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Standard Chartered : Strategic Report 2020

April 07, 2021 at 08:18 am EDT

Strategic Report 2020

ªSupporting our clients, colleagues and communitiesº

Here for good

Strategic report

Standard Chartered is a leading international banking group

Our heritage and values are expressed in our brand promise, Here for good. Our operations reﬂect our purpose, which is to drive commerce and prosperity through our unique diversity.

Contents

Who we are and what we do

Our response to COVID-19

Group Chairman's statement

Group Chief Executive's review

Market environment

Business model

Our strategy

Client segment reviews

Regional reviews

Group Chief Financial Ofﬁcer's review

Group Chief Risk Ofﬁcer's review

Stakeholders and responsibilities

Non-ﬁnancialinformation statement
Underlying versus statutory results

Alternative performance measures

Governance overview

Directors' remuneration report overview

Shareholder information

About this report

Sustainability reporting

We adopt an integrated approach to corporate reporting, embedding non-ﬁnancial information throughout the strategic report.

More information is available in our full annual report at sc.com/annual report

Alternative performance measures

The Group uses a number of alternative performance measures in the discussion of its performance. These measures exclude certain items which management believes are not representative of the underlying performance of the business and which distort period-on-period comparison. They provide the reader with insight into how management measures the performance of the business.

Responding to COVID-19

In 2020, we committed to providing $1 billion in not-for-proﬁt loans to help ﬁnance companies that supply goods and services in the battle with COVID-19. We also created a $50 million Global Charitable Fund to provide emergency support, and longer-term assistance, for the communities most impacted by the pandemic. Find out more about our responses to COVID-19, and how we have supported our clients, colleagues and communities on pages 6 to 9.

$1 billion

Our COVID-19not-for-proﬁt loan pledge

Read more about our activities on page 6, and for information about total lending to date, see page 63

$50 million

Our COVID-19 Global Charitable Fund

For more information please visit sc.com

Read more about our activities on pages 8 and 57

Delivering our strategy

We have continued to make good progress against the strategic priorities we laid out in February 2019. As we accelerate our strategy, we have reﬁned our focus onto four strategic priorities and three enablers (pages 26 and 27). We believe this new framework will enable us to focus on the key areas needed to transform our bank. We measure our progress against Group key performance indicators (KPIs), a selection of which are below, as well as client KPIs, some of which can be found on pages 29 to 32. Our Group KPIs include non-ﬁnancial measures reﬂecting our commitment to sustainability, focusing on sustainable ﬁnance, being a responsible company and promoting inclusive communities. Our 11 Sustainability Aspirations, aligned to the UN Sustainable Development Goals (page 54), provide tangible targets to drive sustainable business outcomes.

Throughout this report, we use these icons to represent the different stakeholder groups for whom we create value.

Clients

Regulators and governments

Investors

Suppliers

Society

Employees

Read more online at sc.com/homebanking

Standard Chartered - Strategic Report 2020

Strategic report Regional reviews

Greater China & North Asia

Proﬁt before taxation

Risk-weighted assets (RWA)

$2,035m $93bn

16% $7bn

underlying basis

$1,900m

17%

statutory basis

Loans and advances to customers

Greater China & North Asia

45% of Group

Income split by key markets

China
15%	Korea
	17%
Others	Hong Kong

10%58%

Supportingª the

Nippon Foundation

and Ashinagaº

As part of our $50 million COVID-19 Global Charitable Fund, we donated JPY10 million to Ashinaga and the Nippon Foundation in Japan.

With the funding, Ashinaga helped 6,500 orphaned students continue their studies, while the Nippon Foundation funded temporary accommodation for COVID-19 patients and health workers.

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

34 Standard Chartered - Strategic Report 2020

ASEAN &

South Asia

Proﬁt before taxation

Risk-weighted assets (RWA)

$779m $81bn

24% $8bn

underlying basis

$737m

29%

statutory basis

Loans and advances to customers

ASEAN & South Asia

26% of Group

Income split by key markets

India	Others
29%
25%

Malaysia

10%

Singapore

36%

Helpingª India breathe easierº

To help beat the COVID-19 crisis we funded the development of a new portable ventilator produced by the Indian Institute of Technology Kanpur and Nocca Robotics.

The ventilator, which can be produced cheaply and easily, has since been installed in government and private hospitals in more than 50 cities, including Pune, Mumbai, Kolkata, Delhi, Chennai, Bihar and Bengaluru

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-weightedassets decreased by $8 billion due mainly to the sale of the Group's stake in Permata in Indonesia

Standard Chartered - Strategic Report 2020

Strategic report Regional reviews

Africa & Middle East

Proﬁt /(loss) before taxation Risk-weighted assets (RWA)

$13m $51bn

98% $2bn

underlying basis

$(75)m

111%.

statutory basis

Loans and advances to customers

Africa & Middle East

9% of Group

Income split by key markets

	UAE
	25%
Nigeria	Others
54%
11%
Kenya
	10%

Fightingª COVID in the Middle Eastº

As part of our efforts to battle the pandemic, we committed $25 million to UAE healthcare services provider Mediclinic.

The money, which was part of our $1 billion COVID-19not-for-proﬁt initiative, was the biggest loan we issued in the region.

In 2020, Mediclinic provided care to three million outpatients and 79,000 inpatients across its seven hospitals in the UAE.

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-riskand 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
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

36 Standard Chartered - Strategic Report 2020

Europe & Americas

Proﬁt before taxation

Risk-weighted assets (RWA)

$386m $46bn

146% $2bn

underlying basis

$341m

177%

statutory basis

Loans and advances to customers

Europe & Americas

20% of Group

Income split by key markets

49%

41%

Others

10%

EDFª helps us pass $2bn in sustainable depositsº

In May 2020, French electricity company EDF helped our Sustainable Deposit product - the ﬁrst of its kind - exceed the $2 billion mark. We use the deposits to ﬁnance assets that meet our Green and Sustainable Product Framework which is aligned to the UN's Sustainable Development Goals, including combatting climate change, supporting ﬁnancial inclusion and tackling the lack of universal access to health and education. The product was launched in May 2019 and reached the $1 billion mark in January 2020.

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

Standard Chartered - Strategic Report 2020

Strategic report Group Chief Financial Ofﬁcer's review

Group Chief Financial Ofﬁcer's review

Andy Halford

Group Chief Financial Ofﬁcer

"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

38 Standard Chartered - Strategic Report 2020

(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
1. 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
1. 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
	2020			currency
	2019	Change	change¹
	$million	$million	%	%
Net interest income	6,882	7,698	(11)	(9)
Other income	7,883	7,573	4	5
Underlying operating income	14,765	15,271	(3)	(2)
Underlying operating expenses	(9,811)	(10,062)	2	1
UK bank levy	(331)	(347)	5	9
Underlying operating expenses	(10,142)	(10,409)	3	1
Underlying operating proﬁt before impairment and taxation	4,623	4,862	(5)	(4)
Credit impairment	(2,294)	(906)	(153)	(159)
Other impairment	15	(38)	139	138
Proﬁt from associates and joint ventures	164	254	(35)	(36)
Underlying proﬁt before taxation	2,508	4,172	(40)	(39)
Restructuring	(382)	(254)	(50)	(53)
Goodwill impairment	(489)	(27)	nm²	nm²
Other items	(24)	(178)	87	87
Statutory proﬁt before taxation	1,613	3,713	(57)	(56)
Taxation	(862)	(1,373)	37	36
Proﬁt for the year	751	2,340	(68)	(67)

Net interest margin (%)3	1.31	1.62	(31)
Underlying return on tangible equity (%)3	3.0	6.4	(340)
Underlying earnings per share (cents)	36.1	75.7	(52)
Statutory return on tangible equity (%)3	0.9	4.8	(390)
Statutory earnings per share (cents)	10.4	57.0	(82)

Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
Not meaningful

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

Standard Chartered - Strategic Report 2020

Strategic report Group Chief Financial Ofﬁcer's review

Operating income by product

				Constant
	2020	2019		currency
	(Restated)²	Change	change¹
	$million	$million	%	%
Transaction Banking	2,838	3,499	(19)	(18)
Trade	994	1,100	(10)	(9)
Cash Management	1,844	2,399	(23)	(23)
Financial Markets	3,854	3,258	18	20
Foreign Exchange	1,291	1,127	15	17
Rates	1,068	696	53	56
Commodities	223	165	35	35
Credit and Capital Markets	639	577	11	12
Capital Structuring Distribution Group	274	329	(17)	(16)
DVA	13	(100)	113	113
Securities Services	320	343	(7)	(5)
Other Financial Markets	26	121	(79)	(78)
Corporate Finance	1,116	1,143	(2)	(1)
Lending and Portfolio Management	848	786	8	10
Wealth Management	1,968	1,879	5	5
Retail Products	3,566	3,862	(8)	(7)
CCPL and other unsecured lending	1,211	1,251	(3)	(2)
Deposits	1,457	1,989	(27)	(26)
Mortgage and Auto	750	511	47	47
Other Retail Products	148	111	33	36
Treasury	635	1,090	(42)	(41)
Other	(60)	(246)	76	74
Total underlying operating income	14,765	15,271	(3)	(2)

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

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.

40 Standard Chartered - Strategic Report 2020

Proﬁt before tax by client segment and geographic region

				Constant
	2020	2019		currency
	(Restated)²	Change	change¹
	$million	$million	%	%
Corporate & Institutional Banking	1,841	2,257	(18)	(18)
Retail Banking	587	1,093	(46)	(47)
Commercial Banking	214	499	(57)	(57)
Private Banking	62	94	(34)	(35)
Central & other items (segment)	(196)	229	(186)	(159)
Underlying proﬁt before taxation	2,508	4,172	(40)	(39)
Greater China & North Asia	2,035	2,432	(16)	(17)
ASEAN & South Asia	779	1,025	(24)	(24)
Africa & Middle East	13	684	(98)	(97)
Europe & Americas	386	157	146	137
Central & other items (region)	(705)	(126)	nm³	nm³
Underlying proﬁt before taxation	2,508	4,172	(40)	(39)

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 by 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.

Additional information on client segment and geographic region performance is contained on pages 73-76

Adjusted net interest income and margin

	2020	2019¹	Change²
	$million	$million	%
Adjusted net interest income3	6,921	8,007	(14)
Average interest-earning assets	526,370	494,756	6
Average interest-bearing liabilities	478,051	444,595	8

Gross yield (%)4	2.34	3.34	(100)
Rate paid (%)4	1.12	1.92	(80)
Net yield (%)4	1.22	1.42	(20)
Net interest margin (%)4,5	1.31	1.62	(31)

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)

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

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.

Standard Chartered - Strategic Report 2020

Strategic report Group Chief Financial Ofﬁcer's review

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

Credit risk summary

Income statement

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.

	2020	2019	Change1
	$million	$million	%
Total credit impairment	2,294	906	153
Of which stage 1 and 2	827	262	216
Of which stage 3	1,467	644	128
1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods

Balance sheet

	2020	2019	Change1
	$million	$million	%
Gross loans and advances to customers2	288,312	274,306	5
Of which stage 1	256,437	246,149	4
Of which stage 2	22,661	20,759	9
Of which stage 3	9,214	7,398	25

Expected credit loss provisions	(6,613)	(5,783)	14
Of which stage 1	(534)	(402)	33
Of which stage 2	(738)	(377)	96
Of which stage 3	(5,341)	(5,004)	7

Net loans and advances to customers	281,699	268,523	5
Of which stage 1	255,903	245,747	4
Of which stage 2	21,923	20,382	8
Of which stage 3	3,873	2,394	62

Cover ratio of stage 3 before/after collateral (%)3	58/76	68/85	(10)/(9)
Credit grade 12 accounts ($million)	2,164	1,605	35
Early alerts ($million)	10,692	5,271	103
Investment grade corporate exposures (%)3	62	61	1

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

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

3 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

42 Standard Chartered - Strategic Report 2020

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

		2020			2019
		Goodwill			Goodwill
	Restructuring	impairment	Other items	Restructuring	impairment	Other items
	$million	$million	$million	$million	$million	$million
Operating income	27	-	(38)	146	-	-
Operating expenses	(252)	-	14	(298)	-	(226)
Credit impairment	(31)	-	-	(2)	-	-
Other impairment	(113)	(489)	-	(98)	(27)	-
Proﬁt from associates and joint ventures	(13)	-	-	(2)	-	48
Loss before taxation	(382)	(489)	(24)	(254)	(27)	(178)

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.

Standard Chartered - Strategic Report 2020

Strategic report Group Chief Financial Ofﬁcer's review

Balance sheet and liquidity

	2020		Increase/	Increase/
	2019	(decrease)	(decrease)
	$million	$million	$million	%
Assets
Loans and advances to banks	44,347	53,549	(9,202)	(17)
Loans and advances to customers	281,699	268,523	13,176	5
Other assets	463,004	398,326	64,678	16
Total assets	789,050	720,398	68,652	10
Liabilities
Deposits by banks	30,255	28,562	1,693	6
Customer accounts	439,339	405,357	33,982	8
Other liabilities	268,727	235,818	32,909	14
Total liabilities	738,321	669,737	68,584	10
Equity	50,729	50,661	68	-
Total equity and liabilities	789,050	720,398	68,652	10

Advances-to-deposits ratio (%)2,3	61.1%	64.2%		(3.1)
Liquidity coverage ratio (%)3	143%	144%		(1)

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

The Group now excludes $14,296 million held with central banks (31.12.19: $9,109 million) that has been conﬁrmed as repayable at the point of stress
3 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

	2020		Increase/	Increase/
	2019	(decrease)	(decrease)
	$million	$million	$million	%
By risk type
Credit Risk	220,441	215,664	4,777	2
Operational Risk	26,800	27,620	(820)	(3)
Market Risk	21,593	20,806	787	4
Total RWAs	268,834	264,090	4,744	2

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

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

44 Standard Chartered - Strategic Report 2020

Capital base and ratios

	2020		Increase/	Increase/
	2019	(Decrease)	(Decrease)
	$million	$million	$million	%
CET1 capital	38,779	36,513	2,266	6
Additional Tier 1 capital (AT1)	5,612	7,164	(1,552)	(22)
Tier 1 capital	44,391	43,677	714	2
Tier 2 capital	12,657	12,288	369	3
Total capital	57,048	55,965	1,083	2
CET1 capital ratio (%)2	14.4	13.8		0.6
Total capital ratio (%)2	21.2	21.2		-
UK leverage ratio (%)2	5.2	5.2		-

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

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.

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 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 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

Standard Chartered - Strategic Report 2020

Sustainability

Measuringª

our impactº

In September 2020, we launched our ﬁrst Sustainable Finance Impact Report, which outlined how our ﬁnancing impacts the communities we serve. The report revealed that, between July 2019 and July 2020, our ﬁnancing of green projects helped save almost 750,000 tonnes of CO2 emissions - the equivalent CO2 output of 217,000 residents in low- and middle-income markets.

Read more online at sc.com/sﬁmpactreport

46 Standard Chartered - Strategic Report 2020

Group Chief Risk Ofﬁcer's review

Mark Smith

Group Chief Risk Ofﬁcer

"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.

Standard Chartered - Strategic Report 2020

Strategic report Group Chief Risk Ofﬁcer's review

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-levelability 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-basedthinking (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-19has 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-19presented a range of new or heightened conduct risks given the move to large-scaleworking 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.

48 Standard Chartered - Strategic Report 2020

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-timebespoke 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-moneylaundering, 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-basedapproach 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 (pages 182 to 184) and the Risk proﬁle section (pages 185 to 247) in the full 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.

Standard Chartered - Strategic Report 2020

Strategic report Group Chief Risk Ofﬁcer's review

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	The Group should maintain a strong capital position, including the maintenance of management buffers
Liquidity Risk	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),
Technology Risk	including any related to conduct 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
Cyber Security Risk	appetite for material 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
Sustainability Risk	business activity is satisfactorily 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 (pages 254 to 269 in the full 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 on page 270 in the full annual report.

50 Standard Chartered - Strategic Report 2020

	Risk trend
Emerging risks	since 20191 Key risk trend drivers	How these are mitigated
COVID-19 and	COVID-19 continues to spread	• As part of our stress tests, a severe stress in the global
the emergence	globally. Measures to contain the	economy associated with a sharp slow-down was
of new diseases	virus, such as travel bans and	assessed
	restrictions, curfews, quarantines and	• Exposures that could result in material credit impairment
	shutdowns have led to increased	charges and risk-weighted asset inﬂation under stress
	volatility in ﬁnancial markets and	tests are regularly reviewed and actively managed
	commodity prices and severe	• To support our clients the Group has enacted
	economic downturns in many
	comprehensive support schemes for retail and corporate
	countries. There is a risk other diseases	customers, including loan and interest repayment
	may emerge	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

US-China trade	Measures taken by China and the	• Sharp slowdowns in the US, China, and more broadly,
tensions driven by	US on trade tariffs since 2018 have	world trade and global growth are a feature of Group
geopolitics and	increased concerns of a global	stress scenarios. These stress tests provide visibility to
trade imbalance	geopolitical and trade war. Tensions	key vulnerabilities so that management can implement
	escalated in 2020 and continue to	timely interventions
	deteriorate, posing a risk to global	• Detailed portfolio reviews are conducted on an ongoing
	supply chains	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

Geopolitical	There are increasing concerns	• We monitor and assess geopolitical events and act as
events, in	following the rise of populism and	appropriate to ensure we minimise the impact to the
particular: the rise	nationalism. COVID-19 and focus	Group and our clients
of populism and	on local economies have helped	• There is continuous monitoring at a country, regional
nationalism,	contribute to reduced security	and Group level to identify emerging risks and evaluate
Middle East	incidents in the Middle East relative	their management
tensions and social	to 2019. 2019 and 2020 saw a surge	• We conduct portfolio reviews at a Group, country and
unrest driven by	in protests globally and the risk is
business level to assess the impact of extreme but
moderation of	these will increase further in 2021.	plausible geopolitical events
growth in key	The economic impact of policy

footprint markets	decisions made in 2020 may pose
and political	a risk to future growth
concerns

Macroeconomic	COVID-19 has exacerbated already	• Exposures that may result in material credit impairment
concerns, in	deteriorating market conditions,	and increased risk-weighted assets are closely monitored
particular,	causing liquidity and potentially	and actively managed
rising sovereign	solvency issues for a number of the	• We conduct stress tests and portfolio reviews at a country
default risk	world's poorest countries. Central	and business level to assess the impact of extreme but
	bank responses to the crisis may	plausible events and manage the portfolio accordingly
	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

Interbank	There are concerns regarding the	• The Group has a global IBOR Transition Programme to
Offered Rate	impact of the discontinuation of the	consider all aspects of the transition and how risks can
discontinuation	IBOR benchmarks and the transition	be mitigated
and transition	to Risk Free Rates (RFRs). LIBOR is	• The Group has raised awareness and understanding
	relied upon by the Group as a	of the transition, both internally and with clients,
	reference rate	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

Standard Chartered - Strategic Report 2020

Strategic report Group Chief Risk Ofﬁcer's review

	Risk trend
Emerging risks	since 20191 Key risk trend drivers	How these are mitigated

Third party	Economic conditions have impacted
dependency	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

New technologies	Client expectations and the way they	• We monitor emerging trends, opportunities and risk
and digitisation	interact with the Group may change,	developments in technology which may have
(including business	potentially accelerating the adoption	implications on the banking sector
disruption risk	of digital solutions	• We have rolled out enhanced digital capabilities in
and responsible		Retail Banking, particularly around onboarding, sales
use of Artificial		and marketing
Intelligence)		• 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

Increased data	Regulatory requirements and client	• We actively monitor regulatory developments in relation
privacy and	expectations relating to data	to data management, data protection and privacy
security risks from	management and privacy are	• We have established a dedicated Data and Privacy
strategic and	increasing across our markets,	team to build data management and privacy expertise
wider use of data	including the ethical use of data	across the Group while ensuring compliance with data
		ownership and consent requirements

Increase in	The number of employees working	• The Group has assessed the risk, impact and robustness
long-term remote	remotely and increasingly advanced	of continuity plans for pandemic critical vendor services
working providing	capabilities of threat actors have	supporting critical banking operations
new challenges	raised this risk in addition to internal	• We actively monitor cyber threats and risks, and have
	(supervision, culture and support)	implemented heightened technical and organisational
	and external (clients and other	measures designed to prevent, detect and respond
	counterparties) considerations	to threats
		• The Group is undertaking a Future of Work assessment
		which considers data privacy and cyber security in
		addition to culture and leadership

Risk heightened in 2020 Risk reduced in 2020 Risk remained consistent with 2019 levels

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 on pages 270 to 276 in the full 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

52 Standard Chartered - Strategic Report 2020

Trade

Essentialª

goods in Indiaº

To keep India trading during COVID-19, Solv -

a B2B marketplace launched by our innovation unit, SC Ventures - helped connect buyers and suppliers to maintain the ﬂow of essential goods. In the face of movement restrictions, the team took to the streets to physically deliver essentials such as food and medicine to communities and hospitals. Through these efforts, more than 10,000 families were able to get their hands on much-needed supplies.

Read more online at sc.com/solvindia

Standard Chartered - Strategic Report 2020

Strategic report Stakeholders and responsibilities

Stakeholders and responsibilities

Our stakeholders

ClientsSuppliers

Regulators	Society
and governments	Employees
Investors

This section forms our Section 172 disclosure, describing how the directors considered the matters set out in section 172(1)(a) to (f) of the Companies Act 2006. It also forms the directors' statement required under section 414CZA of the Act.

See the following pages for:

How we engage stakeholders to understand their interests See pages 54 to 57
How we engage employees and respond to their interests See pages 58 to 61
How we respond to stakeholder interests through sustainable and responsible business
See pages 62 to 71

Detailed information about how the Board engages directly with stakeholders and shareholders can be found in the Directors' report on pages 102 to 104 in the full annual report.

Examples of a selection of the Board's principal decisions are included throughout this section.

This section also forms our key non-ﬁnancial disclosures in relation to sections 414CA and 414CB of the Companies Act. Our non-ﬁnancial information statement can be found at the end of this section on page 72.

As an international bank working in 59 markets, stakeholder engagement is crucial in ensuring we understand local, regional and global perspectives, and trends, that inform how we do business.

Sustainability Aspirations

As part of our commitment to being a sustainable and responsible bank, our Sustainability Aspirations provide performance targets aligned to the UN Sustainable Development Goals (SDGs). Selected Aspirations form part of our Group Scorecard and long-term incentive plan.

During 2020, we refreshed any Aspirations coming to an end and introduced new goals to reﬂect our evolving strategy. For example, we developed a range of sustainable Retail Banking as part of our growing sustainable ﬁnance proposition.

To ensure stakeholders are conﬁdent in our approach, we have conducted a limited-scope assurance exercise on selected Aspirations, details of which can be found in our Sustainability Summary.

Read our Sustainability Summary at sc.com/sustainabilitysummary

Group KPI: Sustainability

Delivering sustainability aspirations %1

-14.7ppt Sustainability Aspirations achieved or on track

2019		93.1 (14.7)ppt
2020	78.4



2018	90.9

Aim: Embed sustainable and responsible practices across our business, operations and communities by measuring progress against the targets set out in our Sustainability Aspirations.

Analysis: In 2020, we released updated Sustainability Aspirations with new annual and multi-year performance targets. At the end of 2020,

78.4 per cent of our Aspirations are on track or achieved. This is a decrease from 93.1 per cent in 2019 as COVID-19 has impacted the delivery of several Aspirations. We remain focused on scaling-up delivery in subsequent years to achieve our targets.

Each aspiration contains one or more performance measures. The KPI is the proportion of all measures that have been achieved or are on track to be delivered at the end of the reporting period.

54 Standard Chartered - Strategic Report 2020

Engaging stakeholders

Regular engagement with our stakeholders enables us to build trust and respond to the opportunities and challenges facing our markets.

In 2020, the world faced unprecedented change. Alongside key topics including Brexit, sustainable ﬁnance and climate change, COVID-19 dominated our work with stakeholder groups as we sought to understand, and adapt to, the impact of the pandemic so we could continue driving commerce and prosperity in our markets.

Stakeholder feedback is communicated internally to senior management through the relevant forums and governing committees, and to the Board's Brand, Values and Conduct Committee (BVCC) which oversees the Group's approach to its main government and regulatory relationships. We communicate progress regularly to external stakeholders through channels such as sc.com and this report.

Clients

How we create value

We enable individuals to grow and protect their wealth. We help businesses trade, transact, invest and expand. We also help a variety of ﬁnancial institutions, including banks, public sector and development organisations, with their banking needs.

How we serve and engage

Clients are at the heart of everything we do. By building and fostering long-term relationships we can better understand our clients' needs, and ﬁnd innovative, tailored solutions to help them achieve their goals.

In 2020, the pandemic led to a shift in client needs, priorities and the pace of support they needed. In addition to announcing a $1 billion not-for-proﬁt facility to support clients producing goods and services to help ﬁght the pandemic, we rapidly implemented innovative initiatives to minimise disruption.

Facilities such as the Hong Kong Client Experience Lab were set up to allow us to work closely with clients to co-design products and services. We also launched an e-learning module on client vulnerability awareness to help retail banking employees support our more vulnerable clients.

Digital transformation of our business meant we were able to help clients bank from home. This included the launch of our new digital Bank in Hong Kong, Mox, and the rollout of e-signature capabilities for our corporate clients.

In 2021, we will continue to strengthen our digital transformation and innovation capabilities.

Their interests

Differentiated product and service offering
Digitally enabled and positive experience
Sustainable ﬁnance

Principal Board decision:

Dividend and share buy-back withdrawal

The interests of stakeholders are central to the Board's capital management decision-making. An example of this was the Board's decision to withdraw the recommendation to pay a ﬁnal dividend for 2019 and suspend the buy-back programme announced earlier in the year.

In line with the Group's approach to dividend growth and capital returns, the Board had previously agreed to carry out a share buy-back for up to a maximum consideration of $0.5 billion to reduce the number of ordinary shares in issue by cancelling the repurchased shares. In addition, the Board had declared a ﬁnal ordinary dividend for 2019 of 20 cents. At the time it agreed that both decisions were in the best interests of the Group and its stakeholders.

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, the Group announced on 31 March 2020 that, after careful consideration, the Board had decided to withdraw the recommendation to pay a ﬁnal dividend for 2019 and to suspend the buy-back programme.

As part of the consideration process for this decision, the Board discussed the impact and views of key stakeholders including our regulators, and recognised the importance of dividends to our shareholders. However, the Board decided that suspending shareholder distributions at the time would allow the Group to maximise its support for individuals, businesses and the communities in which it operates while at the same time preserving strong capital ratios and investing to transform the business for the long term. One such example of this was the launch of a $50 million global fund to provide assistance to those affected by COVID-19. The Group made a contribution of $25 million and announced that it would match other contributions including those made by its employees and conﬁrmed it would make further contributions as needed to reach the total. It was announced that Board and Management Team members would be making personal contributions to the fund. The Board welcomed the initiative, the approach and leadership management had taken in launching the fund.

Standard Chartered - Strategic Report 2020

Strategic report Stakeholders and responsibilities

Engaging stakeholders continued

Regulators and governments

How we create value

We engage with public authorities to help the ﬁnancial system and the broader economy function effectively.

a strategic impact on the Group and managing relationships with regulators and government ofﬁcials. During 2020,

we improved our capacity to identify and analyse policy developments that have a strategic impact on the Group.

How we serve and engage

We actively engage with governments, regulators and policymakers at a global, regional and national level to share insights, develop best practice and ensure we function consistently across our markets. In 2020, we worked with policymakers inter alia on the impact and response to

the pandemic, prudential regulation, Brexit, operational resilience, benchmark reform, sustainable ﬁnance, climate risk, ﬁntech, artificial intelligence, cyber security, ﬁnancial crime and conduct.

We are committed to complying with legislation, rules and other regulatory requirements that apply in the markets we operate in. Our compliance with legal and regulatory frameworks ensures the Group meets its obligations and supports the resilience and effective functioning of the broader ﬁnancial system and economy.

To support this, we have a Public and Regulatory Affairs team, responsible for anticipating changes to legislation and regulation, analysing policy developments that have

We meet all relevant transparency requirements and have an ongoing dialogue with regulators and governments, submitting responses to formal consultations and participating in industry working groups. We typically publish our consultation responses on sc.com/politicalengagement.

In 2021, we expect to engage on regulation and legislation associated with the recovery from COVID-19, international trade, Brexit, emerging digital technologies and innovations in banking, sustainable ﬁnance and artificial intelligence including data analytics and privacy.

Their interests

Strong capital base and liquidity position
Robust standards for conduct
Healthy economies and competitive markets
Positive sustainable development, both environmental and social

Investors

How we create value	Investor feedback, recommendations and requests are
We aim to deliver robust returns and long-term sustainable	considered by the Board, whose members keep abreast
value for our investors.	of current topics of interest. Following the annual general
	meeting in May 2020 for procedural matters, the Board
How we serve and engage	hosted a virtual retail shareholder event as well as a
We rely on capital from debt and equity investors to execute	stewardship event for institutional investors in November.
Both events provided a platform for shareholders to direct
our business model. Whether they have short- or long-term
questions to the Board.
investment horizons, we provide our investors with information
We continue to respond to the growing interest from
about all aspects of progress against our strategic and
ﬁnancial frameworks.	mainstream investors on ESG matters including the UN's
Our footprint and intent to become the world's most	SDGs, sustainable ﬁnance, climate change, coal and the
wider low-carbon transition and human rights. We also work
sustainable and responsible bank provides our investors with
with sustainability analysts and participate in sustainability
exposure to opportunities in emerging markets. We believe
indices that benchmark our performance including the
that our integrated approach to environmental, social
Carbon Disclosure Project and Workforce Disclosure Initiative.
and governance (ESG) issues, as well as a strong risk and
In 2021, we will continue to engage with investors on progress
compliance culture is a key differentiator. We delivered a
resilient performance in 2020, weathering the geopolitical	against our refreshed strategic priorities and medium-term
and health crises very well while continuing to progress our	ﬁnancial framework as we progressively advance to our
strategic transformation. Our refreshed strategic priorities are	returns target.
underpinned by our purpose and support our recommitment	Their interests
to achieve a 10 per cent return on tangible equity.
For more information see pages 26 - 27	• Safe, strong and sustainable ﬁnancial performance

Regular and transparent engagement with our investors,	• Facilitation of sustainable ﬁnance to meet the UN SDGs
• Progress on environment, social and governance matters
and the wider market, helps us understand investors' needs
and tailor our public information accordingly. In addition to
direct engagement from our Investor Relations team, we
communicate through quarterly, half and full-year results,
conferences, roadshows and media releases. Adoption of
virtual mediums was accelerated due to the pandemic.

56 Standard Chartered - Strategic Report 2020

Suppliers

How we create value	We have made real progress against our supply chain
We work with suppliers to ensure they can provide the	sustainability agenda. As well as incorporating modern
right goods and services for our business, efﬁciently	slavery into our risk framework, we introduced a new control
and sustainably.	framework to strengthen the governance and management
	of modern slavery risk within our supply chain.

How we serve and engage

Our work is guided by our Supplier Charter, which sets out our expectations on issues such as ethics, anti-bribery and corruption, human rights, diversity and inclusion (D&I) and environmental performance. Our suppliers must recommit to the charter annually, and performance monitoring is built into our procurement practices and standards.

We work globally and locally to create supply chain value for our business and our suppliers. In 2020, we announced a strategic partnership with Microsoft to help us create a cloud-ﬁrst technology strategy. This partnership marks a signiﬁcant milestone for us and our vision to make virtual banking, next-generation payments, open banking and banking-as-a-service a reality.

We continue to support our suppliers through the pandemic by paying invoices from small and medium-sized suppliers immediately upon receipt. Our payment processes for all suppliers were also streamlined, with 95 per cent of invoices paid on time in December 2020, up from 82 per cent in 2019.

We accelerated our supplier diversity strategy and published our global standard to ensure our suppliers share our mission to increase D&I across the supply chain, embed best practice and work with us to create an equal marketplace for diverse suppliers.

In 2021, supply chain sustainability will continue to be a primary focus as we roll out initiatives to scale up our supplier D&I practices and reduce carbon emissions within our own operations and supply chain.

Our Supplier Charter can be viewed at sc.com/suppliercharter

Read more about our supplier diversity standard:

sc.com/supplierdiversity

Their interests

Open, transparent and consistent tendering process
Willingness to adopt supplier-driven innovations
Accurate and on-time payments

Society

How we create value	We brought Futuremakers participants together with more
We strive to operate as a sustainable and responsible	than 300 business leaders, policy experts and clients to
company, working with local partners to promote social	discuss how we can collaborate as part of the ﬁrst ever
and economic development.	Futuremakers Forum. We also joined our SiB partner, the
	International Agency for the Prevention of Blindness, and
How we serve and engage	more than 100 other eye health representatives in a virtual
We engage with a wide range of civil society and	conference to share our learnings from the ﬁnal year of our
long-standing partnership.
international and local NGOs, ranging from those focused on
As the global pandemic unfolded, we increased engagement
environmental and public policy issues to partners delivering
our community programmes. Our aim is to have an open	with organisations supporting vulnerable groups impacted by
dialogue to ensure we understand alternative positions	COVID-19. This included continuing work with long-standing
which can shape our thinking, and that how we do business	partners Women Win and the Red Cross, and providing
is understood. The views and concerns of our stakeholders	additional support to 166 partners in 59 markets by delivering
are fed into our decision-making process.	emergency relief through our $50 million COVID-19 Global
In 2020, against the backdrop of the pandemic, we continued	Charitable Fund.
Meanwhile, our employees were given an additional day
to engage with organisations on topics including climate
change, human rights, and the value of nature to global	of volunteering leave - increased from three to four days -
supply chains. We undertake this engagement to inform	to support activities in their own communities.
our thinking and help shape our Position Statements.	Their interests
Engagement took place via one-to-one sessions using online
channels and calls, virtual roundtables and written responses.	• Positive social and economic contribution
In 2020, we continued to engage with NGOs, charities	• COVID-19 emergency relief and support for longer-term
and other organisations to promote youth economic	economic support
inclusion through our Futuremakers by Standard Chartered	• Climate change and environmental issues
programme, and eye health through Seeing is Believing (SiB).

Standard Chartered - Strategic Report 2020

Strategic report Stakeholders and responsibilities

Engaging stakeholders continued

Employees

2020 Sustainability Aspirations:

Employees

People

Conduct a feasibility analysis to incorporate a Living Wage into	Jan 2019
agreements for all non-employed workers	- Dec 2020

Complete disability conﬁdence assessments for 44 of our	Jan 2020
larger markets	- Dec 2020

Embed an integrated health and wellbeing strategy to support	Jan 2020
building and re-skilling a future-ready, diverse workforce	- Dec 2021

Support all employees to develop a personalised growth plan to	Jan 2020
reﬂect the future skills needed to respond to the changing and	- Dec 2021
digitised nature of work

Increase gender representation: 35% women in senior roles	Sept 2016
with an interim target:	- Dec 20252
- Dec 2020: 30%1

Increase our 'Culture of Inclusion' score to 84.5% with an	Jan 2020
interim target:	- Dec 2024
- Dec 2021: 80%

Group KPI:

Employee engagement

Employee Net Promoter Score (eNPS) +5.4%

2020

17.51

201911.51

201811.3

eNPS measures the number of promoters (who would recommend the Group as a great place to work) compared to detractors on a scale from -100 to +100. This is reﬂected in the percentage change calculation

Aim: Increase engagement across the Group by creating a better working environment for our employees that should translate into an improved client experience.

Analysis: Our eNPS has signiﬁcantly increased since 2016 when we started our culture transformation.

Concluded in the year	Ongoing aspirations
Achieved	Not achieved	On track	Not on track

Interim target not achieved. 29.5% women in senior roles. However, we remain on track to reach our overall aspiration by Dec 2025

2 Target date changed from December 2024 to December 2025.

How we create value

We recognise that our workforce is a signiﬁcant source of value that helps our performance and productivity. Given the advances in technology and the changing needs of our clients, we are using long-term workforce planning to build the skills and culture necessary for a future ready-workforce.

How we serve and engage

By engaging employees and fostering a positive experience for them, we can better serve our clients and deliver on our purpose. An inclusive culture enables us to unlock innovation, make better decisions, deliver our business strategy, live our valued behaviours, and embody our brand promise Here for good.

We proactively assess and manage people-related risks, for example, organisation, capability, and culture, as part of our Group risk management framework. Our People Strategy, as approved by the Board in July 2019, remains in place and COVID-19 has accelerated many of the future of work trends which informed our approach.

Their interests

In 2018, we conducted research to understand our Employee Value Proposition (EVP) - the value that employees, or potential employees, feel they gain from being part of our organisation. Our employees told us they want to: have interesting and impactful jobs; innovate within a unique set of markets and clients; cultivate a brand that sustainably drives commerce and offers enriching careers and development; and be supported by great people leaders. They want these elements to be anchored in competitive rewards and a positive work-life balance. The EVP is a key input to our People Strategy which supports the delivery of our business strategy.

Listening to employees

Feedback from employee surveys helps us identify and close gaps between employees' expectations and experience.

A pulse survey in April 2020 revealed how employees were coping with COVID-19 and allowed us to target support where it was needed most. This was followed by our annual survey, My Voice, in June and July. On a par with previous years, 74,566 employees (91 per cent), and a further 3,599 agency workers (71 per cent) took part.

58 Standard Chartered - Strategic Report 2020

Employees continued

Satisfaction increased from 2019 in both the employee	Developing skills of future strategic value
engagement index and the employee net promoter score,	The world of work continues to change rapidly. Our employees
which measures how likely employees are to recommend	need a combination of personal and technical skills to
working for the us. Externally, this is reﬂected in a 27 per cent	succeed both today and in the future.
increase in LinkedIn followers since December 2019 (1.27	In 2020, we focused on laying the foundations for upskilling
million), and 77 per cent of Glassdoor ratings stating that
they would recommend working at the Bank to a friend.	and re-skilling our workforce by building a culture of
My Voice also revealed a commitment among employees to	continuous learning. Our learning intensiﬁed during the
pandemic and we virtualised all appropriate programmes
doing what is required to help us succeed (97 per cent), and	and sessions. Currently, 67 per cent of employees have a
increasing satisfaction with job impact (up 6 per cent), reward	growth plan and we expect this to increase as we deepen
(up 6 per cent) and development opportunities (up 5 per cent)	our culture of continuous learning.
- all indicators that we are delivering our EVP. Investment in	In support of this shift in skills, we have identiﬁed a core set
people leader capability has translated into a 10 per cent
increase in our manager net promoter scores, which is	of new roles and are developing existing talent to take up
important as the variety of demands on our people leaders	these positions. This approach unites our recruitment, talent
to engage with dynamic workforce needs are increasing.	management and learning efforts to target, upskill and place
During 2020, new ways of working brought greater freedoms	learners into new roles. This will be piloted in 2021 across ﬁve
roles before being extended across the Group.
and beneﬁts for some colleagues; for many, however, physical

restrictions and a lack of social connection signiﬁcantly	Creating an inclusive culture
affected their wellbeing - 40 per cent of our employees said	There is no doubt that 2020 was a challenging year, and the
they were experiencing high or frequent levels of work-related
need to lead inclusively was a central theme for our people
stress. We are continuing to invest in wellbeing tools such as
leaders. Our commitment to D&I is supported by more than
a mental health app, an upgraded employee assistance
60 employee resource groups (ERGs) that help create a
service, wellbeing toolkits for employees and people leaders,
culture of inclusion and provide learning, development and
and learning programmes on mental health and resilience.
networking opportunities. The ERGs align to our focus areas
The pandemic has reinforced how important our health
of gender, ethnicity and nationality, generations, sexual
and wellbeing strategy is, and supporting employees with
orientation, and disability and wellbeing.
these skills is a long-term area of focus.
Our gender diversity is growing with more female leaders
We are also listening to employees' preferences for greater
coming through the pipeline. Currently, females represent
ﬂexibility in working arrangements post-pandemic, with
31 per cent of the Board, increasing to 36 per cent in January
80 per cent of employees in our nine largest markets telling
2021. Fourteen of our markets have female CEOs, and
us they would like some form of ﬂexibility. We recognise the
female representation in senior leadership roles increased
positive lessons that can be learnt from the pandemic on
by 1 per cent to 29.5 per cent at the end of 2020. We are
productivity, employee experience and talent attraction
committed to improving, and aspire to 35 per cent female
and retention. Conversely, enforced absence from ofﬁces
representation at senior level by 2025. This Aspiration is
has highlighted the beneﬁt of face-to-face interaction and
supported by programmes that develop our talent in
the value of physical workspaces as hubs of teamwork,
preparation for future roles.
collaboration and learning. Based on this data we are

introducing a hybrid model, combining virtual and ofﬁce-
based working with greater ﬂexibility in working patterns
and locations.
The Board listens to the views of the workforce through
several sources, including information reported from
senior management on culture and directly via workforce	Learnª	anywhere,

engagement sessions. More information can be found
on pages 105 to 106 in the Directors' Report in the full
annual report.	anytimeº

	In March 2020 we launched our new digital learning
	platform, diSCover, to make learning accessible to all.
	Aligned to our future skills academies, it uses artificial
	intelligence (AI) to create personalised content. We have
	had over 55,000 users, of which 80 per cent are active.
	Participation in our second global learning week (over
	500 events and 21,000 participants) both demonstrated
	and galvanised our employees' appetite for learning.

Standard Chartered - Strategic Report 2020

Strategic report Stakeholders and responsibilities

Engaging stakeholders continued

Employees continued

Inclusion is how we will derive true value from our diverse talent. Pleasingly, 82 per cent of colleagues reported positive sentiments in the My Voice culture of inclusion questions, compared to 78 per cent in 2019. This was supported by

94 per cent of our people leaders completing our Inclusive Leadership programme.

In addition to six key D&I dates we recognise across the year, several external events helped increase awareness of inclusion and equality. In response to global Black Lives Matter protests, we ran a series of listening and engagement sessions on race involving employees, people leaders, the Management Team and Board members. We shared our guide on having conversations about race externally, to further support our clients and communities. We signed the UK Business in the Community - Race at Work Charter, to tackle barriers facing ethnic minority talent, and partnered with Leadership Enterprise for a Diverse America to diversify the leadership pipeline. We have committed to ethnicity targets for senior leadership in both the UK and the US and we continue to nurture local talent in markets across Asia, Africa and Middle East to ensure we reﬂect the diversity of our global clients.

Meanwhile, as reported by the World Health Organization, there has been a signiﬁcant increase in global cases of domestic violence and abuse. In response, we became the ﬁrst bank to publish a framework and global standards to support colleagues, and a toolkit to share best practice with other organisations.

In line with our Sustainability Aspirations, all markets with

50 or more employees have completed our internal Disability Conﬁdent Assessment to help us focus on removing barriers and increasing accessibility.

Ignitingª our talent through coachingº

Through an experimental 'pay it forward' coaching programme, 'IGNITE', we have accredited 51 internal coaches who have in return provided coaching to 141 female employees in 18 countries. We have extended this to

119 further coaches, with the aim for individuals to explore their potential, discover new levels of performance and experience community from the peer network.

Group Chief Executive, Bill Winters, signed the UN Global Standards for Business to tackle discrimination against lesbian, gay, bi, trans and intersex (LGBT+) people. In addition, we developed a toolkit on transgender inclusion in the workplace, issued guidance on how to be an ally, and offered medical and domestic relocation beneﬁts to LGBT+ partners of employees in India.

Our progress is also recognised externally. We are among the top 100 organisations in the Bloomberg Gender Equality Index and ranked as a Diversity Leader in the Financial Times report on Diversity and Inclusion in Europe. We were the ﬁrst ﬁnancial institution in Singapore to be granted the Economic Dividends for Gender Equality certification. Seven of our D&I champions were recognised by Yahoo Finance HERoes awards for their contributions to gender equality.

Read more about our approach to tackling domestic violence at sc.com/tacklingdomesticabuse and sc.com/toolkitdomesticabuse

Read more about our ethnicity targets at sc.com/ethnicity and access our toolkit for conversations about race at sc.com/toolkitrace

Principal Board decision: Sustainability as a pillar of our overall strategy

Stakeholder interests are a key consideration during Board decision-making. This includes decisions regarding the Group's purpose, values and strategy. An illustration of this is the Board's decision to make sustainability a pillar of our overall strategy.

Our refreshed strategic priorities link directly to our purpose to drive commerce and prosperity through our unique diversity. An important aspect of this is the way in which we approach sustainability in our own operations, in our communities and in how we conduct our business. During 2020, management presented to the Board a proposed near-to-medium term roadmap to build upon our existing sustainability credentials and raise our proﬁle with stakeholders, which the Board considered and agreed to.

As part of the consideration of this decision, the Board received material prepared by colleagues from across the organisation including our Sustainability, Corporate Affairs,

Brand & Marketing, Risk and Business teams, as well as appropriate client segments. The material included, among other relevant information, consideration of key stakeholder groups including our colleagues, clients, communities, civil society, regulators, and investors. The Board recognised the increased client demand for sustainable ﬁnance products, the potential for Standard Chartered to play a distinct role in enabling capital ﬂows to the markets where it matters most, and noted that sustainability is an increasingly high priority for other key stakeholders.

As part of considering and agreeing the proposed sustainability strategy, the Board highlighted the signiﬁcance of the Group communicating its sustainability successes to its stakeholders through enhanced disclosure and communication plans.

Further detail regarding the Group's refreshed strategic priorities can be found throughout the Strategic report.

60 Standard Chartered - Strategic Report 2020

Employees continued

Gender pay gap and equal pay	When the pay of men and women at the same level and in
We continue to analyse our gender pay gap for the UK,	the same business area are compared, our gender pay gaps
Hong Kong, Singapore, UAE and the US. The gender pay	are signiﬁcantly smaller. The remaining gaps exist due to
gap compares the average pay of men and women without	differences in the market pay level for different types of
accounting for some of the key factors which inﬂuence pay,	roles at the same level and in the same business areas,
including different roles, skills, seniority and market pay rates.	and differences in the relative positioning of the pay of
Our gender pay gaps are caused by there being fewer women	each role holder around the market benchmark.
in senior roles and in business areas where market rates of pay	Equal pay is a more detailed measure of pay equality and is
are highest.	a key commitment in our Fair Pay Charter. We analyse equal
With the exception of the mean hourly pay gap in UAE	pay during our annual performance and pay review process
and the mean bonus pay gap in the UK, our mean gender	to ensure equal pay for equal work.
pay gaps have remained ﬂat or reduced across all ﬁve	We have been reporting our gender pay gaps for a number
markets. We understand it will take time to see the level	of years and support initiatives that will enable a truly diverse
of change needed to signiﬁcantly reduce our gender pay	workforce. We responded to the UK Government consultation
gaps and we remain committed to our initiatives to support	on ethnicity pay gap reporting and are considering potential
gender diversity.	ways to draw from available data to inform our inclusion
	strategy. Obtaining signiﬁcant enough disclosure of ethnicity
	data remains a challenge and we are taking steps to
	encourage disclosure, where possible, so we can develop
	our approach.

2020 Gender pay gap	UK	Hong Kong	Singapore	UAE	US
Mean hourly pay gap	30%	20%	34%	29%	25%
Mean bonus pay gap	51%	35%	44%	52%	43%

Read more about this in our gender pay gap report at sc.com/genderpaygap

Female representation

Board

FemaleFemale

31% 4

(2019: 31%)	Male
9

2020

2019

Management Team and their direct reports

FemaleFemale

31.8% 41

(2019: 31%)	Male
88

2020

2019

Senior leadership

(Managing directors and band 4)

FemaleFemale

29.5% 1,236

(2019: 28.5%)	Male
2,960

2020

2019

All employees

FemaleFemale

45.4% 38,013

(2019: 46.1%)	Male
45,644

2020

2019

Standard Chartered - Strategic Report 2020

Strategic report Stakeholders and responsibilities

Sustainable and responsible business

Sustainability is embedded in our business, operations and communities through the three pillars of our sustainability framework - sustainable ﬁnance, responsible company and inclusive communities. This allows us to deliver on our purpose of driving commerce and prosperity through our unique diversity, in line with our valued behaviours and

our brand promise - to be Here for good.

Clients

Investors

Society

Our approach is framed around a sustainability philosophy that informs our decision-making, Sustainability Aspirations that provide tangible targets for sustainable outcomes aligned to the UN Sustainable Development Goals (SDGs), and Position Statements that set out our environmental and social client standards.

In 2020, we continued to integrate sustainability across the Group, incorporating selected Sustainability Aspirations metrics into the 2020 Group Scorecard to drive widespread awareness and support delivery. We continued to progress our management of climate change, including it as a material cross-cutting risk within our risk framework, via the provision of sustainable ﬁnance products and services, as well as making our ﬁrst purchase of offsets for our business travel emissions. We also measured the social and economic impacts of our lending to the infrastructure and manufacturing sectors in Ghana, and plan to use learnings from this study to guide our wider impact measurement strategy in 2021.

The Board is responsible for ensuring that high standards of responsible business are maintained and receives information to identify and assess risks and opportunities related to environmental and social matters, including climate change. Sustainability is overseen by the Board and its Brand, Values and Conduct Committee (BVCC), which reviews priorities and oversees the development of, and delivery against, public commitments.

At a management level, the CEO, Corporate & Institutional Banking and Commercial Banking is responsible for sustainable ﬁnance, which incorporates environmental and social risk management. The Group Head, Corporate Affairs, Brand & Marketing and Conduct, Financial Crime and Compliance leads a cross-business Sustainability Forum and dedicated sustainability team to develop and deliver the strategy and champion sustainability across the Group.

We continued to advance our ambition to become the world's most sustainable and responsible bank and the leading private sector catalyser of ﬁnance for the SDGs in Asia, Africa and the Middle East.

Further information on sustainability can be read in our standalone Sustainability Summary and Task Force on Climate-related Financial Disclosures reports at sc.com/ sustainabilitysummary and sc.com/tcfd. In 2021, we will provide additional ESG-related information to stakeholders and investors, including via Sustainable Accounting Standards Board (SASB) aligned disclosures.

See page 55 to read how engagement with stakeholders informs our approach to sustainable and responsible business.

Read more about our position statements:

sc.com/positionstatements

See pages 440 and 441 in the full annual report for a full list of our 2021 Sustainability Aspirations

62 Standard Chartered - Strategic Report 2020

Sustainable ﬁnance

Our Sustainability Aspirations focus on the areas we can have the most impact on sustainable development in our markets. In 2020, we updated our Sustainability Aspirations and set a new target to fund and facilitate $75 billion of sustainable infrastructure, clean tech and renewables between 2020 and December 2024, catalysing capital from across the ﬁnancial sector.

Clients

Investors

Society

91%

of our total Sustainable Finance assets are located in emerging markets

86%

In many of our markets, micro and small businesses are the powerhouses of the economy and are major drivers of job creation. Our Aspirations for small business lending ($15 billion Jan 2020-Dec 2024) and to microfinance ($3 billion Jan 2020-Dec 2024) are reﬂected in our asset base and our Sustainable Finance Impact Report. We have reached more than 1.3 million people through the loans we have provided to microfinance institutions in places like Nepal, Tanzania and Bangladesh. We also provided more than 20,000 SME loans in emerging markets including India, Kenya, Pakistan and

Sri Lanka.

In addition, our dedicated Sustainable Finance team is committed to scaling up sustainable ﬁnance and mobilising capital to the markets where it is needed most. We are growing our product portfolio to support sustainable development. Our Green and Sustainable Product Framework developed in collaboration with Sustainalytics, reviewed annually, sets out what qualifies as 'sustainable' and 'green' products and was updated in 2020.

Our ﬁrst annual Sustainable Finance Impact Report reveals the impact of our Sustainability Bond issued in 2019 and, for the ﬁrst time discloses the $3.9 billion of Sustainable Assets aligned to the UN's Sustainable Development Goals (SDGs) in our sustainable ﬁnance portfolio. These include loans for renewable energy, healthcare and education as well as microfinance and SME lending in low-income countries.

From July 2019 to July 2020, our green projects in our Sustainable Finance portfolio helped us to avoid 738,998 tonnes of CO2 emissions - the equivalent of 217,000 people's annual emissions in low and middle-income countries.

In response to the COVID-19 pandemic, we announced a $1 billion not-for-proﬁt facility to help clients produce goods and services to help in the ﬁght against COVID-19 and by year end had credit approved $579 million.

In 2021, we will continue to grow our sustainable ﬁnance proposition, and increase lending into areas aligned with the SDGs.

Read our Sustainable Finance impact report: sc.com/SFimpactreport

Read more about our 2020 Sustainability Aspirations performance at sc.com/sustainabilitysummary

See our 2021 Sustainability Aspirations on pages 440 and 441 in the full annual report

of our total Sustainable Finance assets are located in some of the world's least developed countries

Standard Chartered - Strategic Report 2020

Strategic report Stakeholders and responsibilities

Sustainable and responsible business continued

Sustainable ﬁnance continued

2020 Sustainability Aspirations:

Sustainable Finance1

Infrastructure2

Facilitate project ﬁnancing services for $40 billion of infrastructure projects that promote sustainable	Jan 2020-
development that align to our verified Green and Sustainable Product Framework3	Dec 2024

Climate change
Facilitate $35 billion worth of project ﬁnancing services, M&A advisory, debt structuring, transaction banking	Jan 2020-
and lending services for renewable energy that align to our verified Green and Sustainable Product Framework	Dec 2024

Develop a methodology to measure, manage and ultimately reduce the emissions related to the ﬁnancing of	Jan 2019-
our clients (Jan 2019-Dec 2020)			Dec 2020

Only provide ﬁnancial services to clients who are:4		Jan 2020-
• By Jan 2021, less than 100% dependent on earnings from thermal coal (based on % EBITDA at group level)	Jan 2030
• By Jan 2025, less than 60% dependent on earnings from thermal coal (based on % EBITDA at group level)
• By Jan 2027, less than 40% dependent on earnings from thermal coal (based on % EBITDA at group level)
• By Jan 2030, less than 10% dependent on earnings from thermal coal (based on % EBITDA at group level)

Entrepreneurs
Provide $15 billion of ﬁnancing to small business clients (Business Banking)	Jan 2020-
				Dec 2024
Provide $3 billion of ﬁnancing to microfinance institutions5	Jan 2020-
				Dec 2024

Commerce

Bank 10,000 of our clients' international and domestic networks of suppliers and buyers through banking the	Jan 2020-
ecosystem programmes			Dec 2024

Digital6
Roll out digital-only banks in a total of 12 markets		Jan 2020-
				Dec 2021
Double the number of clients we serve in Africa and the Middle East to 3.2 million7	Jan 2020 -
				Dec 2021
Impact ﬁnance
Introduce ESG scores for equity investments for Private Banking clients allowing them to tailor their investment	Jan 2020 -
choices in a sustainable manner			Dec 2020

Develop a tailored Impact Proﬁle for all Private Banking clients providing a framework that enables them to	Jan 2020-
understand their passions and harness capital market solutions to support the SDGs	Dec 2024

Increase the proportion of Private Bank investment solutions (across funds, bonds, structured products and	Jan 2020-
discretionary mandates) with a sustainability lens from below 10% to 50%8	Dec 2024

Concluded in the year	Ongoing aspirations
Achieved	Not achieved	On track	Not on track

The COVID-19 pandemic impacted the pace of delivering three new Aspirations set in 2020 focused on infrastructure, microfinance and retail. These Aspirations underpin sustainable development and we remain committed to progressing these targets in 2021

To avoid double counting with other Aspirations, the previous Aspiration to "Catalyse $5 billion of ﬁnance via blended ﬁnance transactions from 2020 - 2024" has been removed

Facilitated $2.4bn in 2020. Due to COVID-19 substantial infrastructure investments across many markets were delayed. We expect to see increased momentum from H2 2021 as infrastructure investment increases to support sustainable economic growth and COVID-19 economic recovery

In 2020, we ceased new business with four clients and are exiting these relationships subject to any outstanding contractual arrangements
5 2020: $509 million
6 These were originally merged into one Aspiration, however we have demerged them to allow accurate reporting of progress 7 2020: 500,000 new clients
8 The proportion of sustainable solutions grew to 6% in 2020 but remained below 10% due to dependencies on the availability of solutions in the market

64 Standard Chartered - Strategic Report 2020

Sustainable ﬁnance continued

Managing environmental and social risk

Responding to climate change

Our main impact on the environment and society is through the activities we ﬁnance. Our seven Position Statements outline the cross-sector standards we expect of ourselves and our clients, as well as sector-specific guidance for clients operating in sectors with a high potential environmental or social impact. The statements draw on International Finance Corporation Performance Standards, the Equator Principles (EP) and global best practice. Our prohibited activities list sets out what we do not ﬁnance and can be found at sc.com/prohibitedactivities.

We identify and assess environmental and social risks related to our Corporate & Institutional, Commercial and Business Banking clients, and embed our risk framework directly into our credit approval process. All relationship managers and credit ofﬁcers are offered training in assessing environmental and social risk against our criteria and have access to online resources.

In 2020, we launched an online learning tool to increase awareness of environmental and social risk management among client-facing employees. This training will become a mandatory for relevant employees in 2021.

Meanwhile, we reviewed 1,090 transactions that presented potential specific risks against our Position Statements.

We also reviewed all our Position Statements, and refreshed documents will be released in 2021.

We work with clients, regulators and peers across the ﬁnance sector to continuously improve environmental and social standards. We proactively engage with clients to mitigate risks and help them improve their environmental and social performance over time. Where this is not possible, transactions have been, and will continue to be, turned down.

We also achieved a number of milestones under our Chairmanship of the EP Association in 2020. These include the launch of the EP Association Strategy, publishing guidance on implementing EP during the pandemic, and publishing guidance on implementing EP4 including specific notes on climate change and human rights and indigenous people.

We consider climate change to be one of the greatest challenges facing the world today.

Since 2018, we have been working on aligning the emissions from both our own operations and our ﬁnancing activities to the Paris Agreement goal of below two degrees of global warming. In 2019, we set a target to achieve net zero emissions from our operations by 2030 and have made a strong start towards achieving this goal.

In 2020, we made strides towards bringing the management of climate change as a ﬁnancial and non-ﬁnancial risk within key Principal Risk Frameworks to the mainstream. This included extending climate risk governance across our markets and client segments.

We acknowledge that climate change is a shared global challenge and believe collaboration with clients, peer banks, industry experts and regulators is crucial. In 2020, we launched a four-year partnership with Imperial College London, through which we aim to strengthen our own resilience to climate risk and support our clients through their own low-carbon transitions. In December, we sponsored Imperial's research report and public webinar focused on energy transitions and the coal supply chain in India, designed to generate insights for ﬁnancial institutions and policymakers.

We also formed partnerships with Baringa and Munich Re to develop bespoke tools to strengthen our risk management infrastructure in response to the various regulatory requirements and forthcoming stress tests.

To build internal knowledge, we launched a Sustainable Finance Academy and new digital learning programmes for climate risk.

We have made disclosures consistent with the recommendations of the Task Force on Climate-related Financial Disclosures in a dedicated, standalone report. We believe this format provides information in a readily identiﬁable and accessible format for all interested stakeholders. This can be accessed at sc.com/tcfd.

Read more about our reporting against the

Equator Principles: sc.com/equatorprinciples

Sustainableª lending to EcoGreenº

As part of our sustainable ﬁnance efforts, we arranged EcoGreen's ﬁrst ever green loan. The China-based company, which produces chemicals using botanic essential oils from plants for the pharmaceutical, household, healthcare and personal care industries, borrowed $185 million in 2020. The loan was subject to a green ﬁnance framework - ensuring that funds are used for sustainability-based projects and initiatives.

Standard Chartered - Strategic Report 2020

Strategic report Stakeholders and responsibilities

Sustainable and responsible business continued

Responsible company

We strive to manage our business sustainably and	Promoting good conduct
responsibly, drawing on our purpose, brand promise,	Good conduct is crucial in delivering positive outcomes for our
valued behaviours and our Code of Conduct to make	clients, markets and stakeholders. In 2020, we enhanced our
the right decisions.			conduct risk management and built out approaches to risk
			identiﬁcation and mitigation.
			The Group Conduct Dashboard was rolled out to enhance
Clients			conduct risk monitoring, and results from an assessment
		of conduct risk management which focused on eight key
Regulators			conduct areas, indicated an improvement in the overall
		quality and consistency in the management of Conduct Risk
and governments			across the Group, regions and countries.
Suppliers			Our Group Code of Conduct (the Code) remains the central
		tool through which we set our conduct expectations.

Society			To reinforce the importance of the highest standards of
		behaviour, each year we ask our colleagues to recommit to

			the Code. In 2020, we refreshed the associated mandatory
			e-learning and 99.8 per cent of our colleagues completed
			the e-learning and recommitted to the Code.
2020 Sustainability Aspirations:
Responsible Company

Environment
Reduce annual greenhouse gas emissions (Scope 1 and 2) to net zero by 2030 with an interim target:	Jan 2019-
Dec 2025: 60,000 tCO2e				Dec 2030
Source all energy from renewable sources			Jan 2020-
				Dec 2030
Reduce our Scope 3 value chain emissions from business travel by 7%		Jan 2020-
				Dec 2020
Introduce an emissions offset programme for Scope 3 travel emissions		Jan 2020-
				Dec 2020
Join the Climate Group 'RE100'1				Jan 2020-
				Dec 2020
Reduce annual ofﬁce paper use by 57% to 10kg/FTE/year2		Jan 2012-
				Dec 2020
Reduce waste per colleague to 40kg/FTE/year			Jan 2020-
				Dec 2025
Recycle 90% of waste3				Jan 2020-
				Dec 2025
Conduct
Learn from risks identiﬁed through concerns raised via our Speaking Up programme and conduct plans and	Ongoing
publish an annual Threats and Themes Report
Develop enhanced internal policies and guidelines on privacy, data ethics and algorithmic fairness, and embed	Jan 2020-
a new governance framework for all data-related risks		Dec 2021
Financial crime compliance
Tackle ﬁnancial crimes such as the laundering of the proceeds of the illegal wildlife trade by contributing to the	Ongoing
development of red ﬂags for ﬁnancial ﬂows, training frontline staff to identify potential suspicious transactions
and participating in public-private partnerships to share intelligence and good practices
Deliver at least 18 correspondent banking academies			Jan 2020-
				Dec 2020
Concluded in the year	Ongoing aspirations
Achieved Not achieved	On track	Not on track

RE100 was closed to new ﬁnancial sector participants while they reviewed their entry criteria in 2020. We are committed to joining in 2021
2 2020: 11.2kg/FTE/year, 2019: 16.96kg/FTE/year
3 2020: 23% recycled

66 Standard Chartered - Strategic Report 2020

Responsible Company

In 2021, our focus is on making conduct risk management an integral component of the Enterprise Risk Management Framework and ensure Conduct Risk is considered as part of each principal risk type (PRT). This is to reﬂect the overarching nature of Conduct Risk and recognise that it can manifest from risks and events which occur under other PRTs.

See page 48 for more on our

Conduct Risk Framework

Speaking Up

Speaking Up is our conﬁdential whistleblowing programme. It includes independent and secure channels for anyone - employees, contractors, suppliers and members of the public

- to raise concerns.

During 2020, 1,209 concerns were raised through Speaking Up, of which 474 were within scope (or in process of triage) of the programme and investigated or resolved. Themes included employee fraud, anti-bribery and corruption (ABC), and information and cyber security.

99.8%

of employees recommitted to the Group Code of Conduct in 2020.

Speaking Up cases

We received 110 disclosures referencing COVID-19 related matters, including concerns around work arrangements, work environment and performance pressure. However, there was a decline in the use of Speaking Up in mid-2020 when pandemic working arrangements were in place. We believe this to be in line with peers and due to home working reducing visibility of misconduct, and more communications over recorded platforms rather than face-to-face.

During the period, 338 cases were closed following investigation (these included cases raised in 2020 as well as those raised in prior years), of which 206 were substantiated while 132 were closed as unsubstantiated.

A range of corrective actions were taken, including process improvements, targeted coaching and training and, for

63 cases, disciplinary actions ranging from verbal or written warning to dismissals.

Results from our 2020 My Voice survey demonstrate conﬁdence in the programme with 87 per cent of employees conﬁrming they would be comfortable in speaking up if they see a violation of Standard Chartered's policies, valued behaviours or the Code. However, this was marginally down from 91 per cent in 2019. We are working to improve our Speaking Up programme by partnering with a leading whistleblowing charity to provide an advice hotline and increasing the number of advocates who work with country management teams to support employees. In 2021, we will also be rolling out an enhanced framework to identify and support staff who are at high risk of being victimised for speaking up.

			Closed3
Year	Total raised1	In scope2	Substantiated4	Unsubstantiated
2020	1,209	474	206	132
2019	1,382	381	263	189
2018	1,473	589	306	275
2017	1,183	460	201	296

1 Total concerns raised within the reporting year

A concern under the FCA whistleblowing rules that is raised within the reporting year and investigated under the Speaking Up programme. For purposes of this report, this number also includes any cases pending triage assessment at the point of reporting.

This represents all cases closed within the reporting year. This includes cases that were raised in the reporting year and in previous years
4 Closed and with sufﬁcient evidence supporting the original allegation(s)

Case numbers reported in prior years differ from those reported in this period due to closed cases being either reclassified, based on new information, or updated for administrative reasons.

Download our Group Code of Conduct at sc.com/codeofconduct and visit sc.com/speakingup to ﬁnd more about how our Speaking Up programme works

Standard Chartered - Strategic Report 2020

Strategic report Stakeholders and responsibilities

Sustainable and responsible business continued

Responsible company continued

Fighting ﬁnancial crime

Respecting human rights

We believe partnering to ﬁght ﬁnancial crime is the best way to protect our business, clients and wider communities. By cutting off funding sources, we help make the ﬁnancial system a hostile environment for criminals and support positive economic development in our markets.

We have safeguards in place to address threats including money laundering, terrorist ﬁnancing, sanctions compliance breaches, bribery and other forms of corruption. Our Conduct, Financial Crime & Compliance (CFCC) team leads our risk management activities, which include adhering to anti- money laundering and sanctions policies and applying controls such as client due-diligence screening and monitoring. See the Risk review section on page 256

in the full annual report for more on how we manage Financial Crime Risk.

In 2020, due to COVID-19, we identiﬁed a new range of emerging risks. Our CFCC experts were able to identify red ﬂags in relation to fraud, money laundering, bribery and corruption. Our in-depth knowledge allows us to share insights with our clients, employees and partners. Despite the pandemic impacting our ability to physically hold Correspondent Banking Academies, we held academies virtually - allowing greater participation. Besides our response to the pandemic we have continued to strengthen our controls by investing in innovation and technology.

Anti-bribery and corruption (ABC) policies aim to prevent employees, or third parties working on our behalf, from participating in active or passive bribery or corruption,

or from making facilitation payments. In 2020, 99.9 per cent of employees completed ABC, anti-money laundering and sanctions and fraud training. By working with our client banks, we share best practice on controls for managing Financial Crime Risk and are able to build a strong network to keep criminal activity out of the ﬁnancial system. In 2020, we surpassed our Aspiration for ﬁnancial crime compliance, delivering 18 training sessions to more than 2,900 people from more than 500 client banks in 70 countries through our Correspondent Banking Academies.

In 2021, we will continue to adapt our controls to emerging threats by making sure we have highly trained and experienced employees working with new technology to detect abuse of the ﬁnancial system. We will also continue to partner with, and educate, peer banks and clients to help them detect ﬁnancial crime risks.

For more visit

sc.com/ﬁghtingﬁnancialcrime

We are committed to respecting human rights and ensuring they are not adversely impacted in our role as an employer, ﬁnancial services provider and procurer of goods and services. We recognise that our footprint and supply chain give us the opportunity to raise awareness of human rights and modern slavery in a wide range of markets and industries.

Our Position Statement on Human Rights outlines our approach, reﬂecting frameworks including the International Bill of Human Rights, the UN Guiding Principles and the UK Modern Slavery Act. This is embedded across a range of internal policies and risk management frameworks, including our Group Code of Conduct and Supplier Charter.

Our Modern Slavery Statement, approved by the Board, details the actions we are taking to tackle modern slavery and human trafﬁcking. In 2020, this included an update of our framework and processes within our supply chain, and a feasibility analysis on extending our living wage commitment to non-employed and third-party workers.

In 2020, we began a review of our Human Rights Position Statement which informs our policies in this area. We expect to ﬁnish the review in early 2021, following consultation with external stakeholders.

Read our 2020 Modern Slavery Statement at sc.com/modernslavery

Managing our environmental footprint

We are committed to improving our environmental footprint and reducing the direct impact of our branches and ofﬁces. To do this, we measure and manage energy and water efﬁciency, greenhouse gas (GHG) emissions and paper use closely, verifying our performance through third parties.

We also measure the amount of non-hazardous waste our branches and ofﬁces generate and recycle. We do not produce or handle material quantities of this and therefore do not report on it.

Our reporting criteria set out the principles and methodology for measuring our emissions. Our Scope 1 and 2 emissions, as well as water and waste data, are independently assured by Global Documentation.

Through our Sustainability Aspirations, we have set ambitious targets to achieve net zero emissions and only use renewable energy sources by 2030. We are increasing our use of renewable energy to meet these challenging targets.

68 Standard Chartered - Strategic Report 2020

Responsible company continued

We have measured and reduced our GHG emissions since	Annual energy use of our property
2008 and have adopted science-based targets (SBT) to	(kWh/m2/year)
signiﬁcantly reduce our carbon footprint. In 2020, we

continued to reduce our property portfolio footprint despite	2020 Actual
	205
a drop in occupancy due to the pandemic, with our GHG
2020 Target		215
emissions falling 19 per cent year-on-year.

Water availability is a growing challenge in our markets. Although we did not face any issues sourcing water in 2020, we continue to take a sustainable and responsible approach to managing water across the Group and reducing consumption year-on-year.

Our aim is to reduce paper use across our operations and since 2012 we have reduced consumption by 52 per cent against a target of 57 per cent. In 2020, the Group Chief Executive encouraged employees around the world to go paperless. In 2021, we will continue to strive to hit our target.

We are committed to reducing waste in all its forms and in 2019, set ambitious targets to reduce waste to 40 kilograms per employee and recycle 90 per cent of our waste by 2025. We are proud to have certified more than 50 of our largest properties as 'single-use plastic free'. Non-recyclable waste is sent for energy generation or compost to limit our impact on landﬁll.

In 2021, we will focus on removing more single-use plastics and reducing waste from all our operations, improving our clean energy procurement and taking the necessary steps to meet our SBTs for net zero greenhouse gas emissions.

2008	494

59%

Since 2008

Read the independent assurance for our energy and greenhouse gas emissions (Scope 1 and 2) at sc.com/environmentalassurance

Innovating diesel reduction in Pakistan

Poweringª Pakistanº

We have traditionally relied heavily on diesel generators across many markets as a source of back-up power

to maintain operations. In 2020, our property team in Pakistan introduced supercapacitors as an alternative backup energy source. Supercapacitors have an advantage in storing peak power when you need it, without harmful carbon emissions. The proposition could be used across other markets to both assist our back-up power requirements and lower our carbon emissions.

Standard Chartered - Strategic Report 2020

Strategic report Stakeholders and responsibilities

Sustainable and responsible business continued

Inclusive communities

We aim to create more inclusive economies by sharing our expertise and developing community programmes that transform lives.

Regulators

and governments

Society

In 2020, we increased support for communities in response to the COVID-19 pandemic. We invested $95.7 million, including our COVID-19 Global Charitable Fund, in communities and 26 per cent of employees took part in volunteering. Despite restrictions preventing volunteering, employees still contributed more than 36,000 volunteering days to communities, many taking advantage of new opportunities for virtual volunteering.

Vulnerable and disadvantaged young people have been hit hard economically by the pandemic. Through Group donations and fundraising from our employees and clients, we surpassed our $50 million target and provided funding of $52.8 million through our COVID-19 Global Charitable Fund. This includes donations of $27.8 million to partners supporting emergency relief across 59 markets. The remaining $25 million will support youth-focused economic recovery projects as part

of Futuremakers by Standard Chartered (Futuremakers). This increases our total commitment to Futuremakers to $75 million between 2019 and 2023. Fundraising from employees and partners in 2020 raised $3.6 million to support Futuremakers, including support for COVID-19 economic recovery. For a full breakdown of our 2020 fundraising and donations, see sc.com/sustainabilitysummary.

We reached more than 168,000 young people through Futuremakers programmes in 2020, and more than 366,000 young people between 2019 and 2020 across 35 markets. The Standard Chartered Foundation is our lead partner in delivering Futuremakers and is the primary recipient of donations from the Group. Several Group Management Team members are Directors of the Standard Chartered Foundation. Read more at sc.com/scfoundation. The rollout of programmes continued in 2020 despite the challenging environment. While some were delayed or paused, many programmes overcame COVID-19 restrictions by moving to alternative methods of delivery.

Goal, our girls' empowerment programme, replaced its sports-based sessions with a new digital curriculum delivered through mobiles, radio or online. In 2020, Goal reached more than 56,000 girls and young women, and has reached more than 645,000 girls between 2006 and 2020.

Youth to Work reached 19,335 young people through employability projects and we reached 6,419 young people and small businesses through entrepreneurship activities.

2020 Sustainability Aspirations: Inclusive communities

Community Engagement

Invest 0.75% of prior year operating proﬁt (PYOP) in our communities	Jan 2006-
				Dec 2020
Raise $75m for Futuremakers by Standard Chartered	Jan 2019-
				Dec 2023
Education: Reach one million girls and young women through Goal1	Jan 2006-
				Dec 2023
Employability: Reach 100,000 young people		Jan 2019-
				Dec 2023
Entrepreneurship: Reach 50,000 young people, and micro and small businesses	Jan 2019-
				Dec 2023
Support the development of the Vision Catalyst Fund	Jan 2019-
				Dec 2020
Increase participation for employee volunteering to 55%	Jan 2020-
				Dec 2023
Concluded in the year	Ongoing aspirations
Achieved	Not achieved	On track	Not on track

1 2020: 56,049 girls participated in Goal; 2006-2020: 646,438 girls participated in Goal

70 Standard Chartered - Strategic Report 2020

Inclusive communities continued

During 2020, our inaugural Futuremakers Forum involving business leaders, policy experts, clients and Futuremakers participants came up with recommendations for greater youth economic inclusion. These included improving connections between young people and employers and addressing the challenges of ﬁnancing for young entrepreneurs.

We marked the ﬁnal year of our Seeing is Believing partnership with the International Agency for the Prevention of Blindness in 2020. Between 2003 and 2020, the global initiative to tackle avoidable blindness raised $104 million through fundraising and Group matching, and reached more than 250 million people. We continued our support through the development of the Vision Catalyst Fund and by helping people with visual impairments through Futuremakers.

In 2021, we will continue to roll-out Futuremakers programmes. To remain on track to deliver its aspiration, Goal will combine in-person and digital learning to reach more girls. We will continue to implement the results framework and host a second Futuremakers Forum, focused on the future of work.

Our community expenditure 2020

1.	Leverage	7.4%
2.	Management costs	4.6%
3.	Gifts in kind	1.2%
4.	Cash contributions	74.7%
5.	Employee time (non- cash item)	12.1%

1. Leverage data relates to the proceeds from staff and other fundraising activity

	1
5	2	3

		4
£95.7m

Futuremakers

Fulﬁllingª dreams through Futuremakersº

Rose is fulﬁlling her dream of running an interior design business thanks to Futuremakers by Standard Chartered, our global initiative to tackle inequality. Despite a childhood spent on the streets of Nairobi, Rose beat the odds to get an education.

She joined Goal - Futuremakers' education programme for girls

learning valuable leadership and life skills through football. She also accessed vocational training to build a new future. Today, Rose is a leader in her community and, as a Goal coach, she supports other vulnerable girls. She is completing her Diploma in Interior Design while running her own business and has put her sewing skills to good use by making masks for local people during COVID-19.

Standard Chartered - Strategic Report 2020

Strategic report Stakeholders and responsibilities

Non-ﬁnancial information statement

This table sets out where shareholders and stakeholders can ﬁnd information about key non-ﬁnancial matters in this report, in compliance with the non-ﬁnancial reporting requirements contained in sections 414CA and 414 CB of the Companies Act 2006. Further disclosures are available on sc.com and in our 2020 Sustainability Summary.

	Where to read more in this report about our policies and impact (including risks,
Reporting requirement	policy embedding, due diligence and outcomes)	Page
Environmental matters	Risk review and Capital review
	• Group Chief Risk Ofﬁcer's review	47
	Sustainable and responsible business
	•	Sustainable ﬁnance	63
	• Managing environmental and social risks	65
	• Responding to climate change	65
	• Managing our environmental footprint	68
	Directors' report
	• Environmental impact of our operations	176 in the full annual report
	Supplementary sustainability information
	•	Environment performance data*	438 in the full annual report
Employees	Engaging stakeholders
	•	Employees	58
	• Gender pay gap and equal pay	61
	Sustainable and responsible business
	•	Speaking Up	67
	Directors' report
	• Employee policies and engagement	171 in the full annual report
	•	Health and Safety	173 in the full annual report
	Supplementary people information	435 in the full annual report
Human Rights	Engaging stakeholders
	•	Suppliers	57
	Sustainable and responsible business
	•	Respecting human rights	68
Social matters	Engaging stakeholders
	•	Society	57
	Sustainable and responsible business
	•	Inclusive communities	70
Anti-corruption and bribery	Group Chief Risk Ofﬁcer's review	47
	Sustainable and responsible business
	•	Promoting good conduct	66
	•	Speaking Up	67
	•	Fighting ﬁnancial crime	68
	Director's report
	•	Political donations	169 in the full annual report
Description of business model	Business model	20
Non-ﬁnancial KPIs	Employees
	•	Employee engagement (eNPS)	58
	• Gender diversity in senior roles	59
	•	Female representation	61
	• Training on anti-bribery,anti-corruption and anti-money laundering	68
	• Recommitment to the Code of Conduct	66
	Society
	• Sustainability Aspirations achieved or on track	54
	• Energy, water, waste and emissions	68
	•	Community expenditure	71
	• Reach of community programmes	70
Principal risks and uncertainties	Risk review and capital review	179 in the full annual report

Visit sc.com/environmentcriteria for our carbon emissions criteria and sc.com/environmentalassurance for Global Documentation's Assurance Statement of our Scope 1 and 2 emissions, and waste and water data

72 Standard Chartered - Strategic Report 2020

Underlying versus statutory results reconciliations

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

Operating income by client segment

			2020
	Corporate &
	Institutional	Retail	Commercial	Private	Central &
	Banking	Banking	Banking	Banking	other items	Total
	$million	$million	$million	$million	$million	$million
Underlying operating income	7,214	5,013	1,409	540	589	14,765
Restructuring	11	-	29	-	(13)	27
Other items	-	-	-	-	(38)	(38)
Statutory operating income	7,225	5,013	1,438	540	538	14,754
			2019 (Restated)¹

	Corporate &
	Institutional	Retail	Commercial	Private	Central &
	Banking	Banking	Banking	Banking	other items	Total
	$million	$million	$million	$million	$million	$million
Underlying operating income	7,074	5,186	1,574	577	860	15,271
Restructuring	146	-	4	-	(4)	146
Other items	-	-	-	-	-	-
Statutory operating income	7,220	5,186	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
	Greater China &	ASEAN &	Africa &	Europe &	Central &
	North Asia	South Asia	Middle East	Americas	other items	Total
	$million	$million	$million	$million	$million	$million
Underlying operating income	6,016	4,366	2,364	1,922	97	14,765
Restructuring	82	(4)	(2)	-	(49)	27
Other items	(43)	-	-	-	5	(38)
Statutory operating income	6,055	4,362	2,362	1,922	53	14,754
			2019

	Greater China &	ASEAN &	Africa &	Europe &	Central &
	North Asia	South Asia	Middle East	Americas	other items	Total
	$million	$million	$million	$million	$million	$million
Underlying operating income	6,155	4,213	2,562	1,725	616	15,271
Restructuring	87	(2)	-	-	61	146
Other items	-	-	-	-	-	-
Statutory operating income	6,242	4,211	2,562	1,725	677	15,417

Proﬁt before taxation (PBT)

				2020
				Net loss on		Share of
		Provision for			proﬁts of
			businesses		PT Bank
		regulatory		disposed/	Goodwill	Permata Tbk
	Underlying	matters Restructuring	held for sale	impairment	joint venture	Statutory
	$million	$million	$million	$million	$million	$million	$million
Operating income	14,765	-	27	(38)	-	-	14,754
Operating expenses	(10,142)	14	(252)	-	-	-	(10,380)
Operating proﬁt/(loss) before impairment	4,623	14	(225)	(38)	-	-	4,374
losses and taxation
Credit impairment	(2,294)	-	(31)	-	-	-	(2,325)
Other impairment	15	-	(113)	-	(489)	-	(587)
Proﬁt from associates and joint ventures	164	-	(13)	-	-	-	151
Proﬁt/(loss) before taxation	2,508	14	(382)	(38)	(489)	-	1,613

Standard Chartered - Strategic Report 2020

Strategic report Underlying versus statutory results

Proﬁt before taxation (PBT) continued

				2019
				Net loss on		Share of
		Provision for			proﬁts of
			businesses		PT Bank
		regulatory		disposed/	Goodwill	Permata Tbk
	Underlying	matters	Restructuring	held for sale	impairment	joint venture	Statutory
	$million	$million	$million	$million	$million	$million	$million
Operating income	15,271	-	146	-	-	-	15,417
Operating expenses	(10,409)	(226)	(298)	-	-	-	(10,933)
Operating proﬁt/(loss) before impairment
losses and taxation	4,862	(226)	(152)	-	-	-	4,484
Credit impairment	(906)	-	(2)	-	-	-	(908)
Other impairment	(38)	-	(98)	-	(27)	-	(163)
Proﬁt from associates and joint ventures	254	-	(2)	-	-	48	300
Proﬁt/(loss) before taxation	4,172	(226)	(254)	-	(27)	48	3,713

Proﬁt before taxation (PBT) by client segment

			2020
	Corporate &
	Institutional	Retail	Commercial	Private	Central &
	Banking	Banking	Banking	Banking	other items	Total
	$million	$million	$million	$million	$million	$million
Operating income	7,214	5,013	1,409	540	589	14,765
External	7,083	4,322	1,320	374	1,666	14,765
Inter-segment	131	691	89	166	(1,077)	-
Operating expenses	(4,178)	(3,701)	(878)	(476)	(909)	(10,142)
Operating proﬁt/(loss) before
impairment losses and taxation	3,036	1,312	531	64	(320)	4,623
Credit impairment	(1,237)	(715)	(316)	(2)	(24)	(2,294)
Other impairment	42	(10)	(1)	-	(16)	15
Proﬁt from associates and joint ventures	-	-	-	-	164	164
Underlying proﬁt/(loss) before taxation	1,841	587	214	62	(196)	2,508
Restructuring	(164)	(50)	(57)	(11)	(100)	(382)
Goodwill impairment & other items	-	-	-	-	(513)	(513)
Statutory proﬁt/(loss) before taxation	1,677	537	157	51	(809)	1,613
			2019 (Restated)¹

	Corporate &
	Institutional	Retail	Commercial	Private	Central &
	Banking	Banking	Banking	Banking	other items	Total
	$million	$million	$million	$million	$million	$million
Operating income	7,074	5,186	1,574	577	860	15,271
External	7,264	4,236	1,618	329	1,824	15,271
Inter-segment	(190)	950	(44)	248	(964)	-
Operating expenses	(4,310)	(3,759)	(953)	(514)	(873)	(10,409)
Operating proﬁt/(loss) before
impairment losses and taxation	2,764	1,427	621	63	(13)	4,862
Credit impairment	(475)	(336)	(122)	31	(4)	(906)
Other impairment	(32)	2	-	-	(8)	(38)
Proﬁt from associates and joint ventures	-	-	-	-	254	254
Underlying proﬁt before taxation	2,257	1,093	499	94	229	4,172
Restructuring	(110)	(63)	(11)	(11)	(59)	(254)
Goodwill impairment & other items	-	-	-	-	(205)	(205)
Statutory proﬁt/(loss) before taxation	2,147	1,030	488	83	(35)	3,713

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

74 Standard Chartered - Strategic Report 2020

Proﬁt before taxation (PBT) by region

			2020
	Greater China &	ASEAN &	Africa &	Europe &	Central &
	North Asia	South Asia	Middle East	Americas	other items	Total
	$million	$million	$million	$million	$million	$million
Operating income	6,016	4,366	2,364	1,922	97	14,765
Operating expenses	(3,739)	(2,618)	(1,683)	(1,383)	(719)	(10,142)
Operating proﬁt/(loss) before
impairment losses and taxation	2,277	1,748	681	539	(622)	4,623
Credit impairment	(352)	(1,132)	(654)	(161)	5	(2,294)
Other impairment	(53)	163	(14)	8	(89)	15
Proﬁt from associates and joint ventures	163	-	-	-	1	164
Underlying proﬁt/(loss) before taxation	2,035	779	13	386	(705)	2,508
Restructuring	(92)	(42)	(88)	(45)	(115)	(382)
Goodwill impairment & other items	(43)	-	-	-	(470)	(513)
Statutory proﬁt/(loss) before taxation	1,900	737	(75)	341	(1,290)	1,613
			2019
	Greater China &	ASEAN &	Africa &	Europe &	Central &
	North Asia	South Asia	Middle East	Americas	other items	Total
	$million	$million	$million	$million	$million	$million
Operating income	6,155	4,213	2,562	1,725	616	15,271
Operating expenses	(3,771)	(2,681)	(1,747)	(1,470)	(740)	(10,409)
Operating proﬁt/(loss) before
impairment losses and taxation	2,384	1,532	815	255	(124)	4,862
Credit impairment	(194)	(506)	(132)	(98)	24	(906)
Other impairment	(5)	(1)	1	-	(33)	(38)
Proﬁt from associates and joint ventures	247	-	-	-	7	254
Underlying proﬁt/(loss) before taxation	2,432	1,025	684	157	(126)	4,172
Restructuring	(138)	(34)	(18)	(34)	(30)	(254)
Goodwill impairment & other items	-	48	-	-	(253)	(205)
Statutory proﬁt/(loss) before taxation	2,294	1,039	666	123	(409)	3,713

Return on tangible equity (RoTE)

			2020
	Corporate &
	Institutional	Retail	Commercial	Private	Central &
	Banking	Banking	Banking	Banking	other items	Total
	%	%	%	%	%	%
Underlying RoTE	6.6	6.5	3.4	4.8	(12.0)	3.0
Provision for regulatory matters	-	-	-	-	0.2	-
Restructuring
Of which: Income	0.1	-	0.7	-	(0.2)	0.1
Of which: Expenses	(0.4)	(0.8)	(1.0)	(1.2)	(1.0)	(0.7)
Of which: Credit impairment	-	-	(0.7)	-	-	(0.1)
Of which: Other impairment	(0.5)	-	(0.2)	-	(0.1)	(0.3)
Of which: Proﬁt from associates	-	-	-	-	(0.2)	-
and joint ventures
Net loss on businesses disposed/	-	-	-	-	(0.6)	(0.1)
held for sale
Goodwill impairment	-	-	-	-	(7.3)	(1.3)
Share of proﬁts of PT Bank	-	-	-	-	-	-
Permata Tbk joint venture
Tax on normalised items	0.3	0.2	0.3	0.4	0.1	0.3
Statutory RoTE	6.1	5.9	2.5	4.0	(21.1)	0.9

Standard Chartered - Strategic Report 2020

Strategic report Underlying versus statutory results

Return on tangible equity (RoTE) continued

			2019 (Restated)¹
	Corporate &
	Institutional	Retail	Commercial	Private	Central &
	Banking	Banking	Banking	Banking	other items	Total
	%	%	%	%	%	%
Underlying RoTE	8.5	12.7	7.4	7.3	(5.1)	6.4
Provision for regulatory matters	-	-	-	-	(3.1)	(0.6)
Restructuring
Of which: Income	0.8	-	0.1	-	-	0.4
Of which: Expenses	(0.8)	(1.0)	(0.3)	(1.2)	(0.6)	(0.8)
Of which: Credit impairment	-	-	-	-	-	-
Of which: Other impairment	(0.5)	-	-	-	(0.1)	(0.3)
Of which: Proﬁt from associates
and joint ventures	-	-	-	-	-	-
Net loss on businesses disposed/
held for sale	-	-	-	-	-	-
Goodwill impairment	-	-	-	-	(0.4)	(0.1)
Share of proﬁts of PT Bank
Permata Tbk joint venture	-	-	-	-	0.7	0.1
Tax on normalised items	-	0.2	0.1	0.3	(2.9)	(0.3)
Statutory RoTE	8.0	11.9	7.3	6.4	(11.5)	4.8

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

Earnings per ordinary share (EPS)

					2020
					Gains
					arising on
		Provision for			repurchase of
				senior and	Net loss on		Tax on
		regulatory		Proﬁt from subordinated	sale of	Goodwill	normalised
	Underlying	matters Restructuring joint venture	liabilities	businesses	impairment	items	Statutory
	$ million	$ million	$ million	$ million	$ million	$ million	$ million	$ million	$ million
Proﬁt for the year
attributable to ordinary	1,141	14	(382)	-	-	(38)	(489)	83	329
shareholders
Basic - Weighted average	3,160								3,160
number of shares (millions)
Basic earnings per ordinary	36.1								10.4
share (cents)
					2019
					Gains
					arising on
		Provision for			repurchase of	Net loss on		Tax on
				senior and
		regulatory		Proﬁt from	subordinated	sale of	Goodwill	normalised
	Underlying	matters	Restructuring	joint venture	liabilities	businesses	impairment	items	Statutory
	$ million	$ million	$ million	$ million	$ million	$ million	$ million	$ million	$ million
Proﬁt for the year
attributable to ordinary
shareholders	2,466	(226)	(254)	48	-	-	(27)	(152)	1,855
Basic - Weighted average
number of shares (millions)	3,256								3,256
Basic earnings per ordinary
share (cents)	75.7								57.0

76 Standard Chartered - Strategic Report 2020

Alternative performance measures

An alternative performance measure is a ﬁnancial measure of historical or future ﬁnancial performance, ﬁnancial position, or cashﬂows, other than a ﬁnancial measure deﬁned or specified in the applicable ﬁnancial reporting framework. The following are key alternative performance measures used by the Group to assess ﬁnancial performance and ﬁnancial position.

Measure	Deﬁnition
Constant currency basis	A performance measure on a constant currency basis is presented such that comparative
	periods are adjusted for the current year's functional currency rate. The following balances
	are presented on a constant currency basis when described as such:
	•	Operating income
	•	Operating expenses
	•	Proﬁt before tax
	• RWAs or Risk-weighted assets
Underlying	A performance measure is described as underlying if the statutory result has been adjusted
	for restructuring and other items representing proﬁts or losses of a capital nature; amounts
	consequent to investment transactions driven by strategic intent; and 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 performance period-by-period. A reconciliation between
	underlying and statutory performance is contained in Note 2 to the ﬁnancial statements.
	The following balances and measures are presented on an underlying basis when described
	as such:
	•	Operating income
	•	Operating expense
	•	Proﬁt before tax
	• Earnings per share (basic and diluted)
	• Cost-to-income ratio
	•	Jaws
	• RoTE or Return on tangible equity
Advances-to-deposits/customer	The ratio of total loans and advances to customers relative to total customer accounts,
advances-to-deposits (ADR) ratio	excluding approved balances held with central banks, conﬁrmed as repayable at the point
	of stress. A low advances-to-deposits ratio demonstrates that customer accounts exceed
	customer loans resulting from emphasis placed on generating a high level of stable funding
	from customers.
Cost-to-income ratio	The proportion of total operating expenses to total operating income.
Cover ratio	The ratio of impairment provisions for each stage to the gross loan exposure for each stage.
Cover ratio after collateral/	The ratio of impairment provisions for stage 3 loans and realisable value of collateral held
cover ratio including collateral	against these non-performing loan exposures to the gross loan exposure of stage 3 loans.
Gross yield	Statutory interest income divided by average interest earning assets.
Jaws	The difference between the rates of change in revenue and operating expenses. Positive jaws
	occurs when the percentage change in revenue is higher than, or less negative than, the
	corresponding rate for operating expenses.
Loan loss rate	Total credit impairment for loans and advances to customers over average loans and advances
	to customers.
Net tangible asset value per share	Ratio of net tangible assets (total tangible assets less total liabilities) to the number of ordinary
	shares outstanding at the end of a reporting period.
Net yield	Gross yield less rate paid.
NIM or Net interest margin	Net interest income adjusted for interest expense incurred on amortised cost liabilities used to
	fund the Financial Markets business, divided by average interest-earning assets excluding
	ﬁnancial assets measured at fair value through proﬁt or loss.

RAR per FTE or Risk adjusted revenue per full-time equivalent

Risk adjusted revenue (RAR) is deﬁned as underlying operating income less underlying impairment over the past 12 months. RAR is then divided by the 12 month rolling average full-time equivalent (FTE) to determine RAR per FTE.

Rate paid	Statutory interest expense adjusted for interest expense incurred on amortised cost liabilities
	used to fund ﬁnancial instruments held at fair value through proﬁt or loss, divided by average
	interest-bearing liabilities.
RoE or Return on equity	The ratio of the current year's proﬁt available for distribution to ordinary shareholders to the
	weighted average ordinary shareholders' equity for the reporting period.

RoTE or Return on ordinary shareholders' tangible equity

The ratio of the current year's proﬁt available for distribution to ordinary shareholders to the weighted average tangible equity, being ordinary shareholders' equity less the average goodwill and intangible assets for the reporting period. Where a target RoTE is stated, this is based on proﬁt and equity expectations for future periods.

TSR or Total shareholder return

The total return of the Group's equity (share price growth and dividends) to investors.

Standard Chartered - Strategic Report 2020

Strategic report Viability statement

Viability statement

The directors are required to issue a viability statement regarding the Group, explaining their assessment of the prospects of the Group over an appropriate period of time and state whether they have reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due.

The directors are to also disclose the period of time for which they have made the assessment and the reason they consider that period to be appropriate.

In considering the viability of the Group, the directors have assessed the key factors, including the current and anticipated impact of COVID-19 likely to affect the Group's business model and strategic plan, future performance, capital adequacy, solvency and liquidity taking into account the emerging risks as well as the principal risks.

The viability assessment has been made over a period of three years, which the directors consider appropriate as it is within both the Group's strategic planning horizon and, the basis upon which its regulatory capital stress tests are undertaken and is representative of the continuous level of regulatory change affecting the ﬁnancial services industry. The directors will continue to monitor and consider the appropriateness of this period.

The directors have reviewed the Corporate Plan, the output of the Group's formalised process of budgeting and strategic planning. For the 2021 Corporate Plan, the forward-looking cash ﬂows and balances include the longer-term impact of COVID-19, specifically with regards to expected credit loss and the impact of global lower interest rates impact on revenues. The Corporate Plan is evaluated and approved each year by the Board with conﬁrmation from the Group Chief Risk Ofﬁcer that the Plan is aligned with the Enterprise Risk Management Framework and Group Risk Appetite Statement and considers the Group's future projections of proﬁtability, cash ﬂows, capital requirements and resources, liquidity ratios and other key ﬁnancial and regulatory ratios over the period.

The Corporate Plan details the Group's key performance measures, of forecast proﬁt, CET 1 capital ratio forecast, return on tangible equity forecasts, cost to income ratio forecasts and cash investment projections. The Board has reviewed the ongoing performance management process of the Group by comparing the statutory results to the budgets and Corporate Plan.

The Group performs enterprise-wide stress tests using a range of bespoke hypothetical scenarios that explore the resilience of the Group to shocks to its balance sheet and business model.

To assess the Group's balance sheet vulnerabilities and capital and liquidity adequacy, severe but plausible macro-ﬁnancial scenarios explore shocks that trigger one or more of:

Global slowdowns, including a China hard landing with spillovers within Asia and more broadly via ﬁnancial and other linkages
Sharp falls in world trade volumes, including the effects of an extreme worsening in and broadening of recent trade tensions.
Material and persistent declines in commodity prices
Financial market turbulence, including a generalised sharp fall in risky asset prices

This year, the primary focus has been on the evolving macro- ﬁnancial stress caused by the response of governments, businesses and individuals to COVID-19, 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 this 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 regulatory minimum capital and liquidity requirements.

To assess the Group's business model vulnerabilities, extreme and unlikely scenarios are explored that, by design, result in the Group's business model no longer being viable. Insights from these reverse stress tests can inform strategy, risk management and capital and liquidity planning.

Further information on stress testing is provided in the Risk management approach section (page 251) in the full annual report.

The Board Risk Committee ("BRC") exercises oversight on behalf of the Board of the key risks of the Group and makes recommendations to the Board on the Group's Risk Appetite Statement. These risks include, amongst others; credit, traded, capital and liquidity, operational and technology, reputational and sustainability, compliance, information and cyber security and model risks.

The BRC receives regular reports that inform it of the Group's key risks, as well as updates on the macroeconomic environment, geo-political outlook, market developments, and regulatory updates in relation to capital, liquidity and risk. A report on COVID-19 risks was received and discussed at each meeting. In 2020, the BRC had deeper discussions on: Blue Sky Thinking/Horizon Scanning, Aviation Finance, Enterprise Risk Review function, Safety and Security Risk, Climate Risk management, Technology Obsolescence, Client Service Resilience and Operational Resilience, Wholesale Credit, Transition from IBOR to risk-free rates, CCIB Fraud Risk Review and SC Ventures - Venture Building.

78 Standard Chartered - Strategic Report 2020

Based on the information received, the directors' considered the emerging risks as well as the principal risks in their assessment of the Group's viability, how these impact the risk proﬁle, performance and viability of the Group and any specific mitigating or remedial actions necessary.

For further details of information relevant to the directors, assessment can be found in the following sections of the annual report and accounts:

The Group's business model (pages 20 to 23) and Strategy (pages 24 to 27)
The Group's current position and prospects including factors likely to affect future results and development, together with a description of ﬁnancial and funding positions are described in the client segment reviews and regional reviews (pages 29 to 37)
An update on the key risk themes of the Group is discussed in the Group Chief Risk Ofﬁcer's review, found in the Strategic Report (pages 47 to 52)
The BRC section of the Directors' report (pages 115 to 120 in the full annual report)
The Group's Emerging Risks, sets out the key external factors that could impact the Group in the coming year (page 50 and pages 262 to 276 in the full annual report).
The Group's Enterprise Risk Management Framework details how the Group identiﬁes, manages and governs risk (pages 248 to 253 in the full annual report)
The Group's Risk proﬁle provides an analysis of our risk exposures across all major risk types (pages 254 to 276 in the full annual report)
The capital position of the Group, regulatory development and the approach to management and allocation of capital are set out in the Capital review (pages 277 to 283 in the full annual report)

Having considered all the factors outlined above, the directors conﬁrm that they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of the assessment up to 31 December 2023.

Our Strategic report from pages 1 to 79 has been reviewed and approved by the Board.

Bill Winters

Group Chief Executive

25 February 2021

Standard Chartered - Strategic Report 2020

Ourª $50 million COVID-19 Global Charitable Fundº

To help the world battle COVID-19, we launched a $50 million Global Charitable Fund to provide emergency support for the communities most impacted by the pandemic. In Nepal, our donation to the Pasang Lhamu Foundation provided immediate relief and recovery for Nepalese mountain communities that rely heavily on tourism for their livelihoods.

Read more online at sc.com/covid19relief

80 Standard Chartered - Strategic Report 2020

Governance

Group Chairman's governance overview
Corporate governance

86 Board of directors

Directors' remuneration report

Remuneration alignment

Group-wideremuneration in 2020

Shareholder information
Forward looking statements

Standard Chartered - Strategic Report 2020

Strategic report Governance overview

Group Chairman's governance overview

José Viñals

Group Chairman

"The Board continued to prioritise making Standard Chartered more proﬁtable and resilient, focusing on delivering safe and sustainable growth"

As I highlighted in my Group Chairman's statement earlier, 2020 was a year of extraordinary global turbulence. As COVID-19 and geopolitical events evolved across our footprint, the Board accelerated its interactions to ensure it was kept updated on the potential impact of the pandemic on our clients, communities, colleagues and our shareholders, whilst maintaining effective Board oversight and good corporate governance.

Despite the multifaceted uncertainties externally, the Board continued to prioritise making Standard Chartered more proﬁtable and resilient, focusing on delivering safe and sustainable growth. During the year, we discussed and approved our Corporate Plan and refreshed strategic priorities which set rightly ambitious, but achievable steps to make this possible. This requires a careful balancing act between business opportunities on the one hand, and risks and controls on the other. Ensuring good conduct and a culture of transparency and trust across the Group are also critical to the effective delivery of our strategic objectives.

The Board also spent considerable time discussing a number of material issues during the year. These included the withdrawal of the 2019 ﬁnal dividend and share buy-back, our ongoing response to COVID-19 and the support provided to clients, colleagues and communities, US/China relations, geopolitical and sanction challenges in relation to Hong Kong, changes in the risk proﬁle resulting from COVID-19, and the delivery of our digital ambitions.

The Board adapted rapidly to new ways of working, quickly adopting new technology for virtual meetings which were held frequently as the Board continued to monitor the evolving impact of COVID-19 across our markets. This required signiﬁcant change to planned Board agendas given the various markets in our footprint and locations of Board members. The Board worked hard to ensure that all items on the forward plan were covered during the year, including training and external speakers to share perspectives on matters of signiﬁcant strategic or geopolitical importance.

As the impact of the pandemic continued, we stepped up our engagement with our shareholders. In November, I hosted a virtual Investor Stewardship event, joined by all of our Committee Chairs and institutional investors representing a sizeable proportion of our equity, as well as several shareholder representative bodies. We updated investors on the key activities and areas of focus for the Board and each of the Committees, followed by a question and answer session.

We were sadly unable to allow shareholders to attend our Annual General Meeting (AGM) in May 2020 given the restrictions in place at the time in the UK. We intended to hold an in-person engagement event later in the year, however, as the pandemic continued, a physical meeting proved impossible. Instead, we hosted our ﬁrst ever virtual retail shareholder meeting in November, where shareholders were able to hear directly from me and Bill Winters, with all Board members available to participate in a virtual question and answer session. We were encouraged by the high level of participation and the positive feedback received, and following approval of the changes to our Articles of Association at the 2020 AGM, we will look to enhance virtual elements of our AGMs going forward.

Employee engagement was an area of additional focus during 2020, not least because of the impact of COVID-19 on employee welfare and ongoing changes in working arrangements, resulting in many colleagues working from home. The Board was keen to hear directly from employees and their experiences during these challenging times. Given travel restrictions, we were unfortunately unable to meet colleagues in our markets, but with the adoption of various technologies we hosted virtual townhall meetings in every major region in our footprint, with every Board member participating in at least one event. The response from our employees has been extremely positive and we will seek to build on this in the year ahead.

Improved linkages between the Group and subsidiary boards was a further key area of focus for us in 2020 following our Board effectiveness reviews last year and the creation of our Greater China & North Asia hub. We held regular meetings with subsidiary board members across our footprint to ensure a strong sharing of perspectives and the re-enforcing of linkages between the Group and all its key subsidiaries. I am pleased with the progress that has been made here.

As part of Board succession planning, we welcomed Phil Rivett to the Board in May following the retirement of Louis Cheung earlier in the year. In December, Phil succeeded Naguib Kheraj as Chair of the Audit Committee while Naguib succeeded David Conner as Chair of the Board Risk Committee. In September, we announced that Maria Ramos would join the Board, Audit Committee and Board Risk Committee in January 2021. Our succession planning discussions also led us to set ambitious aspirations in relation to the diversity of our Board both in terms of ethnicity and the wider diversity agenda. Following the recent announcement of Ngozi Okonjo-Iweala's appointment as Director-General of the World Trade Organisation from 1 March 2021, Ngozi will step down from the Board on 28 February 2021. Ngozi has made valuable contributions to the Board during her tenure and we wish her all the best in her new role.

The year ahead will remain challenging, and we have much to deliver. The Board has started the year focusing on the impact of climate change and our progress on our sustainability agenda. This is a good place to start the discussion for the future and the need to deliver in the changed environment in which we ﬁnd ourselves today.

If we execute our Corporate Plan well, leading with our purpose, we will be able to deliver not just a leaner, more proﬁtable and strongly capitalised bank in the coming years, but a better one. Better for our customers, our communities, our employees and our shareholders.

I would like to close by thanking my colleagues across the Group and my fellow Board members for their commitment and contribution over this intense and challenging period.

José Viñals

Group Chairman

82 Standard Chartered - Strategic Report 2020

Corporate governance

Code compliance

The UK Corporate Governance Code 2018 (the Code) and the Hong Kong Corporate Governance Code contained in Appendix 14 of the Hong Kong Listing Rules (HK Code) are the standards against which we measured ourselves in 2020.

The directors are pleased to conﬁrm that Standard Chartered PLC (the Company) continued to comply with the provisions set out in the Code and the HK Code for the year under review other than those identiﬁed below.

Throughout this corporate governance report we have provided an insight into how governance operates within the Group and how we have applied the principles set out in the Code and HK Code. Further detail is found within the corporate governance section in the full annual report.

The Group conﬁrms that it has adopted a code of conduct regarding directors' securities transactions on terms no less exacting than required by Appendix 10 of the Hong Kong Listing Rules. Having made specific enquiry of all directors, the Group conﬁrms that all directors have complied with the required standards of the adopted code of conduct.

Due to inadvertent oversight, the Company did not maintain on the Hong Kong Stock Exchange Limited's website an updated list of its directors identifying their roles and functions in October and November 2020, and therefore deviated from provision A.3.2 of the HK Code. The Company did maintain detail on its own website, a key aspect of the provision, and notified the market via regulatory announcements on the London Stock Exchange and Hong Kong Stock Exchange Limited. The deviation was rectified by uploading an updated list of its directors immediately upon discovering the oversight.

Copies of the UK Corporate Governance Code and the Hong Kong Corporate Governance Code can be found at frc.org.uk and hkex.com.hk respectively

Key areas of Board discussion during 2020

The Board starts each year discussing its key priorities which help shape the forward plan. The agenda is structured to create the right balance between standing items, governance requirements, and areas of strategic and operational focus.

Board meetings are an important mechanism to facilitate discussion and action. Some of the areas detailed on the following pages formed part of the standing agenda for each meeting, while others were reviewed periodically through the year. Directors are alert to their statutory duties and obligations, including those outlined under section 172 of the Companies Act 2006 (s.172), and this forms an integral part of director induction and annual training. Directors recognise the importance of promoting open dialogue and the need to foster positive stakeholder relationships.

The impact on stakeholders, their views and their feedback are collectively at the heart of Board discussions and actions, and directors spend signiﬁcant time interacting with key stakeholders to better understand their views and perspectives.

Some examples of this can be found in the s.172 disclosure on pages 54 to 71, within spotlight items on the following pages and on our website here sc.com/investors

The Board will continue to enhance ways to ensure that stakeholders are given consideration as part of the Board's decision-making.

COVID-19 response

The pandemic crisis has signiﬁcantly impacted people across the world, altering the way they work and how they live their lives.

Standard Chartered is no exception, with the ever- changing pandemic landscape affecting how we operate across all of our markets. During this challenging time, upholding effective governance remotely has been a key priority for the Board.

The Board has played a crucial role in steering the Group's COVID-19 response, assessing and evaluating potential actions. The Board's focus, as the pandemic continued throughout this year, has been on protecting and advancing the interests of shareholders while also ensuring the wellbeing of colleagues, supporting the Group's customers and clients, and showing solidarity with our communities. Most importantly, the Board has aspired to respond to this crisis, and everything it does, with humanity. In order to assist with this aim, the Board has delegated specific responsibilities to its committees and senior management team. This, combined with key stakeholder and expert opinions where necessary, ensured effective and considered decision-making during 2020.

This year the Group committed to providing $1 billion in not-for-proﬁt loans to help ﬁnance companies that supply goods and services in the battle with COVID-19. The Group also created a $50 million Global Charitable Fund to provide emergency support, and longer-term assistance, for the communities most impacted by the pandemic. Find out more about the Group's responses to COVID-19, and how we have supported our clients, colleagues and communities on pages 6 to 9.

The COVID-19 crisis has reinforced the relevance of the Group's strategic priorities and has not prevented the Board from interacting with key stakeholders. The Board continues to engage with stakeholders virtually, both individually and as a group. All Board and committee meetings since March 2020 were adapted into virtual meetings, utilising interactive technology to ensure agile and robust engagement. In addition, a number of virtual ad hoc Board meetings were held through the year to ensure key areas of discussion were not compromised. Weekly risk reports were produced and provided to the Board during the peak of the pandemic.

Standard Chartered - Strategic Report 2020

Strategic report Governance overview

Key areas of Board discussion during 2020 continued

SpotlightStakeholders

Refreshing the Group's strategic priorities	Clients
Providing oversight of the Group's strategy is a central role of the Board. In June 2020,
Suppliers
the Board held a two-day strategy session at which it focused on the evolution of
the Group strategy towards four strategic priorities: Digital Network; Afﬂuent; Mass
Retail; and Sustainability, underpinned by three critical enablers: People and Culture;	Regulators and governments
Innovation and Productivity and New Ways of Working. The Board spent time probing
and scrutinising the refreshed strategic priorities supporting the approach to extend	Society
the Group's existing scale and impact in a number of key areas, ultimately improving
our return on tangible equity and delivering beneﬁts to our key stakeholders.	Investors
Further detail on the Group's refreshed strategic priorities and critical enablers can be
found in the Strategic report on pages 26 and 27.	Employees

Spotlight

Board Diversity Policy

This year the Board introduced two progressive aspirations into the Board Diversity Policy, demonstrating the Board's commitment to reﬂecting the business and network we operate and to ensure that we better reﬂect the Group's aspirations in relation to other strands of diversity. These changes included the adoption of an aspiration that a minimum of 30 per cent of the Board is from an ethnic minority background and for the Board to align with other aspects of diversity. We will report on progress against these aspirations alongside the more long-standing aspirations in next year's report.

Stakeholders

Regulators and	Investors
governments	Employees
Society

Spotlight

COVID-19 risk reports

During the peak of the pandemic this year, the Board received weekly reports from the Group Chief Risk Ofﬁcer regarding the impact of COVID-19 on the ﬁnancial markets, the Group's client segments, product groups and markets as well as employees and the communities in which we operate. Updates were later incorporated into Board papers throughout the year.

Stakeholders

ClientsSociety

SuppliersInvestors

Regulators	Employees
and governments

Spotlight

Withdrawal of 2019 ﬁnal dividend

In response to a request from the PRA and in reaction to the impact of the COVID-19 crisis, the Board took the decision to withdraw its recommendation to pay a 20 cents per ordinary share ﬁnal dividend for 2019 and to suspend the buy-back programme. The Board took the decision after signiﬁcant discussion and having taken into account the views and impact on key stakeholders.

Stakeholders

Regulators and	Investors
governments	Employees

Spotlight

Geopolitical landscape

The Board invited a number of guest speakers to attend Board sessions providing important and specialist insight and context to the Board discussion, on a variety of highly relevant geopolitical matters, including: US-China tensions; Hong Kong regulatory environment; US political context and the impact of the US elections; and developments in global trade.

Stakeholders

ClientsSociety

SuppliersInvestors

Regulators and	Employees
governments

Spotlight

Stakeholders

Subsidiary governance

The Board made signiﬁcant progress in developing and enhancing its linkages and engagement with the Group's subsidiary boards during the year through a variety of forums. This included: the Group Chairman's virtual meetings with subsidiary chairs; subsidiary board committee chairs calls with the Audit, Board Risk, Board Financial Crime Risk and Remuneration Committees; and Board member attendance at subsidiary board and/or committee meetings, including those held by Standard Chartered Bank (Hong Kong) Limited and Standard Chartered Bank Nigeria Limited.

Clients

Suppliers

Regulators and governments

Society

Employees

84 Standard Chartered - Strategic Report 2020

Spotlight

Stakeholders

Virtual retail shareholder event

Given the impact of COVID-19, we were forced to hold the Standard Chartered PLC AGM in May 2020 as a procedural meeting, in line with the emergency framework approved by the government in the UK. We were unable to invite shareholders to attend the meeting, but instead asked them to vote in advance and submit questions by email. While we had every intention of holding a retail shareholder event later in the year, COVID-19 restrictions in the UK continued. Instead the Board hosted a virtual event, giving shareholders the opportunity to hear directly from the Board on topics raised by shareholders through an interactive Q&A session. Some of the areas covered included: performance against the Group's refreshed strategic priorities; the impact of COVID-19 across the Group's markets; the decision to withdraw the 2019 ﬁnal dividend; as well as detail on the initiatives the Group had put in place to support our clients, colleagues and communities.

For a detailed overview of our strategy see pages 24 to 27

Examples of how the Board considered stakeholder perspectives in some principal decisions during the year are provided on pages 55 and 60

Regulators and governments

Society

Investors

Employees

Board effectiveness

Following the thorough evaluation of the Board by Independent Board Evaluation at the end of last year in parallel to the review carried out by the PRA, this year's Board and committees' effectiveness review was conducted internally, facilitated by the Group Company Secretary, and in accordance with the UK Corporate Governance Code.

Progress against the 2020 Action Plan

The 2020 Action Plan set out a number of actions to be achieved following the external effectiveness reviews conducted by Independent Board Evaluation and the PRA in 2019. The 2020 Action Plan was regularly reviewed during the year and good progress had been made against many of the actions as evidenced by this year's internal Board effectiveness review. While the ambition of the plan meant that it was a 12-18 month programme, limitations to travel during the year has impacted on the delivery of some specific actions which have been carried forward to 2021.

2020 Board effectiveness review

Questionnaires were sent to each director for completion, seeking to draw out and explore some of the themes highlighted in last year's review as well as pose some wide- ranging and probing questions. The results were compiled into a detailed report and conclusions were discussed with the Group Chairman and by the Governance and Nomination Committee ahead of a Board discussion. Here, the key ﬁndings and recommendations were presented along with an action plan for 2021, which was approved by the Board. Details of the key observations from this year's review and the agreed Action Plan are set out on this page.

The Board's six committees were also included as part of the effectiveness review. The observations and key themes were shared with the relevant committee Chairs before discussion by each of the committees and action plans for 2021 approved.

Key observations from the 2020 internal effectiveness review

The Board has made good progress in meeting its priorities against a difficult backdrop which prevented in-person engagement between the Board or with stakeholders across our markets
Positive progress was made against the KPIs and on the quality of Board papers and management information. Directors were encouraged to continue giving feedback in this area
Suggestions and recommendations made to further drive efﬁciencies in the operation of the Board committees
Improvements were made to the linkages with subsidiary boards and committees through active engagement
Further scope for Board training in respect to information cyber security and technology

2021 Action Plan

Review efﬁciency of Board and committee structures. Review allocation of current committee matters across the Board and its committees
Continue to drive employee engagement with more events (virtually, if necessary), including more informal virtual sessions with colleagues and country teams
Arrange for Board members to meet country management teams (virtually, if necessary) to extend understanding and relationships
Continue focus on technology, IT and SC Ventures and establish a programme to expose the Board to both the challenges and the opportunities for the Group in this area

Standard Chartered - Strategic Report 2020

Strategic report Governance overview

Board of Directors

Committee key

Committee Chair shown in green

Audit Committee

Ri Board Risk Committee

Brand, Values and Conduct Committee

Governance and Nomination Committee

Board Financial Crime Risk Committee

Remuneration Committee

José Viñals (66)

Group Chairman

Appointed October 2016 and Group Chairman in December 2016. José was appointed to the Court of Standard Chartered Bank in April 2019.

Bill Winters, CBE (59)

Group Chief Executive

Appointed June 2015. Bill was also appointed to the Court of Standard Chartered Bank in June 2015.

Andy Halford (61)

Group Chief Financial Ofﬁcer

Appointed: July 2014. Andy was also appointed to the Court of Standard Chartered Bank in July 2014.

Experience José has substantive experience in the international regulatory arena and has exceptional understanding of the economic and political dynamics of our markets and of global trade, and a deep and broad network of decision-makers in the jurisdictions in our footprint.

Career José began his career as an economist and as a member of the faculty at Stanford University, before spending

25 years at the Central Bank of Spain, where he rose to be the Deputy Governor. José has held many other board and advisory positions, including Chair of Spain's Deposit Guarantee Fund, Chair of the International Relations Committee at the European Central Bank, member of the Economic and Financial Committee of the European Union, and Chair of the Working Group

on Institutional Investors at the Bank for International Settlements. José joined the International Monetary Fund (IMF) in 2009 and stepped down in September 2016 to

Experience Bill is a career banker with signiﬁcant frontline global banking experience and a proven track record of leadership and ﬁnancial success. He has extensive experience of working in emerging markets and a proven record in spotting and nurturing talent.

Career Bill began his career with JP Morgan, where he went on to become one of its top ﬁve most senior executives and later co-chief executive ofﬁcer at the investment bank from 2004 until he stepped down in 2009. Bill was invited to be a committee member of the Independent Commission on Banking, established in 2010, to recommend ways to improve competition and ﬁnancial stability in banking. Subsequently, he served as an

Experience Andy has a strong ﬁnance background and deep experience of managing complex international businesses across dynamic and changing markets.

Career Andy was ﬁnance director at East Midlands Electricity plc prior to joining Vodafone in 1999 as ﬁnancial director for Vodafone Limited, the UK operating company. Andy was later appointed ﬁnancial director for Vodafone's Northern Europe, Middle East and Africa region, and later the chief ﬁnancial ofﬁcer of Verizon Wireless in the US. He was a member of the board of representatives of the Verizon Wireless Partnership. Andy was appointed chief ﬁnancial ofﬁcer of Vodafone Group plc in 2005, a position he held for nine years.

join Standard Chartered PLC. While at the IMF, he was the Financial Counsellor and the Director of the Monetary and Capital Markets Department, and was responsible for the oversight and direction of the IMF's monetary and ﬁnancial sector work. He was the IMF's chief spokesman on ﬁnancial matters, including global ﬁnancial stability. During his tenure at the IMF, José was

a member of the Plenary and Steering Committee of the Financial Stability Board, playing a key role in the reform of international ﬁnancial regulation.

External appointments José is a Board Member of the Institute of International Finance (IIF) and a Member of the IIF's Group of Trustees of the Principles for Stable Capital Flows and Fair Debt Restructuring. He is also a member of the Board of Directors of the Bretton Woods Committee and serves as a Board Member of the Social Progress Imperative.

Committees N

adviser to the Parliamentary Commission on Banking Standards and was asked by the Court of the Bank of England to complete an independent review of the bank's liquidity operations. In 2011, Bill founded Renshaw Bay, an alternative asset management ﬁrm, where he was chairman and CEO.

He stepped down on appointment to the Standard Chartered PLC Board.

Bill was previously a non-executive director of Pension Insurance Corporation plc and RIT Capital Partners plc. He received a CBE in 2013.

External appointments Bill is an independent non-executivedirector of Novartis International AG.

Bill Winters leads the

Management Team

As Group Chief Financial Ofﬁcer at Standard Chartered, Andy is responsible for Finance, Corporate Treasury, Strategy, Group Corporate Development, Group Investor Relations, Property and Supply Chain Management functions.

External appointments Andy is Senior Independent Director and Chair of the Audit Committee at Marks and Spencer Group plc. He is also a trustee of the Standard Chartered Foundation.

Andy Halford also sits on the

Management Team

86 Standard Chartered - Strategic Report 2020

Naguib Kheraj (56)

Deputy Chairman

Appointed January 2014 and Deputy Chairman in December 2016. Naguib was appointed to the Court of Standard Chartered Bank in April 2019.

Experience Naguib has signiﬁcant banking and ﬁnance experience.

Career Naguib began his career at Salomon Brothers in 1986 and went on to hold senior positions at Robert Fleming, Barclays,

JP Morgan Cazenove and Lazard. Over the course of 12 years at Barclays, Naguib served as group ﬁnance director and vice-chairman and in various business leadership positions in wealth management, institutional asset management and investment banking. Naguib was also a Barclays' nominated non- executive director of ABSA Group in South Africa and of First Caribbean International Bank. He also served as chief executive ofﬁcer of JP Morgan Cazenove.

Naguib is a former non-executive director of NHS England and served as a senior adviser to Her Majesty's Revenue and Customs and to the Financial Services Authority in the UK. He also served as a member of the investment committee of the Wellcome Trust and the Finance Committee of the Oxford University Press.

External appointments Naguib is Chairman of Rothesay Life, a specialist pensions insurer and a member of the Finance Committee of the University of Cambridge. Naguib spends a substantial amount of his time as a senior adviser to the Aga Khan Development Network and serves on the boards of various entities within its network.

Committees Ri A R C N

Christine Hodgson, CBE (56)

Senior Independent Director

Appointed September 2013 and Senior

Experience Christine has strong business leadership, ﬁnance, accounting and technology experience.

Career Christine held a number of senior positions at Coopers & Lybrand and was corporate development director of Ronson plc before joining Capgemini in 1997, where she held a variety of roles including chief ﬁnancial ofﬁcer for Capgemini UK plc and chief executive ofﬁcer of technology services for North West Europe. Christine stepped down as chair for Capgemini UK plc in March 2020. Christine was previously a trustee of MacIntyre Care, a non-executive director of Ladbrokes Coral Group plc, and stepped down from the board of The Prince

of Wales' Business in the Community on 9 February 2021.

External appointments Christine is chair of Severn Trent Plc and The Careers & Enterprise Company Ltd, a government- backed company established to help inspire and prepare young people for the world of work. She is also Senior Pro Chancellor and Chair of Council of Loughborough University and External Board Advisor to Spencer Stuart Management Consultants NV. Christine received a CBE for services

to education in the Queen's New Year Honours 2020.

Committees R A C V N

Gay Huey Evans, OBE (66)

Independent Non-Executive Director

Appointed April 2015. Gay was appointed to the Court of Standard

Chartered Bank in April 2019.

Experience Gay has extensive banking and ﬁnancial services experience with signiﬁcant commercial and UK regulatory and governance experience.

Career Gay spent over 30 years working within the ﬁnancial services industry, the international capital markets and with the ﬁnancial regulator. Gay spent seven years with the Financial Services Authority from 1998 to 2005, where she was director of markets division, capital markets sector leader, with responsibility for establishing a market- facing division for the supervision of market infrastructure, oversight of market conduct and developing markets policy. From 2005 to 2008, Gay held a number of roles at Citibank, including head of governance, Citi Alternative

Investments, EMEA, before joining Barclays Capital where she was vice chair of investment banking and investment management.

She was previously a non-executive director at Aviva plc, the London Stock Exchange Group plc and Itau BBA International Plc. She received an OBE for services to ﬁnancial services and diversity in 2016.

External appointments Gay is Chair of the London Metal Exchange, a non-executivedirector of ConocoPhillips and IHS Markit, and a non-executivemember of the HM Treasury board. Gay also sits on the panel of senior advisers at Chatham House and the Board of the Benjamin Franklin House.

Committees C Ri

Phil Rivett (65)

Independent Non-Executive Director

Appointed May 2020. Phil was also appointed to the Court of Standard

Experience Phil has signiﬁcant professional accountancy and audit experience, specifically focused in the ﬁnancial services sector. He has a strong technical understanding and broad ﬁnancial and business experience.

Career Phil joined PricewaterhouseCoopers (PwC) as a graduate trainee accountant in 1976, becoming a Partner in 1986. He spent more than 30 years as a Partner at PwC and was lead relationship Partner for several large FTSE 100 companies including a number of international banks and ﬁnancial services institutions. He also has substantial international experience, having worked with banks across the Middle East and Asia, in particular China.

He became Leader of the Financial Services Assurance practice in 2007 and was appointed Chairman of its Global Financial Services Group in 2011. Phil has sat on a number of global ﬁnancial services industry groups, producing guidelines for best practice in governance, ﬁnancial reporting and risk management.

External appointments Phil is an independent non-executivedirector of Nationwide Building Society, the world's largest building society.

Committees A Ri N

Standard Chartered - Strategic Report 2020

Strategic report Governance overview

Jasmine Whitbread (57)

Independent Non-Executive Director

Appointed April 2015. Jasmine was appointed to the Court of Standard Chartered Bank in April 2019.

Experience Jasmine has signiﬁcant business leadership experience as well as ﬁrst-hand experience of operating across our markets.

Career Jasmine began her career in international marketing in the technology sector and joined Thomson Financial in 1994, becoming managing director of the Electronic Settlements Group. After completing the Stanford Executive Program, Jasmine set up one of Oxfam's ﬁrst regional ofﬁces, managing nine country operations in West Africa, later becoming international director responsible for Oxfam's programmes worldwide. Jasmine joined Save the Children in 2005, where she was responsible for revitalising one of the UK's most established charities. In 2010, she was

appointed as Save the Children's ﬁrst international chief executive ofﬁcer, a position she held until she stepped down in 2015. Jasmine stepped down as a non-executive director from the Board of BT Group plc in December 2019.

External appointments Jasmine is chief executive of London First, a business campaigning group with a mission to make London the best city in the world to do business and a non-executivedirector of WPP Plc. She will step down as chief executive of London First and become chair of Travis Perkins plc in March 2021.

Committees V R N

David Conner (72)

Independent Non-Executive Director

Appointed January 2016. David was appointed to the Court of Standard Chartered Bank in April 2019.

Experience David has signiﬁcant global and corporate, investment and retail banking experience, strong risk management credentials and an in-depth knowledge

of Asian markets.

Career David spent his career in the ﬁnancial services industry, living and working across Asia for 37 years, for both Citibank and OCBC Bank. He joined Citibank in 1976 as a management trainee and went on

to hold a number of Asia-based senior management roles, including chief executive ofﬁcer of Citibank India and managing director and marketing manager at Citibank Japan, before leaving Citibank in 2002.

David joined OCBC Bank in Singapore as chief executive ofﬁcer and director in 2002. He implemented a strategy of growth and led the bank through a period of signiﬁcant turbulence. David stepped down as chief executive ofﬁcer in 2012 but remained as a non-executive director on the board of OCBC Bank, before leaving the group in 2014. He was previously a non-executive director of GasLog Ltd.

Committees Ri A C V

David is also a member of the Combined US Operations Risk Committee of Standard Chartered Bank.

Byron Grote (72)

Independent Non-Executive Director

Appointed July 2014.

Experience Byron has broad and deep commercial, ﬁnancial and international experience.

Career From 1988 to 2000, Byron worked across BP in a variety of commercial, operational and executive roles. He was appointed as chief executive of BP Chemicals and a managing director of BP plc in 2000 and had regional group-level accountability for BP's activities in Asia from 2001 to 2006. Byron was chief ﬁnancial ofﬁcer of BP plc from 2002 until 2011, subsequently serving as BP's executive vice president, corporate business activities, from 2012 to 2013, with responsibility for

the group's integrated supply and trading activities, alternative energy, shipping and technology. Byron was a non-executive director at Unilever plc and Unilever NV before stepping down in 2015.

External appointments Byron is Senior Independent Director at Anglo American plc, a non-executivedirector and chair of the Audit Committee at Tesco PLC and is deputy chairman of the supervisory board at Akzo Nobel NV. He is also a member of the European Audit Committee Leadership Network.

Committees A R

Ngozi Okonjo-Iweala (66)

Independent Non-Executive Director

Appointed November 2017. Ngozi was appointed to the Court of Standard Chartered Bank in April 2019.

Ngozi will be appointed as Director-General of the World Trade Organisation (WTO) from 1 March 2021 and will step down from the Board on 28 February 2021.

Experience Ngozi has signiﬁcant geopolitical, economic, risk and development experience and expertise at a governmental and intergovernmental level.

Career A development economist, Ngozi spent 25 years working at the World Bank in various positions. After leaving in 2003, she served as the Finance Minister of Nigeria from 2003 to 2006. She returned to the World Bank in 2007, serving as a Managing Director until 2011, when she was appointed to the role of Minister of Finance and Coordinating Minister of Economy in the Nigerian government, a position she held until 2015. During her time in government, she spearheaded Nigeria's successful programme to obtain debt relief and is credited with developing reforms that helped improve governmental transparency to stabilise and grow the Nigerian economy. Ngozi was until recently chair of GAVI and

the African Risk Capacity, and co-chair of Lumos Global before stepping down in 2020.

External appointments Ngozi is an independent director of Twitter, Inc. and holds a number of prestigious international advisory positions, including the Asian Infrastructure Investment Bank. Ngozi is co-chair of the Global Commission on Economy and Climate. She is also a member of the G20 Eminent Persons Group, reviewing Global Financial Governance, an ambassador of the Open Government Partnership and is a trustee of the Carnegie Endowment for International Peace. Ngozi was appointed special envoy for the Access to COVID-19 Tools Accelerator as well as the African Union to address the economic challenges as a result of the COVID-19 pandemic during 2020.

Committees V

88 Standard Chartered - Strategic Report 2020

Maria Ramos (62)

Independent Non-Executive Director

Appointed January 2021. Maria was also appointed to the Court of Standard Chartered Bank in January 2021.

David Tang (66)

Independent Non-Executive Director

Appointed June 2019. David was also appointed to the Court of Standard Chartered Bank in June 2019.

Experience Maria has extensive CEO, banking, commercial, ﬁnancial, policy and international experience.

Career Based in South Africa, Maria served as chief executive ofﬁcer of ABSA Group Limited (previously Barclays Africa Group), a diversiﬁed ﬁnancial services group serving 12 African markets from 2009 to 2019. Before joining ABSA, Maria was the group chief executive of Transnet Ltd, the state-owned freight transport and logistics service provider for ﬁve years. Prior to her CEO career, Maria served for seven years as director-general of South Africa's National Treasury (formerly the Department of Finance) where she played a key role in transforming the National Treasury into one of the most effective and efﬁcient state departments in the post-apartheid

Experience David has deep understanding and experience of emerging technologies in the context of some of our key markets, most notably mainland China.

Career David has more than 30 years of international and Chinese operational experience in the technology and venture capital industries, covering venture investments, sales, marketing, business development, research and development, and manufacturing. From 1989 to 2004, David held a number of senior positions in Apple, Digital Equipment Corp and 3Com based in China and across the Asia Pacific region. From 2004 to 2010, David held various positions in Nokia, including corporate vice president, chairman of Nokia Telecommunications Ltd and vice chairman of Nokia (China) Investment Co. Ltd. He went on

administration. Maria has served on a number of international boards, including Sanlam Ltd, Remgro Ltd, and SABMiller plc and more recently was a non-executive director of The Saudi British Bank and Public Investment Corporation Limited before stepping down in December 2020.

External appointments Maria is Chair of AngloGold Ashanti Limited and a non- executive director of Compagnie Financière Richemont SA. She is also a member of the Group of Thirty, sits on the International Advisory Board of the Blavatnik School of Government at Oxford University, the advisory board of the Bretton Woods Committee, and the Board of Protectors of Ikamva Labantu Charitable Trust.

Committees A Ri

to become corporate senior vice president, regional president of Advanced Micro Devices (AMD), Greater China, before joining NGP Capital (Nokia Growth Partners) as Managing Director and Partner in 2013.

External appointments David is managing director and partner of NGP Capital in Beijing, managing investments in a range of technology start-up and emerging technology companies. David is also a non-executive director of JOYY Inc., the Chinese live streaming social media platform, listed on the Nasdaq, and Kingsoft Corporation, a leading Chinese software and internet services company, listedontheHongKongStockExchange.

Committees V Ri

Carlson Tong (66)

Independent Non-Executive Director

Appointed February 2019. Carlson was appointed to the Court of Standard Chartered Bank in April 2019.

Experience Carlson has a deep understanding and knowledge of operating in mainland China and Hong Kong and has signiﬁcant experience of the ﬁnancial services sector in those markets.

Career Carlson joined KPMG UK in 1979, becoming an Audit Partner of the Hong Kong ﬁrm in 1989. He was elected Chairman of KPMG China and Hong Kong in 2007, before becoming Asia Pacific chairman and a member of the global board and global executive team in 2009. He spent over 30 years at KPMG and was actively involved in the work of the securities and futures markets, serving as a member of the Main Board and Growth Enterprise Market Listing Committee of the Stock Exchange of Hong Kong from 2002 to 2008 (Chair from 2006 to 2008). After retiring from KPMG in 2011, he was appointed a non-executive director of the Securities and Futures Commission, becoming its Chair in

2012 until he stepped down in October 2018. He oversaw a number of major policy initiatives during his term as the chair including the introduction of the Hong Kong and Shanghai/ Shenzhen Stock connect schemes and the mutual recognition of funds between the mainlandandHongKong.Carlsonwasappointed as a non-executive director of the Hong Kong International Airport Authority in 2017, a position he held until he stepped down in July 2020.

External appointments Carlson sits on various Hong Kong SAR government bodies, including as chair of the University Grants Committee and a member of the Hong Kong Human Resource Planning Commission. Carlson is also an observer on behalf of the Hong Kong Government for Cathay Pacific Airways Ltd.

Committees A Ri C

Amanda Mellor (56)

Group Company Secretary

Appointed Amanda was appointed Group Company Secretary in May 2019.

Experience Prior to joining Standard Chartered, Amanda was Group Secretary and Head of Corporate Governance at Marks and Spencer Group plc (M&S) from 2009-2019, where she was also an executive member of the Operating Committee. From 2004-2009, she was Head of Investor Relations at M&S having been Director of Corporate Relations at Arcadia Group plc and the Burton Group plc. Prior to working in investor relations, Amanda worked in investment banking at James Capel and Robert Fleming.

Career Amanda is a non-executive director of Volution Group PLC and a member of all their board committees, having previously served as a non-executive director and Chair of the Remuneration Committee of Kier Group plc. Amanda served as a member of the Council and the Remuneration Committee of Leeds University from 2013-2019, where she is also a visiting professor of the Inter-Disciplinary Ethics Applied Centre. Amanda is a Fellow of the Institute of Chartered Secretaries.

Standard Chartered - Strategic Report 2020

Strategic report Directors' remuneration report overview

Directors' remuneration report

"Supporting colleagues through challenging times, prioritising their wellbeing and providing fair remuneration"

Summary of 2020 remuneration decisions

Total discretionary incentives down 23 per cent year-on-year
Annual incentives for executive directors down almost 70 per cent year-on-year given voluntary waiver of cash portion
No salary increases for executive directors
Distribution of 2020 annual discretionary incentives and 2021 salary increases targeted at junior colleagues
No UK Government support taken and no colleagues made redundant or furloughed due to the impact of COVID-19
Prioritisation of health and wellbeing for all colleagues

An overview of directors' and Group-wide remuneration and how we supported colleagues during 2020 is set out below. For the complete directors' remuneration report please see pages 133 to 166 of the full annual report.

Supporting colleagues during the COVID-19 pandemic

The COVID-19 pandemic has had an extraordinary impact across the globe, not only in an economic sense but on the lives of everyone. Throughout the year we have supported our colleagues, prioritising their wellbeing, safety and security, and have accelerated the implementation of wellbeing initiatives. 91 per cent of colleagues who responded to our COVID-19 pulse survey in April believed that their health and wellbeing was a top priority for the Group and 80 per cent felt that

our response to the pandemic had minimised stress for employees. We have supported colleagues to work both from home and safely from Group locations for essential roles, offering ﬂexibility to provide the most positive outcome for them and for the Group.

We maintained pay for employees who were unable to work full hours as a result of family care requirements and provided ﬂexibility for those whose return to their usual working location was impacted because of travel restrictions. We did not access UK Government support schemes and no colleagues were made redundant or furloughed due to the impact of COVID-19. Where business transformation that was underway before the pandemic impacted some roles, increased investment was made in redeployment and reskilling programmes and any employees leaving the Group received their full salary for 2020, in addition to severance pay.

Our Fair Pay Charter continues to guide our performance and reward decision-making globally and has been the compass in our approach to support colleagues fairly and consistently through the challenges of the pandemic. We have continued to implement changes to improve colleagues' experience, including launching our ﬂexible beneﬁt plan in Poland, as part of the phased roll-out, and expanding the use of salary ranges to cover 74 per cent of colleagues globally. In 2019 we introduced fair pay reporting and our 2020 Fair Pay Report provides an update of the progress made and summarises how we meet the principles of our Fair Pay Charter.

The 2020 Fair Pay Report can be viewed at

sc.com/fairpaycharter

90 Standard Chartered - Strategic Report 2020

Impact of COVID-19 on remuneration during 2020

As the pandemic developed the Committee considered remuneration decisions very carefully, exercising judgement, taking account of the developing crisis situation and the impact of COVID-19 on our external stakeholders and our colleagues. This included the payment of annual discretionary incentives in respect of performance in 2019 which were communicated to colleagues in February and paid in March 2020. These decisions were made in good faith, and pre-dated the Prudential Regulation Authority's (PRA) statement at

the end of March requesting that we suspend shareholder distributions due to the impact of COVID-19. There are no plans for these 2019 awards to be repaid or clawed back. The Committee considered the withdrawal of the recommendation to pay a ﬁnal ordinary dividend for 2019 when making 2020 decisions.

Our performance in 2020

Throughout the year the Group has remained resilient and competitive, despite the economic and geopolitical challenges, even though our progress has inevitably slowed in some areas. The pandemic has been one of the most signiﬁcant events in recent history and it materially impacted the ﬁnancial performance of most banks, including us, in 2020.

The impact of COVID-19 has meant that some of the measures and targets set within the Group scorecard at the start of 2020 were unachievable. No changes were made to business performance criteria and targets for 2020 incentive outcomes.

Underlying proﬁt before tax is down 40 per cent on 2019 and return on tangible equity (RoTE) is down 340 basis points to 3.0 per cent. The Group's capital is strong, with the Common Equity Tier 1 (CET1) ratio at a historically high level, demonstrating our resilience in the face of such an extraordinary economic shock.

The total scorecard outcome was 37 per cent with 13 per cent being based on ﬁnancial achievements including effective cost management and growth in high performing liabilities and

24 per cent based on non-ﬁnancial achievements including improved digital client onboarding, on-track development of new ventures and an improved employee net promoter score of 6 points to 17.5.

2020 annual discretionary incentives

Whilst the annual scorecard has been used as a starting point for determining the Group's discretionary incentives, the Committee has needed to exercise its judgement carefully.

The Committee considered several factors including the Group's underlying performance, the experience of our stakeholders, the withdrawal of the 2019 ﬁnal ordinary dividend, the resilience of our business, inherent future risks, the signiﬁcant contribution of our colleagues who have continued to serve clients whilst managing the crisis and the need to compete for talent globally across 59 markets.

The Committee also considered carefully, throughout the year and when incentives were determined, risk, control and conduct matters, reviewing material issues from across the Group.

Considering all factors, the Committee applied a downward adjustment of $160 million to total discretionary incentives of $1,150 million, resulting in overall discretionary incentives of $990 million, which is 23 per cent lower than 2019.

In allocating the discretionary incentives, focus was primarily placed on Group performance given the challenges created by COVID-19 in fairly and objectively assessing the relative performance of each business, function, region and country.

The one notable exception was within the Corporate & Institutional Banking (CIB) business, where discretionary incentives were differentiated for Financial Markets in order to reward colleagues for the strong performance in 2020.

Across the rest of the Group, at an individual level, focus was placed on protecting compensation levels for more junior colleagues as shown in the table below.

		Average year-on-year change (%)
	Number of	Annual
	discretionary	Total
	colleagues1	incentives	compensation
Management Team	11	(43)	(23)
Managing Directors	1,055	(34)	(13)
Other senior leaders	2,621	(30)	(6)
All other colleagues	62,304	(27)	0

Number of colleagues eligible for annual discretionary incentives, excluding Financial Markets

Executive director remuneration in 2020

Annual incentives for executive directors

The annual incentives for Bill and Andy are directly linked to the Group scorecard outcome with potential to adjust upwards or downwards based on personal performance. In April 2020, Bill and Andy announced they will waive any cash portion of an annual incentive award in respect of 2020 performance, reducing any potential award for 2020 by

50 per cent. In addition, along with other members of the Management Team they made signiﬁcant personal donations to the COVID-19 assistance fund.

Based on the scorecard assessment of 37 per cent, and the voluntary waiver of the cash element (50 per cent of the award), the Committee concluded that the annual incentives for 2020 set out below were appropriate:

	Year-on-year
Annual incentives for	change		2019
executive directors	(%)	20201
% of maximum		18.5%	55%
Bill Winters (CEO)	(69)	£385,836	£1,251,360
Andy Halford (CFO)	(68)	£246,642	£776,600

1 All to be delivered in shares subject to a 12-month retention period

The approach impacts the annual incentive outcomes for Bill and Andy signiﬁcantly more than for the wider workforce. The Committee considered the personal performance of both executive directors against their objectives and recognised their exceptional performance in leading the Group through the crisis. Taking account of the total discretionary incentive outcomes for the wider workforce, and the broader impact of the pandemic, no adjustment has been made for personal performance to the outcome.

2018-20 LTIP awards vesting in March 2021

The 2018-20long-term incentive plan (LTIP) awards are due to vest in March 2021 based on performance over three years from 2018 to 2020. Following an assessment of the performance conditions, the expected levels of vesting are:

Return on equity (RoE) - 0% vesting
Total shareholder return (TSR) - 0% vesting
Strategic priorities - 26% vesting underpinning our progress towards our target to deliver higher returns in the medium term, despite the challenging economic environment

We have not adjusted the performance targets to reﬂect the increased stretch in both the ﬁnancial and strategic measures caused by the impact of the pandemic for existing LTIP awards.

Standard Chartered - Strategic Report 2020

Strategic report Directors' remuneration report overview

The value delivered by the 26 per cent vesting outcome and included in the single total ﬁgure of remuneration is based on a share price of £4.22 (the three-month average to

31 December 2020) compared with the share price at grant in 2018 of £7.78. This reduces the award outcome value by 46 per cent.

Single total ﬁgure of remuneration for 2020

The 2020 annual incentive and expected 2018-20 LTIP vesting results in a 2020 single ﬁgure for Bill of £3,812,000 and for Andy of £2,381,000. This represents a year-on-year decrease of 29 and 27 per cent respectively.

On 1 January 2020, the pension allowance for Bill and Andy was reduced from 20 per cent of salary to 10 per cent of salary, aligned with the UK workforce.

2020 single total ﬁgure of remuneration £000

	Salary (cash and shares)	Annual incentive			29% decrease for
	Pension				LTIP			Bill Winters in 2020

	Beneﬁts									27% decrease for

Bill Winters									Andy Halford in 2020

2020									3,812
2019											5,360

Andy Halford
2020						2,381
2019
							3,282


0	1,000	2,000	3,000	4,000	5,000	6,000

Executive directors' shareholdings

A signiﬁcant portion of Bill and Andy's total remuneration is delivered in shares which will be released over the next eight years. The deferral, retention and recovery provisions of their pay reinforce continued alignment with shareholder interests and the Group's long-term performance. Alignment has been demonstrated in 2020 in particular through the reduction in the value of Bill and Andy's shareholdings, their unvested deferred remuneration and their extant LTIP awards.

As at 31 December 2020, both Bill and Andy had exceeded their shareholding requirement outlined below. Shares purchased voluntarily from their own funds are equivalent to 61 and 44 per cent of salary for Bill and Andy, respectively.

Executive director shareholdings (% of salary)

Actual shareholding

Shareholding requirement

colleagues who are behind market and in locations with high wage inﬂation. In line with this approach, ﬁxed pay for Bill, Andy and the Management Team will not be increased in 2021.

2021-23 LTIP awards to be granted in March 2021

After considering 2020 performance, 2021-23 LTIP awards will be granted to both Bill and Andy of 120 per cent of ﬁxed pay in line with our policy. Subject to performance over the next three years, awards will vest pro rata over years three to seven with an additional retention period of 12 months after vesting. Performance will be assessed based on RoTE with a CET1 underpin, TSR relative to a peer group, and the achievement of measures that are aligned to the Group's refreshed strategic priorities.

To reﬂect the Group's ambition to become the world's most sustainable and responsible bank and increased focus on sustainability, we are adjusting the weightings of the performance measures and including a standalone sustainability priority. The sustainability measures have been selected carefully from our broader range of sustainability aspirations based on their level of impact for the Group and wider society and ability to drive ﬁnancial returns in the medium term. The other strategic measures have been adjusted to align with the refreshed strategic priorities. The Committee will assess progress against the specific targets and proof points for the strategic measures at the end of the three-year performance period and will disclose full details of their assessment of achievement against targets at vesting.

2021-23 LTIP performance measures and weightings summary

	Previous	2021-23
	weighting	weighting	Key measures/targets
RoTE	33%	30%	• 6 to 10 per cent
TSR	33%	30%	• Median to upper quartile
Sustainability	-	15%	• Grow our sustainable
			ﬁnance business and be a
			responsible company with
			targets to reduce our carbon
			footprint
Other	33%	25%	• Grow across our client
strategic			footprint and improve
measures			client satisfaction
			• Drive culture of innovation,
			adopt new ways of working
			and continue to increase
			diversity and culture of
			inclusion

• Underpinned by risk and control management

Bill Winters

382%

250%

Andy Halford

249%

200%

50%

100%

150%

200%

250%

300%

350%

400%

Executive directors' remuneration in 2021

The Group has adopted a highly targeted approach to salary increases for 2021 given affordability constraints and the challenging macroeconomic environment, prioritising junior

RoTE is one of the ﬁnancial KPIs used to measure progress against our strategy (see page 1). We consider target setting carefully before each grant and set targets that are challenging and act as an effective incentive for executive directors to execute our strategy.

The RoTE target range for 2021-23 LTIP awards is 6 to 10 per cent. This is a wider range than in previous years given the unusually uncertain macroeconomic environment, including the impact of severe economic dislocations and low interest rates on the Group's returns. It takes into account our expectation that our refreshed strategic priorities should allow us to improve our RoTE from the 3 per cent we delivered in 2020 to over 7 per cent by 2023 as we progressively advance to our target of over 10 per cent. The current market consensus estimate for RoTE in 2023 is 6.9 per cent.

92 Standard Chartered - Strategic Report 2020

We will assess the value of the 2021-23 LTIP on vesting and consider the share price when the awards were made to determine whether vesting is a result of genuine underlying performance and not just a market rebound from a recession.

Meetings with shareholders were held in December 2020 and January 2021 on the development of these performance measures and targets, and the helpful feedback was taken into account and contributed to the ﬁnal decisions made by the Committee.

In the rest of this report we present the disclosures required by regulations, as well as additional information to explain how our executive remuneration aligns with our strategy, with shareholder interests and with wider workforce pay.

We hope shareholders recognise the way the Committee has endeavoured to achieve appropriate outcomes in extraordinary circumstances, and we strongly valued the continued engagement of shareholders as we sought to strike the appropriate balance in making remuneration decisions. We look forward to further engagement in 2021.

Christine Hodgson

Chair of the Remuneration Committee

Standard Chartered - Strategic Report 2020

Strategic report Directors' remuneration report overview

Remuneration alignment

How does our executive remuneration align to our strategy?

Remuneration decisions made across the Group and by the Committee align with our strategy, our shareholders' interests to deliver long-term sustainable value and with the wider workforce in line with the principles set out in our Fair Pay Charter.

We have reﬁned our focus onto four strategic priorities and three enablers. The diagram below sets out how we have aligned our strategy with the measures that determine incentives for executive directors and the wider workforce.

How we align our strategy and		Strategic priorities
remuneration measures		Clients		Sustainability
Annual and long-term	Within our wholesale network, afﬂuent client and mass retail	•	Deliver sustainable ﬁnance
incentive performance	businesses we will:			business growth: track
measures and targets sit	• Improve client satisfaction		progress against the Bank's
under these priorities	• Deliver growth in clients and network income		Paris Alignment of Financing
	•	Bank's carbon footprint:
	• Grow revenue from new ventures - key digital partnerships,
		reduce and offset emission
	platforms and technologies
		waste from ﬂights, properties

				and suppliers
		The combination of these measures help us to deliver shareholder returns
Driving shareholder returns	• Operating proﬁt	• Total shareholder return	•	Return on tangible equity
These priorities are driven by three		Through people and culture, new ways of working and innovation
critical enablers

Performance against the	• Drive culture of innovation across the Group
enablers is measured in	• Adopt new ways of working that results in quicker decision-making and delivery
the annual and long-term	• Increase our culture of diversity and inclusion across the Group
incentives

	Additional risk and control measures support the sustainability of our business through good management of risk
Within our risk and control	• Maintain risk proﬁle within the Group's Risk Appetite
framework with targets	• Successfully deliver milestones within the cyber risk management plan
included in the annual and
long-term incentive plans

How does our executive remuneration align with shareholder interests?

The diagram below shows how a portion of ﬁxed pay, annual incentive and long-term incentive is paid in shares which are released up to eight years following grant, so that the ﬁnal component of pay granted in 2021 is released in 2029. This creates strong alignment between the interests of executives and shareholders to create long-term value. On a maximum opportunity basis, Bill's total remuneration is delivered 68 per cent in shares (including those subject to performance conditions) and

32 per cent in cash.

			LTIP shares vest pro rata	20%
LTIP			over years 3 to 7 with additional	20%
Vesting based on performance	retention period of 12 months
(up to 120%
	measured over 3 years	20%
of ﬁxed

pay)			20%
			20%
Annual	Shares
100%
(up to 40% of
incentive	ﬁxed pay)
(up to 80%	Cash
of ﬁxed pay)	(up to 40% of
	ﬁxed pay)

Annual incentive and LTIP shares are also subject to clawback for up to 10 years from grant

Beneﬁts	Beneﬁts					20%
	Pension				20%
				20%
Fixed pay =	Salary		20%
20%
salary +	shares
pension	Salary cash		Salary shares released pro rata over 5 years

	2021	2022	2023	2024	2025	2026	2027	2028	2029

Alignment has been demonstrated in 2020 in particular through the reduction in the value of Bill and Andy's shareholdings, their unvested deferred remuneration and their extant LTIP awards. The chart on the next page shows Bill's increased shareholding since 2019 (increased by 19 per cent) and the decrease in value (decreased by 22 per cent).

94 Standard Chartered - Strategic Report 2020

Value of CEO shareholding

CEO shareholding	CEO shareholding value	Share price

(million)	(£ million)

	16				8
	14				7
shareholding (million)	12				6
10				5	Share price (£)
8				4
6				3

CEO	4				2

	2				1
	0	2017	2018	2019	0
	2016	2020

How does our executive remuneration align with the wider workforce?

Our approach to remuneration is consistent for all employees and is designed to help ensure pay is fair and competitive in line with our Fair Pay Charter principles which apply globally. As we say in Principle 6 of the Charter, pay structure varies according to location. The diagram below shows how our executive director remuneration aligns with our

UK workforce, being the most relevant market, as this is where they are based.

In addition to our existing reward offering, during 2020 we have accelerated and implemented a variety of wellbeing initiatives to support colleagues with the range of challenges they faced due to the pandemic. Further information is on page 141 in the full annual report, in our Group-wide remuneration in 2020 section.

Salary

Salary is the contractually ﬁxed amount paid and set based on role, skills and experience
It is set and reviewed annually against relevant market benchmarks for
all employees
Executive director salary is paid in a combination of cash and shares to align with shareholder interests
For other employees, salary is paid 100% in cash in line with market norms

All UK employees

Pension

10% of salary for all UK employees, aligned to the provisions of the UK Corporate Governance Code
Pension is set as a percentage of salary for all employees
For the executive directors both the cash and share elements of salary are pensionable
In line with the UK Corporate Governance Code, only salary is pensionable
Beneﬁts and incentives are not pensionable

Annual incentive

All UK employees are eligible for an annual incentive
Annual incentives are based on Group performance against the annual Group scorecard and individual performance
The same Group scorecard is used to determine incentives for executive directors and other UK employees
Annual incentives are subject to risk adjustment provisions

Executive directors and the

Management Team

LTIP

LTIP awards are granted to senior executives who have clear line of sight to inﬂuence the targets linked to the long-term performance of the Group
The grant of awards is dependent on performance in the year and the vesting of awards is dependent on performance over a three-yearpost-grant period
Vested shares are subject to further retention periods
LTIP awards are subject to risk adjustment provisions

Executive directors only

Shareholding requirement

Executive directors have a shareholding requirement of 250% of salary for the CEO and 200% for the CFO
A post employment shareholding requirement equal to the full shareholding requirement for one year and 50% for an additional year applies to the executive directors

Beneﬁts

The core beneﬁts offered to executive directors and other employees are the same: private medical insurance, life assurance, income protection, accidental death and disability insurance and
a cash beneﬁts allowance
Executive directors receive a lower cash beneﬁts allowance than other UK employees as a percentage of their salary
Executive directors have a role based provision of the use of a Company vehicle and driver on account of the security and privacy requirements of the role
The CEO is entitled to a contribution to the preparation of his annual tax returns owing to the complexity of his tax affairs, in part due to his extensive travel on Group business
Employees are eligible for tax return preparation in the year of an international relocation owing to the complexity of their returns in those years

Sharesave

All UK employees are eligible to participate in the Sharesave plan, which enables employees to share in the success of the Group at a discounted share price

Standard Chartered - Strategic Report 2020

Strategic report Directors' remuneration report overview

Group-wide remuneration in 2020

Our Fair Pay Charter

Our Fair Pay Charter sets out 10 principles we use to guide performance and reward decision-making globally, and has been fundamental to our approach to supporting colleagues through the challenges of the pandemic, acting as a compass for consistent and fair decision-making as we rapidly adapted to support new ways of working.

In February 2020 we published our second internal Fair Pay Report to all colleagues to explain how our performance and reward approach meets the principles of the Charter and to provide an update on areas where we are working to enhance our approach. In addition we published our ﬁrst external Fair Pay Report to share our progress with wider stakeholders. Both reports were well received.

How do we understand the views of our workforce?

There is a wide range of mechanisms the Group uses to seek feedback from colleagues on remuneration as well as other workforce policies and practices. Our 2020 engagement survey was completed by over 74,500 employees and 3,600 non-employed workers, answering questions on how they feel about different areas of reward. We also conducted an annual survey that asked employees about their experience of the performance and pay review process, including whether they understand variable pay, whether they believe performance and pay decisions are fair, and whether they understand the principles which form our Fair Pay Charter. The results from both of these engagement surveys are analysed by various demographics, and summary trends and key ﬁndings on year-on-year movements in sentiment are presented to the Committee for discussion. Results

are also shared with the workforce along with relevant commentary on action being taken based on ﬁndings in our Fair Pay Reports.

The Board engages and listens to the views of employees, through several sources including the increased use of virtual, interactive regional engagement sessions, with four being held in 2020, and from information provided by senior management. More than 3,500 employees joined these sessions and asked about a range of people-related topics including business restructuring, remuneration, diversity and inclusion and the long-term impact of COVID-19.

Further information on our workforce engagement framework is included in our BVCC report on pages 121 to 124 in the full annual report.

Fair Pay Charter principles

We commit to pay a living wage in all our markets and seek to go beyond compliance with minimum wage requirements

We provide an appropriate mix of ﬁxed and variable pay and a core level of beneﬁts to ensure a minimum level of earnings and security to colleagues and to reﬂect the Group's commitment to wellbeing

We support colleagues in working ﬂexibly, in ways that balance both business needs and their personal circumstances, and provide colleagues with the opportunity to select the combination and level of beneﬁts that is right for them

Pay is well administered with colleagues paid accurately, on time and in a way that is convenient for them

We provide a competitive total ﬁxed and variable pay opportunity that enables us to attract, motivate and retain colleagues based on market rates for their role, location, performance, skills and experience

The structure of pay and beneﬁts is consistent for colleagues based on their location and role, with a clear rationale for exceptions

We are committed to rewarding colleagues in a way that is free from discrimination on the basis of diversity, as set out in our Group Code of Conduct

We ensure pay decisions reﬂect the performance of the individual, the business they work in and the Group, and recognise the potential, conduct, behaviours and values demonstrated by each individual

We set clear expectations for how colleagues are rewarded and the principles guiding decisions, including clear personal objectives and feedback

10 We provide clear communication of pay and performance decisions, and seek feedback and input from colleagues on our pay structures and outcomes

Responding to the views of the workforce

In our annual survey employees told us that recognition is just as important to them as the ﬁnancial reward they receive
We have used this, along with dedicated research and focus group insights, to support the development of a refreshed approach to performance, reward, recognition and talent management. Through driving behaviour and mindset change we aim to deliver a performance orientated, inclusive and innovative culture focusing on both extrinsic and intrinsic motivation to drive individual performance

96 Standard Chartered - Strategic Report 2020

Wellbeing

Our wellbeing strategy was refreshed in 2019 and the challenges of the pandemic highlighted the importance of this work. We know we are moving in the right direction, with 87 per cent of respondents to our annual survey telling us they feel the Group supports their wellbeing (+4 percentage points since 2019), but we have more to do, particularly for the 40 per cent who told us they are experiencing a high level and frequency of work-related stress.

In 2020 we provided colleagues with a range of support and tools, detailed below. In addition, we provided support for transport and meals for colleagues who continued to work

at Group locations during periods of restrictions, ﬁnancial support towards purchasing necessary equipment for working from home and maintained pay for those who were unable to work full hours as a result of family care requirements. We also provided ﬂexibility for those whose return to their usual working location was impacted because of travel restrictions. In April we conducted a pulse survey to understand how employees were coping with the impact of COVID-19 and what support they needed. 91 per cent of respondents believed that their health and wellbeing was a top priority for the Group and 80 per cent felt that our response to the pandemic had minimised stress for employees.

Support for	• Launched a new global employee assistance programme, enabling all colleagues and their household
colleagues	members to access conﬁdential counselling and guidance, available 24/7
suffering	• Mental health ﬁrst aider (MHFA) programme expanded, increasing the number of trained MHFAs globally
wellbeing	by 133%, whilst centralising support and introducing a Group Standard for Mental Health First Aid
challenges	• Group Standard for Tackling Domestic Violence and Abuse launched, offering a broad range of help and
	support to colleagues who are experiencing domestic violence and abuse
Preventative	• Introduced a new three-year wellbeing strategy, supporting colleagues in developing the skills needed for
wellbeing	the future, building resilience, agility and inclusive leadership into the organisation to support us in realising
support to help	our strategic ambitions
colleagues in	• Launched Unmind, a digital application and platform that enables colleagues to assess their wellbeing
building skills for	needs and receive personalised recommendations and coaching on simple steps to develop healthier habits
the future	• Launched the Switch+ platform, providing access to hundreds of live and on-demand classes dedicated to
	improving wellbeing. Over 6,000 colleagues from 57 countries have signed up
	• Launched a mental health and resilience learning programme, equipping colleagues and people leaders
	with the core skills they need to support others including recognising signs of poor wellbeing, to increase
	psychological ﬂexibility and create sustainable high performance
Regular practical	• Provided guidance on how to manage wellbeing, productivity and social connection whilst working
support and	from home
communications	• Ran webinars on expected challenge areas while working at home including parenting, mindfulness and
for colleagues	ﬁnding purpose
through the	• Shared helpful guidance and practical tips across our wellbeing framework through a colleague toolkit,

pandemic	with over 10,000 views to date

	• Ran global and local multi-media campaigns for World Mental Health Day focused on building resilience

Transforming our business

We have continued to transform our Group which has affected some colleagues. This was no change from our pre-pandemic plans. Where business transformation was already underway before the pandemic, we entirely paused all restructuring activity for the ﬁrst half of the year. Once activity resumed, increased investment was made in redeployment and reskilling programmes. Given the unique circumstances, we adjusted our redundancy approach and all colleagues impacted in 2020 received enhanced support, ensuring they received their full salary for the year, in addition to severance pay and improved outplacement support.

Future ready workforce

Consistent with Principle 8 of the Fair Pay Charter, we are focused on how we adapt and remain future-ready in response to the evolving nature of work and changing expectations from clients and colleagues.

Continuous learning is central to this, ensuring colleagues are able to adapt, upskill, reskill and retool not only to be better at their current jobs but to ensure they can develop and grow for new roles to best serve our clients in the future. In March 2020 we launched a new digital learning platform, actively encouraging colleagues to adopt a learning mindset through setting and pursuing 'aspirational' goals and developing their careers. Since the launch more than 55,000 colleagues have accessed learning content and engagement in our second global learning week (over 400 events) spurred this on.

The pandemic has brought into focus the way in which our business and the ways of working are rapidly changing. Throughout the year we have listened to colleagues' preferences for greater ﬂexibility in working arrangements as we come out of the pandemic. Responses to our 2020 annual survey highlighted that 74 per cent of colleagues would choose to work from home or another non-primary workplace for at least 50 per cent of the time and 77 per cent told us they feel able to choose a reasonable balance between personal and work life. Rather than simply offering ﬂexible working (which we had in all markets before COVID-19) we intend to implement a hybrid approach combining virtual and ofﬁce- based working with greater ﬂexibility in working patterns and locations, balancing colleague preference and business demands. A review of all roles (where and how they can

be done) showed that more than 80 per cent of roles are suitable for some form of ﬂexible working. Beginning in 2021, employees in eight markets will be able to apply for formal ﬂexi-working arrangements, with subsequent markets expected through 2021 to mid-2022.

Other fair pay developments in 2020

We have made good progress in implementing the principles of our Charter since its launch in 2018 and implementation continues as our new ways of working evolve. During 2020 we have made further progress to improve colleagues' experience, including:

Standard Chartered - Strategic Report 2020

Strategic report Directors' remuneration report overview

Assurance that all colleagues are paid a living wage, as measured by the benchmarks in place through our work with Fair Wage Network. In addition, we have taken the ﬁrst steps in assessing the feasibility of incorporating living wages into our supply chain, which is a multi-year undertaking. During 2021, we will focus on specific actions for non-employed workers
We have Group-wide principles, guided by market data, for making salary decisions to help us balance what is right for colleagues with the Group's ﬁnancial position. During 2020, we expanded the use of salary ranges to cover 74 per cent of colleagues globally (increased from
25 per cent in 2019). We expect salary ranges to improve further the transparency and fairness of ﬁxed pay decision-making
Our multi-year review of beneﬁts is progressing, increasing the consistency of the structure of pay and beneﬁts by country, including the removal of differentiation of allowances and beneﬁts solely by band, age, tenure and dependent status. The phased roll-out of our ﬂexible beneﬁts plan which enables colleagues to choose beneﬁts which best suit their individual needs continues, with the introduction in Poland in September 2020 and preparation work completed for launch in Malaysia in March 2021
Work in additional markets continues to align beneﬁts more closely to the Charter and to increase inclusivity. For example, in India, medical beneﬁts and domestic relocation beneﬁts were extended from 2020 to LGBT+ partners of colleagues

Our Strategic report contains further information on colleagues, including a summary of our gender pay gap on page 61

Determining Group-wide 2020 discretionary incentives

The Group delivered a resilient performance in 2020 in conditions that became extremely challenging. Strong and broad-based growth in the initial months was followed by lower income year-on-year in the second half and for the year overall driven by the effects of COVID-19, which led to severe global economic contraction and substantially reduced interest rates. As a result, pre-provision operating proﬁt declined despite lower expenses. Underlying proﬁt fell because of substantially higher credit impairments due mainly to provisions against credit losses booked in the ﬁrst half driven by the deterioration in the macroeconomic outlook. The Group remains strongly capitalised despite the external challenges, with a CET1 ratio of 14.4 per cent above the top of the medium-term target range enabling recommencement of shareholder distributions.

The total scorecard outcome was 37 per cent with 13 per cent being based on ﬁnancial achievements including effective cost management and growth in high-performing liabilities, and 24 per cent based on non-ﬁnancial achievements including improved digital client onboarding, on-track development of new ventures and an improved employee net promoter score of 6 points to 17.5.

Deliver the ﬁnancial					Outcome (%)/
13/50
framework
				Maximum (%)
Purpose and people			7/10
Deliver our network and
3/10
grow our afﬂuent business


Improve productivity			3/5
Transform and disrupt
		6/10
with digital


Risk and controls	5/15
Overall 2020 scorecard

outcome	37%

The annual scorecard is the starting point for determining the Group's annual discretionary incentives. Based on the 37 per cent outcome, and without any discretionary adjustment, total 2020 discretionary incentives would have been $1,150 million.

However the Committee has exercised its judgement carefully for 2020 and considered several factors including the Group's underlying performance, the experience of our stakeholders, the withdrawal of the 2019 ﬁnal ordinary dividend, the resilience of our business, inherent future risks, the signiﬁcant contribution of our colleagues whilst managing the crisis and the need to compete for talent globally across 59 markets.

Considering all factors, the Committee applied a downward adjustment of $160 million, resulting in total discretionary incentives of $990 million, which is 23 per cent lower than 2019 and the lowest in the last ﬁve years. $129 million of the total discretionary incentives is deferred and charged in future years, including $21 million in LTIP awards for senior management, the value of which will be determined by Group performance over the period 2021 to 2023.

Total discretionary incentives - last ﬁve years ($ million)

1,400			1,278

1,200	1,146	1,179

1,039				990
1,000

800
600
400
200
0	2017	2018	2019	2020
2016

In allocating discretionary incentives for 2020, we thought carefully about how to reﬂect the challenges of the pandemic and the need to recognise the collective contribution of colleagues to the Group's performance. Focus was primarily placed on Group performance given the challenges created by COVID-19 in fairly and objectively assessing the relative performance of each business, function, region and country. The one notable exception was within the CIB business, where incentives were differentiated for Financial Markets in order to reward colleagues for the strong performance in 2020.

Across the rest of the Group, at an individual level, focus was placed on protecting compensation levels for junior colleagues, as shown in the table below.

		Average year-on-year change (%)
	Number of	Annual
	discretionary	Total
	colleagues1	incentives	compensation
Management Team	11	(43)	(23)
Managing Directors	1,055	(34)	(13)
Other senior leaders	2,621	(30)	(6)
All other colleagues	62,304	(27)	0

Number of colleagues eligible for annual discretionary incentives, excluding Financial Markets

98 Standard Chartered - Strategic Report 2020

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Chart Standard Chartered PLC

Duration

Period

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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

More financial data

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

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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

8.007 USD

Average target price

10.89 USD

Spread / Average Target

+36.03%

Consensus

EPS Revisions

Estimates Revisions

Quarterly earnings - Rate of surprise

Company calendar

Sector Other Banks

	1st Jan change	Capi.
STANDARD CHARTERED PLC	-3.51%	20.31B
JPMORGAN CHASE & CO.	+5.87%	519B
BANK OF AMERICA CORPORATION	+4.63%	273B
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED	+7.07%	248B
WELLS FARGO & COMPANY	+16.17%	198B
BANK OF CHINA LIMITED	+12.42%	170B
CHINA CONSTRUCTION BANK CORPORATION	+5.16%	156B
HSBC HOLDINGS PLC	+0.09%	146B
HDFC BANK LIMITED	-11.56%	137B
COMMONWEALTH BANK OF AUSTRALIA	+0.93%	120B

Other Banks

1.		2.
Retail Banking	Commercial Banking
Serving more than nine million	Supporting more than 43,000
individuals and small	local corporations and medium-
businesses.		sized enterprises across Asia,
		Africa and the Middle East.
Operating income	Operating income
$5,013m	$5,013m	$1,409m	$1,438m
Underlying basis	Statutory basis	Underlying basis	Statutory basis
Global

3.		4.
Corporate &		Private Banking
Institutional Banking	Helping nearly 7,000
Serving more than 5,000 large	clients grow and protect
their wealth.
corporations, governments,

banks and investors.
Operating income	Operating income
$7,214m	$7,225m	$540m	$540m
Underlying basis	Statutory basis	Underlying basis	Statutory basis

5. Central & other items	Operating income
	$589m	$538m
	Underlying basis	Statutory basis

Global functions	Our client-facing businesses are supported by our global
	functions, which ensure our Group operations run smoothly
	and consistently

5. 1.
4.
Total operating income
$14,765m
Underlying basis
$14,754m	2.

Statutory basis
3.

1.	2.
ASEAN & South Asia	Europe & Americas
Our largest markets by income are	Centred in London and New York
Singapore and India. We are active	with a presence across both
in all 10 ASEAN countries.	continents. A key income originator
	for the Group.
Operating income	Operating income
$4,366m $4,362m	$1,922m	$1,922m
Underlying basis Statutory basis	Underlying basis	Statutory basis

3.	4.
Greater China	Africa &
& North Asia	Middle East
Serving clients in mainland China,	Present in 25 markets, of which
Hong Kong, Korea, Japan, Taiwan	the most sizeable by income
and Macau. The Group's largest	are the UAE, Nigeria and Kenya.
region by income.
Operating income	Operating income


		$6,016m	$6,055m	$2,364m $2,362m
		Underlying basis	Statutory basis	Underlying basis	Statutory basis

		5. Central & other items	Operating income
				$97m	$53m
				Underlying basis	Statutory basis
Valued behaviours	Our valued behaviours ensure we do things the right way, in
	order for us to succeed. Only by living our values will we realise

Better together	Do the right thing
• See more in others	• Live with integrity
• "How can I help?"	• Think client
• Build for the long term	• Be brave, be the change

Argentina	Germany	Turkey
Brazil	Ireland	UK
Colombia	Jersey	US
Falkland Islands	Poland
France	Sweden

Angola	Kenya	Tanzania
Bahrain	Lebanon	UAE
Botswana	Mauritius	Uganda
Cameroon	Nigeria	Zambia
Cote d'Ivoire	Oman	Zimbabwe
Egypt	Pakistan
The Gambia	Qatar
Ghana	Saudi Arabia
Iraq	Sierra Leone
Jordan	South Africa
		Case study
		Africa & Middle East
		Fighting
		COVID-19 in
		the Middle
		East
		Read more
		on page 36

Australia	Indonesia	Philippines
Bangladesh	Laos	Singapore
Brunei	Malaysia	Sri Lanka
Cambodia	Myanmar	Thailand
India	Nepal	Vietnam

1.	Bill Winters, CBE	5.	Dr Michael Gorriz
	Group Chief Executive		Group Chief Information Ofﬁcer
2.	Andy Halford	6.	Benjamin Hung
	Group Chief Financial Ofﬁcer		CEO, Asia
3.	Simon Cooper	7.	Judy Hsu
	CEO, Corporate, Commercial &		CEO, Consumer, Private and
	Institutional Banking and		Business Banking
	Europe & Americas	8.	Tanuj Kapilashrami
4.	David Fein
	Group Head, Human Resources
	Group General Counsel	9.	Sunil Kaushal

Market environment	Macroeconomic factors
affecting the global landscape

Proﬁts	Return on tangible equity
• Income gained from	• Proﬁt generated relative to
providing our products	tangible equity invested
and services minus
expenses and impairments

Total number of	Total number of business
individual clients1	banking and CCIB clients2

Senior appointments	Employees committed
which are internal	to our success

2019	3.0%	6.4%	3.0%
2020
				340bps


2018	5.1%


2019		20.2% -34.6%
(34.6)%
2020



2018	(20.6)%

2019	13.8%	60bps
	14.4%

2018	14.2%

UK	2021		4.8%
	2020
	(9.9)%
US	2021
	5.5%
	2020
		(3.5)%

Transform		Grow
and disrupt	Purpose	our afﬂuent
with digital	business
	and
	people
Improve		Optimisation
productivity		markets

Employee net promoter score	Sustainability Aspirations
+17.5 +6pts	achieved or on track*
78% -15pts
2019: +11.5 pts	2019: 93.1%

Progress in 2020		Progress in 2020
Afﬂuent client income	Underlying operating proﬁt before taxation
		in India, Indonesia, Korea and the UAE

$3.5bn -1%	$559m +33%
2019: $3.5bn	2019: $420m
Income from Retail Banking Priority, Retail Banking	Aggregate underlying proﬁt before taxation
Premium and Private Banking clients	in the four markets. Excludes Permata.
Transform and disrupt with digital

Transform our Retail Banking business	Progress in 2020
with digital
Retail Banking digital adoption
As part of our efforts to transform our
61% +7%
retail bank, digital onboarding improved
to 80 per cent (~30 per cent in 2019), while
digital servicing increased to 70 per cent
(25 per cent in 2019).	2019: 54%
We launched our new virtual bank Mox	Mobile and online adoption by active clients.
in Hong Kong and already had 66,000
customers and HKD5.2 billion in deposits as	Corporate & Institutional
of the end of 2020.
Banking digital volumes

We also announced nexus, our 'banking as	$189m +20%
a service' solution for consumer platforms,
in Indonesia.
Consolidate our position with	2019: $157m

corporate clients	Financial markets sales income originated
We are leading an industry workgroup to	via e-platforms

develop a Trade Finance Registry pilot to	Commercial Banking digital adoption
enhance transparency in commodity trade.
74% +7%
We completed the ﬁrst cross-border live
transaction on Trusple, the newly launched
digital international trade and ﬁnancial
service platform of AntChain.	2019: 68%
Percentage of Commercial Banking clients
We launched an ambitious three-year
active on our Straight2Bank application
programme to build the leading banking
platform in our footprint.
We support clients on their digital journey,
and we have set a target of 95 per cent of
clients on digital platforms by 2023.
Standard Chartered - Strategic Report 2020	25

CCIB network income		% of CCIB transactions
	digitally initiated

$4.4bn
41%

Mass market customers		% of digital sales for
	Retail Products

7.6m	68%

Afﬂuent client income	Total number of
afﬂuent clients

$3.5bn	2.0m

		Reduction in carbon
Sustainability Aspirations		footprint from
achieved or on track		previous year

78%	37%

Proﬁt before	Return on tangible equity
taxation	(RoTE)
$1,841m	6.6%
18%	190bps
underlying basis	underlying basis
$1,677m	6.1%
22%	190bps
statutory basis	statutory basis
Risk-weighted assets (RWA)

•	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

Standard Chartered PLC

Equities

STAN

GB0004082847

Banks

Standard Chartered : Strategic Report 2020

EPS Revisions

•	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