share of Bohai's annual preference share dividend, $22 million, was deducted from its share of profit in 4Q'20. Additionally, the Group's share of China Bohai Bank reduced in 4Q'20 to 16.26 per cent from 19.99 per cent and this will be the share of profit that is reported in future quarters

• Profit before tax decreased 40 per cent or 39 per cent on a constant currency basis. Statutory profit before tax decreased 57 per cent driven by charges totalling $895 million relating to restructuring, goodwill impairment - including $489 million principally relating to India and United Arab Emirates - and other items
• Taxation was $862 million on a statutory basis. Taxation on underlying profits was at an effective rate of 37.7 per cent, an increase of 8 percentage points reflecting the non-repeat of prior year credits and the effect of lower profits concentrating the impact of non-deductible expenses partly offset by a one-off credit in 4Q'20 relating to an increase in the rate at which the US deferred tax asset is recognised. Taxation on statutory profits was at an effective rate of 53.4 per cent, an increase of 16 percentage points on the underlying rate due to elevated goodwill impairments
• Return on tangible equity decreased by 340 basis points to 3.0 per cent, with the impact of reduced profits partly offset by lower tangible equity reflecting the share buy-back programmes completed since 1Q'19
• Underlying basic earnings per share (EPS) reduced 52 per cent to 36.1 cents and statutory EPS declined 46.6 cents to 10.4 cents
• A final ordinary dividend per share of 9 cents has been proposed, which along with the announced share buy-back programme of $254 million is the maximum the Group is authorised by its regulator to return to shareholders currently, being 0.2 per cent of risk-weighted assets as at 31 December 2020

Summary of financial performance

Constant	Constant	Constant
Currency	Currency	Currency
4Q'20	4Q'19	Change	Change¹	3Q'20	Change	Change¹	FY20	FY19	Change	Change¹
$million	$million	%	%	$million	%	%	$million	$million	%	%
Net Interest income	1,760	1,899	(7)	(8)	1,620	9	7	6,882	7,698	(11)	(9)
Other income	1,439	1,698	(15)	(15)	1,899	(24)	(25)	7,883	7,573	4	5
Underlying operating income	3,199	3,597	(11)	(11)	3,519	(9)	(10)	14,765	15,271	(3)	(2)
Underlying operating expenses	(2,618)	(2,592)	(1)	‐	(2,480)	(6)	(3)	(9,811)	(10,062)	2	1
UK bank levy	(331)	(347)	5	9	‐	nm²	nm²	(331)	(347)	5	9
Underlying operating expenses	(2,949)	(2,939)	‐	1	(2,480)	(19)	(16)	(10,142)	(10,409)	3	1
Underlying operating profit before
impairment and taxation	250	658	(62)	(55)	1,039	(76)	(72)	4,623	4,862	(5)	(4)
Credit impairment	(374)	(373)	‐	(1)	(353)	(6)	(4)	(2,294)	(906)	(153)	(159)
Other impairment	(82)	(12)	nm²	nm²	(15)	nm²	nm²	15	(38)	139	138
Profit from associates and joint ventures	14	52	(73)	(74)	74	(81)	(81)	164	254	(35)	(36)
Underlying profit before taxation	(192)	325	(159)	(144)	745	(126)	(119)	2,508	4,172	(40)	(39)
Restructuring	(248)	(117)	(112)	(115)	(44)	nm²	nm²	(382)	(254)	(50)	(53)
Goodwill impairment	‐	(27)	100	100	(231)	100	100	(489)	(27)	nm²	nm²
Other items	(9)	13	(169)	(162)	(35)	74	77	(24)	(178)	87	87
Statutory profit before taxation	(449)	194	nm²	nm²	435	nm²	(193)	1,613	3,713	(57)	(56)
Taxation	(27)	(122)	78	80	(274)	90	91	(862)	(1,373)	37	36
Profit for the period	(476)	72	nm²	nm²	161	nm²	nm²	751	2,340	(68)	(67)
Net interest margin (%)3	1.24	1.54	(30)	1.23	1	1.31	1.62	(31)
Underlying return on tangible equity (%)3	(4.3)	(0.1)	(420)	4.4	(870)	3.0	6.4	(340)
Underlying earnings per share (cents)	(13.5)	(0.4)	nm2	13.6	nm2	36.1	75.7	(52)
Statutory return on tangible equity (%)3	(6.2)	(1.3)	(490)	1.3	(750)	0.9	4.8	(390)
Statutory earnings per share (cents)	(19.4)	(3.9)	nm2	3.9	nm2	10.4	57.0	(82)

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Not meaningful
3 Change is the basis points (bps) difference between the two periods rather than the percentage change

Operating income by Product

Constant	Constant	Constant
Currency	Currency	Currency
4Q'20	4Q'19²	Change	Change¹	3Q'20	Change	Change¹	FY20	FY19²	Change	Change¹
$million	$million	%	%	$million	%	%	$million	$million	%	%
Transaction Banking	652	834	(22)	(22)	665	(2)	(3)	2,838	3,499	(19)	(18)
Trade	249	259	(4)	(4)	255	(2)	(4)	994	1,100	(10)	(9)
Cash Management	403	575	(30)	(30)	410	(2)	(3)	1,844	2,399	(23)	(23)
Financial Markets	697	716	(3)	(2)	909	(23)	(25)	3,854	3,258	18	20
Foreign Exchange	267	264	1	4	266	‐	(2)	1,291	1,127	15	17
Rates	150	163	(8)	(10)	201	(25)	(28)	1,068	696	53	56
Commodities	37	37	‐	6	60	(38)	(38)	223	165	35	35
Credit and Capital Markets	175	125	40	38	188	(7)	(8)	639	577	11	12
Capital Structuring Distribution Group	70	86	(19)	(19)	91	(23)	(25)	274	329	(17)	(16)
DVA	(69)	(72)	4	3	(22)	nm³	nm³	13	(100)	113	113
Securities Services	78	85	(8)	(8)	79	(1)	(4)	320	343	(7)	(5)
Other Financial Markets	(11)	28	(139)	(128)	46	(124)	(119)	26	121	(79)	(78)
Corporate Finance	285	328	(13)	(13)	284	‐	1	1,116	1,143	(2)	(1)
Lending and Portfolio Management	199	201	(1)	‐	222	(10)	(11)	848	786	8	10
Wealth Management	436	415	5	4	568	(23)	(24)	1,968	1,879	5	5
Retail Products	848	960	(12)	(12)	859	(1)	(3)	3,566	3,862	(8)	(7)
CCPL and other unsecured lending	303	311	(3)	(4)	309	(2)	(4)	1,211	1,251	(3)	(2)
Deposits	271	484	(44)	(44)	301	(10)	(11)	1,457	1,989	(27)	(26)
Mortgage and Auto	234	130	80	77	211	11	8	750	511	47	47
Other Retail Products	40	35	14	18	38	5	3	148	111	33	36
Treasury	92	196	(53)	(52)	40	130	130	635	1,090	(42)	(41)
Other	(10)	(53)	81	82	(28)	64	63	(60)	(246)	76	74
Total underlying operating income	3,199	3,597	(11)	(11)	3,519	(9)	(10)	14,765	15,271	(3)	(2)

1	Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2	Following a reorganisation of certain clients, there has been a reclassification of balances across products
3	Not meaningful

Transaction Banking income was down 19 per cent. Trade declined 10 per cent reflecting a significant reduction in global trade as a result of COVID-19. Cash Management declined 23 per cent with double-digit volume growth being more than offset by declining margins given the low interest rate environment.

Financial Markets income grew 18 per cent, or 14 per cent excluding DVA, benefiting from market volatility and increased hedging and investment activity by clients. There was strong double-digit growth in Rates, Foreign Exchange and Commodities. After a slow first quarter, Credit and Capital Markets recovered momentum and ended the year with income up 11 per cent. Income from Securities Services, which is now managed within Financial Markets having previously been reported as part of Transaction Banking, declined 7 per cent. The decline in Other Financial Markets included a $56 million charge related to a change in the valuation methodology of structured notes in 4Q'20.

Corporate Finance income was down 2 per cent driven by lower income from aviation clients as the sector was significantly impacted by

COVID-19, partly offset by drawdowns on revolving credit facilities which were largely repaid or refinanced in 2H'20.

Lending and Portfolio Management income was up 8 per cent with improved margins in Corporate Lending.

Wealth Management income grew 5 per cent despite significantly more challenging market conditions. There was a particularly strong sales performance in FX, equities and structured notes driving income excluding bancassurance up 14 per cent. Bancassurance income was lower by 16 per cent resulting from reduced branch walk-ins due to COVID-19, partially offset by increased digital channel usage.

Retail Products income declined 8 per cent or 7 per cent on a constant currency basis. Deposits income declined 27 per cent as margin compression more than offset increased volumes. Increases in volumes and margins led to double-digit income growth across Mortgages and Auto and Other Retail Products. Credit Cards and Personal Loans income was down 3 per cent as COVID-19 impacted new sales.

Treasury income reduced 42 per cent as a fall in interest rates led to lower interest income on Treasury assets that was partially offset by a reduction in the expense of Treasury liabilities. An additional $220 million in realisation gains, primarily booked in 1H'20, was broadly offset by lower FX switch income and negative movements in hedge ineffectiveness, primarily recorded in 2H'20.

Other products income improved by $186 million to negative $60 million reflecting interest credits and other one-off items in India, Korea and Singapore.

Profit before tax by client segment and geographic region

Constant	Constant	Constant
Currency	Currency	Currency
4Q'20	4Q'19²	Change	Change¹	3Q'20	Change	Change¹	FY20	FY19²	Change	Change¹
$million	$million	%	%	$million	%	%	$million	$million	%	%
Corporate & Institutional Banking	184	371	(50)	(48)	525	(65)	(64)	1,841	2,257	(18)	(18)
Retail Banking	4	169	(98)	(100)	257	(98)	(100)	587	1,093	(46)	(47)
Commercial Banking	13	46	(72)	(73)	19	(32)	(40)	214	499	(57)	(57)
Private Banking	(11)	(3)	nm³	nm³	17	(165)	(153)	62	94	(34)	(35)
Central & other items (segment)	(382)	(258)	(48)	(31)	(73)	nm³	nm³	(196)	229	(186)	(159)
Underlying profit/(loss) before taxation	(192)	325	(159)	(144)	745	(126)	(119)	2,508	4,172	(40)	(39)
Greater China & North Asia	323	493	(34)	(37)	578	(44)	(46)	2,035	2,432	(16)	(17)
ASEAN & South Asia	80	23	nm³	165	243	(67)	(66)	779	1,025	(24)	(24)
Africa & Middle East	(88)	96	(192)	(195)	11	nm³	nm³	13	684	(98)	(97)
Europe & Americas	(7)	82	(109)	(103)	37	(119)	(105)	386	157	146	137
Central & other items (region)	(500)	(369)	(36)	(29)	(124)	nm³	nm³	(705)	(126)	nm³	nm³
Underlying profit/(loss) before taxation	(192)	325	(159)	(144)	745	(126)	(119)	2,508	4,172	(40)	(39)

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Following a reorganisation of certain clients, there has been a reclassification of balances across client segments
3 Not meaningful

Corporate & Institutional Banking income, which is now broadly half the Group's income, increased 2 per cent with a very strong

Financial Markets performance partly offset by the impact of low interest rates. Lower expenses were more than offset by higher credit impairments resulting in profits declining 18 per cent. Retail Banking income declined 3 per cent as income growth in Wealth Management was more than offset by the effects of the low interest rate environment which resulted in Deposits income declining 26 per cent. Expenses were 2 per cent lower but were more than offset by higher impairments, which resulted in profits declining 46 per cent. Commercial Banking profits more than halved, driven by impairments which more than doubled and 10 per cent lower income partly offset by 8 per cent lower expenses. A non-repeat of a prior-year impairment release meant Private Banking profit was down 34 per cent. Central & other items (segment) recorded a loss of $196 million driven by a 32 per cent decline in income, primarily in Treasury, 4 per cent higher expenses from increased investment spend including funding SC Ventures, and a reduction in the Group's share of China Bohai Bank's profits.

Greater China & North Asia remained the largest regional contributor to the Group, generating 81 per cent of the overall Group's profit before tax. Profit declined 16 per cent driven by higher impairments while income declined only 2 per cent despite challenging market conditions partly offset by a 1 per cent reduction in expenses. ASEAN & South Asia income growth of 4 per cent and 2 per cent lower expenses were more than offset by higher impairments, resulting in profits declining 24 per cent. Africa & Middle East income declined 8 per cent, or 3 per cent on a constant currency basis with continued macroeconomic challenges also impacting credit impairments, which resulted in profits declining to $13 million for the year. Europe & Americas profit increased 146 per cent driven by 11 per cent higher income reflecting exceptionally strong Financial Markets performance and 6 per cent lower expenses. The loss incurred by Central & other items (regions) increased by $579 million to $705 million loss due to lower returns paid to Treasury on the equity provided to the regions in a falling interest rate environment.

Adjusted net interest income and margin

4Q'20	4Q'19¹	Change²	3Q'20	Change²	FY20	FY19¹	Change²
$million	$million	%	$million	%	$million	$million	%
Adjusted net interest income3	1,676	1,978	(15)	1,626	3	6,921	8,007	(14)
Average interest-earning assets	538,637	508,001	6	524,921	3	526,370	494,756	6
Average interest-bearing liabilities6	490,778	455,177	8	477,688	3	478,051	444,595	8
Gross yield (%)4	1.99	3.19	(120)	2.07	(8)	2.34	3.34	(100)
Rate paid (%)4	0.82	1.84	(102)	0.92	(10)	1.12	1.92	(80)
Net yield (%)4	1.17	1.35	(18)	1.15	2	1.22	1.42	(20)
Net interest margin (%)4,5	1.24	1.54	(30)	1.23	1	1.31	1.62	(31)

1 The Group in 2019 changed its accounting policy for net interest income and the basis of preparation of its net interest margin to better reflect the underlying performance of its banking book. See notes to the financial statements in the 2019 Annual Report for further details
2 Variance is better/(worse) other than assets and liabilities which is increase/(decrease)
3 Adjusted net interest income is statutory net interest income less funding costs for the trading book and financial guarantee fees on interest earning assets
4 Change is the basis points (bps) difference between the two periods rather than the percentage change
5 Adjusted net interest income divided by average interest-earning assets, annualised
6 Average interest-bearing liabilities has been restated by $2,236 million in 4Q'19 due to the reclassification of balances from interest-bearing liabilities to non interest-bearing liabilities. There is a corresponding impact in rate paid % and net yield %

Adjusted net income was down 14 per cent driven by a 19 per cent decline in net interest margin which fell 31 basis points, primarily reflecting the interest rate cuts which occurred in late 2019 and to a much larger extent in early 2020. This more than offset the impact of improvements in balance sheet mix and liability repricing initiatives. The fourth quarter net interest margin included 2 basis points uplift from a one-off interest credit in Korea.

Average interest-earning assets increased 6 per cent driven by an increase in investment securities balances and higher loans and advances to customers. Gross yields declined by 100 basis points predominantly reflecting the flow-through of interest rates cuts which occurred in the second half of 2019 and those that occurred in the first quarter of 2020.

Average interest-bearing liabilities increased 8 per cent driven by growth in customer accounts. The rate paid on liabilities decreased by 80 basis points compared to the average in 2019 reflecting interest rate movements. This was partly offset by a shift of customer accounts from higher-paying time deposits to lower-rate and non-interest bearing current and savings accounts.

Credit risk summary

Income Statement

FY19	Change1
$million	%
Total credit impairment	906	153
Of which stage 1 and 2	262	216
Of which stage 3	644	128
1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods

4Q'20 $million

4Q'19 $millionChange1

3Q'20 $millionChange1

FY20 $million

374

373

‐

353

2,294

50 324

125 248

(60) 31

109 244

(54) 33

827 1,467

Balance sheet

31.12.20	30.09.20	Change1	30.06.20	Change1	31.12.19	Change1
$million	$million	%	$million	%	$million	%
Gross loans and advances to customers2	288,312	288,046	‐	282,826	2	274,306	5
Of which stage 1	256,437	251,113	2	250,278	2	246,149	4
Of which stage 2	22,661	27,597	(18)	23,739	(5)	20,759	9
Of which stage 3	9,214	9,336	(1)	8,809	5	7,398	25
Expected credit loss provisions	(6,613)	(6,666)	(1)	(6,513)	2	(5,783)	14
Of which stage 1	(534)	(571)	(6)	(476)	12	(402)	33
Of which stage 2	(738)	(706)	5	(780)	(5)	(377)	96
Of which stage 3	(5,341)	(5,389)	(1)	(5,257)	2	(5,004)	7
Net loans and advances to customers	281,699	281,380	‐	276,313	2	268,523	5
Of which stage 1	255,903	250,542	2	249,802	2	245,747	4
Of which stage 2	21,923	26,891	(18)	22,959	(5)	20,382	8
Of which stage 3	3,873	3,947	(2)	3,552	9	2,394	62
Cover ratio of stage 3 before/after collateral (%)3	58 / 76	58 / 76	(0) / (0)	60 / 80	(2) / (4)	68 / 85	(10) / (9)
Credit grade 12 accounts ($million)	2,164	1,954	11	1,519	42	1,605	35
Early alerts ($million)	10,692	13,407	(20)	14,406	(26)	5,271	103
Investment grade corporate exposures (%)3	62	59	3	57	5	61	1

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

2 Includes reverse repurchase agreements and other similar secured lending held at amortised cost of $2,919 million at 31 December 2020, $4,330 million at 30 September 2020, $4,383 million at 30 June 2020 and $1,469 million at 31 December 2019

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

The rapid and extreme global economic dislocation caused by the onset of the COVID-19 pandemic led to a deterioration in asset quality and higher impairments overall. Actions taken in previous years to secure the Group's foundations - including increasing diversification of credit exposures and improving the risk culture - underpinned the Group's resilience to these extraordinary challenges. Having made substantial provisions against expected credit losses in the first half of the year, conditions stabilised somewhat in the second half and the stock of high-risk assets reduced from its peak in August 2020. However, despite these encouraging signs the credit risks facing the Group are likely to remain elevated during what is likely to be a difficult and uneven economic recovery.

Full year 2020 credit impairment increased by $1,388 million to $2,294 million but was $840 million lower in 2H'20 compared to 1H'20 while credit impairment in 4Q'20 was broadly flat compared to 4Q'19.

Stage 1 and 2 impairments increased to $827 million due to deteriorating macroeconomic variables and stage downgrades on account of COVID-19 uncertainties. The $565 million increase included an increase in the overlay of $337 million which was net of a $41 million release in 4Q'20. The overlay reflected management's judgement regarding:

• Elements of the macroeconomic outlook not captured in the modelled outcome for Corporate & Institutional Banking and
Commercial Banking
• The potential impact to delinquencies and flow rates in Retail Banking of extensions to payment relief schemes and ongoing lockdowns in some markets as well as the ending of these schemes in India, Malaysia, Bangladesh, Nepal and Indonesia

Stage 3 impairments increased by $823 million across all client segments to $1,467 million with broadly one-third relating to three unconnected fraud-related Corporate & Institutional Banking client exposures that were reported in 1Q'20.

Total credit impairment of $2,294 million represents a loan-loss rate of 66 basis points (2019: 27 basis points) with the management overlay contributing 11 basis points.

Gross Stage 3 loans and advances to customers of $9.2 billion were up 25 per cent compared to 31 December 2019, reflecting the impact of COVID-19 volatility which led to macroeconomic deterioration in Retail Banking portfolios and Corporate & Institutional Banking and Commercial Banking clients. These credit-impaired loans represented 3.2 per cent of gross loans and advances, an increase of 50 basis points compared to 31 December 2019. The stage 3 cover ratio decreased to 58 per cent from 68 per cent in 2019 due to write-offs particularly in relation to Corporate & Institutional Banking and Commercial Banking clients and new downgrades with low levels of coverage, which have benefited from credit insurance and guarantees, including from export credit agencies. The cover ratio post tangible collateral decreased to 76 per cent from 85 per cent in 2019 with some of the 2020 downgrades being covered by guarantees and insurance which are not included as tangible collateral.

Credit grade 12 balances increased 35 per cent since 31 December 2019 primarily from new inflows from Early Alert Non-Purely Precautionary (EANPP) accounts. These EANPP accounts more than doubled to $10.7 billion in 2020 on the back of proactive portfolio and sector reviews, particularly for vulnerable sectors but have declined through 2H'20 since the peak in August 2020. The Group continues to monitor its exposures in the Aviation, Hospitality and Oil & Gas sectors particularly carefully, given the unusual stresses caused by the effects of COVID-19.

The proportion of investment grade corporate exposures has increased since 31 December 2019 by 1 percentage point to 62 per cent.

Restructuring, goodwill impairment and other items

FY20

FY19

4Q'20

Restructuring

Goodwill impairmentOther items

Restructuring

Goodwill impairmentOther items

Restructuring

Goodwill impairmentOther items

$million

Operating income (9) Operating expenses

Credit impairment Other impairment

Profit from associates and joint ventures

Loss before taxation (9)

(252)

(31)

(113)

(13)

- - - (489)

(38) 14 - - -

146

(298)

(2)

(98)

- - - (27)

- (226)

(2)

- - 48

(41)

(168)

(17)

(18)

(4)

- - - - -

(9)

- - - -

(382)

(489)

(24)

(254)

(27)

(178)

(248)

(9)

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

Restructuring charges of $382 million for 2020 are broadly split evenly between actions to exit the Group's discontinued businesses, primarily ship leasing and principal finance, and actions to transform the organisation to improve productivity, primarily redundancy related charges, the majority of which were booked in 4Q'20. Charges related to restructuring increased 50 per cent due to the significant decline in income from discontinued businesses, including negative movements in the valuation of principal finance investments primarily recorded in 4Q'20.

The goodwill impairment of $489 million reflects writing off all goodwill relating to the Group's businesses in India, UAE, Indonesia and

Brunei. This was primarily due to lower forward-looking cash flows, lower economic growth forecasts and higher discount rates reflecting lower interest rate environments.

Other restructuring items also include a $43 million dilution loss following the initial public offering of the Group's associate in China Bohai Bank. Charges related to other items reduced 87 per cent primarily due to the regulatory provisions booked in the prior year.

The Group is likely to incur further restructuring charges of around $500 million over the next few years, primarily in 2021, relating predominantly to people and property actions intended to generate enduring productivity improvements.

Balance sheet and liquidity

31.12.20	30.09.20	Change1	30.06.20	Change1	31.12.19	Change1
$million	$million	%	$million	%	$million	%
Assets
Loans and advances to banks	44,347	49,040	(10)	50,499	(12)	53,549	(17)
Loans and advances to customers	281,699	281,380	‐	276,313	2	268,523	5
Other assets	463,004	424,009	9	414,773	12	398,326	16
Total assets	789,050	754,429	5	741,585	6	720,398	10
Liabilities
Deposits by banks	30,255	28,138	8	28,986	4	28,562	6
Customer accounts	439,339	417,517	5	421,153	4	405,357	8
Other liabilities	268,727	258,204	4	241,549	11	235,818	14
Total liabilities	738,321	703,859	5	691,688	7	669,737	10
Equity	50,729	50,570	‐	49,897	2	50,661	‐
Total equity and liabilities	789,050	754,429	5	741,585	6	720,398	10
Advances-to-deposits ratio (%)2,3	61.1%	63.8%	(2.7)	62.7%	(1.6)	64.2%	(3.1)
Liquidity coverage ratio (%)3	143%	142%	1	149%	(6)	144%	(1)

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

2 The Group now excludes $14,296 million held with central banks (30.09.20: $14,363 million, 30.06.20: $13,595 million, 31.12.19: $9,109 million) that has been confirmed as repayable at the point of stress

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

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

• Loans and advances to banks decreased 17 per cent since 31 December 2019 as the Group ran down its Financial Institutions
Trade Loan book to optimise balance sheet returns in a low interest rate environment
• Loans and advances to customers increased 5 per cent since 31 December 2019 to $282 billion driven mainly by growth in Mortgages and Treasury Products. Volumes were broadly stable in 4Q'20 with underlying growth in Mortgages, primarily in GCNA, offset by the roll-off of temporary balances booked in 3Q'20 relating to initial public offerings in Hong Kong. Excluding the impact of the temporary balances and movements in reverse repurchase agreements, loans and advances to customers grew an underlying 2 per cent in 4Q'20 equivalent to a 7 per cent annualised growth rate
• Customer accounts of $439 billion increased 8 per cent since 31 December 2019 with an increase in operating account balances within Cash Management and in Retail current and saving accounts partly offset by a reduction in Corporate and Retail Time Deposits
• Other assets and other liabilities since 31 December 2019 were 16 per cent and 14 per cent higher, respectively. The growth in other assets was driven by increased balances at central banks and reverse repurchase agreements to support the strong growth in Financial Markets. The growth in other liabilities reflects repurchase agreements and issued debt securities

The advances-to-deposits ratio decreased to 61.1 per cent from 64.2 per cent at 31 December 2019 while the point-in-time liquidity coverage ratio was broadly stable at 143 per cent and has remained resilient throughout the year despite significant market disruption in

1H'20.

Risk-weighted assets

31.12.20	30.09.20	Change1	30.06.20	Change1	31.12.19	Change1
$million	$million	%	$million	%	$million	%
Credit risk	220,441	217,720	1	213,136	3	215,664	2
Operational risk	26,800	26,800	‐	26,800	‐	27,620	(3)
Market risk	21,593	22,144	(2)	22,616	(5)	20,806	4
Total RWAs	268,834	266,664	1	262,552	2	264,090	2
1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods

By risk type

Total risk-weighted assets (RWA) increased 2 per cent or $4.7 billion since 31 December 2019 to $268.8 billion.

• Credit Risk RWA increased $4.8 billion to $220.4 billion, driven by an increase of $15 billion from negative credit migration related to the impact of economic disruption due to COVID-19, of which $3 billion occurred in 4Q'20, underlying asset growth of $6 billion as well as unfavourable FX movements of $2 billion. This was partly offset by the completion of the sale of the Group's interest in PT Bank Permata Tbk (Permata) in Indonesia - which reduced Credit RWA by $8 billion - and a $11 billion reduction from improved RWA density and the impact of RWA optimisation actions
• Market Risk RWA increased by $0.8 billion to $21.6 billion due to higher levels of Financial Markets activity with increased value-at-risk from elevated market volatility partly offset by regulatory mitigation for back-testing exceptions
• Operational Risk RWA reduced by $0.8 billion primarily reflecting a $1 billion reduction relating to the disposal of the Group's stake in Permata

Capital base and ratios

31.12.20	30.09.20	Change¹	30.06.20	Change¹	31.12.19	Change¹
$million	$million	%	$million	%	$million	%
CET1 capital	38,779	38,449	1	37,625	3	36,513	6
Additional Tier 1 capital (AT1)	5,612	5,611	‐	5,612	‐	7,164	(22)
Tier 1 capital	44,391	44,060	1	43,237	3	43,677	2
Tier 2 capital	12,657	12,991	(3)	13,231	(4)	12,288	3
Total capital	57,048	57,051	‐	56,468	1	55,965	2
CET1 capital ratio (%)2	14.4	14.4	‐	14.3	0.1	13.8	0.6
Total capital ratio (%)2	21.2	21.4	(0.2)	21.5	(0.3)	21.2	‐
UK leverage ratio (%)2	5.2	5.2	‐	5.2	‐	5.2	‐
1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods
2 Change is percentage points difference between two points rather than percentage change

The Group remains very well capitalised and highly liquid with all metrics above regulatory thresholds.

The Group's common equity tier 1 (CET1) ratio of 14.4 per cent was above the top-end of the 13-14 per cent target range, 60 basis points higher than as at 31 December 2019 and over four percentage points above the Group's latest regulatory minimum of 10.0 per cent. The primary driver of the increase in the CET1 ratio was the completion in 2Q'20 of the sale of the Group's stake in Permata, which resulted in an increase in the CET1 ratio of approximately 50 basis points.

The Group announced on 31 March 2020 that in response to a request from the Prudential Regulation Authority (PRA) and as a consequence of the unprecedented challenges facing the world due to the COVID-19 pandemic, the Board had decided after careful consideration to withdraw the recommendation to pay a final dividend for 2019 of 20 cents per ordinary share which increased the CET1 ratio by approximately 20 basis points.

Various amendments to the Capital Requirements Regulation increased the CET1 ratio by 29 basis points, of which 22 basis points related to the revised treatment in 4Q'20 of software assets in CET1. Profit accretion and other items including the net impact of FX movement on reserves and RWAs contributed an increase in the CET1 ratio of approximately 40 basis points.

The impact on credit risk RWAs from negative credit migration, higher RWA on derivatives and revolving credit facilities led to approximately 60 basis point reduction in the CET1 ratio.

The Group had purchased 40 million ordinary shares for $242 million through the buy-back programme announced on 28 February 2020 which reduced the Group's CET1 ratio by approximately 10 basis points.

Following the publication of recent PRA guidance, the Board has recommended a final ordinary dividend of 9 cents per share or $284 million. The accrual of the 2020 final ordinary share dividend reduced the year-end CET1 ratio by approximately 10 basis points.

The Board has also decided to carry out a share buy-back for up to a maximum consideration of $254 million to further reduce the number of ordinary shares in issue by cancelling the repurchased shares. The terms of the buy-back will be announced and the programme will start shortly and is expected to reduce the Group's CET1 ratio in the first quarter of 2021 by approximately 10 basis points.

The UK leverage ratio remained at 5.2 per cent, significantly above the Group's minimum requirement of 3.6 per cent.

Outlook

Overall income in 2021 is expected to be similar to that achieved in 2020 at constant currency given the full-year impact of the global interest rate cuts that occurred in 1H'20, which will likely cause 1H'21 income to be lower than last year. The FY'21 net interest margin should stabilise at marginally below the 4Q'20 level of 1.24 per cent. Our performance in the opening weeks of this year gives us the confidence that we are on the right track with strong performances in our less interest rate-sensitive Financial Markets and Wealth Management businesses. We expect income to return to 5 to 7 per cent growth per annum from 2022.

We will continue to manage our balance sheet prudently, particularly throughout the remainder of the pandemic. Our intent is to operate within our 13 to 14 per cent target CET1 range and we will seek approval to return to shareholders capital that cannot be deployed profitably within the business through a mixture of dividends and share buy-backs.

The progress we were making up to the onset of the COVID-19 pandemic in every key financial and strategic metric gives us confidence that we can achieve our ambition to deliver a double-digit RoTE. By 2023 we expect to deliver at least 7 per cent RoTE, higher if interest rates normalise earlier than anticipated, through strong operating leverage and disciplined capital management.

Andy Halford

Group Chief Financial Officer

25 February 2021

Supplementary financial information

Underlying performance by client segment

2020

Corporate & Institutional Banking $million

Retail Banking $million

Commercial Banking $millionPrivate Banking $million

Central & other items $million

Total $million

Operating income

External

Inter-segment

Operating expenses

Operating profit/(loss) before impairment losses and taxation

Credit impairment Other impairment

Profit from associates and joint ventures Underlying profit/(loss) before taxation Restructuring

Goodwill impairment & other items Statutory profit/(loss) before taxation Total assets

Total liabilities

Of which: loans and advances to customers2 loans and advances to customers loans held at fair value through profit or loss

Of which: customer accounts2 Risk-weighted assets

Underlying return on tangible equity (%) Cost to income ratio (%)

7,214	5,013	1,409	540	589	14,765
7,083 131	4,322 691	1,320 89	374 166	1,666 (1,077)	14,765 -
(4,178)	(3,701)	(878)	(476)	(909)	(10,142)
3,036 (1,237) 42 -	1,312 (715) (10) -	531 (316) (1) -	64 (2) - -	(320) (24) (16) 164	4,623 (2,294) 15 164
1,841 (164) -	587 (50) -	214 (57) -	62 (11) -	(196) (100) (513)	2,508 (382) (513)
1,677	537	157	51	(809)	1,613
355,401 160,629	118,067 115,611	32,902 27,342	13,716 13,619	268,964 19,075	789,050 336,276
109,043 51,586	115,476 135	24,498 2,844	13,619 -	19,063 12	281,699 54,577
429,239 262,201 136,622 6.6 57.9	158,827 154,831 47,170 6.5 73.8	51,803 48,578 28,469 3.4 62.3	18,882 18,675 5,923 4.8 88.1	79,570 7,869 50,650 (12.0) 98.1	738,321 492,154 268,834 3.0 66.4

2019 (Restated)¹

Corporate & Institutional

Banking $million

Operating income

External

Inter-segment

Operating expenses

Operating profit/(loss) before impairment losses and taxation

Credit impairment Other impairment

Profit from associates and joint ventures Underlying profit before taxation Restructuring

7,074 7,264 (190) (4,310)

2,764 (475) (32)

Goodwill impairment & other items Statutory profit/(loss) before taxation Total assets

- 2,257 (110)

Of which: loans and advances to customers2 loans and advances to customers loans held at fair value through profit or loss

Total liabilities

Of which: customer accounts2 Risk-weighted assets

Underlying return on tangible equity (%) Cost to income ratio (%)

- 2,147 326,565 153,884 108,746

45,138

387,561

243,269

129,084

8.5

60.9

Retail Banking $million

5,186 4,236 950 (3,759)

1,427 (336)

2 - 1,093

(63)

- 1,030 109,368 107,140 106,902

238

148,413

144,760

44,508

12.7

72.5

1 Following a reorganisation of certain clients, there has been a reclassification of balances across client segments
2 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements

Commercial

Banking $millionPrivate Banking $million

1,574 1,618

(44) (953)

577 329 248 (514)

621 (122)

- - 499 (11)

63 31 - - 94 (11)

- 488 33,978 28,831 27,978

- 83 14,922 14,821 14,821

853

41,628

18,480

38,847

18,424

30,976

6,409

7.4

7.3

60.5

89.1

Central & other items $million

860 15,271

1,824 15,271

(964)

(873) (10,409)

(13) 4,862

(4) (906)

(8) (38)

254 254

229 4,172

(59) (254)

(205) (205)

(35) 3,713

235,565 720,398

10,078 314,754

10,076 268,523

2 46,231

73,655 669,737

7,433 452,733

53,113 264,090

(5.1) 6.4

61.2 65.9

(10,142)

(2,294)

(382) (513)

Total $million

Corporate & Institutional Banking

Constant	Constant	Constant
currency	currency	currency
4Q'20	4Q'19²	Change³	change¹,3	3Q'20	Change³	change¹,3	FY20	FY19²	Change³	change¹,3
$million	$million	%	%	$million	%	%	$million	$million	%	%
Operating income	1,492	1,692	(12)	(12)	1,735	(14)	(15)	7,214	7,074	2	3
Transaction Banking	480	619	(22)	(23)	484	(1)	(2)	2,084	2,604	(20)	(19)
Trade	162	165	(2)	(1)	162	-	(2)	634	698	(9)	(8)
Cash Management	318	454	(30)	(30)	322	(1)	(2)	1,450	1,906	(24)	(23)
Financial Markets	621	643	(3)	(3)	830	(25)	(26)	3,532	2,923	21	23
Foreign Exchange	229	223	3	6	228	-	(2)	1,121	943	19	21
Rates	144	158	(9)	(10)	197	(27)	(28)	1,036	664	56	59
Commodities	32	31	3	7	53	(40)	(40)	196	138	42	42
Credit and Capital Markets	163	121	35	34	179	(9)	(10)	602	547	10	11
Capital Structuring
Distribution Group	58	75	(23)	(24)	76	(24)	(25)	238	295	(19)	(18)
DVA	(69)	(72)	4	3	(22)	nm⁷	nm⁷	13	(100)	113	113
Securities Services	78	84	(7)	(8)	79	(1)	(4)	320	342	(6)	(5)
Other Financial Markets	(14)	23	(161)	(157)	40	(135)	(134)	6	94	(94)	(93)
Corporate Finance	261	306	(15)	(14)	256	2	2	1,013	1,032	(2)	-
Lending and Portfolio
Management	139	132	5	5	161	(14)	(14)	604	540	12	13
Other	(9)	(8)	(13)	(13)	4	nm⁷	nm⁷	(19)	(25)	24	14
Operating expenses	(1,127)	(1,110)	(2)	(1)	(1,066)	(6)	(4)	(4,178)	(4,310)	3	2
Operating profit before
impairment losses and taxation	365	582	(37)	(36)	669	(45)	(45)	3,036	2,764	10	11
Credit impairment	(120)	(206)	42	42	(132)	9	13	(1,237)	(475)	(160)	(167)
Other impairment	(61)	(5)	nm⁷	nm⁷	(12)	nm⁷	nm⁷	42	(32)	nm⁷	nm⁷
Underlying profit before
taxation	184	371	(50)	(48)	525	(65)	(64)	1,841	2,257	(18)	(18)
Restructuring	(96)	(28)	nm⁷	nm⁷	(12)	nm⁷	nm⁷	(164)	(110)	(49)	(49)
Statutory profit before taxation	88	343	(74)	(73)	513	(83)	(82)	1,677	2,147	(22)	(21)
Total assets	355,401	326,565	9	8	338,690	5	4	355,401	326,565	9	8
Of which: loans and
advances to customers4	160,629	153,884	4	3	167,015	(4)	(5)	160,629	153,884	4	3
Total liabilities	429,239	387,561	11	10	402,786	7	5	429,239	387,561	11	10
Of which: customer
accounts4	262,201	243,269	8	7	255,631	3	1	262,201	243,269	8	7
Risk-weighted assets	136,622	129,084	6	nm⁷	138,412	(1)	nm⁷	136,622	129,084	6	nm⁷
Underlying return on risk-
weighted assets (%)5	0.5	1.1	(60)bps	nm⁷	1.5	(100)bps	nm⁷	1.3	1.7	(40)bps	nm⁷
Underlying return on tangible
equity (%)5	2.7	5.6	(290)bps	nm⁷	7.4	(470)bps	nm⁷	6.6	8.5	(190)bps	nm⁷
Cost to income ratio (%)6	75.5	65.6	(9.9)	(9.2)	61.4	(14.1)	(13.5)	57.9	60.9	3.0	3.0

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Following a reorganisation of certain clients, there has been a reclassification of balances across client segments
3 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
4 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
5 Change is the basis points (bps) difference between the two periods rather than the percentage change
6 Change is the percentage points difference between the two periods rather than the percentage change
7 Not meaningful

Corporate & Institutional Banking supports clients with their transaction banking, corporate finance, financial markets and borrowing needs across 50 markets, providing solutions to more than 5,000 clients in some of the world's fastest-growing economies and most active trade corridors.

Our clients include large corporations, governments, banks and investors operating or investing in Asia, Africa and the Middle East. Our strong and deep local presence across these markets enables us to connect our clients multilaterally to investors, suppliers, buyers and sellers and enable them to move capital, manage risk, invest to create wealth, and to help co-create bespoke financing solutions.

We collaborate increasingly with other segments, introducing Commercial Banking services to our clients' ecosystem partners - their networks of buyers, suppliers, customers and service providers - and offering our clients' employees banking services through Retail

Banking.

Finally, we are committed to sustainable finance, delivering on our ambitions to increase support and funding for financial products and services that have a positive impact on our communities and the environment and support sustainable economic growth.

Strategic priorities

•	Deliver sustainable growth for clients by leveraging our network to facilitate trade, capital and investment flows across our
footprint markets
•	Generate high-quality returns by growing 'capital-lite'1 income, driving balance sheet velocity and improving funding quality
while maintaining risk controls
•	Be the leading digital banking platform providing network services and partner with third parties to expand capabilities and to
access new clients
•	Accelerate our sustainable finance offering to our clients through product innovation and enabling transition to a low carbon
future
Progress
•	Network income was down 10 per cent due to the impact of lower interest rates, particularly in Cash Management. Underlying
quality of income remains resilient and our network continues to generate 58 per cent of total income
•	Maintained balance sheet quality with investment grade net exposures representing 65 per cent of total corporate net
exposures (2019: 65 per cent) and high-quality operating account balances improving to 64 per cent of Transaction Banking
and Securities Services customer balances (2019: 61 per cent)
•	Migrated c.15,000 client entities to S2B2 NextGen platform and increased S2B cash payment transaction volumes by 4 per cent
•	Resilient performance driven by diversified product suite and expanded client solutions delivering growth despite challenging
geopolitical and macroeconomic conditions across footprint markets

Performance highlights

• Underlying profit before tax of $1,841 million down 18 per cent, primarily driven by higher credit impairments, partially offset by higher income and lower expenses
• Underlying operating income of $7,214 million up 2 per cent, primarily driven by Financial Markets on the back of higher market volatility offsetting lower income from Cash Management impacted by a lower interest rate environment
• Good balance sheet momentum with total assets up 9 per cent, of which loans and advances to customers were up 4 per cent
• Underlying RoTE decreased from 8.5 per cent to 6.6 per cent

1 Capital-lite income refers to products with low RWA consumption or of a non-funded nature. This mainly includes Cash Management and FX products
2 Our next generation Transaction Banking digital platform

Retail Banking

Constant	Constant	Constant
currency	currency	currency
4Q'20	4Q'19²	Change³	change¹,3	3Q'20	Change³	change¹,3	FY20	FY19²	Change³	change¹,3
$million	$million	%	%	$million	%	%	$million	$million	%	%
Operating income	1,175	1,260	(7)	(7)	1,301	(10)	(11)	5,013	5,186	(3)	(2)
Transaction Banking	5	5	-	-	5	-	-	19	19	-	-
Trade	5	5	-	-	5	-	-	19	19	-	-
Wealth Management	355	341	4	3	471	(25)	(25)	1,586	1,516	5	5
Retail Products	816	906	(10)	(10)	825	(1)	(3)	3,401	3,642	(7)	(5)
CCPL and other unsecured
lending	303	311	(3)	(4)	309	(2)	(4)	1,211	1,251	(3)	(2)
Deposits	247	440	(44)	(44)	276	(11)	(11)	1,326	1,804	(26)	(25)
Mortgage and Auto	226	119	90	85	202	12	9	716	475	51	51
Other Retail Products	40	36	11	18	38	5	-	148	112	32	35
Other	(1)	8	(113)	(113)	-	nm⁷	-	7	9	(22)	(33)
Operating expenses	(1,006)	(993)	(1)	(1)	(915)	(10)	(9)	(3,701)	(3,759)	2	-
Operating profit before
impairment losses and
taxation	169	267	(37)	(39)	386	(56)	(58)	1,312	1,427	(8)	(8)
Credit impairment	(156)	(100)	(56)	(57)	(129)	(21)	(19)	(715)	(336)	(113)	(116)
Other impairment	(9)	2	nm⁷	nm⁷	-	nm⁷	nm⁷	(10)	2	nm⁷	nm⁷
Underlying profit before
taxation	4	169	(98)	(100)	257	(98)	(100)	587	1,093	(46)	(47)
Restructuring	(36)	(54)	33	29	(11)	nm⁷	nm⁷	(50)	(63)	21	17
Statutory profit/(loss) before
taxation	(32)	115	(128)	(131)	246	(113)	(115)	537	1,030	(48)	(49)
Total assets	118,067	109,368	8	5	111,275	6	3	118,067	109,368	8	5
Of which: loans and
advances to customers4	115,611	107,140	8	5	108,828	6	3	115,611	107,140	8	5
Total liabilities	158,827	148,413	7	5	153,278	4	1	158,827	148,413	7	5
Of which: customer
accounts4	154,831	144,760	7	5	149,793	3	1	154,831	144,760	7	5
Risk-weighted assets	47,170	44,508	6	nm⁷	44,845	5	nm⁷	47,170	44,508	6	nm⁷
Underlying return on risk-
weighted assets (%)5	-	1.5	(150)bps	nm⁷	2.3	(230)bps	nm⁷	1.3	2.6	(130)bps	nm⁷
Underlying return on
tangible equity (%)5	0.2	7.5	(730)bps	nm⁷	11.3	(1,110)bps	nm⁷	6.5	12.7	(620)bps	nm⁷
Cost to income ratio (%)6	85.6	78.8	(6.8)	(7.2)	70.3	(15.3)	(15.5)	73.8	72.5	(1.3)	(1.7)

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Following a reorganisation of certain clients, there has been a reclassification of balances across client segments
3 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
4 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
5 Change is the basis points (bps) difference between the two periods rather than the percentage change
6 Change is the percentage points difference between the two periods rather than the percentage change
7 Not meaningful

Segment overview

Retail Banking serves more than nine million individuals and small businesses, with a focus on affluent and emerging affluent in many of the world's fastest-growing cities. We provide digital banking services with a human touch to our clients, with services spanning across deposits, payments, financing products and Wealth Management. We also support our clients with their business banking needs.

Retail Banking represents around one-third of the Group's operating income and one-quarter of its operating profit. We are closely integrated with the Group's other client segments; for example, we offer employee banking services to Corporate & Institutional Banking clients, and Retail Banking provides a source of high-quality liquidity for the Group.

Increasing levels of wealth across Asia, Africa and the Middle East support our opportunity to grow the business sustainably. We aim to improve productivity and client experience by driving digitisation and cost efficiencies, and simplifying processes.

•	Invest in our affluent and emerging affluent clients with a focus on Wealth Management and Deposits to capture the significant
rise of the middle class in our markets
•	Improve our clients' experience through an enhanced end-to-end digital offering, with intuitive platforms, best-in-class
products and service responding to the change in digital habits of clients in our markets
Progress
•	Increased the share of income from more affluent Premium and Priority clients from 57 per cent in 2019 to 59 per cent as a
result of resilient performance in Wealth Management and Mortgages and CCPL income growth
•	Premium Banking income has grown 15 per cent since the launch in ten markets last year
•	Mox launched in Hong Kong in September 2020 and at the end of 2020 had 66,000 customers, more than $670 million in
deposits and is one of the highest rated and most-reviewed virtual banks
•	Our fully digital African banks have now acquired half a million new customers. 75 per cent are below the age of 35, which is
helping to build our pipeline of next generation emerging affluent clients
•	We have announced a 'banking-as-a-service' solution, nexus, for consumer platforms, such as e-commerce, social media or
ride hailing companies, so these companies can offer their own branded financial services to their customers. We have signed
up Sociolla and Bukalapak in Indonesia as partners
•	Exponential increase in digital sales, up over 300 per cent driven by our Ant Financial partnership in China, Mox and our nine
digital banks in Africa & Middle East
•	A further improvement in digital adoption, with 61 per cent of clients now actively using online or mobile banking compared
with 54 per cent in 2019

Performance highlights

• Underlying profit before tax of $587 million was down 46 per cent driven by lower income and higher credit impairments.
Expenses were well-managed and slightly lower
• Underlying operating income of $5,013 million was down 3 per cent. Greater China & North Asia was down 1 per cent, ASEAN & South Asia was down 5 per cent and Africa & Middle East was down 9 per cent (down 1, 3 and 5 per cent on a constant currency basis, respectively)
• Strong income momentum growth from Mortgages and Business Banking Lending with improved margins and balance sheet growth and 5 per cent growth in Wealth Management. These were offset by Deposit margin compression, impacted by a lower interest rate environment, which was partially offset by 7 per cent growth in Customer Accounts
• Underlying RoTE decreased to 6.5 per cent from 12.7 per cent

Commercial Banking

Constant	Constant	Constant
currency	currency	currency
4Q'20	4Q'19²	Change³	change¹,3	3Q'20	Change³	change¹,3	FY20	FY19²	Change³	change¹,3
$million	$million	%	%	$million	%	%	$million	$million	%	%
Operating income	328	375	(13)	(12)	341	(4)	(5)	1,409	1,574	(10)	(9)
Transaction Banking	167	210	(20)	(21)	175	(5)	(6)	734	876	(16)	(16)
Trade	82	89	(8)	(8)	87	(6)	(6)	340	383	(11)	(11)
Cash Management	85	121	(30)	(30)	88	(3)	(6)	394	493	(20)	(20)
Financial Markets	76	73	4	6	79	(4)	(5)	322	335	(4)	(2)
Foreign Exchange	38	41	(7)	(10)	38	-	(5)	170	184	(8)	(5)
Rates	6	5	20	-	4	50	-	32	32	-	-
Commodities	5	6	(17)	-	7	(29)	(29)	27	27	-	-
Credit and Capital Markets	12	4	200	140	9	33	33	37	30	23	23
Capital Structuring
Distribution Group	12	11	9	20	15	(20)	(25)	36	34	6	6
Securities Services	-	1	(100)	nm⁷	-	nm⁷	nm⁷	-	1	(100)	nm⁷
Other Financial Markets	3	5	(40)	(17)	6	(50)	25	20	27	(26)	(26)
Corporate Finance	24	22	9	9	28	(14)	(11)	103	109	(6)	(4)
Lending and Portfolio
Management	60	69	(13)	(10)	61	(2)	(5)	244	246	(1)	2
Wealth Management	-	-	nm⁷	nm⁷	1	(100)	nm⁷	1	1	-	(50)
Retail Products	2	1	100	(50)	1	100	-	6	6	-	-
Deposits	2	1	100	(50)	1	100	-	6	6	-	(14)
Other	(1)	-	nm⁷	100	(4)	75	100	(1)	1	(200)	-
Operating expenses	(232)	(264)	12	11	(225)	(3)	(3)	(878)	(953)	8	6
Operating profit before
impairment losses and taxation	96	111	(14)	(13)	116	(17)	(19)	531	621	(14)	(14)
Credit impairment	(82)	(65)	(26)	(28)	(97)	15	15	(316)	(122)	(159)	(170)
Other impairment	(1)	-	nm⁷	nm⁷	-	nm⁷	nm⁷	(1)	-	nm⁷	nm⁷
Underlying profit before
taxation	13	46	(72)	(73)	19	(32)	(40)	214	499	(57)	(57)
Restructuring	(33)	(11)	(200)	nm⁷	(6)	nm⁷	nm⁷	(57)	(11)	nm⁷	nm⁷
Statutory profit/(loss) before
taxation	(20)	35	(157)	(153)	13	nm⁷	nm⁷	157	488	(68)	(68)
Total assets	32,902	33,978	(3)	(5)	32,845	-	(1)	32,902	33,978	(3)	(5)
Of which: loans and advances
to customers4	27,342	28,831	(5)	(7)	27,353	-	(2)	27,342	28,831	(5)	(7)
Total liabilities	51,803	41,628	24	23	44,518	16	15	51,803	41,628	24	23
Of which: customer accounts4	48,578	38,847	25	23	41,420	17	16	48,578	38,847	25	23
Risk-weighted assets	28,469	30,976	(8)	nm⁷	30,495	(7)	nm⁷	28,469	30,976	(8)	nm⁷
Underlying return on risk-
weighted assets (%)5	0.2	0.6	(40)bps	nm⁷	0.2	-	nm⁷	0.7	1.5	(80)bps	nm⁷
Underlying return on tangible
equity (%)5	0.8	2.9	(210)bps	nm⁷	1.3	(50)bps	nm⁷	3.4	7.4	(400)bps	nm⁷
Cost to income ratio (%)6	70.7	70.4	(0.3)	(0.3)	66.0	(4.7)	(5.0)	62.3	60.5	(1.8)	(2.0)

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Following a reorganisation of certain clients, there has been a reclassification of balances across client segments
3 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
4 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
5 Change is the basis points (bps) difference between the two periods rather than the percentage change
6 Change is the percentage points difference between the two periods rather than the percentage change
7 Not meaningful

Commercial Banking serves more than 43,0001 local corporations and medium-sized enterprises in 22 markets across Asia, Africa and the

Middle East. We aim to be our clients' main international bank, providing a full range of international financial services in areas such as trade finance, cash management, financial markets and corporate finance.

Through our close linkages with Retail Banking and Private Banking, our clients can access additional services they value including employee banking services and personal wealth solutions. We also collaborate with Corporate & Institutional Banking to service clients' end-to-end supply chains.

Our clients represent a large and important part of the economies we serve and are potential future multinational corporates.

Commercial Banking is at the heart of the Group's shared purpose to drive commerce and prosperity through our unique diversity.

Strategic Priorities

•	Drive quality sustainable growth by deepening relationships with existing clients and onboarding new clients, focusing on
rapidly growing and internationalising companies
•	Improve balance sheet and income mix, accelerating utilisation of growth in Cash and FX products.
•	Continue to enhance capital allocation discipline and credit risk management
•	Improve client experience, using technology and investing in frontline training, tools and analytics
Progress
•	Onboarded 6,500 new clients in 2020, which helped generate $78 million additional income and $3 billion additional cash
liabilities
•	Double-digit income growth seen in the Hong Kong-Taiwan, Taiwan-Singapore and Singapore-India corridors as we continue
to tap their potential to help our Commercial Banking clients capture international opportunities
•	Maintained cost discipline (down 8 per cent) while reducing RWAs (down 8 per cent)
•	RWA efficiency2 improved to 65 per cent in 2020 (2019: 70 per cent)
•	Continued to improve client experience: reduced client turnaround time from five to four days
•	Good progress on client satisfaction with Commercial Banking client engagement improving to 31 per cent (2019: 26 per cent)

Performance highlights

• Underlying profit before tax of $214 million was down 57 per cent mainly due to lower income and higher credit impairments from the effects of COVID-19
• Underlying operating income of $1,409 million was down 10 per cent mainly driven by lower Transaction Banking income
• ASEAN & South Asia, Greater China & North Asia and Africa & Middle East income was down 6, 14 and 14 per cent, respectively
• Underlying RoTE reduced from 7.4 per cent to 3.4 per cent

1 Relates to individual entities
2 RWA efficiency is derived as credit RWA divided by assets and contingents

Private Banking

Constant	Constant	Constant
currency	currency	currency
4Q'20	4Q'19	Change²	change¹,2	3Q'20	Change²	change¹,2	FY20	FY19	Change²	change¹,2
$million	$million	%	%	$million	%	%	$million	$million	%	%
Operating income	111	126	(12)	(13)	129	(14)	(13)	540	577	(6)	(6)
Transaction Banking	-	-	nm⁶	nm⁶	1	(100)	nm⁶	1	-	nm⁶	nm⁶
Trade	-	-	nm⁶	nm⁶	1	(100)	nm⁶	1	-	nm⁶	nm⁶
Wealth Management	81	74	9	8	96	(16)	(16)	381	362	5	5
Retail Products	30	53	(43)	(42)	33	(9)	(6)	159	214	(26)	(26)
Deposits	22	43	(49)	(48)	24	(8)	(8)	125	179	(30)	(30)
Mortgage and Auto	8	11	(27)	(20)	9	(11)	(11)	34	36	(6)	(6)
Other Retail Products	-	(1)	100	nm⁶	-	nm⁶	100	-	(1)	100	nm⁶
Other	-	(1)	100	nm⁶	(1)	100	nm⁶	(1)	(1)	-	-
Operating expenses	(123)	(127)	3	4	(114)	(8)	(7)	(476)	(514)	7	7
Operating profit/(loss)
before impairment losses
and taxation	(12)	(1)	nm⁶	nm⁶	15	(180)	(167)	64	63	2	-
Credit impairment	1	(2)	150	150	2	(50)	(50)	(2)	31	(106)	(106)
Underlying profit/(loss)
before taxation	(11)	(3)	nm⁶	nm⁶	17	(165)	(153)	62	94	(34)	(35)
Restructuring	(7)	(6)	(17)	(40)	(1)	nm⁶	nm⁶	(11)	(11)	-	-
Statutory profit/(loss) before
taxation	(18)	(9)	(100)	(167)	16	nm⁶	(194)	51	83	(39)	(39)
Total assets	13,716	14,922	(8)	(9)	13,626	1	(1)	13,716	14,922	(8)	(9)
Of which: loans and
advances to customers3	13,619	14,821	(8)	(10)	13,528	1	(1)	13,619	14,821	(8)	(10)
Total liabilities	18,882	18,480	2	1	18,641	1	-	18,882	18,480	2	1
Of which: customer
accounts3	18,675	18,424	1	-	18,507	1	-	18,675	18,424	1	-
Risk-weighted assets	5,923	6,409	(8)	nm⁶	6,251	(5)	nm⁶	5,923	6,409	(8)	nm⁶
Underlying return on risk-
weighted assets (%)4	(0.7)	(0.2)	(50)bps	nm⁶	1.1	(180)bps	nm⁶	1.0	1.5	(50)bps	nm⁶
Underlying return on
tangible equity (%)4	(3.3)	(0.8)	(250)bps	nm⁶	5.3	(860)bps	nm⁶	4.8	7.3	(250)bps	nm⁶
Cost to income ratio (%)5	110.8	100.8	(10.0)	(9.8)	88.4	(22.4)	(20.7)	88.1	89.1	1.0	0.8

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the basis points (bps) difference between the two periods rather than the percentage change
5 Change is the percentage points difference between the two periods rather than the percentage change
6 Not meaningful

Segment overview

Private Banking offers a full range of investment, credit and wealth planning products to grow, and protect, the wealth of high-net-worth individuals.

Our investment advisory capabilities and product platform are independent from research houses and product providers, allowing us to put client interests at the centre of our business. This is coupled with an extensive network across Asia, Africa and the Middle East which provides clients with relevant market insights and cross-border investment and financing opportunities.

As part of our universal banking proposition, clients can also leverage our global Commercial Banking and Corporate & Institutional Banking capabilities to support their business needs. Private Banking services can be accessed from six leading centres: Hong Kong, Singapore, London, Jersey, Dubai and India.

•	Leverage significant wealth creation and wealth transfers in our markets to increase franchise scale
•	Deliver a unique and compelling client value proposition, which focuses on:
- Access: through market-leading products and platforms
- Advice: differentiated investment insights delivered through our bankers and investment advisers
- Affinity: partnering clients through a sustainable investing offering and our Next Generation programme
•	Build adaptive teams with strong leaders and a transparent focus on results
•	Build for scale by focusing on efficiency on all fronts
•	Sustainable growth through establishment of robust controls and an active "Think Conduct" culture
Progress
•	Accelerated our client digital agenda to meet their needs in the new normal:
•
•

- Dedicated efforts to increase client registrations drove adoption rate of our award-winning PvB App to 62 per cent (53 per cent growth in number of users since January 2020)
- We listened to our clients' needs and launched new functionalities such as portfolio performance analysis capabilities and online publication of market insights; this helped to increase app usage with half of users logging in more than once a month

Through our virtual rehearsal programme with video-based role play training, we aim to transform a generation of bankers, teaching them how to deliver a high-tech but also high-touch client engagement experience

Digitisation of our client onboarding has empowered our bankers to prospect beyond their borders and be future-ready:

- Launch of eSign (digital signatures) in all booking centres, facilitating account opening and credit applications

- Innovative use of video conferencing solutions as an alternative to face-to-face meeting requirements has improved the client experience as clients are empowered to seamlessly connect with their bankers

Performance highlights

• Underlying profit before tax of $62 million was down 34 per cent, due to non-recurrence of a credit impairment release of $29 million in 2019. Excluding this and normalised for a one-off provision of $4.5 million in 2020, underlying profit was up 1 per cent, benefiting from early cost management actions and strong client engagement driving Wealth Management income expansion
• Underlying operating income of $540 million was down 6 per cent, impacted by margin compression in the deposit book due to rate cuts. This was partially offset by resilient growth from Wealth Management, up 5 per cent, mainly from Structured Products and Equities
• Assets under management increased $6 billion or 9 per cent, driven by $0.7 billion of net new money and positive market movements
• Underlying RoTE decreased from 7.3 to 4.8 per cent

Central & other items (segment)

Constant	Constant	Constant
currency	currency	currency
4Q'20	4Q'19	Change²	change¹,2	3Q'20	Change²	change¹,2	FY20	FY19	Change²	change¹,2
$million	$million	%	%	$million	%	%	$million	$million	%	%
Operating income	93	144	(35)	(30)	13	nm⁶	nm⁶	589	860	(32)	(31)
Treasury	92	196	(53)	(52)	40	130	130	635	1,090	(42)	(41)
Other	1	(52)	102	97	(27)	104	94	(46)	(230)	80	79
Operating expenses	(461)	(445)	(4)	4	(160)	(188)	(161)	(909)	(873)	(4)	(5)
Operating loss before
impairment losses and
taxation	(368)	(301)	(22)	(8)	(147)	(150)	(116)	(320)	(13)	nm⁶	nm⁶
Credit impairment	(17)	-	nm⁶	nm⁶	3	nm⁶	nm⁶	(24)	(4)	nm⁶	nm⁶
Other impairment	(11)	(9)	(22)	-	(3)	nm⁶	nm⁶	(16)	(8)	(100)	(67)
Profit from associates and
joint ventures	14	52	(73)	(74)	74	(81)	(81)	164	254	(35)	(36)
Underlying profit/(loss)
before taxation	(382)	(258)	(48)	(31)	(73)	nm⁶	nm⁶	(196)	229	(186)	(159)
Restructuring	(76)	(18)	nm⁶	nm⁶	(14)	nm⁶	nm⁶	(100)	(59)	(69)	(71)
Goodwill impairment &
other items	(9)	(14)	36	43	(266)	97	97	(513)	(205)	(150)	(149)
Statutory loss before
taxation	(467)	(290)	(61)	(44)	(353)	(32)	(17)	(809)	(35)	nm⁶	nm⁶
Total assets	268,964	235,565	14	13	257,993	4	3	268,964	235,565	14	13
Of which: loans and
advances to customers3	19,075	10,078	89	87	19,087	-	(3)	19,075	10,078	89	87
Total liabilities	79,570	73,655	8	7	84,636	(6)	(7)	79,570	73,655	8	7
Of which: customer
accounts3	7,869	7,433	6	4	6,694	18	15	7,869	7,433	6	4
Risk-weighted assets	50,650	53,113	(5)	nm⁶	46,661	9	nm⁶	50,650	53,113	(5)	nm⁶
Underlying return on risk-
weighted assets (%)4	(3.1)	(1.9)	(120)bps	nm⁶	(0.6)	(250)bps	nm⁶	(0.5)	0.6	(110)bps	nm⁶
Underlying return on
tangible equity (%)4	(29.8)	(23.7)	(610)bps	nm⁶	(9.3)	(2,050)bps	nm⁶	(12.0)	(5.1)	(690)bps	nm⁶
Cost to income ratio (%)
(excluding UK bank levy)5	139.8	68.1	(71.7)	(46.2)	nm⁶	nm⁶	nm⁶	98.1	61.2	(36.9)	(37.8)

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the basis points (bps) difference between the two periods rather than the percentage change
5 Change is the percentage points difference between the two periods rather than the percentage change
6 Not meaningful

Performance highlights

• Underlying operating income declined 32 per cent with Treasury income down 42 per cent as a fall in interest rates led to lower interest income on Treasury assets that was partially offset by a reduction in the expense of Treasury liabilities. An additional $220 million in realisation gains, primarily booked in 1H'20, was broadly offset by lower FX switch income and negative movements in hedge ineffectiveness, primarily recorded in 2H'20
• The increase in Other Income mainly relates to interest credits and other one-off items in India, Korea and Singapore.
• Profit from associates and joint ventures was down 35 per cent to $164 million. The Group could only recognise its share of the profits of its associate China Bohai Bank for ten months due to the timing of its recently completed initial public offering in July
2020. The Group' share of Bohai's annual preference share dividend, $22 million, was deducted from its share of profit in 4Q'20. Additionally, the Group's share of China Bohai Bank reduced in 4Q'20 to 16.26 per cent from 19.99 per cent and this will
be the share of profit that is reported in future quarters

Underlying performance by region

Greater China & North

Asia $million

Operating income Operating expenses

Operating profit/(loss) before impairment losses and taxation

Credit impairment Other impairment

Profit from associates and joint ventures Underlying profit/(loss) before taxation Restructuring

Goodwill impairment & other items Statutory profit/(loss) before taxation Total assets

Total liabilities

Of which: loans and advances to customers1 loans and advances to customers loans held at fair value through profit or loss

Of which: customer accounts1 Risk-weighted assets

Cost to income ratio (excl. Bank levy) (%)

6,016 (3,739)	4,366 (2,618)	2,364 (1,683)	1,922 (1,383)	97 (719)	14,765 (10,142)
2,277 (352) (53) 163	1,748 (1,132) 163 -	681 (654) (14) -	539 (161) 8 -	(622) 5 (89) 1	4,623 (2,294) 15 164
2,035 (92) (43)	779 (42) -	13 (88) -	386 (45) -	(705) (115) (470)	2,508 (382) (513)
1,900	737	(75)	341	(1,290)	1,613
311,484 151,879	155,728 87,213	58,069 29,413	253,438 67,771	10,331 -	789,050 336,276
143,260 8,619	82,897 4,316	28,214 1,199	27,328 40,443	- -	281,699 54,577
286,855 231,456 92,860 62.2	134,856 103,167 81,423 60.0	39,980 32,106 51,149 71.2	211,840 125,425 45,758 72.0	64,790 - (2,356) nm²	738,321 492,154 268,834 66.4

Greater China & North

Asia $million

Operating income Operating expenses

6,155 (3,771)

Operating profit/(loss) before impairment losses and taxation

Credit impairment Other impairment

Profit from associates and joint ventures Underlying profit/(loss) before taxation Restructuring

2,384

(194)

(5)

247

Goodwill impairment & other items Statutory profit/(loss) before taxation Total assets

2,432

(138)

Of which: loans and advances to customers1 loans and advances to customers loans held at fair value through profit or loss

Total liabilities

Of which: customer accounts1 Risk-weighted assets

Cost to income ratio (excl. Bank levy) (%)

- 2,294 277,704 139,977 134,066

5,911

249,004 204,286 85,695 61.3

ASEAN & South Asia $million

4,213 (2,681)

1,532 (506)

(1)

1,025

(34)

1,039

149,785

80,885

78,229 2,656

126,213 97,459 88,942 63.6

1 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements 2 Not meaningful

2020

Africa & Middle East $millionEurope & Americas $millionCentral & other items $million

2019

Africa & Middle East $millionEurope & Americas $million

2,562 (1,747)

1,725 (1,470)

815 (132)

1 - 684 (18)

255 (98)

- - 157 (34)

- 666 59,828 31,487 29,940 1,547

- 123 220,579 62,405

26,288 - 268,523

36,117 - 46,231

36,144 29,280 49,244 68.2

218,794 121,708 43,945 85.2

Central & other items $million

616

(740) (10,409)

(124) 4,862

24 (906)

(33) (38)

7 254

(126) 4,172

(30) (254)

(253) (205)

(409) 3,713

12,502 720,398

- 314,754

39,582 669,737

- 452,733

(3,736) 264,090

63.8

Total $million

15,271

65.9

Greater China & North Asia

Constant	Constant	Constant
currency	currency	currency
4Q'20	4Q'19	Change²	change¹,2	3Q'20	Change²	change¹,2	FY20	FY19	Change²	change¹,2
$million	$million	%	%	$million	%	%	$million	$million	%	%
Operating income	1,401	1,497	(6)	(9)	1,471	(5)	(7)	6,016	6,155	(2)	(3)
Operating expenses	(1,021)	(1,001)	(2)	-	(938)	(9)	(7)	(3,739)	(3,771)	1	1
Operating profit before impairment
losses and taxation	380	496	(23)	(26)	533	(29)	(30)	2,277	2,384	(4)	(5)
Credit impairment	(34)	(54)	37	38	(29)	(17)	(21)	(352)	(194)	(81)	(82)
Other impairment	(38)	-	nm⁵	nm⁵	-	nm⁵	nm⁵	(53)	(5)	nm⁵	nm⁵
Profit from associates and joint
ventures	15	51	(71)	(73)	74	(80)	(81)	163	247	(34)	(35)
Underlying profit before taxation	323	493	(34)	(37)	578	(44)	(46)	2,035	2,432	(16)	(17)
Restructuring	(34)	(84)	60	57	(15)	(127)	(147)	(92)	(138)	33	34
Other items	(8)	-	nm⁵	nm⁵	(35)	77	77	(43)	-	nm⁵	nm⁵
Statutory profit before taxation	281	409	(31)	(35)	528	(47)	(50)	1,900	2,294	(17)	(17)
Total assets	311,484	277,704	12	9	298,430	4	2	311,484	277,704	12	9
Of which: loans and advances to
customers3	151,879	139,977	9	5	150,598	1	(2)	151,879	139,977	9	5
Total liabilities	286,855	249,004	15	12	266,617	8	5	286,855	249,004	15	12
Of which: customer accounts3	231,456	204,286	13	10	215,291	8	5	231,456	204,286	13	10
Risk-weighted assets	92,860	85,695	8	nm⁵	92,863	-	nm⁵	92,860	85,695	8	nm⁵
Cost to income ratio (%)4	72.9	66.9	(6.0)	(6.2)	63.8	(9.1)	(9.2)	62.2	61.3	(0.9)	(0.8)

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the percentage points difference between the two periods rather than the percentage change
5 Not meaningful

Region overview

Greater China & North Asia generated the largest share of the Group's income in 2020, at 41 per cent. We serve clients in Hong Kong - the Group's largest market - as well as Mainland China, Japan, Korea, Macau and Taiwan.

The region is highly interconnected, with China's economy at its core. Our global footprint, strong regional presence and continued investment allow us to capture opportunities as they arise from the opening of China's economy.

We are building on the region's economic growth, the rising wealth of its population, the increasing sophistication and internationalisation of Chinese businesses and the increased use of the renminbi internationally.

Strategic priorities

• Use the strength of our network to serve the inbound and outbound cross-border trade and investment needs of our clients
• Make the most of opportunities from China's opening, including the Greater Bay Area (GBA), renminbi, Belt and Road initiative, onshore capital markets and mainland wealth, as well as the development of our digital capabilities
• Strengthen our market position in Hong Kong and improve performance in Korea

Progress

• Our China business has been resilient during a year of unprecedented difficulty. As China has emerged from COVID-19 restrictions, its economy has recovered and our business has grown with underlying operating profit before impairment and tax up 26 per cent driven by Wealth Management, Financial Markets and unsecured products. The income we have booked from clients based in China has grown 3 per cent and China remains the Group's largest source of network income
• Hong Kong faced a unique combination of geopolitical, social and pandemic-related challenges in 2020 which impacted financial performance. However, we have seen very good progress in Wealth Management, and Financial Markets, where income grew strongly and have progressed our digital agenda by launching Mox, our virtual bank

• We have stepped up our investment in the GBA with the creation of a GBA Centre to better support our clients, a dedicated
GBA CEO and the launch of the Standard Chartered GBA Business Confidence Index
• Despite the disruption of the pandemic, our Korea business has delivered operating profit growth of 50 per cent. This has been driven by a strong Wealth Management and Financial Markets performance and reflects the flow-through benefits of management's restructuring actions in recent years

Performance highlights

• Underlying profit before tax of $2,035 million was down 16 per cent, mainly due to higher credit impairment charges, partially offset by strong cost control
• Underlying operating income of $6,016 million was down 2 per cent. Lower income in Cash Management, Retail Deposits and
Treasury Products was partially offset by strong performances in Financial Markets and Wealth Management
• Retail Banking income fell 1 per cent driven by a fall in Deposit income as a result of lower interest rates, almost entirely offset by strong momentum in Mortgages and Wealth Management. Private Banking income was also down. Corporate & Institutional Banking income grew, mainly due to a strong Financial Markets performance, partly offset by lower Corporate Finance and Transaction Banking income. Commercial Banking income was down 14 per cent driven by lower Transaction Banking
• Strong balance sheet momentum with loans and advances to customers up 9 per cent mainly from strong growth in
Mortgages and Corporate Lending. Customer accounts were up 13 per cent, with strong double-digit growth in retail current and savings accounts and Transaction Banking cash balances
• RWAs increased by $7 billion due to market and credit risk, in line with loans and advances growth, mainly in Treasury and
Retail

ASEAN & South Asia

Constant	Constant	Constant
currency	currency	currency
4Q'20	4Q'19	Change²	change¹,2	3Q'20	Change²	change¹,2	FY20	FY19	Change²	change¹,2
$million	$million	%	%	$million	%	%	$million	$million	%	%
Operating income	956	992	(4)	(3)	1,034	(8)	(8)	4,366	4,213	4	5
Operating expenses	(708)	(718)	1	1	(663)	(7)	(5)	(2,618)	(2,681)	2	-
Operating profit before impairment
losses and taxation	248	274	(9)	(8)	371	(33)	(33)	1,748	1,532	14	15
Credit impairment	(166)	(250)	34	32	(128)	(30)	(28)	(1,132)	(506)	(124)	(132)
Other impairment	(2)	(1)	(100)	nm⁵	-	nm⁵	nm⁵	163	(1)	nm⁵	nm⁵
Underlying profit before taxation	80	23	nm⁵	165	243	(67)	(66)	779	1,025	(24)	(24)
Restructuring	(28)	(19)	(47)	(53)	(7)	nm⁵	nm⁵	(42)	(34)	(24)	(31)
Other items	-	13	(100)	(100)	-	nm⁵	nm⁵	-	48	(100)	(100)
Statutory profit before taxation	52	17	nm⁵	107	236	(78)	(76)	737	1,039	(29)	(29)
Total assets	155,728	149,785	4	4	150,651	3	2	155,728	149,785	4	4
Of which: loans and advances to
customers3	87,213	80,885	8	7	86,540	1	(1)	87,213	80,885	8	7
Total liabilities	134,856	126,213	7	6	130,794	3	2	134,856	126,213	7	6
Of which: customer accounts3	103,167	97,459	6	5	101,376	2	-	103,167	97,459	6	5
Risk-weighted assets	81,423	88,942	(8)	nm⁵	80,123	2	nm⁵	81,423	88,942	(8)	nm⁵
Cost to income ratio (%)4	74.1	72.4	(1.7)	(1.5)	64.1	(10.0)	(9.7)	60.0	63.6	3.6	3.5

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the percentage points difference between the two periods rather than the percentage change
5 Not meaningful

Region overview

The Group has a long-standing presence in the region and, as the only international bank present in all 10 ASEAN countries, we are a strong banking partner for our clients. Our two biggest markets in the region are Singapore and India.

The region contributes more than a quarter of the Group's income and Singapore is home to the majority of our global business leadership, our technology operations and our innovation hub SC Ventures. The strong underlying economic growth in the region means we can help our clients grow and sustainably improve returns.

The region benefits from rising trade flows, including activity generated from China's Belt and Road initiative, strong investment, and a rising middle class which is driving consumption and improving digital connectivity.

Strategic priorities

•	Leverage the strength of our international network to support our clients' cross-border trade and investment activities across
the high-growth regional corridors
•	Expand Wealth Management offerings and client engagement through digital-only or hybrid channels to accelerate growth in
affluent segments
•	Improve capital efficiency and sharpen our investments in higher-returning businesses
•	Continue to reshape our India and Indonesia franchises to optimise returns
Progress
•	In Singapore, we are proud to have been awarded 'Significantly Rooted Foreign Bank' status. We are the only international
bank to receive this honour, reflecting our long and deep-rooted presence in the market. This has paved the way for us to
establish a new digital bank and expand our reach and touchpoints in one of our most important markets
•	In India, despite COVID-19, we more than quadrupled operating profit and improved returns. The growth in lower cost
liabilities has improved margins and supported clients in strategic transactions. Expenses remain tightly controlled benefiting
from increased client digital adoption

• In Indonesia, we improved profitability through growth in Financial Markets and Wealth Management income. Costs were flat with client digital adoption reducing channel costs. We have announced a 'banking-as-a-service' solution, nexus, having signed partnerships with Bukalapak and Sociolla in Indonesia as partners
• Bangladesh and Vietnam delivered sound performances leveraging client relationships both domestically and cross border, particularly with China, Japan and Korea

Performance highlights

• Underlying profit before tax of $779 million decreased 24 per cent driven by higher credit impairment. Underlying operating profit before impairment and tax improved 14 per cent as income grew 4 per cent, while expenses were 2 per cent lower
• Underlying operating income of $4,366 million grew 4 per cent (5 per cent on a constant currency basis excluding a positive debit valuation adjustment), underpinned by strong growth in Corporate & Institutional Banking and realisation gains within Treasury Markets. Commercial Banking income declined 6 per cent and Retail Banking was down 5 per cent, while Private Banking was also down
• Higher Corporate & Institutional Banking income driven by strong performance in Financial Markets and Corporate Finance, partially offset by margin compression in Transaction Banking
• Resilient balance sheet momentum with loans and advances to customers up 8 per cent. Customer accounts were up 6 per cent driven by higher retail current and savings accounts and Transaction Banking cash balances. These were partially offset by a reduction in high-priced corporate time deposits
• Risk-weighted assets decreased by $8 billion due mainly to the sale of the Group's stake in Permata in Indonesia

Africa & Middle East

Constant	Constant	Constant
currency	currency	currency
4Q'20	4Q'19	Change²	change¹,2	3Q'20	Change²	change¹,2	FY20	FY19	Change²	change¹,2
$million	$million	%	%	$million	%	%	$million	$million	%	%
Operating income	519	605	(14)	(9)	590	(12)	(11)	2,364	2,562	(8)	(3)
Operating expenses	(464)	(454)	(2)	(5)	(426)	(9)	(7)	(1,683)	(1,747)	4	(1)
Operating profit before impairment losses
and taxation	55	151	(64)	(52)	164	(66)	(60)	681	815	(16)	(12)
Credit impairment	(130)	(56)	(132)	(136)	(154)	16	17	(654)	(132)	nm⁵	nm⁵
Other impairment	(13)	1	nm⁵	nm⁵	1	nm⁵	nm⁵	(14)	1	nm⁵	nm⁵
Underlying profit/(loss) before taxation	(88)	96	(192)	(195)	11	nm⁵	nm⁵	13	684	(98)	(97)
Restructuring	(68)	(11)	nm⁵	nm⁵	(11)	nm⁵	nm⁵	(88)	(18)	nm⁵	nm⁵
Statutory profit/(loss) before taxation	(156)	85	nm⁵	nm⁵	-	nm⁵	nm⁵	(75)	666	(111)	(111)
Total assets	58,069	59,828	(3)	(1)	61,472	(6)	(6)	58,069	59,828	(3)	(1)
Of which: loans and advances to
customers3	29,413	31,487	(7)	(5)	31,408	(6)	(7)	29,413	31,487	(7)	(5)
Total liabilities	39,980	36,144	11	12	40,275	(1)	(2)	39,980	36,144	11	12
Of which: customer accounts3	32,106	29,280	10	11	32,630	(2)	(3)	32,106	29,280	10	11
Risk-weighted assets	51,149	49,244	4	nm⁵	52,524	(3)	nm⁵	51,149	49,244	4	nm⁵
Cost to income ratio (%)4	89.4	75.0	(14.4)	(11.4)	72.2	(17.2)	(15.1)	71.2	68.2	(3.0)	(3.1)

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the percentage points difference between the two periods rather than the percentage change
5 Not meaningful

Region overview

We have a deep-rooted heritage in Africa & Middle East and are present in 25 markets, of which the UAE, Nigeria, Pakistan and Kenya are the largest by income. We are present in the largest number of sub-Saharan African markets of any international banking group.

A rich history, deep client relationships and a unique footprint in the region, as well as across centres in Asia, Europe and the Americas enable us to seamlessly support our clients. Africa & Middle East is an important element of global trade and investment corridors, including those on China's Belt and Road initiative and we are well placed to facilitate these flows.

Global and local macroeconomic headwinds in 2020 impacted income across both the Middle East and Africa, and have resulted in an elevated risk environment, particularly in Africa. However, we're confident the opportunities in the region will support long-term sustainable growth for the Group. We continue to invest selectively and drive efficiencies.

Strategic priorities

•	Provide best-in-class structuring and financing solutions and drive creation through client initiatives
•	Invest to accelerate growth in differentiated international network and affluent client businesses
•	Invest in market-leading digitisation initiatives in Retail Banking to protect and grow market share in core markets, continue
with our retail transformation agenda to recalibrate our network and streamline structures
•	De-risk and improve the quality of income with a focus on return enhancements
Progress
•	Our role leading several marquee transactions across the region reflects our strong client franchise. We continue to be the
market leader in bond issuance and Islamic Sukuk and achieved our highest-ever debt capital markets notional volumes
•	On a constant currency basis, Wealth Management income grew 8 per cent and priority deposits grew by 17 per cent despite a
slow-down post COVID-19
•	Rapid growth in the Africa digital transformation, with half a million customers and $125 million in deposits. Awarded Best
Digital Bank across 10 countries at the Global Finance's Best Digital Banks Awards 2020
35

• Continuing cost discipline has allowed investments to continue through the cycle. The number of branches reduced by 19 per cent and headcount was 7 per cent lower
• Liquidity and capital remained healthy across markets, ensuring a better ability to navigate market challenges
• On a constant currency basis, fee-based income grew and accounted for a higher share of total income than in 2019

Performance highlights

• Underlying profit before tax of $13 million was 98 per cent lower with continued macroeconomic challenges negatively impacting income and driving higher credit impairment. Efficiency actions funded ongoing strategic investments
• Underlying operating income of $2,364 million was down 8 per cent (3 per cent on a constant currency basis) due to the impact of interest rate cuts on margins, while Financial Markets performed well. Income across the Middle East, North Africa and Pakistan was down 7 per cent, and in Africa was down 8 per cent (1 per cent on a constant currency basis)
• Loans and advances to customers were down 7 per cent and customer accounts were up 10 per cent

Europe & Americas

Constant	Constant	Constant
currency	currency	currency
4Q'20	4Q'19	Change²	change¹,2	3Q'20	Change²	change¹,2	FY20	FY19	Change²	change¹,2
$million	$million	%	%	$million	%	%	$million	$million	%	%
Operating income	404	464	(13)	(12)	423	(4)	(5)	1,922	1,725	11	11
Operating expenses	(362)	(365)	1	2	(360)	(1)	1	(1,383)	(1,470)	6	6
Operating profit before impairment
losses and taxation	42	99	(58)	(52)	63	(33)	(32)	539	255	111	105
Credit impairment	(44)	(17)	(159)	(122)	(37)	(19)	(8)	(161)	(98)	(64)	(60)
Other impairment	(5)	-	nm⁵	nm⁵	11	(145)	(142)	8	-	nm⁵	nm⁵
Underlying profit/(loss) before taxation	(7)	82	(109)	(103)	37	(119)	(105)	386	157	146	137
Restructuring	(27)	(13)	(108)	(100)	(8)	nm⁵	(189)	(45)	(34)	(32)	(41)
Statutory profit/(loss) before taxation	(34)	69	(149)	(148)	29	nm⁵	(197)	341	123	177	160
Total assets	253,438	220,579	15	14	233,772	8	8	253,438	220,579	15	14
Of which: loans and advances to
customers3	67,771	62,405	9	7	67,265	1	-	67,771	62,405	9	7
Total liabilities	211,840	218,794	(3)	(4)	225,332	(6)	(6)	211,840	218,794	(3)	(4)
Of which: customer accounts3	125,425	121,708	3	2	122,748	2	2	125,425	121,708	3	2
Risk-weighted assets	45,758	43,945	4	nm⁵	43,818	4	nm⁵	45,758	43,945	4	nm⁵
Cost to income ratio (%)4	89.6	78.7	(10.9)	(8.9)	85.1	(4.5)	(4.2)	72.0	85.2	13.2	12.8

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the percentage points difference between the two periods rather than the percentage change
5 Not meaningful

Region overview

The Group supports clients in Europe & Americas through hubs in London and New York as well as a presence in several markets in Europe and Latin America. Our expertise in Asia, Africa and the Middle East allows us to offer our clients in the region unique network and product capabilities.

The region generates significant income for the Group's Corporate & Institutional Banking business. Clients based in Europe & Americas make up more than one-third of the Group's Corporate & Institutional Banking income, with three-quarters of client income booked

elsewhere in the network generating above-average returns.

In addition to being a key origination centre for Corporate & Institutional Banking, the region offers local, on-the-ground expertise and solutions to help internationally-minded clients grow across Europe & Americas.

The region is home to the Group's two biggest payment clearing centres and the largest trading floor. More than 80 per cent of the region's income derives from Financial Markets and Transaction Banking products.

Our Private Banking business focuses on serving clients with links to our footprint markets.

Strategic priorities

• Continue to attract new international corporate and financial institutional clients and deepen relationships with existing clients by connecting them to the fastest growing and highest potential economies
• Enhance capital efficiency, maintain strong risk oversight and further improve the quality of our funding base
• Leverage our network capabilities as new e-commerce industries grow internationally
• Scale up our continental European business, leveraging significant trade corridors with Asia and Africa
• Grow assets under management in Private Banking and strengthen the franchise generally

Progress

• Good progress in improving our share of business from targeted Corporate & Institutional Banking priority clients, with income up 3 per cent from 'Top 100', 'Next 100' and 'New 90' client initiatives, with growth of 20 per cent from Financial Markets products, partially offset by lower Transaction Banking income
• Significant improvement to our client service offering with onboarding turnaround time more than halved
• Launched Sustainable Fund Finance and exceeded $2 billion in Sustainable Deposits
• Significant increase in high-quality liabilities achieved to improve the funding base
• Restructured our Private Bank London Advisory centre to improve productivity and sharpen focus
• SCB AG Germany has experienced growth, as clients re-positioned their banking arrangements in preparation for Brexit

Performance highlights

• Underlying profit before tax of $386 million improved 146 per cent driven by higher income and lower costs. Impairments were up two-thirds but remain at a modest level relative to the size of the loan portfolio
• Underlying operating income of $1,922 million was up 11 per cent largely due to growth in Financial Markets performance in addition to realisation gains in Treasury, partially offset by the impact of lower interest rates on Cash Management and Retail Products. Adjusting for movements in the debit valuation adjustment, income was up 7 per cent
• Expenses reduced by 6 per cent largely due to lower regulatory costs, reduced travel-related expenses and variable compensation payments
• Strong growth in loans and advances to customers up 9 per cent while customer accounts grew 3 per cent

Central & other items (region)

Constant	Constant	Constant
currency	currency	currency
4Q'20	4Q'19	Change²	change¹,2	3Q'20	Change²	change¹,2	FY20	FY19	Change²	change¹,2
$million	$million	%	%	$million	%	%	$million	%	%	%
Operating income	(81)	39	nm⁴	nm⁴	1	nm⁴	nm⁴	97	616	(84)	(84)
Operating expenses	(394)	(401)	2	9	(93)	nm⁴	nm⁴	(719)	(740)	3	2
Operating loss before impairment losses
and taxation	(475)	(362)	(31)	(24)	(92)	nm⁴	nm⁴	(622)	(124)	nm⁴	nm⁴
Credit impairment	-	4	(100)	(100)	(5)	100	100	5	24	(79)	(75)
Other impairment	(24)	(12)	(100)	(85)	(27)	11	14	(89)	(33)	(170)	(159)
Profit from associates and joint ventures	(1)	1	(200)	(100)	-	nm⁴	100	1	7	(86)	(86)
Underlying loss before taxation	(500)	(369)	(36)	(29)	(124)	nm⁴	nm⁴	(705)	(126)	nm⁴	nm⁴
Restructuring	(91)	10	nm⁴	nm⁴	(3)	nm⁴	nm⁴	(115)	(30)	nm⁴	nm⁴
Goodwill impairment & other items	(1)	(27)	96	100	(231)	100	100	(470)	(253)	(86)	(86)
Statutory loss before taxation	(592)	(386)	(53)	(47)	(358)	(65)	(51)	(1,290)	(409)	nm⁴	nm⁴
Total assets	10,331	12,502	(17)	(18)	10,104	2	2	10,331	12,502	(17)	(18)
Total liabilities	64,790	39,582	64	64	40,841	59	59	64,790	39,582	64	64
Risk-weighted assets	(2,356)	(3,736)	37	nm⁴	(2,664)	12	nm⁴	(2,356)	(3,736)	37	nm⁴
Cost to income ratio (%) (excluding UK bank
levy)3	(77.8)	138.5	nm⁴	172.2	nm⁴	nm⁴	nm⁴	nm⁴	63.8	nm⁴	nm⁴

1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Change is the percentage points difference between the two periods rather than the percentage change
4 Not meaningful

Performance highlights

• Underlying loss before tax of $705 million was down $579 million, as a fall in interest rates led to lower interest income on
Treasury assets

Retail Banking

Operating income Operating expenses

Operating profit before impairment losses and taxation Credit impairment

Other impairment

Underlying profit/(loss) before taxation Restructuring

Statutory profit/(loss) before taxation

Loans and advances to customers including FVTPL

Customer accounts including FVTPL and repurchase agreements

2,989 (2,036)	1,360 (1,057)	635 (586)	29 (22)	5,013 (3,701)
953 (211) -	303 (376) -	49 (125) (10)	7 (3) -	1,312 (715) (10)
742 (13)	(73) (5)	(86) (32)	4 -	587 (50)
729	(78)	(118)	4	537
81,542 106,832	28,776 37,266	4,745 9,674	548 1,059	115,611 154,831

Greater China & North

Asia $million

Operating income Operating expenses

Operating profit before impairment losses and taxation Credit impairment

Other impairment

Underlying profit before taxation Restructuring

Statutory profit before taxation

Loans and advances to customers including FVTPL

Customer accounts including FVTPL and repurchase agreements

Greater China & North

Asia $million

3,018 (2,020)

998 (153)

845

(47)

798

73,329

99,149

1 Following a reorganisation of certain clients, there has been a reclassification of balances across client segments

2020

ASEAN & South Asia $millionAfrica & Middle East $millionEurope & Americas $million

Total $million

2019 (Restated)¹

ASEAN & South Asia $millionAfrica & Middle East $million

1,432 (1,097)

700 (619)

335 (136)

(47) - (336)

199

(7)

(9)

192

Europe & Americas $million

(23) (3,759)

13 1,427

13 1,093

- (63)

13 1,030

27,934

5,320

557 107,140

35,959

8,585

1,067 144,760

Total $million

5,186

Commercial Banking

Operating income Operating expenses

Operating profit before impairment losses and taxation Credit impairment

Other impairment

Underlying profit/(loss) before taxation Restructuring

Statutory profit/(loss) before taxation

Loans and advances to customers including FVTPL

Customer accounts including FVTPL and repurchase agreements

487 (330)	631 (344)	291 (204)	1,409 (878)
157 (32) -	287 (190) (1)	87 (94) -	531 (316) (1)
125 (24)	96 (7)	(7) (26)	214 (57)
101	89	(33)	157
14,065 31,055	9,390 14,078	3,887 3,445	27,342 48,578

Greater China & North

Asia $million

Greater China & North

Asia $million

Operating income Operating expenses

564

(383)

Operating profit before impairment losses and taxation Credit impairment

Other impairment

181

(23)

Underlying profit before taxation Restructuring

158

(8)

Statutory profit before taxation

150

Loans and advances to customers including FVTPL

Customer accounts including FVTPL and repurchase agreements

13,178

22,691

1 Following a reorganisation of certain clients, there has been a reclassification of balances across client segments

2020

ASEAN & South Asia $millionAfrica & Middle East $million

2019 (Restated)¹

ASEAN & South Asia $million

671

(349)

322

(34)

288

(1)

287

Africa & Middle East $million

339 1,574

(221) (953)

118 621

(65) (122)

-53 499

(2) (11)

51 488

10,657

12,948

Total $million

4,996 28,831

3,208 38,847

Analysis of underlying performance by key market

The following tables provide information for key markets in which the Group operates. The numbers are prepared on a management view.

2020

Operating income Operating expenses

Operating profit before impairment losses and taxation

Credit impairment Other impairment

Profit from associates and joint ventures

Underlying profit/(loss) before taxation

Total assets employed

Of which: loans and advances to customers1

Total liabilities employed

Of which: customer accounts1 Cost to income ratio (%)

3,485 (1,959)	1,046 (723)	926 (667)	1,562 (977)	1,245 (680)	309 (176)	579 (409)	946 (673)	783 (525)
1,526	323	259	585	565	133	170	273	258
(199) (55) -	(43) 3 -	(112) (1) 163	(474) - -	(227) (1) -	(84) - -	(277) (3) -	(128) 9 -	(30) - -
1,272	283	309	111	337	49	(110)	154	228
167,080 78,398 160,976 135,487 56.2	69,214 42,636 60,329 44,748 69.1	41,827 16,877 36,713 26,319 72.0	88,246 53,444 83,554 63,303 62.5	28,272 14,258 20,728 15,058 54.6	4,968 2,212 3,494 2,382 57.0	19,856 10,316 14,324 11,720 70.6	174,346 45,803 133,862 81,198 71.1	63,330 18,103 65,307 36,717 67.0

Operating income Operating expenses

Operating profit before impairment losses and taxation

Credit impairment Other impairment

Profit from associates and joint ventures

Underlying profit before taxation Total assets employed

Of which: loans and advances to customers1

Total liabilities employed

Of which: customer accounts1 Cost to income ratio (%)

51.5

79.1

76.4

60.2

64.6

65.9

68.6

89.0

77.3

Hong Kong $millionKorea $millionChina $million

Singapore $million

Hong Kong $millionKorea $millionChina $million

Singapore $million

3,755 (1,934)

972 (769)

872 (666)

1,639 (986)

1,821 (111)

203 (15)

206

653

(81)

(91)

- 1,705 159,725 77,277 149,703 123,330

(5)

- 189 54,408 34,469 47,420 38,533

247 372

- - 562

30,293 85,155
14,772 45,951
27,005 80,006
21,797 60,821

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

2019

Indonesia	UAE	UK	US
$million	$million	$million	$million
India	Indonesia	UAE	UK	US
$million	$million	$million	$million	$million
1,041	273	617	762	759
(672)	(180)	(423)	(678)	(587)
369	93	194	84	172
(290)	(87)	(48)	(33)	(63)
-	-	-	-	-
-	-	-	-	-
79	6	146	51	109
28,163	4,795	20,301	150,103	60,373
15,674	2,098	10,406	42,179	17,038
18,437	3,188	12,905	142,804	66,357
13,800	2,320	10,078	82,036	34,733

India $million

Quarterly underlying operating income by product

4Q'20	3Q'20	2Q'20	1Q'20	4Q'19¹	3Q'19¹	2Q'19¹	1Q'19¹
$million	$million	$million	$million	$million	$million	$million	$million
Transaction Banking	652	665	721	800	834	887	901	877
Trade	249	255	230	260	259	282	282	277
Cash Management	403	410	491	540	575	605	619	600
Financial Markets	697	909	970	1,278	716	877	834	831
Foreign Exchange	267	266	343	415	264	261	304	298
Rates	150	201	339	378	163	176	136	221
Commodities	37	60	82	44	37	39	44	45
Credit and Capital Markets	175	188	250	26	125	167	145	140
Capital Structuring Distribution Group	70	91	52	61	86	87	74	82
DVA	(69)	(22)	(201)	305	(72)	14	11	(53)
Securities Services	78	79	79	84	85	88	87	83
Other Financial Markets	(11)	46	26	(35)	28	45	33	15
Corporate Finance	285	284	269	278	328	281	272	262
Lending and Portfolio Management	199	222	232	195	201	201	197	187
Wealth Management	436	568	434	530	415	488	511	465
Retail Products	848	859	913	946	960	975	976	951
CCPL and other unsecured lending	303	309	295	304	311	315	320	305
Deposits	271	301	413	472	484	510	501	494
Mortgage and Auto	234	211	169	136	130	123	129	129
Other Retail Products	40	38	36	34	35	27	26	23
Treasury	92	40	178	325	196	335	251	308
Other	(10)	(28)	3	(25)	(53)	(66)	(59)	(68)
Total underlying operating income	3,199	3,519	3,720	4,327	3,597	3,978	3,883	3,813

1 Following a reorganisation of certain clients, there has been a reclassification of balances across products

Earnings per ordinary share

4Q'20	4Q'19	Change	3Q'20	Change	FY20	FY19	Change
$million	$million	%	$million	%	$million	$million	%
(Loss)/profit for the period attributable to equity holders	(476)	72	nm¹	161	nm¹	751	2,340	(68)
Non-controlling interest	(2)	(7)	71	(7)	71	(27)	(37)	27
Dividend payable on preference shares and AT1 classified
as equity	(132)	(191)	31	(31)	nm¹	(395)	(448)	12
(Loss)/profit for the period attributable to ordinary
shareholders	(610)	(126)	nm¹	123	nm¹	329	1,855	(82)
Items normalised:
Provision for regulatory matters	-	-	nm¹	-	nm¹	(14)	226	nm¹
Restructuring	248	117	112	44	nm¹	382	254	50
Profit from joint venture	-	(13)	nm¹	-	nm¹	-	(48)	nm¹
Gains arising on repurchase of subordinated liabilities	-	-	nm¹	-	nm¹	-	-	nm¹
Goodwill impairment	-	27	nm¹	231	nm¹	489	27	nm¹
Net loss on sale of businesses	9	-	nm¹	35	(74)	38	-	nm¹
Tax on normalised items	(72)	(19)	nm¹	(5)	nm¹	(83)	152	nm¹
Underlying (loss)/profit	(425)	(14)	nm¹	428	nm¹	1,141	2,466	(54)
Basic - Weighted average number of shares (millions)	3,152	3,197	nm¹	3,151	nm¹	3,160	3,256	nm¹
Diluted - Weighted average number of shares (millions)	3,196	3,228	nm¹	3,192	nm¹	3,199	3,290	nm¹
Basic earnings per ordinary share (cents)²	(19.4)	(3.9)	(15.5)	3.9	(23.3)	10.4	57.0	(46.6)
Diluted earnings per ordinary share (cents)²	(19.1)	(3.9)	(15.2)	3.9	(23.0)	10.3	56.4	(46.1)
Underlying basic earnings per ordinary share (cents)²	(13.5)	(0.4)	(13.1)	13.6	(27.1)	36.1	75.7	(39.6)
Underlying diluted earnings per ordinary share (cents)²	(13.3)	(0.4)	(12.9)	13.4	(26.7)	35.7	75.0	(39.3)
1 Not meaningful

2 Change is cents difference between two points rather than percentage change for earnings per share

Return on Tangible Equity

Average parent company Shareholders' Equity Less Preference share premium

Less Average intangible assets

Average Ordinary Shareholders' Tangible Equity

(Loss)/profit for the period attributable to equity holders Non-controlling interests

Dividend payable on preference shares and AT1 classified as equity

(Loss)/profit for the period attributable to ordinary shareholders

Items normalised:

Provision for regulatory matters Restructuring

Profit from joint venture Goodwill Impairment

Net loss on sale of businesses Tax on normalised items

Underlying (loss)/profit for the period attributable to ordinary shareholders

Underlying Return on Tangible Equity Statutory Return on Tangible Equity

1 Not meaningful

Net Tangible Asset Value per Share

4Q'20 $million

45,814 (1,494) (4,990) 39,330

(476)

(610)

- 248 - - 9 (72)

(425)

(4.3)% (6.2)%

Parent company shareholders' equity Less Preference share premium

Less Intangible assets

Net shareholders tangible equity

Ordinary shares in issue, excluding own shares (millions)

Net Tangible Asset Value per share (cents)

31.12.20 $million

31.12.19 $millionChange %

45,886 (1,494) (5,063)

44,835 (1,494) (5,290)

2 - 4

39,329

38,051

3,150

3,191

(1)

1,249

1,192

57.0

4Q'19 $millionChange %

44,855 (1,494) (5,187) 38,174

72 (7)

(191)

(126)

- 117 (13) 27 -

(19)

(14)

(0.1)% (1.3)%

(420)bps (490)bps

3Q'20 $million

2 45,400

- 4 3

(1,494) (4,972) 38,934

nm¹ 71 31 nm¹

161

(7)

(31)

123

nm¹ 112 nm¹ nm¹ nm¹ nm¹ nm¹

- 44 - 231 35 (5)

428

4.4% 1.3%

Change %

1 - - 1

45,087 (1,494) (5,003)

38,590

nm¹ 71 nm¹ nm¹

329

nm¹ nm¹ nm¹ nm¹ (74) nm¹ nm¹

(870)bps (750)bps

1,141 3.0% 0.9%

FY20 $million

FY19 $million

45,187 (1,494) (5,119)

38,574

2,340 (68)

(448) 12

1,855 (82)

(14) 382 - 489 38 (83)

2,466

6.4% (340)bps

4.8% (390)bps

30.09.20 $million

45,743 (1,494) (4,916) 39,333

3,149 1,249

Change %

- - 2 -

(37) 27

226 254 (48) 27 - 152

nm¹ 50 nm¹ nm¹ nm¹ nm¹

(54)

Change %

- -

(3)

- - -

Underlying versus statutory results reconciliations

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

Operating income by client segment

2020
Private	Central &
Commercial Banking	Banking	other items	Total
$million	$million	$million	$million
2019 (Restated)¹
Private	Central &
Commercial Banking	Banking	other items	Total
$million	$million	$million	$million
1,574	577	860	15,271
4	-	(4)	146
-	-	-	-
1,578	577	856	15,417
1 Following a reorganisation of certain clients, there has been a reclassification of balances across client segments
Operating income by region
2020
Africa &	Europe &	Central &
Middle East	Americas	other items	Total
$million	$million	$million	$million
2019
Africa &	Europe &	Central &
Middle East	Americas	other items	Total
$million	$million	$million	$million
2,562	1,725	616	15,271
-	-	61	146
-	-	-	-
2,562	1,725	677	15,417

Corporate & Institutional Banking $million

Underlying operating income Restructuring

Other items

Statutory operating income

7,214 11 -	5,013 - -	1,409 29 -	540 - -	589 (13) (38)	14,765 27 (38)
7,225	5,013	1,438	540	538	14,754

Underlying operating income Restructuring

Other items

Statutory operating incomeUnderlying operating income Restructuring

Other items

Statutory operating income

6,016 82 (43)

4,366

(4)

2,364

(2)

1,922 - -

97 (49)

14,765 27 (38)

6,055

4,362

2,362

1,922

14,754

Underlying operating income Restructuring

Other items

Statutory operating income

Corporate & Institutional Banking $million

7,074 146 - 7,220

Greater China & North

Asia $million

Greater China & North

Asia $million

6,155 87 - 6,242

Retail Banking $million

5,186 - - 5,186

ASEAN & South Asia $million

4,213

(2)

- 4,211

Profit before taxation (PBT)

Operating income Operating expenses

Operating profit/(loss) before impairment losses and taxation Credit impairment

Other impairment

Profit from associates and joint ventures Profit/(loss) before taxation

14,765 (10,142)

- 14

27 (252)

(38)

- -

14,754 (10,380)

4,623 (2,294)

15 164

14 - - -

(225) (31) (113) (13)

(38)

- - -

- -

(489)

- - - -

4,374 (2,325)

(587) 151

2,508

(382)

(38)

(489)

1,613

Operating income Operating expenses

Operating profit/(loss) before impairment losses and taxation Credit impairment

Other impairment

Profit from associates and joint ventures Profit/(loss) before taxation

Provision for

Underlying regulatory matters

$million

Provision for

Underlying regulatory matters

2020

Net loss on businesses disposed/ held for sale $millionShare of profits ofRestructuring $millionGoodwill impairment $million

PT Bank Permata Tbk joint venture $millionStatutory $million

2019

Net loss on businesses disposed/ held for sale $millionShare of profits of

$million

$millionRestructuring $millionGoodwill impairment $million

PT Bank Permata Tbk joint venture $millionStatutory $million

15,271

146 (298)

- -

15,417

(10,409)

(226)

- (10,933)

4,862

(226)

(152) - - - 4,484

(906)

- - -

(2) - - - (908)

(38)

(98)

254

(2) (254)

- - -

(27) - (163) - 48 300

4,172

(226)

(27)

48 3,713

Profit before taxation (PBT) by client segment

Operating income

External

Inter-segment

Operating expenses

Operating profit/(loss) before impairment losses and taxation

Credit impairment Other impairment

Profit from associates and joint ventures Underlying profit/(loss) before taxation Restructuring

Goodwill impairment & other items Statutory profit/(loss) before taxation

Corporate & Institutional Banking $million

7,214	5,013	1,409	540	589	14,765
7,083 131	4,322 691	1,320 89	374 166	1,666 (1,077)	14,765 -
(4,178)	(3,701)	(878)	(476)	(909)	(10,142)
3,036 (1,237) 42 -	1,312 (715) (10) -	531 (316) (1) -	64 (2) - -	(320) (24) (16) 164	4,623 (2,294) 15 164
1,841 (164) -	587 (50) -	214 (57) -	62 (11) -	(196) (100) (513)	2,508 (382) (513)
1,677	537	157	51	(809)	1,613

Operating income

External

Inter-segment

Operating expenses

Operating profit/(loss) before impairment losses and taxation

Credit impairment Other impairment

Profit from associates and joint ventures Underlying profit before taxation Restructuring

Goodwill impairment & other items Statutory profit/(loss) before taxation

Corporate & Institutional Banking $million

7,074 7,264 (190) (4,310)

2,764 (475) (32)

- 2,257 (110)

- 2,147

Retail Banking $million

5,186 4,236 950 (3,759)

1,427 (336)

2 - 1,093

(63)

- 1,030

1 Following a reorganisation of certain clients, there has been a reclassification of balances across client segments

2020

Commercial Banking $millionPrivate Banking $million

2019 (Restated)¹

Commercial Banking $million

1,574 1,618

(44) (953)

621 (122)

- - 499 (11)

- 488

Private Banking $million

577 329 248 (514)

63 31 - - 94 (11)

- 83

Central & other items $million

Total $million

Central & other items $million

860 15,271

1,824 15,271

(964)

(873) (10,409)

(13) 4,862

(4) (906)

(8) (38)

254 254

229 4,172

(59) (254)

(205) (205)

(35) 3,713

Total $million

Profit before taxation (PBT) by region

Operating income Operating expenses

Operating profit/(loss) before impairment losses and taxation

Credit impairment Other impairment

Profit from associates and joint ventures Underlying profit/(loss) before taxation Restructuring

Goodwill impairment & other items Statutory profit/(loss) before taxation

Greater China & North

Asia $million

6,016 (3,739)	4,366 (2,618)	2,364 (1,683)	1,922 (1,383)	97 (719)	14,765 (10,142)
2,277 (352) (53) 163	1,748 (1,132) 163 -	681 (654) (14) -	539 (161) 8 -	(622) 5 (89) 1	4,623 (2,294) 15 164
2,035 (92) (43)	779 (42) -	13 (88) -	386 (45) -	(705) (115) (470)	2,508 (382) (513)
1,900	737	(75)	341	(1,290)	1,613

Operating income Operating expenses

Operating profit/(loss) before impairment losses and taxation

Credit impairment Other impairment

Profit from associates and joint ventures Underlying profit/(loss) before taxation Restructuring

Goodwill impairment & other items Statutory profit/(loss) before taxation

Greater China & North

Asia $million

6,155 (3,771)

2,384

(194)

(5)

247

2,432

(138)

- 2,294

ASEAN & South Asia $million

2020

Africa & Middle East $millionEurope & Americas $million

ASEAN & South Asia $million

4,213 (2,681)

1,532 (506)

(1)

- 1,025

(34)

48 1,039

2019

Africa & Middle East $millionEurope & Americas $million

2,562 (1,747)

1,725 (1,470)

815 (132)

1 - 684 (18)

255 (98)

- - 157 (34)

- 666

- 123

Central & other items $million

616

(740) (10,409)

(124) 4,862

24 (906)

(33) (38)

7 254

(126) 4,172

(30) (254)

(253) (205)

(409) 3,713

Total $million

15,271

Return on tangible equity (RoTE)

Underlying RoTE

Provision for regulatory matters Restructuring

Of which: Income
Of which: Expenses
Of which: Credit impairment
Of which: Other impairment
Of which: Profit from associates and joint ventures

Net loss on businesses disposed/ held for sale

Goodwill impairment

Share of profits of PT Bank Permata Tbk joint venture Tax on normalised items

Corporate & Institutional Banking %

Statutory RoTE

6.6

6.5

3.4

4.8

(12.0)

0.2

3.0

0.1 (0.4)

(0.5)

- - - - 0.3

(0.8)

- - - - - - 0.2

0.7 (1.0) (0.7) (0.2)

- - - - 0.3

(1.2)

- - - - - - 0.4

(0.2) (1.0)

(0.1)

(0.2)

(0.6) (7.3)

- 0.1

0.1 (0.7) (0.1) (0.3)

(0.1) (1.3)

- 0.3

6.1

5.9

2.5

4.0

(21.1)

0.9

Underlying RoTE

Provision for regulatory matters Restructuring

Of which: Income
Of which: Expenses
Of which: Credit impairment
Of which: Other impairment
Of which: Profit from associates and joint ventures

Net loss on businesses disposed/ held for sale

Goodwill impairment

Share of profits of PT Bank Permata Tbk joint venture Tax on normalised items

Corporate & Institutional

Banking %

8.5

0.8 (0.8)

(0.5)

Statutory RoTE

- - - - - 8.0

Retail Banking %

12.7

(1.0)

- - - - 0.2 11.9

1 Following a reorganisation of certain clients, there has been a reclassification of balances across client segments

2020

Commercial Banking %Private Banking %

2019 (Restated)¹

Commercial Banking %

7.4

- -

0.1 (0.3)

- -

- - - - 0.1 7.3

Private Banking %

7.3

- -

(1.2)

- -

- - - - 0.3 6.4

Central & other items %Total %

Central & other items %

(5.1) 6.4

(3.1) (0.6)

- 0.4

(0.6) (0.8)

(0.1)

- -(0.4) (0.1)

0.7 0.1

(2.9) (0.3)

(11.5) 4.8

Total %

(0.3)

- -

Earnings per ordinary share (EPS)

Basic earnings per ordinary share (cents)

1,141	14	(382)	-	-	(38)	(489)	83	329
3,160	3,160
36.1	10.4

Profit for the year attributable to ordinary shareholders

Basic - Weighted average number of shares (millions)

Underlying $ million

Profit for the year attributable to ordinary shareholders 2,466 Basic - Weighted average number of

2020

Provision for regulatory matters $ millionRestructuring $ millionProfit from joint venture $ millionGains arising on repurchase of senior and subordinated liabilities $ millionNet loss on sale of businesses $ million

Goodwill

Tax onimpairment normalised items

$ million

$ millionStatutory $ million

2019

Gains arising on repurchase ofProvision for regulatory matters $ millionRestructuring $ millionProfit from joint venture $ millionsenior and subordinated liabilities $ millionNet loss on sale of businesses $ million

Goodwill

Tax onimpairment normalised items

$ million

$ millionStatutory $ million

(226)

(254)

(27)

(152) 1,855

shares (millions) 3,256 3,256

Basic earnings per ordinary share (cents) 75.7 57.0

Group Chief Risk Officer's review

Ready for recovery, prepared for further volatility

2020 was a year of significant challenges, with COVID-19, uncertainty around the US elections and Brexit, and heightened tensions between the US and China resulting in levels of macroeconomic and geopolitical upheaval not seen in recent history.

The impact of a global crisis driven by public health concerns rather than economic issues has varied vastly across different markets and sectors, with some devastated while others continue to thrive. Uneven recovery trajectories have resulted in volatility in growth rates across periods, although unprecedented levels of government support, and the provision of significant liquidity in most economies, has dampened some of the shock. The longer-term consequences of this volatility are unclear but suggest we are likely to see an inflationary period in the future. This has created unique challenges in terms of risk management as we strive to support our clients, colleagues and communities while ensuring we remain robust and resilient.

The crisis has also required us to re-examine our systems and processes and adapt to new ways of working. We have accelerated some of our ongoing initiatives by investing significantly in remote working and continuing to enhance our operational resilience. As we progress the Group's digital agenda we are conscious of the related cyber risks, as well as a heightened risk of fraud as criminals look to exploit the instability caused by the pandemic.

As we look forward to 2021 and beyond, we remain vigilant as the landscape continues to evolve, with the transition from Interbank Offered Rate (IBOR) to alternative risk-free rates and the longer-term impact of the Common Framework Agreement on emerging market debt being just two of the areas we are monitoring closely.

The pandemic and related economic shock has impacted our loan portfolio, with credit impairment at elevated levels compared to 2019. However, we faced these challenges from a fundamentally strong position. Actions taken in previous years, including reducing our concentration on single names and high-risk sectors and increasing the proportion of investment grade assets, helped to mitigate deterioration in our portfolios. Our capital and liquidity positions have also remained resilient.

While there were improvements in the second half of 2020 as economies in many of our markets began to emerge from local restrictions, we remain cognisant that the global recovery will be uneven with some sectors and markets continuing to face challenges as the world adapts to the new normal.

The growing sentiment to 'build back better' during the recovery from COVID-19 means we can benefit from our expertise in creating sustainable finance solutions, often in collaboration with the public sector. We are working with clients to understand the potential risks and opportunities sustainability brings. In the second half of 2020, we integrated environmental, social and governance risk management into our Reputational Risk Type Framework. We recognise our role in supporting our clients and markets in the transition to a low-carbon economy and are focused on developing transition frameworks and a range of sustainable financing solutions. We remain committed to being a sustainable, innovative, resilient and client-centric bank.

An update on our key risk priorities

The financial services sector is evolving at a rapid pace and, in a challenging macroeconomic environment, we must continue to innovate. We remain focused on the following key priorities.

Strengthening the Group's risk culture: Embedding a healthy risk culture remains a core objective across the Group. It underpins an enterprise-level ability to identify and assess, openly discuss, and take prompt action to address existing and emerging risks. Our Enterprise Risk Management Framework (ERMF) sets out the guiding principles for our colleagues, enabling us to have integrated and holistic risk conversations across the Group and the three lines of defence. Senior management promote a healthy risk culture by rewarding risk-based thinking (including in remuneration decisions), challenging the status quo and creating a transparent and safe environment for employees to communicate risk concerns.

Enhancing information and cyber security (ICS) capabilities: The Group continues to invest in ICS capabilities. Despite the challenges posed by COVID-19, our technology infrastructure, supervision and controls have been strengthened to meet the additional requirements brought by the pandemic. The expansion of Virtual Private Network capacity along with Multi-Factor Authentication controls have facilitated a large increase in secure remote working across our footprint. We continue to review cyber threats as they evolve, anticipating areas of risk and adapting our continuity arrangements to maintain client service. These threats extend beyond the Group, and we have made it a priority to review our processes and strengthen controls around third-party security risk in response to recent external reports of ransomware attacks. We have benefited from an external review of our ICS enhancements.

Embedding climate risk management: We are making good progress on integrating climate risk into mainstream risk management, with some relevant Reputational, Compliance, Operational and Country Risk processes now incorporating Climate Risk. The Group is also conducting several pilot exercises to accelerate further integration into Credit, Traded, Capital and Liquidity Risk. Governance has been enhanced and rolled out to regions, focusing on markets with local regulatory requirements.

Training and upskilling colleagues across the Group has been a key priority. This year we delivered virtual training sessions and launched our first digital training course on climate risk under our partnership with Imperial College London. We also collaborated with them on a virtual event on energy scenarios and integration into macroeconomic and climate scenarios, with a focus on the coal supply chain in India.

Measuring climate risk remains an industry-wide challenge, and we have invested in internal capabilities and external partnerships to tackle climate risk assessments. With Munich Re's toolkit for physical risk assessment, Baringa's solution for transition risk assessment under various climate scenarios, and granular climate data from S&P Trucost, we significantly advanced our climate risk quantification capabilities. In 2021, we plan to engage our corporate clients with our climate risk insights, to better understand their adaptation and mitigation plans and assess how to best serve their sustainable financing needs.

Our 2020 Task Force on Climate-related Financial Disclosures Report provides further details on the Group's progress. More details on the Group's approach to Climate Risk can be found at sc.com/sustainability

Managing our environmental, social and governance (ESG) risk: There is increasing focus on issues relating to ESG risks from regulators and investors, and we are committed to being a leader in sustainable and responsible banking. The expansion of our Reputational Risk

Type Framework to integrate ESG risk management focuses on core principles aligned with the OECD's Due Diligence for Responsible

Business Conduct and that of doing no significant harm. We are investing in technology and innovative solutions in this area, having already developed a Reputational Risk and ESG Due Diligence Tool to enable us to better understand and manage ESG issues across our markets. We have also delivered a proof-of-concept model which utilises data on client behaviours combined with machine learning to predict the likelihood that a client relationship would expose the Group to heightened ESG risk and its potential severity.

Managing financial crime risks: We strive to remain at the forefront of the fight against financial crime. COVID-19 has presented a range of new threats, as well as heightening existing risks as criminals look to exploit the instability caused by the pandemic. We have identified and shared information about these threats and have taken steps to protect clients.

Our control capability has continued to strengthen and our Financial Crime Compliance team has identified and prevented fraud, money laundering, bribery and corruption using next-generation surveillance and financial crime monitoring infrastructure. With natural language processing and machine learning tools we generate higher quality cases and reduce false positives, creating a safer environment for our clients. We have also been able to share insights with our clients, colleagues and partners. Despite the pandemic impacting our ability to physically hold Correspondent Banking Academies, we have adapted and held academies virtually, allowing greater participation and helping further promote de-risking through education. We have also continued to strengthen our controls through internal innovation and investment in technology.

More information about the Group's commitment to fighting financial crime can be found at sc.com/fightingfinancialcrime

Strengthening our conduct environment: We continued to enhance our management of conduct risk in 2020, particularly in our approach to identification and mitigation. COVID-19 presented a range of new or heightened conduct risks given the move to large-scale working from home arrangements as well as the economic impact on clients. We focused on ensuring those risks were understood and mitigated throughout the year.

More generally, we have seen an improvement in the overall quality and consistency in the identification and management of conduct risk across the Group, regions and countries. Each area assesses its own operations to identify conduct risks and create conduct plans to mitigate them. The ownership of these plans sits with the first line and they are reviewed and challenged by the Conduct, Financial Crime and Compliance function (CFCC). We have also supplemented our management information and reporting by rolling out the Group Conduct Dashboard which provides conduct-related metrics at a firm-wide level.

We are mindful of new and emerging risks and continue to focus on identifying and mitigating conduct risk arising from the pandemic. Given the expected difficult and uncertain nature of the recovery from COVID-19, we remain vigilant to the need to identify new ways conduct risk may arise in 2021 and beyond.

Enhancing our Risk and CFCC infrastructure: Flexible risk aggregation, centralised data and advanced analytical capabilities have enabled an agile response to the challenges of COVID-19. The integration of our risk aggregation platform with front office data has enabled near real-time bespoke exposure analysis, decisioning and reporting, and our stress testing scenarios have been expanded to include the impact of the pandemic. We have also developed capabilities in areas such as anti-money laundering, identity verification, and digital signatures through partnerships developed by our internal innovation centre, SC Ventures.

In Retail Banking, the use of more sophisticated data mining and predictive analytics tools has accelerated development and deployment of risk and forecasting models. Hubs have been established to centralise specialist knowledge in data engineering and visualisation, model development, validation and governance, with automation of supporting processes to reduce operational risks.

Enhancing our model risk management: During 2020, we focused on delivering a sustainable risk management framework through the Model Risk Management Strategic Enhancement Programme. Model Risk Policy and Standards have been strengthened to enable a risk-based approach and an enhanced set of Risk Appetite metrics has been approved by the Board.

The launch of a Model Risk e-learning module is aimed at increasing awareness of model risk management among our people. The Group Model Inventory has been enhanced under a new platform to improve its technological capability and operations. We constantly review our target operating model to ensure we have the right resources and skillsets for timely delivery. This will continue to be an area of focus with more model redevelopment and validation to be completed in 2021.

Our risk profile and performance in 2020

COVID-19 and the related economic shock has impacted our loan portfolio, and as a result asset quality has deteriorated over the past year. However, actions taken as the crisis unfolded and the work done in previous years to solidify our foundations have helped to mitigate the impact. Our capital and liquidity positions remain strong.

The incorporation of COVID-19 into our stress scenarios and portfolio reviews of exposures most at risk to the economic downturn have allowed us to proactively identify potential areas of vulnerability and manage them accordingly.

We remain cognisant that the recovery will be uneven globally, and the threat of prolonged weak economic outlooks may lead to a sustained period of increased risk aversion and uncertainty.

In the first half of the year we placed selected clients from vulnerable sectors on our watchlist categories for close monitoring. This led to a $5.4 billion increase in early alerts exposure (2020: $10.7 billion; 2019: $5.3 billion), although there was a decrease in the second half of the year due to reductions in exposure, regularisations, and downgrades. Credit Grade 12 loans have increased to $2.2 billion (2019: $1.6 billion) as outflows to non-performing loans were offset by inflows from early alert categories.

The credit impairment charge was significantly higher at $2.3 billion compared to $0.9 billion in 2019. Increases were seen across all stages, with stage 1 and 2 impairment rising partly due to management overlays to reflect expected future deterioration. Stage 3 impairment increased by $0.8 billion to $1.5 billion, with around one third relating to three unrelated downgrades in Corporate & Institutional Banking in the first quarter of 2020.

Overall, gross credit-impaired (stage 3) loans for the Group increased by 25 per cent in 2020, from $7.4 billion to $9.2 billion, driven by downgrades in Corporate & Institutional Banking in the ASEAN & South Asia and Africa & Middle East regions. Retail Banking saw an increase of $0.3 billion in stage 3.

The stage 3 cover ratio in the total customer loan book decreased by 10 percentage points to 58 per cent (2019: 68 per cent) mainly in Corporate & Institutional Banking. This was driven by write-offs and new stage 3 loans with low levels of coverage, which benefit from credit insurance and guarantees, including from export credit agencies. The cover ratio including tangible collateral decreased to 76 per cent (2019: 85 per cent) with some of the 2020 downgrades being covered by guarantees and insurance which are not included as tangible collateral.

Average Group value at risk (VaR) in 2020 was $108 million, a significant increase compared with the previous year (2019: $30 million), driven by the extreme market volatility in interest rates and credit spreads following the outbreak of COVID-19 and the collapse in oil prices. The increase in VaR was predominantly observed in the non-trading book from credit bonds held in the Treasury Markets liquid assets buffer which are almost exclusively of investment grade.

Further details of the Group's risk performance for 2020 are set out in the Risk update and the Risk profile section of the Annual Report

An update on our risk management approach

Our Enterprise Risk Management Framework outlines how we manage risk across the Group, as well as at branch and subsidiary level. It gives us the structure to manage existing risks effectively in line with our Risk Appetite, as well as allowing for holistic risk identification. In the first half of the year we introduced a number of enhancements including the elevation of Model Risk to a Principal Risk Type (PRT), as well as refreshes of the Risk Type Frameworks for Information and Cyber Security Risk and Operational Risk. These changes have been rolled out and further embedded in the second half of the year.

As part of the annual review of the ERMF we have expanded the Reputational Risk PRT to include Sustainability Risk. There is an increasing focus on issues relating to ESG risk from both regulators and investors, and the Group's commitments to be a leader in sustainable and responsible banking make this is a core tenet of our franchise.

Given its overarching nature, conduct risk management has been incorporated as an integral component of the overall ERMF rather than viewed as a standalone risk, effective from January 2021. The Group will continue to identify conduct risks inherent to the Group's strategy, business model and geographies it operates in, and expects each business and function to be responsible for managing conduct within their area with CFCC providing oversight and challenge. This change allows us to view conduct risk through the lens of delivering positive outcomes for our clients, markets, and internal and external stakeholders. We remain committed to ensuring the highest standard of conduct from all our people. We have no appetite for negative conduct risk outcomes arising from negligent or wilful actions by the Group or individuals recognising that while incidents are unwanted, they cannot be entirely avoided.

Given the Group's diverse footprint, Country Risk management has also been elevated as an integral component of the overall ERMF as part of Group strategy and strategic risk management, effective from January 2021. The Group continues to ensure that country limits and exposures are reasonable and in line with Group strategy, country strategy, Risk Appetite and the operating environment. This includes economic, political, environmental and social risk factors under base and stressed conditions. The Credit Risk PRT will continue to refer and rely on sovereign risk ratings managed through the Country Risk management process.

To meet the needs of the digital agenda and strengthen the technology risk management capabilities of the Group, we have expanded the Operational Risk PRT to include Technology Risk, effective from January 2021. This allows us to focus on risks arising from technology events, with the Operational Risk team providing second-line oversight. We also continue to develop our risk capabilities in new asset classes and technologies such as our approach to cryptoasset-related activities.

Principal and cross-cutting risks

Principal risks are risks inherent in our strategy and business model. These are formally defined in our ERMF which provides a structure for monitoring and controlling these risks through the Board-approved Risk Appetite. We will not compromise adherence to our Risk Appetite in order to pursue revenue growth or higher returns.

Principal Risk Types	How these are managed
Credit Risk	The Group manages its credit exposures following the principle of diversification across products, geographies, client segments and
industry sectors
Traded Risk	The Group should control its trading portfolio and activities to ensure that Traded Risk losses (financial or reputational) do not cause
material damage to the Group's franchise
Capital and Liquidity Risk	The Group should maintain a strong capital position, including the maintenance of management buffers sufficient to support its strategic
aims, and hold an adequate buffer of high-quality liquid assets to survive extreme but plausible liquidity stress scenarios for at least 60
days without recourse to extraordinary central bank support
Operational and	The Group aims to control operational risks to ensure that operational losses (financial or reputational), including any related to conduct
Technology Risk	of business matters, do not cause material damage to the Group's franchise
Information and	The Group seeks to avoid risk and uncertainty for our critical information assets and systems and has a low appetite for material
Cyber Security Risk	incidents affecting these or the wider operations and reputation of the Group
Compliance Risk	The Group has no appetite for breaches in laws and regulations, while recognising that regulatory non-compliance cannot be entirely
avoided, the Group strives to reduce this to an absolute minimum
Financial Crime Risk	The Group has no appetite for breaches in laws and regulations related to financial crime, recognising that while incidents are
unwanted, they cannot be entirely avoided
Model Risk	The Group has no appetite for material adverse implications arising from the misuse of models or errors in the development or
implementation of models, while accepting model uncertainty
Reputational and	The Group aims to protect the franchise from material damage to its reputation by ensuring that any business activity is satisfactorily
Sustainability Risk	assessed and managed by the appropriate level of management and governance oversight
Climate Risk1	The Group aims to measure and manage financial and non-financial risks from climate change, and reduce emissions related to our own
activities and those related to the financing of clients in alignment with the Paris Agreement

1 In addition to principal risks, the Group also recognises Climate Risk as a cross-cutting risk that manifests through other principal risks

Further details of our Principal Risks and how these are being managed are set out in the Principal Risks section of the Annual Report

Emerging risks

Emerging risks refer to unpredictable and uncontrollable events with the potential to materially impact our business. As part of our continuous risk identification process, we have updated the Group's emerging risks from those disclosed in the 2019 Annual Report.

The table on the next page summarises our current list of emerging risks, outlining the risk trend changes since the end of 2019, the reasons for any changes and the mitigating actions we are taking based on our current knowledge and assumptions. This reflects the latest internal assessment as identified by senior management. The list is not exhaustive and there may be additional risks which could have an adverse effect on the Group. Our mitigation approach for these risks may not eliminate them, but shows the Group's attempt to reduce or manage the risk. As certain risks develop and materialise over time, management will take appropriate steps to mitigate the risk based on its impact on the Group.

Climate related transition and physical risks have been removed as an emerging risk as Climate Risk is now classified as a cross-cutting risk. A detailed explanation of the other changes to our Emerging Risks compared with 2019 can be found in the Annual Report.

Emerging Risks

COVID-19 and the emergence of new diseasesUS-China trade tensions driven by geopolitics and trade imbalanceGeopolitical events, in particular: the rise of populism and nationalism, Middle East tensions and social unrest driven by moderation of growth in key footprint markets and political concernsMacroeconomic concerns, in particular, rising sovereign default riskInterbank Offered Rate discontinuation and transition

since 20191

Key risk trend drivers

How these are mitigated



COVID-19 continues to spread globally. Measure•s to contain the virus, such as travel bans and restrictions, curfews, quarantines and shutdown•s have led to increased volatility in financial markets and commodity prices and severe economic downturns in many countries. There is a risk other diseases may emerge

As part of our stress tests, a severe stress in the global economy associated with a sharp slow-down was assessed

Exposures that could result in material credit impairment charges and risk-weighted asset inflation under stress tests are regularly reviewed and actively managed

• To support our clients the Group has enacted comprehensive support schemes for retail and corporate customers, including loan and interest repayment holidays, covenant relief, fee waivers or cancellations, loan extensions and new facilities
• The Group's priority remains the health and safety of our clients and employees and continuation of normal operations by leveraging our robust Business Continuity Plans which enable the majority of our colleagues to work remotely where possible



Measures taken by China and the US on trade • tariffs since 2018 have increased concerns of a global geopolitical and trade war. Tensions escalated in 2020 and continue to deteriorate,posing a risk to global supply chains

• Detailed portfolio reviews are conducted on an ongoing basis and action is taken where necessary
• We monitor and assess geopolitical events and act as appropriate to ensure we minimise the impact to the Group and our clients
• Increased scrutiny is applied when onboarding clients in sensitive industries and in ensuring compliance with sanctions requirements

Sharp slowdowns in the US, China, and more broadly, world trade and global growth are a feature of Group stress scenarios. These stress tests provide visibility to key vulnerabilities so that management can implement timely interventions

→ There are increasing concerns following the rise•of We monitor and assess geopolitical events and act as appropriate to ensurepopulism and nationalism. COVID-19 and focus onlocal economies have helped contribute to reduced security incidents in the Middle East relative to 2019. 2019 and 2020 saw a surge in protests globally and the risk is these will increase further in 2021. The economic impact of policy decisions made in 2020 may pose a risk to future growth

we minimise the impact to the Group and our clients

• There is continuous monitoring at a country, regional and Group level to identify emerging risks and evaluate their management
• We conduct portfolio reviews at a Group, country and business level to assess the impact of extreme but plausible geopolitical events



COVID-19 has exacerbated already deteriorating• market conditions, causing liquidity and potentially

solvency issues for a number of the world's

• We conduct stress tests and portfolio reviews at a country and business levelpoorest countries. Central bank responses to the crisis may result in asset bubbles and inflation

• We actively utilise credit risk mitigation techniques including credit insurance and collateral
• We actively track the participation of our footprint countries in G20's
Common Framework for Debt Treatments and the associated exposure

→ There are concerns regarding the impact of the • discontinuation of the IBOR benchmarks and the transition to Risk Free Rates (RFRs). LIBOR is relie•d upon by the Group as a reference rateExposures that may result in material credit impairment and increased risk-weighted assets are closely monitored and actively managed

to assess the impact of extreme but plausible events and manage the portfolio accordingly

The Group has a global IBOR Transition Programme to consider all aspects of the transition and how risks can be mitigated

The Group has raised awareness and understanding of the transition, both internally and with clients, with around 6,500 staff and more than 1,900 clients trained globally

• From an industry and regulatory perspective, the Group is actively participating in and contributing to different RFR Working Groups, industry associations and business forums focusing on different aspects of the IBOR to RFR transition

Emerging Risks

Third party dependencyNew technologies and digitisation (including business disruption risk and responsible use of Artificial Intelligence)

Increased data privacy and security risks from strategic and wider use of data

Increase in long-term remote working providing new challenges

since 20191

Key risk trend drivers

How these are mitigated



Economic conditions have impacted businesses • globally and placed significant pressure on the financial health of our suppliers, vendors and other third parties. There is a risk of increased cyber • threats associated with third-party vendors as a result of COVID-19

An internal review of third-party risk was completed in 4Q'20 and recommendations to enhance overall third-party risk management are being implemented

Enhanced 2021 Risk Appetite metrics for vendor services were approved by the Board

→ Client expectations and the way they interact wi•th We monitor emerging trends, opportunities and risk developments inthe Group may change, potentially accelerating the adoption of digital solutions

• We have rolled out enhanced digital capabilities in Retail Banking, particularly around onboarding, sales and marketing
• We are enhancing capabilities to ensure our systems are resilient, we remain relevant and can capitalise quickly on technology trends
• We continue to make headway in harnessing new technologies, and are investing in machine learning solutions that rapidly analyse large data sets and fine-tune the accuracy of our financial crime tools

technology which may have implications on the banking sector



Regulatory requirements and client expectation•s relating to data management and privacy are increasing across our markets, including the ethi•cal use of data

We actively monitor regulatory developments in relation to data management, data protection and privacy

We have established a dedicated Data and Privacy team to build data management and privacy expertise across the Group while ensuring compliance with data ownership and consent requirements



The number of employees working remotely an•d increasingly advanced capabilities of threat actors have raised this risk in addition to internal • (supervision, culture and support) and external (clients and other counterparties) considerationsThe Group has assessed the risk, impact and robustness of continuity plans for pandemic critical vendor services supporting critical banking operations

We actively monitor cyber threats and risks, and have implemented heightened technical and organisational measures designed to prevent, detect and respond to threats

• The Group is undertaking a Future of Work assessment which considers data privacy and cyber security in addition to culture and leadership

1 The risk trend refers to the overall risk score trend which is a combination of potential impact, likelihood and velocity of change

Further details on our Emerging Risks can be found in the Annual Report.

Summary

The world has undergone significant upheaval in the past year and we have demonstrated resilience and adapted to the new and distinct challenges we have faced. We recognise that risks will remain heightened during the coming period amid what is likely to be a difficult and uneven economic recovery. We remain vigilant with a focus on achieving the right outcomes for our clients. The actions we take will set the foundations for achieving sustained growth and performance as we build back better during the recovery.

Mark Smith

Group Chief Risk Officer

25 February 2021

Risk review

Credit quality by client segment

Amortised cost

Stage 1 - Strong - Satisfactory Stage 2

- Strong
- Satisfactory
- Higher risk

Of which (stage 2):

- Less than 30 days past due - More than 30 days past due

Stage 3, credit-impaired financial assets Gross balance¹

Stage 1 - Strong - Satisfactory Stage 2

- Strong
- Satisfactory
- Higher risk

Of which (stage 2):

- Less than 30 days past due - More than 30 days past due

Stage 3, credit-impaired financial assets Total credit impairment

Net carrying value Stage 1 - Strong - Satisfactory Stage 2

- Strong
- Satisfactory
- Higher risk

Of which (stage 2):

- Less than 30 days past due - More than 30 days past due

Stage 3, credit-impaired financial assets Cover ratio

Fair value through profit or loss Performing

- Strong
- Satisfactory
- Higher risk

Defaulted (CG13-14) Gross balance (FVTPL)2

Net carrying value (incl FVTPL)

44,015	90,559	113,162	20,434	13,132	19,150	256,437	143,703	49,489
34,961	58,031	110,903	6,246	8,863	18,889	202,932	122,792	30,879
9,054	32,528	2,259	14,188	4,269	261	53,505	20,911	18,610
349	16,408	2,459	3,596	198	-	22,661	9,698	3,573
95	2,538	1,328	218	194	-	4,278	3,537	386
233	12,326	661	2,779	4	-	15,770	5,522	2,399
21	1,544	470	599	-	-	2,613	639	788

-	168	661	34	2	-	865	-	-
29	64	470	84	10	-	628	-	-
-	5,506	1,173	2,146	389	-	9,214	2	770
44,364	112,473	116,794	26,176	13,719	19,150	288,312	153,403	53,832
(14)	(67)	(429)	(28)	(9)	(1)	(534)	(39)	(20)
(7)	(25)	(300)	(9)	(7)	-	(341)	(19)	(13)
(7)	(42)	(129)	(19)	(2)	(1)	(193)	(20)	(7)
(3)	(387)	(251)	(100)	-	-	(738)	(78)	(36)
-	(41)	(100)	(1)	-	-	(142)	(3)	(3)
(3)	(223)	(85)	(68)	-	-	(376)	(44)	(19)
-	(123)	(66)	(31)	-	-	(220)	(31)	(14)

-	(4)	(85)	(2)	-	-	(91)	-	-
-	(3)	(66)	(3)	-	-	(72)	-	-
-	(3,065)	(569)	(1,545)	(162)	-	(5,341)	-	(194)
(17)	(3,519)	(1,249)	(1,673)	(171)	(1)	(6,613)	(117)	(250)
44,347	108,954	115,545	24,503	13,548	19,149	281,699
0.0%	0.1%	0.4%	0.1%	0.1%	0.0%	0.2%	0.0%	0.0%
0.0%	0.0%	0.3%	0.1%	0.1%	0.0%	0.2%	0.0%	0.0%
0.1%	0.1%	5.7%	0.1%	0.0%	0.4%	0.4%	0.1%	0.0%
0.9%	2.4%	10.2%	2.8%	0.0%	0.0%	3.3%	0.8%	1.0%
0.0%	1.6%	7.5%	0.5%	0.0%	0.0%	3.3%	0.1%	0.8%
1.3%	1.8%	12.9%	2.4%	0.0%	0.0%	2.4%	0.8%	0.8%
0.0%	8.0%	14.0%	5.2%	0.0%	0.0%	8.4%	4.9%	1.8%

0.0%	2.4%	12.9%	5.9%	0.0%	0.0%	10.5%	0.0%	0.0%
0.0%	4.7%	14.0%	3.6%	0.0%	0.0%	11.5%	0.0%	0.0%
0.0%	55.7%	48.5%	72.0%	41.6%	0.0%	58.0%	0.0%	25.2%
0.0%	3.1%	1.1%	6.4%	1.2%	0.0%	2.3%	0.1%	0.5%

22,082	51,549	135	2,835	-	12	54,531	-	-
18,100	27,323	133	2,204	-	8	29,668	-	-
3,982	24,144	2	631	-	4	24,781	-	-
-	82	-	-	-	-	82	-	-
-	37	-	9	-	-	46	-	-
22,082	51,586	135	2,844	-	12	54,577	-	-
66,429	160,540	115,680	27,347	13,548	19,161	336,276

2020

CustomersCorporate & InstitutionalBanks $million

Banking Retail Banking

$million

$millionCommercial

Banking $millionPrivate Banking $million

Central & other items $million

Customer

Total $millionUndrawn commitments $million

1 Loans and advances includes reverse repurchase agreements and other similar secured lending of $2,919 million under Customers and of $1,247 million under Banks, held at amortised cost
Financial Guarantees $million
2 Loans and advances includes reverse repurchase agreements and other similar secured lending of $45,200 million under Customers and of $18,205 million under Banks, held at fair value through profit or loss

Risk review continued

2019
Customers3
Corporate &
Institutional	Commercial	Private	Central &	Undrawn	Financial
Banks	Banking	Retail Banking	Banking	Banking	other items	Customer Total	commitments	Guarantees
Amortised cost	$million	$million	$million	$million	$million	$million	$million	$million	$million
Stage 1	52,634	94,226	103,899	23,683	14,249	10,092	246,149	132,242	42,597
- Strong	41,053	58,623	101,246	6,941	10,145	9,961	186,916
- Satisfactory	11,581	35,603	2,653	16,742	4,104	131	59,233
Stage 2	924	13,454	3,029	3,985	284	7	20,759	8,951	3,509
- Strong	225	2,711	2,231	208	280	-	5,430
- Satisfactory	476	9,652	462	3,493	4	-	13,611
- Higher risk	223	1,091	336	284	-	7	1,718
Of which (stage 2):
- Less than 30 days past due	2	145	462	58	-	-	665	-	-
- More than 30 days past due	23	175	336	86	4	-	601	-	-
Stage 3, credit-impaired financial assets	-	4,173	846	2,013	366	-	7,398	1	608
Gross balance¹	53,558	111,853	107,774	29,681	14,899	10,099	274,306	141,194	46,714
Stage 1	(5)	(78)	(289)	(24)	(10)	(1)	(402)	(43)	(14)
- Strong	-	(29)	(182)	(1)	(8)	-	(220)	(8)
- Satisfactory	(5)	(49)	(107)	(23)	(2)	(1)	(182)	(6)
Stage 2	(4)	(143)	(173)	(60)	(1)	-	(377)	(38)	(16)
- Strong	(2)	(33)	(88)	(5)	(1)	-	(127)	(3)
- Satisfactory	(2)	(51)	(45)	(40)	-	-	(136)	(8)
- Higher risk	-	(59)	(40)	(15)	-	-	(114)	(5)
Of which (stage 2):
- Less than 30 days past due	-	(3)	(45)	(2)	-	-	(50)	-	-
- More than 30 days past due	-	(4)	(40)	(5)	-	-	(49)	-	-
Stage 3, credit-impaired financial assets	-	(2,980)	(374)	(1,503)	(147)	-	(5,004)	-	(206)
Total credit impairment	(9)	(3,201)	(836)	(1,587)	(158)	(1)	(5,783)	(81)	(236)
Net carrying value	53,549	108,652	106,938	28,094	14,741	10,098	268,523	-	-
Stage 1	0.0%	0.1%	0.3%	0.1%	0.1%	0.0%	0.2%	0.0%	0.0%
- Strong	0.0%	0.0%	0.2%	0.0%	0.1%	0.0%	0.1%
- Satisfactory	0.0%	0.1%	4.0%	0.1%	0.0%	0.8%	0.3%
Stage 2	0.4%	1.1%	5.7%	1.5%	0.4%	0.0%	1.8%	0.4%	0.5%
- Strong	0.9%	1.2%	3.9%	2.4%	0.4%	0.0%	2.3%
- Satisfactory	0.4%	0.5%	9.7%	1.1%	0.0%	0.0%	1.0%
- Higher risk	0.0%	5.4%	11.9%	5.3%	0.0%	0.0%	6.6%
Of which (stage 2):
- Less than 30 days past due	0.0%	2.1%	9.7%	3.4%	0.0%	0.0%	7.5%	0.0%	0.0%
- More than 30 days past due	0.0%	2.3%	11.9%	5.8%	0.0%	0.0%	8.2%	0.0%	0.0%
Stage 3, credit-impaired financial assets	0.0%	71.4%	44.2%	74.7%	40.2%	0.0%	67.6%	0.0%	33.9%
Cover ratio	0.0%	2.9%	0.8%	5.3%	1.1%	0.0%	2.1%	0.1%	0.5%
Fair value through profit or loss
Performing	21,797	45,104	238	845	-	2	46,189	-	-
- Strong	19,217	26,511	236	253	-	1	27,001
- Satisfactory	2,580	18,584	1	592	-	1	19,178
- Higher risk	-	9	1	-	-	-	10
Defaulted (CG13-14)	-	34	-	8	-	-	42	-	-
Gross balance (FVTPL)2	21,797	45,138	238	853	-	2	46,231	-	-
Net carrying value (incl FVTPL)	75,346	153,790	107,176	28,947	14,741	10,100	314,754

113,195 19,047

27,417 15,180

3,988 4,601 362

1,049 2,248 212

(22) (21)

(8) (6)

(7) (14) (17)

(3) (8) (5)

0.0% 0.1%

0.0% 0.0%

0.2% 0.3% 4.8%

0.3% 0.4% 2.4%

- - -

Loans and advances includes reverse repurchase agreements and other similar secured lending of $1,469 million under Customers and of $1,341 million under Banks, held at amortised cost

2 Loans and advances includes reverse repurchase agreements and other similar secured lending of $39,335 million under Customers and of $18,269 million under Banks, held at fair value through profit or loss

Corporate & Institutional Banking, Commercial Banking and Retail Banking Gross and ECL numbers have been restated to reflect client transfers between the segments. The changes are in stage 1 and stage 2 only. In the Fair value through profit or loss section, the swap is between Corporate & Institutional Banking and Commercial Banking

Risk review continued
Credit impairment charge
Total	Stage 1 & 2	Stage 3	Total
$million	$million	$million	$million
Ongoing business portfolio
Corporate & Institutional Banking	95	380	475
Retail Banking	175	161	336
Commercial Banking	(13)	135	122
Private Banking	1	(32)	(31)
Central & Others	4	-	4
Credit impairment charge	262	644	906
Restructuring business portfolio
Others1	1	1	2
Credit impairment charge	1	1	2
Total credit impairment charge	263	645	908
1 There was a net $31 million impairment (31 December 2019: $2 million) from the Group's discontinued businesses
COVID-19 relief measures
ASEAN & South Asia	Africa & Middle East

2020

Stage 1 & 2 $millionStage 3 $million

321 414 70 (2) 24	916 301 246 4 -	1,237 715 316 2 24
827	1,467	2,294
-	31	31
-	31	31
827	1,498	2,325

2019

Greater China &

North Asia

Europe & Americas

Total Retail Banking

2,372

652

1,554

166

Out-standing	% of	Out-standing	% of	Out-standing	% of	Out-standing	% of
Segment	$m	portfolio1	$m	$m	portfolio1	$m	portfolio1	$m	portfolio1
Credit Card & Personal loans	241	2%	23	90	0%	128	7%
Mortgages & Auto	1,758	2%	526	1,202	7%	30	1%
Business Banking	373	3%	103	262	4%	8	1%
Corporate & Institutional Banking	727	51	320	336	20
Commercial Banking	468	262	113	93	-

% of portfolio1

Out-standing

0% 1% 2%

Total at 31 December 2020

3,567

965

1,987

595

1 Percentage of portfolio represents the outstanding amount at 31 December 2020 as a percentage of the gross loans and advances to banks and customers by product and segment and total loans and advances to banks and customers at 31 December 2020

Risk review continued

Vulnerable Sectors

Amortised Cost

Industry: Aviation1 Commodity traders Metals & mining Commercial real estate Hotels & tourism

Oil & gas

Total

Total Corporate & Institutional Banking and Commercial Banking Total Retail Banking, Private Banking and other segments

Total Group

3,839 8,664 3,882 19,090 2,557 7,199	2,106 318 513 8,004 1,110 1,032	1,733 8,346 3,369 11,086 1,447 6,167	1,321 2,189 2,850 5,283 1,185 8,332	531 4,459 886 313 110 5,587	1,852 6,648 3,736 5,596 1,295 13,919	3,585 14,994 7,105 16,682 2,742 20,086
45,231	13,083	32,148	21,160	11,886	33,046	65,194
133,457	27,561	105,896	92,001	46,725	138,726	244,622
192,589	103,886	88,703	61,285	6,857	68,142	156,845
326,046	131,447	194,599	153,286	53,582	206,868	401,467

Amortised Cost

Industry: Aviation1 Commodity traders Metals & mining Commercial real estate Hotels & tourism

Oil & gas

Total

Total Corporate & Institutional Banking and Commercial Banking Total Retail Banking, Private Banking and other segments

Total Group

2020

Maximum on-balance sheet exposure (net of credit impairment)

$millionCollateral $millionNet on-balance sheet exposure $millionUndrawn commitments (net of credit impairment)

$millionFinancial guarantees (net of credit impairment)

$millionNet off-balance sheet exposure $million

2019

Maximum on-balance sheet exposure (net of credit impairment)

$millionCollateral $millionNet on-balance sheet exposure $millionUndrawn commitments (net of credit impairment)

$millionFinancial guarantees (net of credit impairment)

$million

Net off-balance balance sheet netsheet exposure $million

3,659

1,186

2,473

1,131

556

1,687 4,160
10,386
326
10,060
2,736
4,075
6,811 16,871
5,436
381
5,055
2,774
602
3,376 8,431
16,476
5,892
10,584
6,771
390
7,161 17,745
2,397
800
1,597
1,634
146
1,780 3,377
8,041
1,241
6,800
8,118
5,943
14,061 20,861
46,395
9,826
36,569
23,164
11,712
34,876 71,445

136,746

27,065

109,681

86,058

40,873

126,931 236,612

185,326

96,391

88,935

55,055

5,605

60,660 149,595

322,072

123,456

198,616

141,113

46,478

187,591 386,207

1 In addition to the aviation sector loan exposures, the Group owns $3.9 billion (31 December 2019: $3.4 billion) of aircraft under operating leases. Refer to page 371 - Operating lease assets

Total on & off-balance sheet net exposure $million

Total on & off-exposure $million

Risk review continued

Loans and advances by stage

Amortised Cost

Industry: Aviation Commodity traders Metals & mining Commercial real estate Hotels & tourism

Oil & gas

Total

Total Corporate & Institutional

2020

Stage 1

Stage 2

Stage 3

TotalGross balance $million

Total credit impair-ment $million

Net carrying amount $millionGross balance $million

Total credit impair-ment $million

Net carrying amount $millionGross balance $million

Total credit impair- Net carrying

ment $millionamount $millionGross balance $million

Total credit impair-ment $million

Net carrying amount $million

Banking and Commercial BankingTotal Retail Banking, Private

Banking and other segments Total Group


2,073	(1)	2,072	1,613	(26)	1,587	258	(78)	180	3,944	(105)	3,839
8,067	(3)	8,064	473	(12)	461	799	(660)	139	9,339	(675)	8,664
3,128	(3)	3,125	677	(18)	659	210	(112)	98	4,015	(133)	3,882
15,847	(13)	15,834	3,068	(34)	3,034	408	(186)	222	19,323	(233)	19,090
1,318	(2)	1,316	1,168	(18)	1,150	138	(47)	91	2,624	(67)	2,557
5,650	(7)	5,643	1,548	(69)	1,479	276	(199)	77	7,474	(275)	7,199
36,083	(29)	36,054	8,547	(177)	8,370	2,089	(1,282)	807	46,719	(1,488)	45,231

110,993	(95)	110,898	20,004	(487)	19,517	7,652	(4,610)	3,042	138,649	(5,192)	133,457

189,459	(453)	189,006	3,006	(254)	2,752	1,562	(731)	831	194,027	(1,438)	192,589
300,452	(548)	299,904	23,010	(741)	22,269	9,214	(5,341)	3,873	332,676	(6,630)	326,046

2019
Stage 1	Stage 2	Stage 3	Total
Total credit	Net carrying	Total credit	Net carrying	Gross	Total credit	Net carrying	Total credit	Net carrying
Gross balance	impair-ment	amount	Gross balance	impair-ment	amount	balance	impair-ment	amount	Gross balance	impair-ment	amount
Amortised Cost	$million	$million	$million	$million	$million	$million	$million	$million	$million	$million	$million	$million
Industry:
Aviation	3,426	(1)	3,425	236	(8)	228	6	-	6	3,668	(9)	3,659
Commodity traders	8,693	(10)	8,683	1,663	(6)	1,657	401	(355)	46	10,757	(371)	10,386
Metals & mining	4,422	(5)	4,417	875	(10)	865	292	(138)	154	5,589	(153)	5,436
Commercial real estate	14,244	(18)	14,226	2,092	(33)	2,059	293	(102)	191	16,629	(153)	16,476
Hotels & tourism	2,012	(4)	2,008	384	(2)	382	35	(28)	7	2,431	(34)	2,397
Oil & gas	6,854	(10)	6,844	1,031	(15)	1,016	441	(260)	181	8,326	(285)	8,041
Total	39,651	(48)	39,603	6,281	(74)	6,207	1,468	(883)	585	47,400	(1,005)	46,395
Total Corporate & Institutional
Banking and Commercial Banking	117,909	(102)	117,807	17,439	(203)	17,236	6,186	(4,483)	1,703	141,534	(4,788)	136,746
Total Retail Banking, Private
Banking and other segments	180,874	(305)	180,569	4,244	(178)	4,066	1,212	(521)	691	186,330	(1,004)	185,326
Total Group	298,783	(407)	298,376	21,683	(381)	21,302	7,398	(5,004)	2,394	327,864	(5,792)	322,072
63

Capital review

Capital ratios

31.12.20	30.09.20	Change4	30.06.20	Change4	31.12.19	Change4
CET1	14.4%	14.4%	-	14.3%	0.1	13.8%	0.6
Tier 1 capital	16.5%	16.5%	-	16.5%	-	16.5%	-
Total capital	21.2%	21.4%	(0.2)	21.5%	(0.3)	21.2%	-
CRD Capital base1 (audited)
31.12.20	30.09.20	Change5	30.06.20	Change5	31.12.19	Change5
$million	$million	%	$million	%	$million	%
CET1 instruments and reserves
Capital instruments and the related share premium accounts	5,564	5,564	-	5,564	-	5,584	-
Of which: share premium accounts	3,989	3,989	-	3,989	-	3,989	-
Retained earnings2	25,723	25,748	-	25,798	-	24,044	7
Accumulated other comprehensive income (and other reserves)	12,688	12,037	5	11,431	11	11,685	9
Non-controlling interests (amount allowed in consolidated CET1)	180	170	6	170	6	723	(75)
Independently reviewed interim and year-end profits	718	1,203	(40)	1,050	(32)	2,301	(69)
Foreseeable dividends	(481)	(228)	111	(163)	195	(871)	(45)
CET1 capital before regulatory adjustments	44,392	44,494	-	43,850	1	43,466	2
CET1 regulatory adjustments
Additional value adjustments (prudential valuation adjustments)	(490)	(508)	(4)	(527)	(7)	(615)	(20)
Intangible assets (net of related tax liability)3	(4,274)	(4,821)	(11)	(4,938)	(13)	(5,318)	(20)
Deferred tax assets that rely on future profitability (excludes those arising from
temporary differences)	(138)	(76)	82	(129)	7	(129)	7
Fair value reserves related to net losses on cash flow hedges	52	71	(27)	121	(57)	59	(12)
Deduction of amounts resulting from the calculation of excess expected loss	(701)	(553)	27	(572)	23	(822)	(5)
Net gains on liabilities at fair value resulting from changes in own credit risk	52	(15)	(447)	(15)	(447)	(2)	(2,700)
Defined-benefit pension fund assets	(40)	(6)	567	(7)	471	(26)	54
Fair value gains arising from the institution's own credit risk related to derivative
liabilities	(48)	(110)	(56)	(128)	(63)	(38)	26
Exposure amounts which could qualify for risk weighting of 1250%	(26)	(27)	(4)	(30)	(13)	(62)	(58)
Total regulatory adjustments to CET1	(5,613)	(6,045)	(7)	(6,225)	(10)	(6,953)	(19)
CET1 capital	38,779	38,449	1	37,625	3	36,513	6
Additional Tier 1 capital (AT1) instruments	5,632	5,631	-	5,632	-	7,184	(22)
AT1 regulatory adjustments	(20)	(20)	-	(20)	-	(20)	-
Tier 1 capital	44,391	44,060	1	43,237	3	43,677	2
-
Tier 2 capital instruments	12,687	13,021	(3)	13,261	(4)	12,318	3
Tier 2 regulatory adjustments	(30)	(30)	-	(30)	-	(30)	-
Tier 2 capital	12,657	12,991	(3)	13,231	(4)	12,288	3
Total capital	57,048	57,051	-	56,468	1	55,965	2
Total risk-weighted assets (unaudited)	268,834	266,664	1	262,552	2	264,090	2

CRD capital is prepared on the regulatory scope of consolidation

2 Retained earnings includes IFRS9 capital relief (transitional) of $394 million, including dynamic relief of $97 million
3 Deduction for intangible assets includes software deduction relief of $677 million as the CRR 'Quick Fix' measures
4 Change is the percentage point difference between two periods, rather than percentage change
5 Variance is increase/(decrease) comparing current reporting period to prior reporting periods

Capital review continued

Movement in total capital (audited)

2020	2019
$million	$million
CET1 at 1 January	36,513	36,717
Ordinary shares issued in the period and share premium	-	25
Share buy-back	(242)	(1,006)
Profit for the period	718	2,301
Foreseeable dividends deducted from CET1	(481)	(871)
Difference between dividends paid and foreseeable dividends	476	(641)
Movement in goodwill and other intangible assets	1,044	(172)
Foreign currency translation differences	700	(180)
Non-controlling interests	(543)	37
Movement in eligible other comprehensive income	324	284
Deferred tax assets that rely on future profitability	(9)	(14)
Decrease/(increase) in excess expected loss	121	53
Additional value adjustments (prudential valuation adjustment)	125	(51)
IFRS 9 transitional impact on regulatory reserves including day one	35	(43)
Exposure amounts which could qualify for risk weighting	36	61
Fair value gains arising from the institution's own Credit Risk related to derivative liabilities	(10)	-
Other	(28)	13
CET1 at 31 December	38,779	36,513
AT1 at 1 January	7,164	6,684
Net issuances (redemptions)	(995)	552
Foreign currency translation difference	8	9
Excess on AT1 grandfathered limit (ineligible)	(565)	(81)
AT1 at 31 December	5,612	7,164
Tier 2 capital at 1 January	12,288	12,295
Regulatory amortisation	(463)	(1,111)
Net issuances (redemptions)	(69)	1,000
Foreign currency translation difference	257	(12)
Tier 2 ineligible minority interest	82	31
Recognition of ineligible AT1	565	81
Other	(3)	4
Tier 2 capital at 31 December	12,657	12,288
Total capital at 31 December	57,048	55,965
The main movements in capital in the period were:

• CET1 increased by $2.3 billion as retained profits of $0.7 billion, a $0.7 billion lower deduction for software resulting from adoption of CRR II Quick fix measures1, favourable foreign currency translation impacts of $0.7 billion and other comprehensive income movements of $0.3 billion were only part offset by the part completed share buy-back of $0.2 billion and the $0.5 billion decrease in non-controlling interests mainly due to the sale of Permata.
• AT1 decreased to $5.6 billion as the call of $2 billion of existing 6.5 per cent AT1 securities and the ongoing de-recognition of legacy Tier 1 was partly offset by the issuance of $1 billion of new 6.0 per cent AT1 securities, increasing the efficiency of the
Group's AT1 stock.
• Tier 2 capital increased by $0.4 billion as issuances of $2.4 billion of new Tier 2 instruments and the recognition of ineligible AT1 were partly offset by regulatory amortisation and the redemption of $2.7 billion of Tier 2 during the year.

1 On 30 June, the PRA published a statement on various amendments to the Capital Requirements Regulation (CRR) including revisions to certain IFRS 9 transitional arrangements and the treatment of software assets in CET1 with the intention of part offsetting COVID impacts on CET1 ratios (CRR Quick Fix). As at 31 December 2020 the CRR Quick Fix changes provided a CET1 benefit of around 29 basis points of which the change in treatment of software assets contributed 22 basis points. However, the PRA is consulting to maintain the earlier position whereby all software assets are fully deducted from CET1.

Capital review continued
Risk-weighted assets by business
31.12.20
Credit risk	Operational risk	Market risk	Total risk
$million	$million	$million	$million
Corporate & Institutional Banking
Retail Banking
Commercial Banking
Private Banking
Central & other items
Total risk-weighted assets
30.09.20
Credit risk	Operational risk	Market risk	Total risk
$million	$million	$million	$million
Corporate & Institutional Banking	103,116	13,153	22,143	138,412
Retail Banking	37,270	7,575	-	44,845
Commercial Banking	27,685	2,810	-	30,495
Private Banking	5,488	763	-	6,251
Central & other items	44,161	2,499	1	46,661
Total risk-weighted assets	217,720	26,800	22,144	266,664
30.06.20
Credit risk	Operational risk	Market risk	Total risk
$million	$million	$million	$million
Corporate & Institutional Banking	101,651	13,153	22,346	137,150
Retail Banking	36,611	7,575	-	44,186
Commercial Banking	28,046	2,810	-	30,856
Private Banking	5,365	763	-	6,128
Central & other items	41,463	2,499	270	44,232
Total risk-weighted assets	213,136	26,800	22,616	262,552
31.12.19
Credit risk	Operational risk	Market risk	Total risk
$million	$million	$million	$million
Corporate & Institutional Banking	95,261	13,261	20,562	129,084
Retail Banking	37,194	7,314	-	44,508
Commercial Banking	28,350	2,626	-	30,976
Private Banking	5,681	728	-	6,409
Central & other items	49,178	3,691	244	53,113
Total risk-weighted assets	215,664	27,620	20,806	264,090
Risk-weighted assets by geographic region
31.12.19	Change1
$million	%
Greater China & North Asia	85,695	8
ASEAN & South Asia	88,942	(8)
Africa & Middle East	49,244	4
Europe & Americas	43,945	4
Central & other items	(3,736)	(37)
Total risk-weighted assets	264,090	2

31.12.20 $million

102,004	13,153	21,465	136,622
39,595	7,575	-	47,170
25,659	2,810	-	28,469
5,160 48,023	763 2,499	- 128	5,923 50,650
220,441	26,800	21,593	268,834

30.09.20 $millionChange1 %

30.06.20 $millionChange1 %

81,423

51,149

45,758

(2,356)

268,834

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

92,863

80,123

52,524

43,818

- 2 (3) 4

89,139 4

80,040 2

52,009 (2)

44,326 3

(2,664)

(12) (2,962) (20)

266,664

262,552

Capital review continued

Movement in risk-weighted assets

Corporate &

Institutional

Banking

$millionRetail Banking $million

At 1 January 2019 Assets growth mix Asset quality

96,954

35,545

1,303

1,020

2,565

832

Risk-weighted assets efficiencies Model, methodology and policy changes Disposals

(1,112)

(33)

(904)

(7)

(397)

Foreign currency translation Other non-credit risk movements At 31 December 2019

(182) (219)

- 98,227

- 37,138

Credit risk
Commercial	Central &
other items	Total	Operational risk	Market risk	Total risk
$million	$million	$million	$million	$million
45,825	211,138	28,050	19,109	258,297
4,093	6,387	-	-	6,387
607	3,370	-	-	3,370
(2,404)	(3,952)	-	-	(3,952)
1,400	489	-	500	989
-	(838)	-	-	(838)
(343)	(930)	-	-	(930)
-	-	(430)	1,197	767
49,178	215,664	27,620	20,806	264,090

Banking $million

Private Banking $million

27,711 5,103

(557) 528 (642) 8

(403)

(441) (228)

- 25,440

- - - 42 - 5,681

At 1 January 2020¹ Assets growth mix Asset quality

Risk-weighted assets efficiencies Model, methodology and policy changes Disposals

Foreign currency translation Other non-credit risk movements At 31 December 2020

95,261

(6,684)

11,685

(150)

586 - 1,306 -

37,194 1,122 325 - 134 - 820 -

28,350

(3,059)

505

(339)

- 123 -

5,681 (602)

(2)

- - - 83 -

49,178 3,711 2,409 - 661 (7,859)

(77)

215,664

(5,512)

14,922

(71)

1,042

(7,859)

2,255 -

27,620 - - - -

(1,003)

- 183

20,806 - - -

(1,500)

(159)

- 2,446

264,090

(5,512)

14,922

(71)

(458)

(9,021)

2,255

2,629

102,004

39,595

25,659

5,160

48,023

220,441

26,800

21,593

268,834

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

Movements in risk-weighted assets

Total risk-weighted assets (RWA) increased 2 per cent or $4.7 billion since 31 December 2019 to $268.8 billion.

• Credit risk RWA increased $4.8 billion to $220.4 billion, driven by an increase of $15 billion from negative credit migration re-lated to the impact of economic disruption due to COVID-19, of which $3 billion occurred in 4Q'20, underlying asset growth of $6 billion as well as unfavourable FX movements of $2 billion. This was partly offset by the completion of the sale of the
Group's interest in PT Bank Permata Tbk (Permata) in Indonesia - which reduced Credit RWA by $8 billion - and a $11 billion reduction from improved RWA density and the impact of RWA optimisation actions
• Market risk RWA increased by $0.8 billion to $21.6 billion due to higher levels of Financial Markets activity with increased value-at-risk from elevated market volatility partly offset by regulatory mitigation for back-testing exceptions
• Operational risk RWA reduced by $0.8 billion primarily reflecting a $1 billion reduction relating to the disposal of the Group's stake in Permata

Capital review continued

UK leverage ratio

31.12.20	30.09.20	Change3	30.06.20	Change3	31.12.19	Change3
$million	$million	%	$million	%	$million	%
Tier 1 capital (transitional)	44,391	44,060	1	43,237	3	43,677	2
Additional Tier 1 capital subject to phase out	(1,114)	(1,114)	-	(1,114)	-	(1,671)	(33)
Tier 1 capital (end point)1	43,277	42,946	1	42,123	3	42,006	3
Derivative financial instruments	69,467	52,961	31	52,227	33	47,212	47
Derivative cash collateral	11,759	8,682	35	9,716	21	9,169	28
Securities financing transactions (SFTs)	67,570	68,286	(1)	65,278	4	60,414	12
Loans and advances and other assets	640,254	624,500	3	614,364	4	603,603	6
Total on-balance sheet assets	789,050	754,429	5	741,585	6	720,398	10
Regulatory consolidation adjustments2	(60,059)	(51,768)	16	(47,271)	27	(31,485)	91
Derivatives adjustments	-
Derivatives netting	(44,257)	(30,799)	44	(29,949)	48	(32,852)	35
Adjustments to cash collateral	(21,278)	(17,179)	24	(18,212)	17	(11,853)	80
Net written credit protection	1,284	1,724	(26)	1,711	(25)	1,650	(22)
Potential future exposure on derivatives	42,410	38,434	10	37,606	13	32,961	29
Total derivatives adjustments	(21,841)	(7,820)	179	(8,844)	147	(10,094)	116
Counterparty risk leverage exposure measure for SFTs	4,969	6,660	(25)	6,414	(23)	7,005	(29)
Off-balance sheet items	128,167	123,628	4	120,725	6	122,341	5
Regulatory deductions from Tier 1 capital	(5,521)	(5,829)	(5)	(6,013)	(8)	(6,913)	(20)
UK leverage exposure (end point)	834,765	819,300	2	806,596	3	801,252	4
UK leverage ratio (end point)	5.2%	5.2%	-	5.2%	-	5.2%	-
UK leverage exposure quarterly average	837,147	820,387	2	810,591	3	816,244	3
UK leverage ratio quarterly average	5.2%	5.2%	-	5.0%	0.2	5.1%	0.1
Countercyclical leverage ratio buffer	0.0%	0.1%	(0.1)	0.0%	-	0.1%	(0.1)
G-SII additional leverage ratio buffer	0.4%	0.4%	-	0.4%	-	0.4%	-

1 Tier 1 Capital (end point) is adjusted only for Grandfathered Additional Tier 1 instruments
2 Includes adjustment for qualifying central bank claims
3 Change is the percentage point difference between two periods, rather than percentage change

Financial statements

Consolidated income statement

For the year ended 31 December 2020

2020	2019
Notes	$million	$million
Interest income	12,292	16,549
Interest expense	(5,440)	(8,882)
Net interest income	3	6,852	7,667
Fees and commission income	3,865	4,111
Fees and commission expense	(705)	(589)
Net fee and commission income	4	3,160	3,522
Net trading income	5	3,672	3,350
Other operating income	6	1,070	878
Operating income	14,754	15,417
Staff costs	(6,886)	(7,122)
Premises costs	(412)	(420)
General administrative expenses	(1,831)	(2,211)
Depreciation and amortisation	(1,251)	(1,180)
Operating expenses	7	(10,380)	(10,933)
Operating profit before impairment losses and taxation	4,374	4,484
Credit impairment	8	(2,325)	(908)
Goodwill, property, plant and equipment and other impairment	9	(587)	(163)
Profit from associates and joint ventures	32	151	300
Profit before taxation	1,613	3,713
Taxation	10	(862)	(1,373)
Profit for the year	751	2,340
Profit attributable to:
Non-controlling interests	29	27	37
Parent company shareholders	724	2,303
Profit for the year	751	2,340
cents	cents
Earnings per share:
Basic earnings per ordinary share	12	10.4	57.0
Diluted earnings per ordinary share	12	10.3	56.4

The notes form an integral part of these financial statements and are available in the Annual Report 2020.

Consolidated statement of comprehensive income For the year ended 31 December 2020

2020	2019
Notes	$million	$million
Profit for the year	751	2,340
Other comprehensive income/(loss)
Items that will not be reclassified to income statement:	(9)	(531)
Own credit losses on financial liabilities designated at fair value through profit or loss	(55)	(462)
Equity instruments at fair value through other comprehensive income	62	13
Actuarial gains/(losses) on retirement benefit obligations	30	1	(124)
Taxation relating to components of other comprehensive income	10	(17)	42
Items that may be reclassified subsequently to income statement:	922	131
Exchange differences on translation of foreign operations:
Net gains/(losses) taken to equity	657	(386)
Net (losses)/gains on net investment hedges	(287)	191
Reclassified to income statement on sale of joint venture	246	-
Share of other comprehensive (loss)/income from associates and joint ventures	(37)	25
Debt instruments at fair value through other comprehensive income:
Net valuation gains taken to equity	815	555
Reclassified to income statement	(431)	(170)
Net impact of expected credit losses	21	7
Cash flow hedges:
Net losses taken to equity	(25)	(64)
Reclassified to income statement	14	17	21
Taxation relating to components of other comprehensive income	10	(54)	(48)
Other comprehensive income/(loss) for the year, net of taxation	913	(400)
Total comprehensive income for the year	1,664	1,940
Total comprehensive income attributable to:
Non-controlling interests	29	15	20
Parent company shareholders	1,649	1,920
Total comprehensive income for the year	1,664	1,940

The notes form an integral part of these financial statements and are available in the Annual Report 2020

Consolidated balance sheet

As at 31 December 2020

2020	2019
Notes	$million	$million
Assets
Cash and balances at central banks	13, 35	66,712	52,728
Financial assets held at fair value through profit or loss	13	106,787	92,818
Derivative financial instruments	13, 14	69,467	47,212
Loans and advances to banks	13, 15	44,347	53,549
Loans and advances to customers	13, 15	281,699	268,523
Investment securities	13	153,315	143,731
Other assets	20	48,688	42,022
Current tax assets	10	808	539
Prepayments and accrued income	2,122	2,700
Interests in associates and joint ventures	32	2,162	1,908
Goodwill and intangible assets	17	5,063	5,290
Property, plant and equipment	18	6,515	6,220
Deferred tax assets	10	919	1,105
Assets classified as held for sale	21	446	2,053
Total assets	789,050	720,398
Liabilities
Deposits by banks	13	30,255	28,562
Customer accounts	13	439,339	405,357
Repurchase agreements and other similar secured borrowing	13	1,903	1,935
Financial liabilities held at fair value through profit or loss	13	68,373	66,974
Derivative financial instruments	13, 14	71,533	48,484
Debt securities in issue	13, 22	55,550	53,025
Other liabilities	23	47,904	41,583
Current tax liabilities	10	660	703
Accruals and deferred income	4,546	5,369
Subordinated liabilities and other borrowed funds	13, 27	16,654	16,207
Deferred tax liabilities	10	695	611
Provisions for liabilities and charges	24	466	449
Retirement benefit obligations	30	443	469
Liabilities included in disposal groups held for sale	21	-	9
Total liabilities	738,321	669,737
Equity
Share capital and share premium account	28	7,058	7,078
Other reserves	12,688	11,685
Retained earnings	26,140	26,072
Total parent company shareholders' equity	45,886	44,835
Other equity instruments	28	4,518	5,513
Total equity excluding non-controlling interests	50,404	50,348
Non-controlling interests	29	325	313
Total equity	50,729	50,661
Total equity and liabilities	789,050	720,398

The notes form an integral part of these financial statements and are available in the Annual Report 2020.

These financial statements were approved by the Board of directors and authorised for issue on 25 February 2021 and signed on its behalf by:

José Viñals	Bill Winters	Andy Halford
Chairman	Group Chief Executive	Group Chief Financial Officer

Consolidated statement of changes in equity For the year ended 31 December 2020

Ordinary share capital and share premium account $million

As at 1 January 2019 Profit for the period

Other comprehensive (loss)/income Distributions

Shares issued, net of expenses3

Other equity instruments issued, net of expenses Treasury shares purchased

Treasury shares issued Share option expense Dividends on ordinary shares

Dividends on preference shares and AT1 securities Share buy-back4

5,617 - - - 25 - - - - - -

(58)

Other movements

As at 31 December 2019 Profit for the period

- 5,584

Other comprehensive (loss)/income Distributions

Other equity instruments issued, net of expenses Redemption of other equity instruments Treasury shares purchased

Treasury shares issued Share option expense

Dividends on preference shares and AT1 securities Share buy-back7

Other movements

As at 31 December 2020

- - - - - - - - -

(20)

- - - - - - - - - - -

- - - - - - - - - 20 -

(54)

- - - - - - - - -

- 332 - - - - - - - - -

(2)

- - - - - - - - -

- 7 - - - - - - - - -

- 631 - - - - - - - - 69

724 112 - -

(13)

(98)

133

(395)

(242)

(60)8

724 925 - -

(13)

(98)

133

(395)

(242)

- - - 992 (1,987)

- - - - - -

27 (12) (20)

- - - - - - - 179

751

913

(20)

992

(2,000)

(98)

133

(395)

(242)

5,564

1,494

17,207

(52)

529

148

(52)

(5,092)

26,140

45,886

4,518

325

50,729

Fair value	Fair value
through	through
other	other
Prefer-ence	compre-	compre-	Parent
share capital	Own credit	hensive	hensive	company	Other
and share Capital and	adjust-	income	income	Cash flow	Trans-	share-	equity	Non-
premium merger	ment	reserve -	reserve -	hedge	lation	Retained	holders'	instru-	controlling
account reserves	reserve	debt	equity	reserve	reserve	earnings	equity	ments	interests	Total
$million $million	$million	$million	$million	$million	$million	$million	$million	$million	$million	$million
412	(161)	120	(10)	(5,612)	26,129	45,118	4,961	273	50,352
-	-	-	-	-	2,303	2,303	-	37	2,340
(410)	358	30	(49)	(180)	(132)2	(383)	-	(17)	(400)
-	-	-	-	-	-	-	-	(35)	(35)
-	-	-	-	-	-	25	-	-	25
-	-	-	-	-	-	-	552	-	552
-	-	-	-	-	(206)	(206)	-	-	(206)
-	-	-	-	-	7	7	-	-	7
-	-	-	-	-	139	139	-	-	139
-	-	-	-	-	(720)	(720)	-	-	(720)
-	-	-	-	-	(448)	(448)	-	-	(448)
-	-	-	-	-	(1,006)	(1,006)	-	-	(1,006)
-	-	-	-	-	65	6	-	556	61
2	197	150	(59)	(5,792)	26,072	44,835	5,513	313	50,661
(20)
(2,000)
(98)
(395)
(242)

1,494 - - - - - - - - - - - - 1,494

17,1291 - - - - - - - - - - 58 - 17,187

1 Includes capital reserve of $5 million, capital redemption reserve of $13 million and merger reserve of $17,111 million
2 Comprises actuarial gain, net of taxation $11 million and nil share from associates and joint ventures ($130 million actuarial loss and $2 milion share of loss from associates and joint ventures for the year ending 31 December 2019)
3 Comprises share capital of shares issued to fulfil discretionary awards $1 million, share capital of shares issued to fulfil employee share save options $1 million (nil for the year ended 31 December 2020) and share premium of shares issued to fulfil employee Sharesave options exercised $23 million (nil for the year ended 31 December 2020)
4 On 1 May 2019, the Group commenced a share buy-back of its ordinary shares of $0.50 each up to a maximum consideration of $1,000 million. Nominal value of share purchases is $58 million for the year ended 31 December 2019 and the total consideration paid was $1,006 million which includes share buyback expenses of $6 million. The total number of shares purchased was 116,103,483 representing 3.51 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
5 Comprises $10 million disposal of non-controlling interest of Phoon Huat Pte Ltd offset by $4 million withholding tax on capitalisation of revenue reserves for Standard Chartered Bank Ghana Limited
6 Comprises $72 million of non-controlling interest in Mox Bank Limited offset by $17 million disposal of non-controlling interest in Phoon Huat Pte Ltd, Sirat Holdings Limited and Ori Private Limited
7 On 28 February 2020, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases was $20 million, and the total consideration paid was $242 million. The total number of shares purchased was 40,029,585 representing 1.25 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account. On 31 March 2020, the Group announced that, in response to a request from the Prudential Regulation Authority and as a consequence of the unprecedented challenges facing the world due to the COVID-19 pandemic, its board had decided after careful consideration to withdraw the recommendation to pay a final dividend for 2019 of 20 cents per ordinary share, and to suspend the buy-back programme
8 Includes $69 million related to prior period adjustments to reclass FX movements from translation reserve to retained earnings ($45 million related to FX movements of the hedging instruments for net investment hedges and $24 million related to FX movements for monetary items, which were considered structural positions), and $9 million increase related to revenue reserves of PT Bank Permata Tbk
9 $17 million movement related to non-controlling interest from Mox Bank Limited

The notes form an integral part of these financial statements.

Basis of preparation

The consolidated and Company 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 consolidated financial statements are presented in United States dollars ($), being the presentation currency of the Group and functional currency of the Company, and all values are rounded to the nearest million dollars, except when otherwise indicated.

Going concern

These financial statements were approved by the Board of directors on 25 February 2021. 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 impact of COVID-19, macroeconomic and geopolitical headwinds, including:

• A review of the Group Strategy and Corporate Plan, both of which cover a year from the date of signing the annual report
• 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 a bespoke COVID-19 stress test with scenario analysis focused on mild, moderate, severe and extreme variants across the Group's footprint markets to ensure that the Group has sufficient capital to withstand this shock. Under a range of scenarios, the results of these stress tests demonstrate that the Group has sufficient capital and liquidity to continue as a going concern and meet minimum regulatory capital and liquidity requirements
• Analysis of the capital, funding and liquidity position of the Group, including the capital 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 ADR and LCR ratios
• 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 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 the date of approval of these financial statements. For this reason, the Group continues to adopt the going concern basis of accounting for preparing the financial statements.

Other supplementary financial information

Average balance sheets and yields and volume and price variances 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 Financial 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.

The following tables set out the average balances and yields for the Group's assets and liabilities for the periods ended 31 December 2020 and 31 December 2019 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

2020

Average assets

Average non-interest earning balance $millionAverage interest earning balance $millionInterest income $millionGross yield interest earning balance %Gross yield total balance %

Cash and balances at central banks Gross loans and advances to banks Gross loans and advances to customers

Impairment provisions against loans and advances to banks and customers Investment securities

Property, plant and equipment and intangible assets Prepayments, accrued income and other assets Investment associates and joint ventures

Total average assets

18,185 27,684 51,322 - 28,313 9,787 116,263 2,122

43,210

54,142

291,432

(6,526)

144,112 - - -

113 801 8,558 - 2,820 - - -

0.26 1.48 2.94 - 1.96 - - -

0.18 0.98 2.50 - 1.64 - - -

253,676

526,370

12,292

2.34

1.58

2019

Average assets

Average non-interest earning balance $million

Average interest earning balance $million

Interest income $millionGross yield interest earning balance %Gross yield total balance %

Cash and balances at central banks Gross loans and advances to banks Gross loans and advances to customers

17,544 26,639 49,662

29,177 61,040 274,970

329 1,834 10,775

1.13 0.70

3.00 2.09

3.92 3.32

Impairment provisions against loans and advances to banks and customers

Investment securities

29,188

Property, plant and equipment and intangible assets Prepayments, accrued income and other assets Investment associates and joint ventures

11,217

84,965

2,608

Total average assets

221,823

(4,786) 134,355 - - - 494,756

- 3,611 - - - 16,549

- 2.69 - - - 3.34

- 2.21 - - - 2.31

Average liabilities

Average liabilities Deposits by banks Customer accounts:

Current accounts and savings deposits

Time and other deposits

Debt securities in issue

Accruals, deferred income and other liabilities Subordinated liabilities and other borrowed funds Non-controlling interests

Shareholders' funds

Adjustment for Financial Markets funding costs Financial guarantee fees on interest earning assets

Total average liabilities and shareholders' funds

17,899	27,178	237	0.87	0.53
43,729 58,789 6,883 122,194 - 319 50,377	226,278 154,865 52,391 1,169 16,170 - -	1,140 2,531 836 59 637 - -	0.50 1.63 1.60 5.05 3.94 - -	0.42 1.18 1.41 0.05 3.94 - -
300,190	478,051	5,440	1.14	0.70

(173)
104
300,190	478,051	5,371	1.12	0.69

Average non-interest bearing balance $million

Average liabilities Deposits by banks Customer accounts:

Current accounts and savings deposits

Time and other deposits

Debt securities in issue

Accruals, deferred income and other liabilities Subordinated liabilities and other borrowed funds Non-controlling interests

Shareholders' funds

Average non-interest bearing balance $million

17,561 38,804 59,094 9,335 95,461 - 293 50,215 270,763

Average interest bearing balance $million

27,619

183,323

167,904

49,351

1,336

15,062 - - 444,595

2020

Interest expense $million

Rate paid interest bearing balance %Rate paid total balance %

2019

Interest expense $million

739

2,114

4,088

1,120

756 - - 8,882

Rate paid interest bearing balance %Rate paid total balance %

2.68 1.64

1.15 0.95

2.43 1.80

2.27 1.91

4.87 0.07

5.02 5.02

- -

2.00 1.24

Adjustment for Financial Markets funding costs

Total average liabilities and shareholders' funds

270,763

(340)

444,595

8,542

1.92 1.19

Volume and price variances

The following table analyses the estimated change in the Group's net interest income attributable to changes in the average volume of interest-earning assets and interest-bearing liabilities, and changes in their respective interest rates for the years presented. Volume and rate variances have been determined based on movements in average balances and average exchange rates over the year and changes in interest rates on average interest-earning assets and average interest-bearing liabilities.

2020 versus 2019

(Decrease)/increase in interest due to:Volume $millionRate $million

Net increase/ (decrease) in interest $million

Interest earning assets

Cash and unrestricted balances at central banks Loans and advances to banks

Loans and advances to customers Investment securities

Total interest earning assets Interest bearing liabilities

Subordinated liabilities and other borrowed funds Deposits by banks

Customer accounts:

Current accounts and savings deposits

Time and other deposits

Debt securities in issue

Total interest bearing liabilities

37 (102) 442 191	(253) (931) (2,659) (982)	(216) (1,033) (2,217) (791)
568	(4,825)	(4,257)
44 (4)	(163) (498)	(119) (502)
233 (213) 49	(1,148) (1,409) (333)	(915) (1,622) (284)
109	(3,551)	(3,442)

2019 versus 2018

(Decrease)/increase in interest due to:Net increase/ (decrease)Volume $millionRate $million

in interest $million

Interest earning assets

Cash and unrestricted balances at central banks Loans and advances to banks

(40)

5 (35)

(141)

192 51

Loans and advances to customers Investment securities

333

404 737

336

310 646

Total interest earning assets Interest bearing liabilities

488

911 1,399

Subordinated liabilities and other borrowed funds Deposits by banks

(36) (60)

25 (11)

205 145

Customer accounts:

Current accounts and savings deposits

Time and other deposits

Debt securities in issue

Total interest bearing liabilities

56 247 28 235

391 447

502 749

104 132

1,227 1,462

Five-year summary1

2020	2019	2018	2017	2016
$million	$million	$million	$million	$million
Operating profit before impairment losses and taxation	4,374	4,484	3,142	4,008	3,849
Impairment losses on loans and advances and other credit risk provisions	(2,325)	(908)	(653)	(1,362)	(2,791)
Other impairment	(98)	(136)	(182)	(179)	(612)
Profit before taxation	1,613	3,713	2,548	2,415	409
Profit/(loss) attributable to shareholders	724	2,303	1,054	1,219	(247)
Loans and advances to banks2	44,347	53,549	61,414	78,188	72,609
Loans and advances to customers2	281,699	268,523	256,557	282,288	252,719
Total assets	789,050	720,398	688,762	663,501	646,692
Deposits by banks2	30,255	28,562	29,715	30,945	32,872
Customer accounts2	439,339	405,357	391,013	370,509	338,185
Shareholders' equity	45,886	44,835	45,118	46,505	44,368
Total capital resources3	67,383	66,868	65,353	68,983	68,181
Information per ordinary share
Basic earnings/(loss) per share	10.4c	57.0c	18.7c	23.5c	(14.5)c
Underlying earnings per share	36.1c	75.7c	61.4c	47.2c	3.4c
Dividends per share4	-	22.0c	17.0c	-	-
Net asset value per share	1,409.3c	1,358.3c	1,319.3c	1,366.9c	1,307.8c
Net tangible asset value per share	1,249.0c	1,192.5c	1,167.7c	1,214.7c	1,163.9c
Return on assets5	0.1%	0.3%	0.3%	0.2%	0.0%
Ratios
Statutory return on ordinary shareholders' equity	0.8%	4.2%	1.4%	1.7%	(1.1)%
Statutory return on ordinary shareholders' tangible equity	0.9%	4.8%	1.6%	2.0%	(1.2)%
Underlying return on ordinary shareholders' equity	2.6%	5.6%	4.6%	3.5%	0.3%
Underlying return on ordinary shareholders' tangible equity	3.0%	6.4%	5.1%	3.9%	0.3%
Statutory cost to income ratio (excluding UK Bank Levy)	68.1%	68.7%	76.6%	70.7%	69.9%
Statutory cost to income ratio (including UK Bank Levy)	70.4%	70.9%	78.8%	72.2%	72.6%
Underlying cost to income ratio (excluding UK Bank levy)	66.4%	65.9%	67.7%	69.3%	69.5%
Underlying cost to income ratio (including UK Bank levy)	68.7%	68.2%	69.9%	70.8%	72.2%
Capital ratios:
(CET 1)/ Tier 1 capital6	14.4%	13.8%	14.2%	13.6%	13.6%
Total capital6	21.2%	21.2%	21.6%	21.0%	21.3%

1 The amounts for the two financial years ended 2016 to 2017 are presented in line with IAS 39 and, therefore, not on a comparable basis to the current financial year presented in accordance with IFRS 9
2 Excludes amounts held at fair value through profit or loss
3 Shareholders' funds, non-controlling interests and subordinated loan capital
4 Dividend paid during the year per share
5 Represents profit attributable to shareholders divided by the total assets of the Group
6 Unaudited

Shareholder information

Dividend and interest payment dates

Ordinary shares	Final dividend
Results and dividend announced	25 February 2021
Ex-dividend date	4 (UK) 3 (HK) March 2021
Record date for dividend	5 March 2021
Last date to amend currency election instructions for cash dividend	21 April 2021
Dividend payment date	20 May 2021
Preference shares	1st half yearly dividend	2nd half yearly dividend
73∕8 per cent non-cumulative irredeemable preference shares of £1 each	1 April 2021	1 October 2021
81∕4 per cent non-cumulative irredeemable preference shares of £1 each	1 April 2021	1 October 2021
6.409 per cent non-cumulative redeemable preference shares of $5 each	30 January and	30 July and
30 April 2021	30 October 2021
7.014 per cent non-cumulative redeemable preference shares of $5 each	30 January 2021	30 July 2021
Annual General Meeting

The Annual General Meeting (AGM) will be held on Wednesday 12 May 2021 at 11.00am UK time (6.00pm Hong Kong time). Further details regarding the format, location and business to be transacted at the meeting will be disclosed within the 2021 Notice of AGM.

Details of voting at the Company's AGM and of proxy votes cast can be found on the Company's website at sc.com/agm

Interim results

The interim results will be announced to the London Stock Exchange, The Stock Exchange of Hong Kong Limited and put on the

Company's website.

Country-by-country reporting

In accordance with the requirements of the Capital Requirements (country-by-country reporting) Regulations 2013, the Group will publish additional country-by-country information in respect of the year ended 31 December 2020, on or before 31 December 2021. We have also published our approach to tax and tax policy.

This information will be available on the Group's website at sc.com

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 receive any dividend 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 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 sharegift.org

Bankers' Automated Clearing System (BACS)

Dividends can be paid straight into your bank or building society account.

Please register online at 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 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 computershare.com/hk/investors

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.

Taxation

Information on taxation applying to dividends paid to you if you are a shareholder in the UK, Hong Kong or the US will be sent to you with your dividend documents. Shareholders and prospective purchasers should consult an appropriate independent professional adviser regarding the tax consequences of an investment in shares in light of their particular circumstances, including the effect of any national, state or local laws.

Previous dividend payments (unadjusted for the impact of the 2015/2010/2008 rights issues)

Dividend and	Cost of one new ordinary share under share
ﬁnancial year	Payment date	Dividend per ordinary share	dividend scheme
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

1 The INR dividend is per Indian Depository Receipt

Chinese translation

If you would like a Chinese version of the 2020 Annual Report please contact Computershare Hong Kong Investor Services Limited, 17M

Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong.

二〇二〇年年報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 Annual 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 Annual Report electronically rather than by post, please register online at: investorcentre.co.uk. Then click on 'register' and follow the instructions. You will need to have your Shareholder or ShareCare reference number when you log on. You can ﬁnd this on your share certiﬁcate or ShareCare statement. Once registered you can also submit your proxy vote and dividend election electronically and change your bank mandate or address information.

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

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

For further information, please contact: Mark Stride, Head of Investor Relations +44 (0) 20 7885 8596

LSE Stock code: STAN.LN HKSE Stock code: 02888

By Order of the Board

Amanda Mellor Group Company Secretary

Hong Kong, 25 February 2021

As at the date of this announcement, the Board of Directors of Standard Chartered PLC comprises:

Chairman:

José María Viñals Iñiguez

Executive Directors:

William Thomas Winters, CBE and Andrew Nigel Halford

Independent Non-Executive Directors:

David Philbrick Conner; Byron Elmer Grote; Christine Mary Hodgson, CBE (Senior Independent Director); Gay Huey Evans, OBE; Naguib Kheraj (Deputy Chairman); Ngozi Okonjo-Iweala; Maria da Conceicao das Neves Calha Ramos; Philip George Rivett; David Tang; Carlson Tong and Jasmine Mary Whitbread

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Standard Chartered plc published this content on 25 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 February 2021 04:17:02 UTC.

Latest news about Standard Chartered PLC

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Chart Standard Chartered PLC

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Company Profile

Standard Chartered PLC is the leading banking group in the emerging countries. Net banking product breaks down by activity as follows: - retail and private banking (51.8%): sale of products and traditional banking services, issue of credit cards, consumer and real estate loans, small and medium business loans, on-line banking, etc.; - commercial, corporate, investment, and market banking (47.3%): business financing, credit unions, sales of structured products, cash and rate management, security compensation and conservation, fund management, etc.; - other (0.9%). At the end of 2023, the group had USD 497.4 billion in current deposits and USD 331.9 billion in current loans. Income is distributed geographically as follows: Europe and the Americas (9.5%), Asia (70.2%), Africa and the Middle East (16.2%) and other (4.1%).

Sector

Banks

Calendar

2024-05-02 - Q1 2024 Earnings Release

Related indices

STOXX EUROPE 600 (EUR) , FTSE 100

More about the company

Income Statement Evolution

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Analysis / Opinion

STANDARD CHARTERED : Limited forecast changes

March 14, 2024 at 06:36 am EDT

Bill Winters, CEO of Standard Chartered: 82% of transactions are executed without human intervention

January 17, 2024 at 06:59 am EST

Standard Chartered: The start of a new chapter

August 04, 2022 at 05:25 am EDT

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Ratings for Standard Chartered PLC

Trading Rating

Investor Rating

ESG Refinitiv

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Analysts' Consensus

Sell

Buy

Mean consensus

OUTPERFORM

Number of Analysts

Last Close Price

8.467 USD

Average target price

10.97 USD

Spread / Average Target

+29.55%

Consensus

EPS Revisions

Estimates Revisions

Quarterly earnings - Rate of surprise

Company calendar

Sector Other Banks

	1st Jan change	Capi.
STANDARD CHARTERED PLC	+2.10%	21.24B
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INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED	+7.85%	249B
WELLS FARGO & COMPANY	+23.81%	214B
BANK OF CHINA LIMITED	+15.44%	172B
CHINA CONSTRUCTION BANK CORPORATION	+5.59%	160B
HSBC HOLDINGS PLC	+5.07%	153B
ROYAL BANK OF CANADA	+1.80%	140B
HDFC BANK LIMITED	-11.80%	138B

Other Banks

Standard Chartered PLC

Equities

STAN

GB0004082847

Banks

Standard Chartered : Full-Year and Fourth Quarter 2020 Results

EPS Revisions