3rd Quarter Results
Standard Chartered PLC
3Q'23 Results
26 October 2023
Registered in England under company No. 966425
Registered Office: 1 Basinghall Avenue, London, EC2V 5DD, UK
Table of contents
|
Performance highlights |
1 |
|
Statement of results |
3 |
|
Group Chief Financial Officer's review |
4 |
|
Supplementary financial information |
14 |
|
Underlying versus reported results reconciliations |
29 |
|
Risk review |
35 |
|
Capital review |
39 |
|
Financial statements |
44 |
|
Other supplementary information |
49 |
Unless another currency is specified, the word 'dollar' or symbol '$' in this document means US dollar and the word 'cent' or symbol 'c' means one-hundredth of one US dollar.
The information within this report is unaudited.
Unless context requires within the document, 'China' refers to the People's Republic of China and, for the purposes of this document only, excludes Hong Kong Special Administrative Region (Hong Kong), Macau Special Administrative Region (Macau) and Taiwan. 'Korea' or 'South Korea' refers to the Republic of Korea. Asia includes Australia, Bangladesh, Brunei, Cambodia, India, Indonesia, Laos, Malaysia, Myanmar, Nepal, Philippines, Singapore, Sri Lanka, Thailand, Vietnam, Mainland China, Hong Kong, Japan, Korea, Macau, Taiwan; Africa and Middle East (AME) includes Angola, Bahrain, Botswana, Cameroon, Côte d'Ivoire, Egypt, The Gambia, Iraq, Kenya, Lebanon, Mauritius, Nigeria, Oman, Pakistan, Qatar, Saudi Arabia, Sierra Leone, South Africa, Tanzania, UAE, Uganda, Zambia, Zimbabwe; and Europe and Americas (EA) include Argentina, Brazil, Colombia, Falkland Islands, France, Germany, Ireland, Jersey, Poland, Sweden, Turkey, the UK, and the US.
Within the tables in this report, blank spaces indicate that the number is not disclosed, dashes indicate that the number is zero and nm stands for not meaningful.
Standard Chartered PLC is incorporated in England and Wales with limited liability, and is headquartered in London. The Group's head office provides guidance on governance and regulatory standards. Standard Chartered PLC. Stock codes are: LSE STAN.LN and HKSE 02888.
|
All figures are presented on an underlying basis and comparisons are made to 2022 on a reported currency basis, unless otherwise stated. A reconciliation of restructuring and other items excluded from underlying results is set out on pages 29-34.
Bill Winters, Group Chief Executive, said:
"We have continued to make strong progress in the third quarter against the five strategic actions outlined last year, delivering a solid set of results. Wealth Management has continued its recovery with double digit income growth and the Financial Markets performance has been resilient against a strong comparator period. We remain highly liquid, and well capitalised, with a CET1 ratio towards the top of our target range and confident in the delivery of our 2023 financial targets, including a return on tangible equity of 10%."
Selected information on 3Q'23 financial performance with comparisons to 3Q'22 unless otherwise stated
• Return on tangible equity ("RoTE") of 7.0%, down 2%pts year-on-year ("YoY"), primarily due to a higher tax charge in 3Q'23
• Income up 6% to $4.4bn, up 7% YoY at constant currency ("ccy")
- Net interest income ("NII") up 20% at ccy to $2.4bn; Other income down 5% at ccy to $2.0bn
- Normalised net interest margin ("NIM") 1.67%, a transient reduction of 4bps since 2Q'23; reported NIM 1.63%, including 4bps from one-offs
- Financial Markets ("FM") down 8% at ccy, down 6% excluding $28m gain on mark-to-market ("MTM") liabilities in 3Q'22
- Wealth Management ("WM") up 18% at ccy, supported by continued strong Affluent client onboarding
• Expenses increased 8% YoY at ccy to $2.8bn; down $56m or 2% quarter-on-quarter ("QoQ")
- Increase due to inflation, business growth and targeted investments, partially funded by productivity saves
• Credit impairment charge of $294m, up $62m YoY, up $148m QoQ; includes China Commercial Real Estate (CRE) charge of $186m, of which $42m related to the management overlay, now $178m
• Underlying profit before tax of $1.3bn, down 2%
• Reduction in China Bohai Bank ("Bohai") value-in-use calculation led to an impairment charge of $0.7bn reflecting subdued 2Q'23 Bohai earnings and challenging macroeconomic outlook; 18bps impact on the CET1 ratio
• Tax charge of $494m: underlying effective tax rate of 38%, up 14%pts reflecting profit mix and increased losses in the United Kingdom where we cannot recognise a tax benefit
• The Group's balance sheet remains strong, liquid and well diversified
- Customer loans and advances of $281bn, down $9bn or 3% since 30.06.23; up $2bn or 1% on an underlying basis
- Customer deposits of $453bn, down $17bn or 3% since 30.06.23; down $14bn or 3% at ccy; managing liquidity coverage ratio (LCR) and business as usual outflows in Transaction Banking Cash
- LCR 156% (30.06.23: 164%); Advances-to-deposit ratio 54.5% (30.06.23: 53.6%)
• RWA of $242bn, down $8bn or 3% since 30.06.23
- Credit risk RWA down $9bn, primarily from optimisation and efficiency actions, and China Bohai Bank impairment
- Market risk RWA up $1bn and Operational RWA stable
• The Group remains strongly capitalised
- CET1 ratio 13.9% (30.06.23: 14.0%), towards the top end of 13-14% target range
- ~$1.8bn of the $2bn buy-backs announced in 2023 completed
Selected information on YTD'23 financial performance with comparisons to YTD'22 unless otherwise stated
• RoTE of 10.4%, up 1%pt YoY
• Income up 11% to $13.4bn, up 15% YoY at ccy
- NII up 30% at ccy to $7.2bn; Other income up 1% to $6.2bn
- NIM up 30bps YoY to 1.66% YTD'23
- FM flat at ccy, up 7% excluding non-repeat of $244m gain on MTM liabilities in YTD22; WM up 9% at ccy
Page 1
Standard Chartered PLC - results for the third quarter ended 30 September 2023
• Expenses up 8%, 11% at ccy; increase due to inflation, business growth and targeted investments partially funded by gross productivity saves
- Positive 4% income-to-cost jaws YTD, with cost-to-income ratio improving 2% pts to 62%
• Credit impairment charge of $466m, down $30m YoY
- Annualised loan-loss loss rate of 20bps, down 2bps YoY
- China CRE portfolio Expected Credit Loss provisions $1.1bn on Stage 3 exposures of $1.4bn; cover ratio including collateral 88%
• Underlying profit before tax of $4.6bn, up 19% at ccy
• Underlying earnings per share (EPS) increased from 89.6 cents or 10% to 98.4 cents; Reported EPS down 21% to 74.9 cents
Update on strategic actions for YTD'23 unless otherwise stated
• Drive improved returns in CCIB: Income RoRWA of 7.9%, ahead of 2024 target of 6.5%; ~ $22bn RWA optimised since 1.1.22, nearly achieved $22bn target over a year ahead of plan
• Transform profitability in CPBB: Cost-to-income ratio of 58%, improved by 11%pts YoY, ahead of 2024 target of 60%; $0.3bn of gross expense savings since 1.1.22
• Seize China opportunity: China onshore and offshore profit before tax up ~3x YoY to $1.0bn
• Create operational leverage: $0.7bn gross productivity saves since 1.1.22; Cost-to-income ratio improved by 2%pts YoY to 62%
• Deliver substantial shareholder returns: $3.9bn of total returns announced since 1.1.22
Other highlights
• Aviation exit: announced the sale of our global aviation business in August, with the transaction expected to be completed by the end of the year and increase CET1 ratio by 19bps in the fourth quarter
Outlook
We remain confident in the delivery of our RoTE targets, supported by continued strong progress on our five strategic actions.
For 2023 our guidance is as follows:
• Income to increase in the 12-14% range at ccy
• Full year average NIM to approach 170bps
• Underlying asset growth in the low single digit percentage range in 2H'23 (from 30.6.23)
• RWA to be similar to 31.12.22
• Positive income-to-cost jaws of around 4%, excluding the UK bank levy at ccy
• Full year loan loss rate to be in the range of 17-25 bps
• Underlying effective tax rate expected to be around 30%
• Operate dynamically within the full 13-14% CET1 target range
• RoTE of 10%
All 2024 guidance remains unchanged. We continue to expect income growth to be in the 8-10% range at ccy and we remain confident of achieving greater than 11% RoTE.
Page 2
Statement of results
|
|
3 months ended 30.09.23 |
3 months ended 30.09.22 |
Change1 |
|
Underlying performance2 |
|
|
|
|
Operating income |
4,403 |
4,138 |
6 |
|
Operating expenses (including UK bank levy) |
(2,770) |
(2,576) |
(8) |
|
Credit impairment |
(294) |
(232) |
(27) |
|
Other impairment |
(26) |
- |
nm⁸ |
|
Profit from associates and joint ventures |
3 |
16 |
(81) |
|
Profit before taxation |
1,316 |
1,346 |
(2) |
|
Profit/(loss) attributable to ordinary shareholders³ |
644 |
915 |
(30) |
|
Return on ordinary shareholders' tangible equity (%) |
7.0 |
9.4 |
(240)bps |
|
Cost to income ratio (excluding bank levy) (%) |
62.9 |
62.3 |
(60)bps |
|
Reported performance9 |
|
|
|
|
Operating income |
4,523 |
4,329 |
4 |
|
Operating expenses |
(2,870) |
(2,696) |
(6) |
|
Credit impairment |
(292) |
(227) |
(29) |
|
Other impairment |
(734) |
(31) |
nm⁸ |
|
Profit from associates and joint ventures |
6 |
16 |
(63) |
|
Profit before taxation |
633 |
1,391 |
(54) |
|
Taxation |
(494) |
(313) |
(58) |
|
Profit for the period |
139 |
1,078 |
(87) |
|
Profit/(loss) attributable to parent company shareholders |
145 |
1,087 |
(87) |
|
Profit/(loss) attributable to ordinary shareholders3 |
(35) |
964 |
(104) |
|
Return on ordinary shareholders' tangible equity (%) |
(0.4) |
10.5 |
(1,090)bps |
|
Cost to income ratio (including bank levy) (%) |
63.5 |
62.3 |
(120)bps |
|
Net interest margin (%) (adjusted)7 |
1.63 |
1.43 |
(20)bps |
|
Balance sheet and capital |
30.09.23 |
30.09.22 |
Change |
|
Total assets |
825,833 |
864,435 |
(4) |
|
Total equity |
48,356 |
50,003 |
(3) |
|
Average tangible equity attributable to ordinary shareholders |
35,693 |
36,569 |
(2) |
|
Loans and advances to customers |
281,009 |
298,390 |
(6) |
|
Customer accounts |
453,157 |
447,259 |
1 |
|
Risk weighted assets |
241,506 |
252,293 |
(4) |
|
Total capital |
51,112 |
53,491 |
(4) |
|
Total capital (%) |
21.2 |
21.2 |
0bps |
|
Common Equity Tier 1 |
33,569 |
34,504 |
(3) |
|
Common Equity Tier 1 ratio (%) |
13.9 |
13.7 |
20bps |
|
Advances-to-deposits ratio (%)4 |
54.5 |
58.1 |
(3.6) |
|
Liquidity coverage ratio (%) |
156.3 |
156.0 |
nm⁸ |
|
Leverage ratio (%) |
4.7 |
4.8 |
(10)bps |
|
Information per ordinary share |
Cents |
Cents |
Change |
|
Earnings per share - underlying5 |
23.2 |
31.0 |
(7.8) |
|
- reported5 |
(1.3) |
32.7 |
(34.0) |
|
Net asset value per share |
1,504 |
1,433 |
71 |
|
Tangible net asset value per share6 |
1,283 |
1,243 |
40 |
|
Number of ordinary shares at period end (millions) |
2,725 |
2,905 |
(6) |
1 Variance is better/(worse) other than assets, liabilities and risk-weighted assets. Change is percentage points difference between two points rather than percentage change for total capital ratio (%), common equity tier 1 ratio (%), net interest margin (%), advances-to-deposits ratio (%), liquidity coverage ratio (%), leverage ratio (%), cost-to-income ratio (%) and return on ordinary shareholders' tangible equity (%). Change is cents difference between two points rather than percentage change for earnings per share, net asset value per share and tangible net asset value per share
2 Underlying performance for relevant periods in 2022 has been restated for removal of (i) AME exits (ii) Aviation Finance and (iii) DVA. No change to reported performance
3 Profit attributable to ordinary shareholders is after the deduction of dividends payable to the holders of non-cumulative redeemable preference shares and Additional Tier 1 securities classified as equity
4 When calculating this ratio, total loans and advances to customers excludes reverse repurchase agreements and other similar secured lending, excludes approved balances held with central banks, confirmed as repayable at the point of stress and includes loans and advances to customers held at fair value through profit and loss. Total customer accounts include customer accounts held at fair value through profit or loss
5 Represents the underlying or reported earnings divided by the basic weighted average number of shares. Prior period refers to 9 months ended 30.09.22
6 Calculated on period end net asset value, tangible net asset value and number of shares
7 Net interest margin is calculated as adjusted net interest income divided by average interest-earning assets, annualised
8 Not meaningful
9 Reported performance/results within this interim financial report means amounts reported under UK-adopted IAS and EU IFRS. In prior periods Reported performance/results were described as Statutory performance/results
Page 3
Group Chief Financial Officer's review
The Group delivered a solid performance in the third quarter of 2023
Summary of financial performance
|
|
3Q'23 |
3Q'22³ |
Change |
Constant currency change¹ |
2Q'23 |
Change |
Constant currency change¹ |
YTD'23 |
YTD'22³ |
Change |
Constant currency change¹ |
|
Underlying net interest income4 |
2,388 |
2,017 |
18 |
20 |
2,436 |
(2) |
(2) |
7,165 |
5,711 |
25 |
30 |
|
Underlying other income4 |
2,015 |
2,121 |
(5) |
(5) |
2,119 |
(5) |
(4) |
6,189 |
6,286 |
(2) |
1 |
|
Underlying operating income |
4,403 |
4,138 |
6 |
7 |
4,555 |
(3) |
(3) |
13,354 |
11,997 |
11 |
15 |
|
Other operating expenses |
(2,770) |
(2,576) |
(8) |
(8) |
(2,826) |
2 |
1 |
(8,271) |
(7,677) |
(8) |
(11) |
|
UK bank levy |
- |
- |
nm⁶ |
nm⁶ |
(3) |
100 |
100 |
(3) |
5 |
(160) |
(160) |
|
Underlying operating expenses |
(2,770) |
(2,576) |
(8) |
(8) |
(2,829) |
2 |
1 |
(8,274) |
(7,672) |
(8) |
(11) |
|
Underlying operating profit before impairment and taxation |
1,633 |
1,562 |
5 |
6 |
1,726 |
(5) |
(5) |
5,080 |
4,325 |
17 |
21 |
|
Credit impairment |
(294) |
(232) |
(27) |
(37) |
(146) |
(101) |
(101) |
(466) |
(496) |
6 |
2 |
|
Other impairment |
(26) |
- |
nm⁶ |
nm⁶ |
(63) |
59 |
60 |
(89) |
(1) |
nm⁶ |
nm⁶ |
|
Profit from associates and |
3 |
16 |
(81) |
(80) |
83 |
(96) |
(96) |
97 |
169 |
(43) |
(42) |
|
Underlying profit before taxation |
1,316 |
1,346 |
(2) |
(2) |
1,600 |
(18) |
(17) |
4,622 |
3,997 |
16 |
19 |
|
Restructuring |
(7) |
(10) |
30 |
75 |
8 |
(188) |
(200) |
49 |
(9) |
nm⁶ |
nm⁶ |
|
Goodwill & other impairment⁵ |
(697) |
- |
nm⁶ |
nm⁶ |
- |
nm⁶ |
nm⁶ |
(697) |
- |
nm⁶ |
nm⁶ |
|
DVA |
21 |
55 |
(62) |
(63) |
(93) |
123 |
123 |
(18) |
175 |
(110) |
(110) |
|
Reported profit before taxation |
633 |
1,391 |
(54) |
(54) |
1,515 |
(58) |
(57) |
3,956 |
4,163 |
(5) |
(2) |
|
Taxation |
(494) |
(313) |
(58) |
(65) |
(474) |
(4) |
(5) |
(1,432) |
(997) |
(44) |
(57) |
|
Profit for the period |
139 |
1,078 |
(87) |
(87) |
1,041 |
(87) |
(86) |
2,524 |
3,166 |
(20) |
(19) |
|
Net interest margin (%)2 |
1.63 |
1.43 |
20 |
|
1.71 |
(8) |
|
1.66 |
1.36 |
30 |
|
|
Underlying return on tangible |
7.0 |
9.4 |
(240) |
|
12.1 |
(511) |
|
10.4 |
9.3 |
110 |
|
|
Underlying earnings per share (cents) |
23.2 |
31.0 |
(25) |
|
37.3 |
(38) |
|
98.4 |
89.6 |
10 |
|
1. Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2. Change is the basis points (bps) difference between the two periods rather than the percentage change
3. Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
4. To be consistent with how we the compute Net Interest Margin (NIM), and to align with the way we manage our business, we have changed our definition of Underlying Net Interest Income (NII) and Underlying Other Income (OI). The adjustments made to NIM, including interest expense relating to funding our trading book, will now be shown against Underlying Other Income rather than Underlying NII. Prior periods have been restated. There is no impact on total income
5. Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
6. Not meaningful
Page 4
Group Chief Financial Officer's review continued
Reported financial performance summary
|
|
3Q'23 |
3Q'22 |
Change |
Constant currency change¹ |
2Q'23 |
Change |
Constant currency change¹ |
YTD'23 |
YTD'22 |
Change |
Constant currency change¹ |
|
Net interest income |
1,925 |
1,932 |
- |
2 |
1,978 |
(3) |
(2) |
5,909 |
5,570 |
6 |
10 |
|
Other income |
2,598 |
2,397 |
8 |
9 |
2,589 |
- |
2 |
7,741 |
6,984 |
11 |
14 |
|
Reported operating income |
4,523 |
4,329 |
4 |
6 |
4,567 |
(1) |
- |
13,650 |
12,554 |
9 |
12 |
|
Reported operating expenses |
(2,870) |
(2,696) |
(6) |
(8) |
(2,918) |
2 |
1 |
(8,538) |
(8,024) |
(6) |
(9) |
|
Reported operating profit before impairment and taxation |
1,653 |
1,633 |
1 |
3 |
1,649 |
- |
1 |
5,112 |
4,530 |
13 |
17 |
|
Credit impairment |
(292) |
(227) |
(29) |
(40) |
(141) |
(107) |
(106) |
(453) |
(490) |
8 |
3 |
|
Goodwill & other impairment |
(734) |
(31) |
nm³ |
nm³ |
(77) |
nm³ |
nm³ |
(811) |
(46) |
nm³ |
nm³ |
|
Profit from associates and |
6 |
16 |
(63) |
(63) |
84 |
(93) |
(93) |
108 |
169 |
(36) |
(36) |
|
Reported profit before taxation |
633 |
1,391 |
(54) |
(54) |
1,515 |
(58) |
(57) |
3,956 |
4,163 |
(5) |
(2) |
|
Taxation |
(494) |
(313) |
(58) |
(65) |
(474) |
(4) |
(5) |
(1,432) |
(997) |
(44) |
(57) |
|
Profit/(loss) for the period |
139 |
1,078 |
(87) |
(87) |
1,041 |
(87) |
(86) |
2,524 |
3,166 |
(20) |
(19) |
|
Reported return on tangible |
(0.4) |
10.5 |
(1,090) |
|
10.8 |
(1,120) |
|
7.8 |
10.1 |
(230) |
|
|
Reported earnings per share (cents) |
(1.3) |
32.7 |
(104) |
|
34.8 |
(104) |
|
74.9 |
94.8 |
(21) |
|
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Change is the basis points (bps) difference between the two periods rather than the percentage change
3 Not meaningful
The Group delivered a solid performance in the third quarter of 2023, supported by strong progress on the five strategic actions. The Group's underlying profit before tax of $1.3 billion was 2 per cent lower than in the prior year. Income grew 7 per cent on a constant currency basis with a 20 per cent increase in net interest income partly offset by a 5 per cent reduction in other income. Expenses increased 8 per cent at constant currency but were down 1 per cent compared to the previous quarter. The credit impairment charges in the quarter of $294 million included further charges relating to the China commercial real estate sector. The Group reduced the carrying value of its investment in China Bohai Bank by $697 million resulting in reported profit before tax declining by half to $633 million, with an 18 basis points impact to the CET1 ratio. The Group remains well capitalised and highly liquid with a CET1 ratio of 13.9 per cent, an advances-to-deposits ratio of 55 per cent, and a liquidity coverage ratio of 156 per cent.
All commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2022 on a reported currency basis, unless otherwise stated.
• Operating income of $4.4 billion was up 6 per cent in the third quarter and increased 7 per cent on a constant currency basis, as the Group benefitted from a year-on-year increase in the net interest margin and a strong recovery in Wealth Management income
• Underlying net interest income increased 18 per cent, or 20 per cent on a constant currency basis as the net interest margin increased 14 per cent or 20 basis points. This was despite a year-on-year incremental 12 basis points drag from hedges. Over the past year, the Group increased its pricing on assets and the yield on its Treasury portfolio more quickly than it repriced its liability base, reflecting strong pricing discipline and passthrough rate management albeit the rate paid increased more quickly than the gross yield on assets during the quarter
• Underlying other income decreased 5 per cent as Financial Markets income was lower on the back of reduced market volatility and the non-repeat of $28 million of gains on mark-to-market liabilities in the third quarter of 2022. This was partly offset by strong growth in Wealth Management income, which continues to benefit from strong Affluent client onboarding and positive net new money
• Operating expenses increased 8 per cent reflecting the impact of the Group's continuing investment into business growth initiatives and strategic investments, and higher inflation partly offset by cost efficiency actions. The Group generated 1 per cent negative income-to-cost jaws while the cost-to-income ratio increased 1 percentage point to 63 per cent
• Credit impairment was a $294 million charge in the quarter, a $62 million increase on the third quarter of 2022, and double the amount booked in the prior quarter. Impairment charges in the quarter include $186 million in relation to the China commercial real estate sector and $115m in relation to the Consumer, Private and Business Banking portfolio. The year-to-date loan loss rate annualises to 20 basis points
Page 5
Group Chief Financial Officer's review continued
• Profit from associates and joint ventures decreased $13 million to $3 million due to lower profits at China Bohai Bank (Bohai)
• Restructuring and other items totalled $683 million in the quarter. The largest item was an impairment charge of $697 million reflecting a reduction in the carrying value of the Group's investment in Bohai following a refresh of the value-in-use calculation. Restructuring charges of $7 million primarily reflect redundancy and property optimisation charges partly offset by the profit from Aviation Finance and Principal Finance while movements in Debit Valuation Adjustment (DVA) were a positive $21 million
• Taxation was $494 million on a reported basis, with an underlying year-to-date effective tax rate of 31 per cent compared to the prior year rate of 25 per cent reflecting a change in the geographic mix of profits and increased losses in the United Kingdom where we cannot recognise a tax benefit
• Underlying return on tangible equity (RoTE) decreased by 240 basis points to 7.0 per cent primarily due to a higher effective tax rate partly offset by lower tangible equity benefitting from distributions to shareholders. On a reported basis, return on tangible equity was a negative 40 basis points
Operating income by product
|
|
3Q'23 |
3Q'222,3 |
Change |
Constant currency change¹ |
2Q'23 |
Change |
Constant currency change¹ |
YTD'23 |
YTD222,3 |
Change |
Constant currency change¹ |
|
Transaction Banking |
1,496 |
1,067 |
40 |
42 |
1,461 |
2 |
2 |
4,356 |
2,620 |
66 |
71 |
|
Trade & Working capital |
325 |
335 |
(3) |
(2) |
334 |
(3) |
(3) |
990 |
1,027 |
(4) |
(1) |
|
Cash Management |
1,171 |
732 |
60 |
61 |
1,127 |
4 |
4 |
3,366 |
1,593 |
111 |
117 |
|
Financial Markets |
1,253 |
1,386 |
(10) |
(8) |
1,391 |
(10) |
(8) |
4,058 |
4,198 |
(3) |
- |
|
Macro Trading |
634 |
736 |
(14) |
(11) |
825 |
(23) |
(22) |
2,289 |
2,337 |
(2) |
2 |
|
Credit Markets |
472 |
455 |
4 |
4 |
462 |
2 |
4 |
1,394 |
1,325 |
5 |
8 |
|
Credit Trading |
137 |
152 |
(10) |
(7) |
140 |
(2) |
1 |
449 |
341 |
32 |
39 |
|
Financing Solutions & Issuance3 |
335 |
303 |
11 |
10 |
322 |
4 |
5 |
945 |
984 |
(4) |
(2) |
|
Financing & Securities Services3 |
147 |
195 |
(25) |
(24) |
104 |
41 |
42 |
375 |
536 |
(30) |
(29) |
|
Lending & Portfolio Management |
121 |
164 |
(26) |
(26) |
132 |
(8) |
(8) |
387 |
446 |
(13) |
(10) |
|
Wealth Management |
526 |
454 |
16 |
18 |
495 |
6 |
7 |
1,532 |
1,438 |
7 |
9 |
|
Retail Products |
1,279 |
1,099 |
16 |
17 |
1,240 |
3 |
4 |
3,731 |
2,880 |
30 |
33 |
|
CCPL & other unsecured lending |
297 |
298 |
- |
2 |
286 |
4 |
5 |
873 |
908 |
(4) |
- |
|
Deposits |
919 |
620 |
48 |
50 |
848 |
8 |
9 |
2,538 |
1,216 |
109 |
115 |
|
Mortgage & Auto |
31 |
140 |
(78) |
(78) |
74 |
(58) |
(57) |
219 |
621 |
(65) |
(64) |
|
Other Retail Products |
32 |
41 |
(22) |
(19) |
32 |
- |
3 |
101 |
135 |
(25) |
(22) |
|
Treasury |
(274) |
(5) |
nm4 |
nm4 |
(160) |
(71) |
(70) |
(667) |
510 |
nm4 |
nm4 |
|
Other |
2 |
(27) |
107 |
78 |
(4) |
150 |
- |
(43) |
(95) |
55 |
36 |
|
Total underlying operating income |
4,403 |
4,138 |
6 |
7 |
4,555 |
(3) |
(3) |
13,354 |
11,997 |
11 |
15 |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Underlying income for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
3 Shipping Finance is now reported under "Financing Solutions & Issuance" which was reported under "Financing & Securities Services" in Q1'23
4 Not meaningful
The operating income by product commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2022 on a constant currency basis, unless otherwise stated.
Transaction Banking income increased 42 per cent. Cash Management income was 61 per cent higher reflecting strong pricing discipline and passthrough rate management to take advantage of a rising interest rate environment. Trade & Working Capital decreased 2 per cent reflecting lower balance sheet and contingent volumes partly offset by higher margins as the Group focused on higher-returning trade products.
Financial Markets income was 8 per cent lower compared to a very strong third quarter performance last year and was down 6 per cent excluding the non-repeat of prior year fair value gains on mark-to-market liabilities. There was 3 per cent growth in flow income which was more than offset by a 28 per cent reduction in episodic income, driven by subdued market volatility and the non-repeat of the gains on mark-to-market liabilities. Macro Trading was down 11 per cent with double-digit declines in FX and Commodities.
Page 6
Group Chief Financial Officer's review continued
Credit Markets income was up 4 per cent with lower Credit Trading income offset by higher Financing Solutions & Issuance, with the closure of a number of financing deals and strong origination volumes in primary markets leading to market share gains. Excluding the non-repeat of $28 million of gains on mark-to-market liabilities, Financing & Security Services income was down 14 per cent as higher Securities Services income benefiting from rising interest rates was more than offset by adverse movements in XVA.
Lending and Portfolio Management income decreased 26 per cent with an increase in losses in relation to portfolio management activities, and a decline in lending income from lower volumes, and increased cost of funding on undrawn commitments.
Wealth Management income grew 18 per cent with strong double-digit growth across Bancassurance, up 30 per cent and Treasury Products up 14 per cent. partly offset by lower income from managed investments. There was continued strong growth in net new money , which offset adverse market movements as Wealth Management AUM remained broadly stable.
Retail Products income increased 17 per cent. Deposit income was up 50 per cent due to low passthrough rates in a rising interest rate environment partly offset by migration from CASA into time deposits. Mortgages & Auto income decreased 78 per cent on the back of lower volumes and the impact of the Best Lending Rate cap in Hong Kong restricting the ability to reprice mortgages, despite an increase in funding costs from higher interest rates. Credit Cards & Personal Loans income increased 2 per cent reflecting growth in balances in both Credit Cards and Personal Loans.
Treasury income was a $274 million loss in the quarter primarily due to the $267 million loss from structural and short-term hedges in a rising interest environment and costs for holding additional liquidity centrally rather than it being recharged out to the products. This was in part offset by gains from RoTE-accretive cross-currency FX swaps which were funded by deposits.
Profit before tax by client segment and geographic region
|
|
3Q'23 |
3Q'22² |
Change |
Constant currency change¹ |
2Q'23 |
Change |
Constant currency change¹ |
YTD'23 |
YTD'22² |
Change |
Constant currency change¹ |
|
Corporate, Commercial & |
1,255 |
1,209 |
4 |
5 |
1,430 |
(12) |
(11) |
4,170 |
3,019 |
38 |
44 |
|
Consumer, Private & Business Banking |
669 |
481 |
39 |
38 |
696 |
(4) |
(4) |
2,042 |
1,195 |
71 |
75 |
|
Ventures |
(117) |
(85) |
(38) |
(34) |
(55) |
(113) |
(113) |
(275) |
(236) |
(17) |
(16) |
|
Central & other items (segment) |
(491) |
(259) |
(90) |
(92) |
(471) |
(4) |
(6) |
(1,315) |
19 |
nm³ |
nm³ |
|
Underlying profit before taxation |
1,316 |
1,346 |
(2) |
(2) |
1,600 |
(18) |
(17) |
4,622 |
3,997 |
16 |
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia |
1,063 |
1,053 |
1 |
- |
1,354 |
(21) |
(21) |
3,812 |
2,829 |
35 |
37 |
|
Africa & Middle East |
273 |
150 |
82 |
83 |
349 |
(22) |
(21) |
926 |
701 |
32 |
54 |
|
Europe & Americas |
(90) |
244 |
(137) |
(134) |
7 |
nm³ |
nm³ |
(101) |
890 |
(111) |
(111) |
|
Central & other items (region) |
70 |
(101) |
169 |
155 |
(110) |
164 |
161 |
(15) |
(423) |
96 |
96 |
|
Underlying profit before taxation |
1,316 |
1,346 |
(2) |
(2) |
1,600 |
(18) |
(17) |
4,622 |
3,997 |
16 |
19 |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
3 Not meaningful
The client segment and geographic region commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2022 on a constant currency basis, unless otherwise stated.
Corporate, Commercial & Institutional Banking (CCIB) profit increased 5 per cent. Income grew 11 per cent with Cash Management benefitting from disciplined pricing initiatives in a rising interest rate environment partly offset by lower episodic income within Financial Markets and lower Lending income. Expenses were 10 per cent higher and credit impairment increased $72 million reflecting further provisions in the China commercial real estate sector.
Consumer, Private & Business Banking (CPBB) profit increased 38 per cent, with income up 17 per cent as the benefit from higher interest rates on Retail Deposit income and a continued recovery in Wealth Management. This was partly offset by lower Mortgage income negatively impacted by the Best Lending Rate cap in Hong Kong. Expenses increased 6 per cent while credit impairment was $29 million higher.
Page 7
Group Chief Financial Officer's review continued
Ventures loss increased by over a third to $117 million, reflecting the Group's continued investment in transformational digital initiatives. Income more than tripled to $35 million but this increase was offset by increased expenses, albeit expenses were flat quarter-on-quarter. The impairment charge increased $26 million to $30 million reflecting increased delinquencies in Mox and the build of expected credit loss provisions as credit portfolios grow.
Central & other items (segment) recorded a loss of $491 million, an increase of $232 million, with hedge losses increasing by $170 million to $267 million driven by increased US Dollar interest rates. Expenses increased by $20 million while there was a net release in credit impairment relating to exposure reductions. Associate income reduced by $13 million reflecting lower profits at Bohai.
Asia profits were stable as income grew 10 per cent offset by a 9 per cent growth in expenses and a $118 million increase in credit impairments. The income growth reflects strong double-digit increases across Cash Management, Retail Deposits and Wealth Management partly offset by lower Mortgage income and a loss in Treasury Markets. The increase in credit impairment reflects further provisions relating to the China commercial real estate portfolio. The profit share from Bohai reduced by $11 million.
Africa & Middle East (AME) profits increased 83 per cent as income increased 19 per cent with strong growth in Cash Management and Retail Deposit income partly offset by a loss in Treasury Markets following de-risking actions in certain markets. This was partly offset by expenses increasing 9 per cent while credit impairment charges reduced by $71 million, reflecting a non-repeat of the prior year's sovereign-related impairments.
Europe & Americas recorded a loss of $90 million as income reduced by 44 per cent, reflecting the increased cost of hedges within Treasury whilst strong growth in Transaction Banking income was partly offset by lower Financial Markets income. Expenses increased 18 per cent reflecting the impact of inflation and higher investment spend. There was a $16 million reduction in the credit impairment release booked in the quarter.
Central & other items (region) recorded a profit of $70 million compared to a $101 million loss in the third quarter of 2022. The return to profitability is mainly due to higher returns paid to Treasury on the equity provided to the regions in a rising interest rate environment while expenses reduced by 22 per cent.
Adjusted net interest income and margin
|
|
3Q'23 |
3Q'22 |
Change¹ |
2Q'23 |
Change¹ |
YTD'23 |
YTD'22 |
Change¹ |
|
Adjusted net interest income2 |
2,380 |
2,023 |
18 |
2,430 |
(2) |
7,151 |
5,720 |
25 |
|
Average interest-earning assets |
579,713 |
562,509 |
3 |
569,811 |
2 |
577,351 |
564,382 |
2 |
|
Average interest-bearing liabilities |
548,297 |
522,641 |
5 |
536,142 |
2 |
541,171 |
525,600 |
3 |
|
|
|
|
|
|
|
|
|
|
|
Gross yield (%)3 |
5.06 |
2.88 |
218 |
4.61 |
45 |
4.68 |
2.34 |
234 |
|
Rate paid (%)3 |
3.63 |
1.57 |
206 |
3.08 |
55 |
3.23 |
1.06 |
217 |
|
Net yield (%)3 |
1.43 |
1.31 |
12 |
1.53 |
(10) |
1.45 |
1.28 |
17 |
|
Net interest margin (%)3,4 |
1.63 |
1.43 |
20 |
1.71 |
(8) |
1.66 |
1.36 |
30 |
1 Variance is better/(worse) other than assets and liabilities which is increase/(decrease)
2 Adjusted net interest income is reported net interest income less funding costs for the trading book and financial guarantee fees on interest-earning assets
3 Change is the basis points (bps) difference between the two periods rather than the percentage change
4 Adjusted net interest income divided by average interest-earning assets, annualised
5 Not meaningful
Adjusted net interest income increased 18 per cent due to a 14 per cent increase in the net interest margin which averaged 163 basis points in the quarter, increasing 20 basis points year-on-year but decreasing 8 basis points compared to the prior quarter. Normalised net interest margin, excluding the impacts of one-offs from a system migration and effective interest rate adjustment in relation to the Singapore mortgage portfolio, averaged 167 basis points in the quarter:
• Average interest-earning assets increased 2 per cent in the quarter with growth primarily from an increase in the cash and balances at central banks and loans and advances to customers. Gross yields increased 45 basis points compared with the prior quarter with an underlying 31 basis points increase in the quarter, adjusting for one-offs, due to the impact of rising interest rates on customer loan pricing and on Treasury portfolio yields partly offset by a 2 basis points quarter-on-quarter additional loss from hedges
• Average interest-bearing liabilities increased 2 per cent in the quarter due to an increase in customer accounts and debt securities in issue. The rate paid on liabilities increased 55 basis points compared with the average in the prior quarter with an underlying 38 basis points increase in the quarter, adjusting for one-offs, due to the impact of interest rate movements and a slight deterioration in the liability mix
Page 8
Group Chief Financial Officer's review continued
Credit risk summary
Income Statement
|
|
3Q'23 |
3Q'22² |
Change1 |
2Q'23 |
Change1 |
YTD'23 |
YTD'22² |
Change1 |
|
Total credit impairment charge/(release) |
294 |
232 |
27 |
146 |
101 |
466 |
496 |
(6) |
|
Of which stage 1 and 2 |
101 |
183 |
(45) |
27 |
274 |
134 |
172 |
(22) |
|
Of which stage 3 |
193 |
49 |
294 |
119 |
62 |
332 |
324 |
2 |
1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods
2 Underlying credit impairment for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME and (ii) Aviation Finance. No change to reported credit impairment
Balance sheet
|
|
30.09.23 |
30.06.23 |
Change1 |
31.12.22 |
Change1 |
30.09.22 |
Change1 |
|
Gross loans and advances to customers2 |
286,531 |
295,508 |
(3) |
316,107 |
(9) |
303,538 |
(6) |
|
Of which stage 1 |
266,590 |
277,711 |
(4) |
295,219 |
(10) |
284,877 |
(6) |
|
Of which stage 2 |
12,431 |
10,110 |
23 |
13,043 |
(5) |
11,460 |
8 |
|
Of which stage 3 |
7,510 |
7,687 |
(2) |
7,845 |
(4) |
7,201 |
4 |
|
|
|
|
|
|
|
|
|
|
Expected credit loss provisions |
(5,522) |
(5,371) |
3 |
(5,460) |
1 |
(5,148) |
7 |
|
Of which stage 1 |
(458) |
(451) |
2 |
(559) |
(18) |
(497) |
(8) |
|
Of which stage 2 |
(440) |
(400) |
10 |
(444) |
(1) |
(434) |
1 |
|
Of which stage 3 |
(4,624) |
(4,520) |
2 |
(4,457) |
4 |
(4,217) |
10 |
|
|
|
|
|
|
|
|
|
|
Net loans and advances to customers |
281,009 |
290,137 |
(3) |
310,647 |
(10) |
298,390 |
(6) |
|
Of which stage 1 |
266,132 |
277,260 |
(4) |
294,660 |
(10) |
284,380 |
(6) |
|
Of which stage 2 |
11,991 |
9,710 |
23 |
12,599 |
(5) |
11,026 |
9 |
|
Of which stage 3 |
2,886 |
3,167 |
(9) |
3,388 |
(15) |
2,984 |
(3) |
|
|
|
|
|
|
|
|
|
|
Cover ratio of stage 3 before/after collateral (%)3 |
62/79 |
59/78 |
3/1 |
57/76 |
5/3 |
59/77 |
3/2 |
|
Credit grade 12 accounts ($million) |
1,132 |
1,316 |
(14) |
1,574 |
(28) |
1,140 |
(1) |
|
Early alerts ($million) |
5,403 |
4,443 |
22 |
4,967 |
9 |
4,957 |
9 |
|
Investment grade corporate exposures (%)3 |
74 |
74 |
- |
76 |
(2) |
75 |
(1) |
1. Variance is increase/(decrease) comparing current reporting period to prior reporting periods
2. Includes reverse repurchase agreements and other similar secured lending held at amortised cost of $10,267 million at 30 September 2023, $10,950 million at 30 June 2023, $24,498 million at 31 December 2022 and $18,032 million at 30 September 2022
3. Change is the percentage points difference between the two points rather than the percentage change
Asset quality remained resilient in the third quarter, with an improvement in a number of underlying credit metrics albeit credit impairment charges increased in the quarter. The Group continues to actively manage the credit portfolio whilst remaining alert to a volatile and challenging external environment including increased geopolitical tensions which has led to idiosyncratic stress in a select number of markets and industry sectors.
Credit impairment was a $294 million charge in the third quarter, a $62 million increase year-on-year and represents an annualised year-to-date loan loss rate of 20 basis points. There was a further $186 million impairment charge relating to the China commercial real estate sector, including a $42 million increase in the management overlay which now totals $178 million. The Group has provided $1.1 billion in total in relation to the China commercial real estate sector primarily over the last two years. There was a net release of $7 million relating to sovereign downgrades while there was a $115 million charge in relation to the CPBB portfolio and $30 million charge in Ventures primarily from portfolio growth and increased delinquencies in Mox.
Gross stage 3 loans and advances to customers of $7.5 billion were 2 per cent lower as repayments, client upgrades, reduction in exposures and write-offs more than offset new inflows. Credit-impaired loans represent 2.6 per cent of gross loans and advances, broadly flat on the prior quarter.
Page 9
Group Chief Financial Officer's review continued
The stage 3 cover ratio of 62 per cent increased by 3 percentage points compared to 30 June 2023, while the cover ratio post collateral at 79 per cent increased by 1 percentage point due to an increase in stage 3 provisions in relation to the China commercial real estate sector and a reduction in gross stage 3 balances.
Credit grade 12 balances decreased $184 million to $1.1 billion in the quarter. Early Alert accounts of $5.4 billion have increased by $960 million since 30 June 2023, reflecting new inflows relating to a select number of clients including sovereign-related exposures. The Group is continuing to carefully monitor its exposures in vulnerable sectors and select markets, given the unusual stresses caused by the currently difficult macro-economic environment.
The proportion of investment grade corporate exposures remained stable in the quarter at 74 per cent.
Restructuring, goodwill impairment and other items
|
|
3Q'23 |
3Q'22¹ |
2Q'23 |
||||||
|
Restructuring |
Goodwill & other Impairment2 |
DVA |
Restructuring |
Goodwill & other impairment |
DVA |
Restructuring |
Goodwill & other impairment |
DVA |
|
|
Operating income |
99 |
- |
21 |
136 |
- |
55 |
105 |
- |
(93) |
|
Operating expenses |
(100) |
- |
- |
(120) |
- |
- |
(89) |
- |
- |
|
Credit impairment |
2 |
- |
- |
5 |
- |
- |
5 |
- |
- |
|
Other impairment |
(11) |
(697) |
- |
(31) |
- |
- |
(14) |
- |
- |
|
Profit from associates and |
3 |
- |
- |
- |
- |
- |
1 |
- |
- |
|
Loss before taxation |
(7) |
(697) |
21 |
(10) |
- |
55 |
8 |
- |
(93) |
1 Restructuring, DVA and other items for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA from underlying operating performance
2 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
The Group's reported 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.
The Group has signed sale agreements to exit seven markets in the AME region and will focus solely on the CCIB segment in two more markets . Additionally, following the Group's announcement on 11 January 2023 that it intends to explore alternatives for the ownership of the Aviation Finance business, the Group signed agreements on 28 August 2023 for the sale of its global aviation finance leasing business to Aircraft Leasing Company ("AviLease") for consideration of US$0.7 billion (the "Consideration"), giving rise to an estimated gain on disposal of US$0.3 billion and an increase in Common Equity Tier 1 capital ratio by around 19 basis points. The Consideration is subject to adjustment with reference to the net asset value of the business sold on completion. The $1 billion Aviation Loan businesses will be sold separately, and it is anticipated this will also be completed before the end of 2023. As a result of these announcements, effective 1st January 2023, the Group has not included the exit markets and the Aviation Finance business within the Group's underlying operating profit before taxation but will report them within restructuring.
The Group has also classified movements in the debit valuation adjustment (DVA) out of its underlying operating profit before taxation and into other items.
To aid comparisons with prior periods the Group has removed the exit markets, Aviation Finance business and DVA from its underlying operating profit before taxation for 2022.
Restructuring loss before tax $7 million reflects the impact of actions to transform the organisation to improve productivity, primarily additional redundancy charges and optimising the Group's property footprint partly offset by the profit from the Aviation Finance business and gains on the remaining Principal Finance portfolio.
Other impairment of $697 million is in relation to a further reduction in the carrying value of the Group's investment in its associate Bohai, to align to a lower value-in-use computation reflecting lower forecasted interest rates and a lower net interest margin reported by Bohai in its half-year financial reporting. The carrying value of the Group's investment in Bohai has reduced to $0.8 billion from $1.5 billion.
Movements in DVA were a positive $21 million driven by the widening of Group's asset swap spreads on derivative liability exposures. The size of the portfolio subject to DVA did not change materially during the quarter.
Page 10
Group Chief Financial Officer's review continued
Balance sheet and liquidity
|
|
30.09.23 |
30.06.23 |
Change1 |
31.12.22 |
Change1 |
30.09.22 |
Change1 |
|
Assets |
|
|
|
|
|
|
|
|
Loans and advances to banks |
46,111 |
44,602 |
3 |
39,519 |
17 |
43,315 |
7 |
|
Loans and advances to customers |
281,009 |
290,137 |
(3) |
310,647 |
(10) |
298,390 |
(6) |
|
Other assets |
498,713 |
503,972 |
(1) |
469,756 |
6 |
522,730 |
(5) |
|
Total assets |
825,833 |
838,711 |
(2) |
819,922 |
1 |
864,435 |
(4) |
|
Liabilities |
|
|
|
|
|
|
|
|
Deposits by banks |
29,744 |
28,560 |
4 |
28,789 |
3 |
27,728 |
7 |
|
Customer accounts |
453,157 |
469,567 |
(3) |
461,677 |
(2) |
447,259 |
1 |
|
Other liabilities |
294,576 |
290,903 |
1 |
279,440 |
5 |
339,445 |
(13) |
|
Total liabilities |
777,477 |
789,030 |
(1) |
769,906 |
1 |
814,432 |
(5) |
|
Equity |
48,356 |
49,681 |
(3) |
50,016 |
(3) |
50,003 |
(3) |
|
Total equity and liabilities |
825,833 |
838,711 |
(2) |
819,922 |
1 |
864,435 |
(4) |
|
|
|
|
|
|
|
|
|
|
Advances-to-deposits ratio (%)2 |
54.5% |
53.6% |
|
57.4% |
|
58.1% |
|
|
Liquidity coverage ratio (%) |
156% |
164% |
|
147% |
|
156% |
|
1 Variance is increase/(decrease)comparing current reporting period to prior reporting periods
2 The Group now excludes $21,241 million held with central banks (30.06.23: $24,749 million, 31.12.22: $20,798 million, 30.09.22: $21,683 million) that has been confirmed as repayable at the point of stress. Advances exclude repurchase agreement and other similar secured lending of $10,267 million (30.06.23: $10,950 million) and include loans and advances to customers held at fair value through profit or loss of $5,935 million (30.06.23: $5,368 million). Deposits include customer accounts held at fair value through profit or loss of $15,930 million (30.06.23: $15,026 million)
The Group's balance sheet remains strong, liquid and well diversified:
Loans and advances to customers decreased by $9 billion or 3 per cent from 30 June 2023 to $281 billion. This reflects the impact of a $7 billion reduction from Treasury and securities backed loans, primarily reverse repurchase agreements, held to collect, a $2 billion reduction from risk-weighted asset optimisation actions primarily in CCIB and $2 billion reduction from currency translation . Excluding these adjustments, loans and advances grew $2 billion or 1 per cent, in the quarter.
Customer accounts of $453 billion decreased by $17 billion or 3 per cent since 30 June 2023. Excluding a $3 billion reduction from currency translation, customer accounts reduced by $14 billion, or 3 per cent, with lower balances in Cash Management and Financial Markets partly offset by an increase in Retail Time Deposits. The reduction in customer accounts reflect actions undertaken by the Group to manage its liquidity coverage ratio.
Other assets decreased 1 per cent in the third quarter with an increase in cash and balances held at central banks and derivative balances more than offset by a reduction in investment securities and unsettled trade balances. Other liabilities increased 1 per cent with an increase in debt securities in issue partly offset by a reduction in derivative liabilities and unsettled trade liabilities.
The advances-to-deposits ratio increased to 54.5 per cent from 53.6 per cent at 30 June 2023. The point-in-time liquidity coverage ratio decreased 8 percentage points in the quarter to 156 per cent and remains well above the minimum regulatory requirement.
Risk-weighted assets
|
|
30.09.23 |
30.06.23 |
Change1 |
31.12.22 |
Change1 |
30.09.22 |
Change1 |
|
By risk type |
|
|
|
|
|
|
|
|
Credit risk |
188,294 |
197,151 |
(4) |
196,855 |
(4) |
202,523 |
(7) |
|
Operational risk |
27,861 |
27,861 |
- |
27,177 |
3 |
27,177 |
3 |
|
Market risk |
25,351 |
24,105 |
5 |
20,679 |
23 |
22,593 |
12 |
|
Total RWAs |
241,506 |
249,117 |
(3) |
244,711 |
(1) |
252,293 |
(4) |
1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods
Page 11
Group Chief Financial Officer's review continued
Total risk-weighted assets (RWAs) decreased $7.6 billion or 3 per cent since 30 June 2023 to $241.5 billion :
• Credit Risk RWA reduced by $8.9 billion in the third quarter to $188.3 billion. There was a $3.7 billion reduction from optimisation actions, primarily in the CCIB low-returning portfolio, a $1.9 billion reduction from currency translation, a $1.7 billion benefit from model and methodology changes. The impairment of Bohai further reduced RWAs by $1.7 billion. This was partly offset by a $0.6 billion increase from asset growth & mix
• Operational Risk RWA was flat in the quarter
• Market Risk RWA increased $1.2 billion to $25.4 billion due to increases in Internal Models Approach traded risk positions and market volatility
Capital base and ratios
|
|
30.09.23 |
30.06.23 |
Change1 |
31.12.22 |
Change1 |
30.09.22 |
Change1 |
|
CET1 capital |
33,569 |
34,896 |
(4) |
34,157 |
(2) |
34,504 |
(3) |
|
Additional Tier 1 capital (AT1) |
5,492 |
5,492 |
- |
6,484 |
(15) |
6,485 |
(15) |
|
Tier 1 capital |
39,061 |
40,388 |
(3) |
40,641 |
(4) |
40,989 |
(5) |
|
Tier 2 capital |
12,051 |
12,281 |
(2) |
12,510 |
(4) |
12,502 |
(4) |
|
Total capital |
51,112 |
52,669 |
(3) |
53,151 |
(4) |
53,491 |
(4) |
|
CET1 capital ratio(%)2 |
13.9 |
14.0 |
(0.1) |
14.0 |
(0.1) |
13.7 |
0.2 |
|
Total capital ratio(%)2 |
21.2 |
21.1 |
0.1 |
21.7 |
(0.5) |
21.2 |
- |
|
Leverage ratio (%)2 |
4.7 |
4.8 |
(0.1) |
4.8 |
(0.1) |
4.8 |
(0.1) |
1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods
2 Change is percentage points difference between two points rather than percentage change
The Group's CET1 ratio of 13.9 per cent was 11 basis points lower than as at 30 June 2023. A reduction in CET1 from shareholder distributions and Bohai impairment was offset by underlying profit accretion and a decrease in RWAs. The CET1 ratio remains 3.4 percentage points above the Group's latest regulatory minimum of 10.5 per cent and at the top of the 13-14 per cent target range.
The Group is part way through the $1 billion share buyback programme which it announced on 31 July 2023, and by 30 September 2023 had spent $469 million purchasing 51 million ordinary shares. Even though the share buyback was still ongoing at 30 September 2023, the entire $1 billion is deducted from CET1 in the period, reducing the CET1 ratio by 40 basis points. Including the buyback that was announced on 17 February 2023 and completed on 29 September 2023 , the Group has purchased 168 million shares during the year to 30 September, reducing the share count by approximately 6 per cent.
The Group is accruing a foreseeable dividend in respect of the final 2023 ordinary share dividend in the third quarter. This is not an indication of the Group's final 2023 ordinary share dividend, which will be proposed by the Board at the presentation of the 2023 full year results. The increase in the foreseeable dividend for ordinary dividend and AT1 coupons reduced the CET1 ratio by 17 basis points
The $697 million impairment of Bohai also resulted in an RWA reduction of $1.7 billion, the net effect of which resulted in a reduction of the CET1 ratio by 18 basis points
The above CET1 ratio headwinds were partly offset by 36 basis points uplift from underlying profit accretion in the quarter and 22 basis points from an underlying $3.9 billion reduction in RWA.
The Group is expecting a further 19 basis points uplift in the CET1 ratio upon completion of the sale of its Aviation Finance business, which is anticipated to occur before the end of 2023.
The Group's leverage ratio of 4.7 per cent is 4 basis points lower than at 30 June 2023. This is primarily driven by reduced CET1 capital partly offset by a $21 billion reduction in leverage exposures. The Group's leverage ratio remains significantly above its minimum requirement of 3.7 per cent.
Page 12
Group Chief Financial Officer's review continued
Outlook
We remain confident in the delivery of our RoTE targets, supported by continued strong progress on our five strategic actions.
For 2023 our guidance is as follows:
• Income to increase in the 12 to 14 per cent range at constant currency
• Full year average net interest margin to approach 170 basis points
• Underlying asset growth in the low single digit percentage range in 2H'23 (from 30.6.23)
• RWA to be similar to 31.12.22
• Positive income-to-cost jaws of around 4%, excluding UK bank levy at constant currency
• Full year loan loss rate to be in the range of 17-25 basis points
• Underlying effective tax rate expected to be around 30 per cent
• Operate dynamically within the full 13-14 per cent CET1 target range
• RoTE of 10 per cent
All 2024 guidance remains unchanged. We continue to expect 2024 income growth to be in the 8 to 10 per cent range at constant currency, and we remain confident of achieving greater than 11 per cent RoTE.
Andy Halford
Group Chief Financial Officer
26 October 2023
Page 13
Supplementary financial information
Underlying performance by client segment
|
|
3Q'23 |
||||
|
Corporate, Commercial & Institutional Banking |
Consumer, |
Ventures |
Central & |
Total |
|
|
Operating income |
2,814 |
1,849 |
35 |
(295) |
4,403 |
|
External |
2,084 |
1,003 |
35 |
1,281 |
4,403 |
|
Inter-segment |
730 |
846 |
- |
(1,576) |
- |
|
Operating expenses |
(1,387) |
(1,065) |
(109) |
(209) |
(2,770) |
|
Operating profit/(loss) before impairment losses and taxation |
1,427 |
784 |
(74) |
(504) |
1,633 |
|
Credit impairment |
(159) |
(115) |
(30) |
10 |
(294) |
|
Other impairment |
(13) |
- |
(9) |
(4) |
(26) |
|
Profit from associates and joint ventures |
- |
- |
(4) |
7 |
3 |
|
Underlying profit/(loss) before taxation |
1,255 |
669 |
(117) |
(491) |
1,316 |
|
Restructuring |
11 |
(17) |
- |
(1) |
(7) |
|
Goodwill & other impairment³ |
- |
- |
- |
(697) |
(697) |
|
DVA |
21 |
- |
- |
- |
21 |
|
Reported profit/(loss) before taxation |
1,287 |
652 |
(117) |
(1,189) |
633 |
|
Total assets |
395,938 |
126,714 |
3,398 |
299,783 |
825,833 |
|
Of which: loans and advances to customers1 |
177,542 |
124,178 |
1,014 |
26,686 |
329,420 |
|
loans and advances to customers |
129,147 |
124,162 |
1,014 |
26,686 |
281,009 |
|
loans held at fair value through profit or loss |
48,395 |
16 |
- |
- |
48,411 |
|
Total liabilities |
471,272 |
190,925 |
2,581 |
112,699 |
777,477 |
|
Of which: customer accounts1 |
319,785 |
186,131 |
2,316 |
7,590 |
515,822 |
|
Risk-weighted assets |
143,386 |
50,365 |
1,786 |
45,969 |
241,506 |
|
Income return on risk-weighted assets (%) |
7.8 |
14.5 |
8.3 |
(2.4) |
7.1 |
|
Underlying return on tangible equity (%) |
17.9 |
27.2 |
nm⁴ |
(38.5) |
7.0 |
|
Cost to income ratio (excluding bank levy) (%) |
49.3 |
57.6 |
nm⁴ |
nm⁴ |
62.9 |
|
|
3Q'22² |
||||
|
Corporate, Commercial & Institutional Banking |
Consumer, |
Ventures |
Central & |
Total |
|
|
Operating income |
2,572 |
1,591 |
10 |
(35) |
4,138 |
|
External |
2,232 |
1,278 |
10 |
618 |
4,138 |
|
Inter-segment |
340 |
313 |
- |
(653) |
- |
|
Operating expenses |
(1,276) |
(1,024) |
(87) |
(189) |
(2,576) |
|
Operating profit/(loss) before impairment losses and taxation |
1,296 |
567 |
(77) |
(224) |
1,562 |
|
Credit impairment |
(87) |
(86) |
(4) |
(55) |
(232) |
|
Other impairment |
- |
- |
- |
- |
- |
|
Profit from associates and joint ventures |
- |
- |
(4) |
20 |
16 |
|
Underlying profit/(loss) before taxation |
1,209 |
481 |
(85) |
(259) |
1,346 |
|
Restructuring |
18 |
(22) |
- |
(6) |
(10) |
|
DVA |
55 |
- |
- |
- |
55 |
|
Reported profit/(loss) before taxation |
1,282 |
459 |
(85) |
(265) |
1,391 |
|
Total assets |
453,985 |
129,698 |
1,574 |
279,178 |
864,435 |
|
Of which: loans and advances to customers1 |
190,782 |
126,961 |
480 |
35,388 |
353,611 |
|
loans and advances to customers |
138,017 |
126,927 |
480 |
32,966 |
298,390 |
|
loans held at fair value through profit or loss |
52,765 |
34 |
- |
2,422 |
55,221 |
|
Total liabilities |
534,469 |
176,087 |
981 |
102,895 |
814,432 |
|
Of which: customer accounts1 |
332,833 |
171,730 |
886 |
6,517 |
511,966 |
|
Risk-weighted assets |
149,779 |
50,923 |
1,158 |
50,433 |
252,293 |
|
Income return on risk-weighted assets (%) |
6.8 |
12.3 |
5.1 |
(0.3) |
6.5 |
|
Underlying return on tangible equity (%) |
16.5 |
19.2 |
nm⁴ |
(15.9) |
9.4 |
|
Cost to income ratio (excluding bank levy) (%) |
49.5 |
64.4 |
nm⁴ |
nm⁴ |
62.3 |
1 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
2 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
3 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
4 Not meaningful
Page 14
Supplementary financial information continued
Corporate, Commercial & Institutional Banking
|
|
3Q'23 |
3Q'221,4 |
Change3 |
Constant currency change2,3 |
2Q'23 |
Change3 |
Constant currency change2,3 |
YTD'23 |
YTD221,4 |
Change3 |
Constant currency change2,3 |
|
Operating income |
2,814 |
2,572 |
9 |
11 |
2,931 |
(4) |
(3) |
8,637 |
7,141 |
21 |
25 |
|
Transaction Banking |
1,449 |
1,034 |
40 |
42 |
1,416 |
2 |
2 |
4,221 |
2,535 |
67 |
71 |
|
Trade & Working Capital |
312 |
322 |
(3) |
(2) |
322 |
(3) |
(3) |
954 |
983 |
(3) |
- |
|
Cash Management |
1,137 |
712 |
60 |
61 |
1,094 |
4 |
4 |
3,267 |
1,552 |
111 |
116 |
|
Financial Markets |
1,253 |
1,386 |
(10) |
(8) |
1,391 |
(10) |
(8) |
4,058 |
4,198 |
(3) |
- |
|
Macro Trading |
634 |
736 |
(14) |
(11) |
825 |
(23) |
(22) |
2,289 |
2,337 |
(2) |
2 |
|
Credit Markets |
472 |
455 |
4 |
4 |
462 |
2 |
4 |
1,394 |
1,325 |
5 |
8 |
|
Credit Trading |
137 |
152 |
(10) |
(7) |
140 |
(2) |
1 |
449 |
341 |
32 |
39 |
|
Financing Solutions & Issuance4 |
335 |
303 |
11 |
10 |
322 |
4 |
5 |
945 |
984 |
(4) |
(2) |
|
Financing & Securities Services4 |
147 |
195 |
(25) |
(24) |
104 |
41 |
42 |
375 |
536 |
(30) |
(29) |
|
Lending & Portfolio Management |
115 |
154 |
(25) |
(25) |
125 |
(8) |
(7) |
364 |
414 |
(12) |
(9) |
|
Retail Products |
- |
- |
nm⁸ |
nm⁸ |
1 |
(100) |
nm⁸ |
1 |
- |
nm⁸ |
nm⁸ |
|
Deposits |
- |
- |
nm⁸ |
nm⁸ |
1 |
(100) |
nm⁸ |
1 |
- |
nm⁸ |
nm⁸ |
|
Other |
(3) |
(2) |
(50) |
33 |
(2) |
(50) |
- |
(7) |
(6) |
(17) |
13 |
|
Operating expenses |
(1,387) |
(1,276) |
(9) |
(10) |
(1,403) |
1 |
- |
(4,205) |
(3,841) |
(9) |
(12) |
|
Operating profit before impairment losses and taxation |
1,427 |
1,296 |
10 |
12 |
1,528 |
(7) |
(6) |
4,432 |
3,300 |
34 |
40 |
|
Credit impairment |
(159) |
(87) |
(83) |
(100) |
(77) |
(106) |
(114) |
(228) |
(281) |
19 |
18 |
|
Other impairment |
(13) |
- |
nm⁸ |
nm⁸ |
(21) |
38 |
36 |
(34) |
- |
nm⁸ |
nm⁸ |
|
Underlying profit before taxation |
1,255 |
1,209 |
4 |
5 |
1,430 |
(12) |
(11) |
4,170 |
3,019 |
38 |
44 |
|
Restructuring |
11 |
18 |
(39) |
21 |
34 |
(68) |
(43) |
84 |
48 |
75 |
140 |
|
DVA |
21 |
55 |
(62) |
(63) |
(93) |
123 |
123 |
(18) |
175 |
(110) |
(110) |
|
Reported profit before taxation |
1,287 |
1,282 |
- |
2 |
1,371 |
(6) |
(4) |
4,236 |
3,242 |
31 |
36 |
|
Total assets |
395,938 |
453,985 |
(13) |
(12) |
401,001 |
(1) |
(1) |
395,938 |
453,985 |
(13) |
(12) |
|
Of which: loans and advances to customers5 |
177,542 |
190,782 |
(7) |
(7) |
174,214 |
2 |
3 |
177,542 |
190,782 |
(7) |
(7) |
|
Total liabilities |
471,272 |
534,469 |
(12) |
(12) |
490,697 |
(4) |
(4) |
471,272 |
534,469 |
(12) |
(12) |
|
Of which: customer accounts5 |
319,785 |
332,833 |
(4) |
(4) |
333,584 |
(4) |
(4) |
319,785 |
332,833 |
(4) |
(4) |
|
Risk-weighted assets |
143,386 |
149,779 |
(4) |
nm⁸ |
147,258 |
(3) |
nm⁸ |
143,386 |
149,779 |
(4) |
nm⁸ |
|
Income return on risk-weighted |
7.8 |
6.8 |
100bps |
nm⁸ |
8.1 |
(30)bps |
nm⁸ |
7.9 |
6.1 |
180bps |
nm⁸ |
|
Underlying return on tangible |
17.9 |
16.5 |
140bps |
nm⁸ |
20.4 |
(250)bps |
nm⁸ |
19.8 |
13.3 |
650bps |
nm⁸ |
|
Cost to income ratio (%)7 |
49.3 |
49.5 |
0.2 |
0.3 |
47.9 |
(1.4) |
(1.3) |
48.7 |
53.8 |
5.1 |
5.4 |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
2 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
3 Variance is better/(worse), except for risk-weighted assets, assets and liabilities which is increase/(decrease)
4 Shipping Finance is now reported under "Financing Solutions & Issuance" which was reported under "Financing & Securities Services" in 1Q'23
5 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
6 Change is the basis points (bps) difference between the two periods rather than the percentage change
7 Change is the percentage points difference between the two periods rather than the percentage change
8 Not meaningful
Page 15
Supplementary financial information continued
Performance highlights
• Underlying profit before tax of $1,255 million was up 5 per cent at constant currency ("ccy") driven mainly by higher income partially offset by higher expenses and impairment
• Underlying operating income of $2,814 million was up 11 per cent at ccy primarily due to continued strong performance in Cash Management from disciplined pricing initiatives in a rising interest rate environment. Financial Markets was down 8 per cent at ccy, mainly from lower trading revenue across products on the back of subdued market volatility and non-repeat of the gains on mark-to-market liabilities in 2022 partly offset by securities services income benefitting from rising interest rates
• Underlying operating expenses increased 10 per cent at ccy, mainly due to inflation, business growth and targeted investments
• Credit impairment increased $72m in 3Q'23 reflecting further provisions in the China commercial real estate sector
• Risk-weighted assets of $143 billion as of 30.09.23 are broadly flat since 31.12.22, as underlying asset growth and mix was offset by optimisation actions of the low-returning portfolio and favourable foreign exchange translation
• RoTE increased 1.4 percentage points to 17.9 per cent from 16.5 per cent in 3Q'22
Page 16
Supplementary financial information continued
Consumer, Private & Business Banking
|
|
3Q'23 |
3Q'221 |
Change3 |
Constant currency change2,3 |
2Q'23 |
Change3 |
Constant currency change2,3 |
YTD23 |
YTD221 |
Change3 |
Constant currency change2,3 |
|
Operating income |
1,849 |
1,591 |
16 |
17 |
1,784 |
4 |
4 |
5,405 |
4,436 |
22 |
25 |
|
Transaction Banking |
47 |
33 |
42 |
42 |
45 |
4 |
4 |
135 |
85 |
59 |
65 |
|
Trade & Working Capital |
13 |
13 |
- |
- |
12 |
8 |
8 |
36 |
44 |
(18) |
(14) |
|
Cash Management |
34 |
20 |
70 |
70 |
33 |
3 |
3 |
99 |
41 |
141 |
148 |
|
Lending & Portfolio Management |
6 |
10 |
(40) |
(33) |
7 |
(14) |
(14) |
23 |
32 |
(28) |
(14) |
|
Wealth Management |
526 |
454 |
16 |
18 |
495 |
6 |
7 |
1,532 |
1,438 |
7 |
9 |
|
Retail Products |
1,266 |
1,095 |
16 |
17 |
1,227 |
3 |
4 |
3,700 |
2,871 |
29 |
33 |
|
CCPL & other unsecured lending |
270 |
292 |
(8) |
(6) |
264 |
2 |
3 |
809 |
896 |
(10) |
(6) |
|
Deposits |
933 |
622 |
50 |
51 |
857 |
9 |
9 |
2,571 |
1,219 |
111 |
117 |
|
Mortgage & Auto |
31 |
140 |
(78) |
(78) |
74 |
(58) |
(57) |
219 |
621 |
(65) |
(64) |
|
Other Retail Products |
32 |
41 |
(22) |
(21) |
32 |
- |
- |
101 |
135 |
(25) |
(22) |
|
Other |
4 |
(1) |
nm⁷ |
nm⁷ |
10 |
(60) |
(60) |
15 |
10 |
50 |
50 |
|
Operating expenses |
(1,065) |
(1,024) |
(4) |
(6) |
(1,042) |
(2) |
(3) |
(3,140) |
(3,074) |
(2) |
(5) |
|
Operating profit before impairment losses and taxation |
784 |
567 |
38 |
38 |
742 |
6 |
6 |
2,265 |
1,362 |
66 |
71 |
|
Credit impairment |
(115) |
(86) |
(34) |
(40) |
(46) |
(150) |
(152) |
(223) |
(166) |
(34) |
(42) |
|
Other impairment |
- |
- |
nm⁷ |
nm⁷ |
- |
nm⁷ |
100 |
- |
(1) |
100 |
- |
|
Underlying profit before taxation |
669 |
481 |
39 |
38 |
696 |
(4) |
(4) |
2,042 |
1,195 |
71 |
75 |
|
Restructuring |
(17) |
(22) |
23 |
27 |
(14) |
(21) |
(23) |
(33) |
(39) |
15 |
27 |
|
Reported profit before taxation |
652 |
459 |
42 |
41 |
682 |
(4) |
(4) |
2,009 |
1,156 |
74 |
79 |
|
Total assets |
126,714 |
129,698 |
(2) |
(4) |
129,660 |
(2) |
(1) |
126,714 |
129,698 |
(2) |
(4) |
|
Of which: loans and advances to customers4 |
124,178 |
126,961 |
(2) |
(4) |
127,039 |
(2) |
(1) |
124,178 |
126,961 |
(2) |
(4) |
|
Total liabilities |
190,925 |
176,087 |
8 |
7 |
190,690 |
- |
1 |
190,925 |
176,087 |
8 |
7 |
|
Of which: customer accounts4 |
186,131 |
171,730 |
8 |
7 |
185,741 |
- |
1 |
186,131 |
171,730 |
8 |
7 |
|
Risk-weighted assets |
50,365 |
50,923 |
(1) |
nm⁷ |
50,664 |
(1) |
nm⁷ |
50,365 |
50,923 |
(1) |
nm⁷ |
|
Income return on risk-weighted |
14.5 |
12.3 |
220bps |
nm⁷ |
14.1 |
40bps |
nm⁷ |
14.2 |
11.3 |
290bps |
- |
|
Underlying return on tangible |
27.2 |
19.2 |
800bps |
nm⁷ |
28.3 |
(110)bps |
nm⁷ |
27.8 |
15.7 |
1,210bps |
nm⁷ |
|
Cost to income ratio (%)6 |
57.6 |
64.4 |
6.8 |
6.3 |
58.4 |
0.8 |
0.6 |
58.1 |
69.3 |
11.2 |
11.2 |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of exit markets and businesses in AME.
2 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
3 Variance is better/(worse), except for risk-weighted assets, assets and liabilities which is increase/(decrease)
4 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
5 Change is the basis points (bps) difference between the two periods rather than the percentage change
6 Change is the percentage points difference between the two periods rather than the percentage change
7 Not meaningful
Performance highlights
• Underlying profit before tax of $669 million was up 38 per cent at constant currency ("ccy") mainly driven by higher income partly offset by higher expenses and impairments
• Underlying operating income of $1,849 million was up 17 per cent at ccy. The benefit from higher interest rates on Retail Deposit income and a continued recovery in Wealth Management across key footprint markets, was partly offset by lower Mortgage income negatively impacted by the Best Lending Rate cap in Hong Kong
• Underlying operating expenses increased 6 per cent at ccy, including the benefit of gross productivity saves in 3Q'23; with positive 11 per cent income-to-cost jaws in 3Q'23
• Credit impairment of $115 million increased $29 million
• Customer accounts increased 7 per cent at ccy year-on-year, due to strong growth driven by Affluent clients
• RoTE increased 8 percentage points to 27.2 per cent from 19.2 per cent in 3Q'22
Page 17
Supplementary financial information continued
Ventures
|
|
3Q'23 |
3Q'22 |
Change2 |
Constant currency change1,2 |
2Q'23 |
Change2 |
Constant currency change1,2 |
YTD23 |
YTD22 |
Change2 |
Constant currency change1,2 |
|
Operating income |
35 |
10 |
nm⁶ |
nm⁶ |
72 |
(51) |
(50) |
124 |
15 |
nm⁶ |
nm⁶ |
|
Retail Products |
13 |
4 |
nm⁶ |
nm⁶ |
12 |
8 |
17 |
30 |
9 |
nm⁶ |
nm⁶ |
|
CCPL & other unsecured lending |
27 |
6 |
nm⁶ |
nm⁶ |
22 |
23 |
17 |
64 |
12 |
nm⁶ |
nm⁶ |
|
Deposits |
(14) |
(2) |
nm⁶ |
nm⁶ |
(10) |
(40) |
(27) |
(34) |
(3) |
nm⁶ |
nm⁶ |
|
Other Retail Products |
- |
- |
nm⁶ |
nm⁶ |
- |
nm⁶ |
nm⁶ |
- |
- |
nm⁶ |
nm⁶ |
|
Treasury |
8 |
- |
nm⁶ |
nm⁶ |
7 |
14 |
29 |
20 |
- |
nm⁶ |
nm⁶ |
|
Other |
14 |
6 |
133 |
160 |
53 |
(74) |
(75) |
74 |
6 |
nm⁶ |
nm⁶ |
|
Operating expenses |
(109) |
(87) |
(25) |
(24) |
(109) |
- |
- |
(320) |
(233) |
(37) |
(37) |
|
Operating Loss before impairment losses and taxation |
(74) |
(77) |
4 |
8 |
(37) |
(100) |
(97) |
(196) |
(218) |
10 |
11 |
|
Credit impairment |
(30) |
(4) |
nm⁶ |
nm⁶ |
(13) |
(131) |
(131) |
(53) |
(7) |
nm⁶ |
nm⁶ |
|
Other impairment |
(9) |
- |
nm⁶ |
nm⁶ |
- |
nm⁶ |
nm⁶ |
(9) |
- |
nm⁶ |
nm⁶ |
|
Profit from associates and |
(4) |
(4) |
- |
(33) |
(5) |
20 |
- |
(17) |
(11) |
(55) |
(55) |
|
Underlying loss before taxation |
(117) |
(85) |
(38) |
(34) |
(55) |
(113) |
(113) |
(275) |
(236) |
(17) |
(16) |
|
Restructuring |
- |
- |
nm⁶ |
nm⁶ |
(1) |
100 |
nm⁶ |
(1) |
(1) |
- |
- |
|
Reported loss before taxation |
(117) |
(85) |
(38) |
(34) |
(56) |
(109) |
(113) |
(276) |
(237) |
(16) |
(16) |
|
Total assets |
3,398 |
1,574 |
116 |
125 |
3,076 |
10 |
12 |
3,398 |
1,574 |
116 |
125 |
|
Of which: loans and advances |
1,014 |
480 |
111 |
110 |
947 |
7 |
7 |
1,014 |
480 |
111 |
110 |
|
Total liabilities |
2,581 |
981 |
163 |
160 |
2,317 |
11 |
12 |
2,581 |
981 |
163 |
160 |
|
Of which: customer accounts3 |
2,316 |
886 |
161 |
159 |
2,072 |
12 |
12 |
2,316 |
886 |
161 |
158 |
|
Risk-weighted assets |
1,786 |
1,158 |
54 |
nm⁶ |
1,925 |
(7) |
nm⁶ |
1,786 |
1,158 |
54 |
66 |
|
Income return on risk-weighted |
8.3 |
5.1 |
320bps |
nm⁶ |
18.9 |
nm⁶ |
nm⁶ |
11.2 |
3.4 |
nm⁶ |
nm⁶ |
|
Underlying return on tangible |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
|
Cost to income ratio (%)5 |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse), except for risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the basis points (bps) difference between the two periods rather than the percentage change
5 Change is the percentage points difference between the two periods rather than the percentage change
6 Not meaningful
Performance highlights
• Underlying loss before tax increased 34 per cent at constant currency to $117 million reflecting the Group's continued investment in transformational digital initiatives. Income more than tripled to $35 million but this increase was offset by increased expenses, albeit expenses were flat quarter-on-quarter. The impairment charge increased $26 million to $30 million reflecting the build of expected credit loss provisions as the credit portfolios grow
• Loans and advances to customers of $1 billion increased 110 per cent year-on-year ("YoY"), whilst customer accounts of $2.3 billion increased 159 per cent YoY, with strong growth in the two digital banks, Mox and Trust
• Risk Weighted Assets of $1.8 billion increased $0.6 billion
Page 18
Supplementary financial information continued
Central & other items (segment)
|
|
3Q'23 |
3Q'221 |
Change3 |
Constant currency change2,3 |
2Q'23 |
Change3 |
Constant currency change2,3 |
YTD23 |
YTD221 |
Change3 |
Constant currency change2,3 |
|
Operating income |
(295) |
(35) |
nm⁸ |
nm⁸ |
(232) |
(27) |
(30) |
(812) |
405 |
nm⁸ |
nm⁸ |
|
Treasury |
(282) |
(5) |
nm⁸ |
nm⁸ |
(167) |
(69) |
(69) |
(687) |
510 |
nm⁸ |
nm⁸ |
|
Other |
(13) |
(30) |
57 |
(55) |
(65) |
80 |
73 |
(125) |
(105) |
(19) |
(64) |
|
Operating expenses |
(209) |
(189) |
(11) |
- |
(275) |
24 |
22 |
(609) |
(524) |
(16) |
(21) |
|
Operating (loss)/profit before impairment losses and taxation |
(504) |
(224) |
(125) |
(123) |
(507) |
1 |
(2) |
(1,421) |
(119) |
nm⁸ |
nm⁸ |
|
Credit impairment |
10 |
(55) |
118 |
130 |
(10) |
200 |
nm⁸ |
38 |
(42) |
190 |
nm |
|
Other impairment |
(4) |
- |
nm⁸ |
nm⁸ |
(42) |
90 |
90 |
(46) |
- |
nm⁸ |
nm⁸ |
|
Profit from associates and |
7 |
20 |
(65) |
(61) |
88 |
(92) |
(92) |
114 |
180 |
(37) |
(36) |
|
Underlying profit/(loss) |
(491) |
(259) |
(90) |
(92) |
(471) |
(4) |
(6) |
(1,315) |
19 |
nm⁸ |
nm⁸ |
|
Restructuring |
(1) |
(6) |
83 |
- |
(11) |
91 |
71 |
(1) |
(17) |
94 |
88 |
|
Goodwill & other impairment7 |
(697) |
- |
nm⁸ |
nm⁸ |
- |
nm⁸ |
nm⁸ |
(697) |
- |
nm |
nm |
|
Reported (loss)/profit before taxation |
(1,189) |
(265) |
nm⁸ |
nm |
(482) |
(147) |
(148) |
(2,013) |
2 |
nm⁸ |
nm⁸ |
|
Total assets |
299,783 |
279,178 |
7 |
6 |
304,974 |
(2) |
(1) |
299,783 |
279,178 |
7 |
6 |
|
Of which: loans and advances |
26,686 |
35,388 |
(25) |
(27) |
33,623 |
(21) |
(20) |
26,686 |
35,388 |
(25) |
(27) |
|
Total liabilities |
112,699 |
102,895 |
10 |
10 |
105,326 |
7 |
7 |
112,699 |
102,895 |
10 |
10 |
|
Of which: customer accounts4 |
7,590 |
6,517 |
16 |
17 |
8,394 |
(10) |
(9) |
7,590 |
6,517 |
16 |
17 |
|
Risk-weighted assets |
45,969 |
50,433 |
(9) |
nm⁸ |
49,270 |
(7) |
nm⁸ |
45,969 |
50,433 |
(9) |
nm⁸ |
|
Income return on risk-weighted |
(2.4) |
(0.3) |
(210)bps |
nm⁸ |
(1.9) |
(50)bps |
nm⁸ |
(2.2) |
1.0 |
(320)bps |
nm⁸ |
|
Underlying return on tangible |
(38.5) |
(15.9) |
nm⁸ |
nm⁸ |
(25.4) |
(1,310)bps |
nm⁸ |
(29.8) |
(5.8) |
nm⁸ |
nm⁸ |
|
Cost to income ratio (%) |
nm⁸ |
nm⁸ |
nm⁸ |
nm⁸ |
nm⁸ |
nm⁸ |
nm⁸ |
nm⁸ |
130.6 |
nm⁸ |
nm⁸ |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets in AME and (ii) Aviation Finance. No change to reported performance
2 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
3 Variance is better/(worse), except for risk-weighted assets, assets and liabilities which is increase/(decrease)
4 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
5 Change is the basis points (bps) difference between the two periods rather than the percentage change
6 Change is the percentage points difference between the two periods rather than the percentage change
7 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
8 Not meaningful
Performance highlights
• Underlying loss before tax of $491 million compared to 3Q'22 loss of $259 million primarily due to lower Treasury income and increased operating expenses, while there was a net release in credit impairment relating to exposure reductions. Associate income reduced by $13 million reflecting lower profits at Bohai
• Underlying operating income was down $260 million year-on-year, with hedge losses increasing by $170 million to $267 million on the back of increased US Dollar interest rates
Page 19
Supplementary financial information continued
Underlying performance by region
|
|
3Q'23 |
||||
|
Asia |
Africa & |
Europe & |
Central & |
Total |
|
|
Operating income |
3,169 |
677 |
337 |
220 |
4,403 |
|
Operating expenses |
(1,797) |
(398) |
(447) |
(128) |
(2,770) |
|
Operating profit/(loss) before impairment losses and taxation |
1,372 |
279 |
(110) |
92 |
1,633 |
|
Credit impairment |
(311) |
(2) |
18 |
1 |
(294) |
|
Other impairment |
(7) |
(4) |
2 |
(17) |
(26) |
|
Profit from associates and joint ventures |
9 |
- |
- |
(6) |
3 |
|
Underlying profit/(loss) before taxation |
1,063 |
273 |
(90) |
70 |
1,316 |
|
Restructuring |
(36) |
(19) |
(6) |
54 |
(7) |
|
Goodwill & other impairment⁵ |
(697) |
- |
- |
- |
(697) |
|
DVA |
- |
16 |
5 |
- |
21 |
|
Reported profit/(loss) before taxation |
330 |
270 |
(91) |
124 |
633 |
|
Total assets |
498,242 |
51,170 |
267,503 |
8,918 |
825,833 |
|
Of which: loans and advances to customers1 |
248,983 |
22,273 |
58,164 |
- |
329,420 |
|
loans and advances to customers |
235,692 |
19,482 |
25,835 |
- |
281,009 |
|
loans held at fair value through profit or loss |
13,291 |
2,791 |
32,329 |
- |
48,411 |
|
Total liabilities |
451,638 |
41,534 |
202,250 |
82,055 |
777,477 |
|
Of which: customer accounts1 |
356,439 |
32,276 |
127,107 |
- |
515,822 |
|
Risk-weighted assets |
150,842 |
38,529 |
48,227 |
3,908 |
241,506 |
|
Income return on risk-weighted assets (%)2 |
8.2 |
6.8 |
2.7 |
22.1 |
7.1 |
|
Underlying return on tangible equity (%)2 |
14.7 |
13.1 |
(3.9) |
nm⁶ |
7.0 |
|
Cost to income ratio (%)3 |
56.7 |
58.8 |
132.6 |
nm⁶ |
62.9 |
|
|
3Q'224 |
||||
|
Asia |
Africa & |
Europe & |
Central & |
Total |
|
|
Operating income |
2,891 |
616 |
580 |
51 |
4,138 |
|
Operating expenses |
(1,665) |
(395) |
(371) |
(145) |
(2,576) |
|
Operating profit/(loss) before impairment losses and taxation |
1,226 |
221 |
209 |
(94) |
1,562 |
|
Credit impairment |
(193) |
(73) |
34 |
- |
(232) |
|
Other impairment |
- |
2 |
1 |
(3) |
- |
|
Profit from associates and joint ventures |
20 |
- |
- |
(4) |
16 |
|
Underlying profit/(loss) before taxation |
1,053 |
150 |
244 |
(101) |
1,346 |
|
Restructuring |
(36) |
16 |
18 |
(8) |
(10) |
|
DVA |
22 |
6 |
27 |
- |
55 |
|
Reported profit/(loss) before taxation |
1,039 |
172 |
289 |
(109) |
1,391 |
|
Total assets |
497,193 |
54,724 |
303,617 |
8,901 |
864,435 |
|
Of which: loans and advances to customers1 |
258,911 |
24,705 |
69,995 |
- |
353,611 |
|
loans and advances to customers |
242,700 |
23,644 |
32,046 |
- |
298,390 |
|
loans held at fair value through profit or loss |
16,211 |
1,061 |
37,949 |
- |
55,221 |
|
Total liabilities |
452,959 |
41,116 |
249,771 |
70,586 |
814,432 |
|
Of which: customer accounts1 |
334,954 |
31,697 |
145,315 |
- |
511,966 |
|
Risk-weighted assets |
156,553 |
42,746 |
50,779 |
2,215 |
252,293 |
|
Income return on risk-weighted assets (%)2 |
7.3 |
5.6 |
4.6 |
12.3 |
6.5 |
|
Underlying return on tangible equity (%)2 |
14.1 |
7.1 |
10.1 |
nm⁵ |
9.4 |
|
Cost to income ratio (%)3 |
57.6 |
64.1 |
64.0 |
nm⁵ |
62.3 |
1 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
2 Change is the basis points (bps) difference between the two periods rather than the percentage change
3 Change is the percentage points difference between the two periods rather than the percentage change
4 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
5 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
6 Not meaningful
Page 20
Supplementary financial information continued
Asia
|
|
3Q'23 |
3Q'226 |
Change2 |
Constant currency change1,2 |
2Q'23 |
Change2 |
Constant currency change1,2 |
YTD'23 |
YTD226 |
Change2 |
Constant currency change1,2 |
|
Operating income |
3,169 |
2,891 |
10 |
10 |
3,164 |
- |
1 |
9,524 |
8,230 |
16 |
18 |
|
Operating expenses |
(1,797) |
(1,665) |
(8) |
(9) |
(1,777) |
(1) |
(2) |
(5,324) |
(4,983) |
(7) |
(9) |
|
Operating profit before impairment losses and taxation |
1,372 |
1,226 |
12 |
11 |
1,387 |
(1) |
(1) |
4,200 |
3,247 |
29 |
32 |
|
Credit impairment |
(311) |
(193) |
(61) |
(60) |
(118) |
(164) |
(164) |
(493) |
(591) |
17 |
15 |
|
Other impairment |
(7) |
- |
nm⁸ |
nm⁸ |
(3) |
(133) |
nm⁸ |
(9) |
(3) |
(200) |
nm⁸ |
|
Profit from associates and |
9 |
20 |
(55) |
(53) |
88 |
(90) |
(90) |
114 |
176 |
(35) |
(35) |
|
Underlying profit before taxation |
1,063 |
1,053 |
1 |
- |
1,354 |
(21) |
(21) |
3,812 |
2,829 |
35 |
37 |
|
Restructuring |
(36) |
(36) |
- |
(6) |
(15) |
(140) |
(157) |
(58) |
(23) |
(152) |
(132) |
|
Goodwill & other impairment⁷ |
(697) |
- |
nm⁸ |
nm⁸ |
- |
nm⁸ |
nm⁸ |
(697) |
- |
nm⁸ |
nm⁸ |
|
DVA |
- |
22 |
(100) |
(105) |
(35) |
100 |
97 |
(22) |
65 |
(134) |
(134) |
|
Reported profit before taxation |
330 |
1,039 |
(68) |
(68) |
1,304 |
(75) |
(74) |
3,035 |
2,871 |
6 |
7 |
|
Total assets |
498,242 |
497,193 |
- |
(1) |
500,118 |
- |
- |
498,242 |
497,193 |
- |
(1) |
|
Of which: loans and advances |
248,983 |
258,911 |
(4) |
(5) |
255,211 |
(2) |
(2) |
248,983 |
258,911 |
(4) |
(5) |
|
Total liabilities |
451,638 |
452,959 |
- |
(1) |
445,833 |
1 |
2 |
451,638 |
452,959 |
- |
(1) |
|
Of which: customer accounts3 |
356,439 |
334,954 |
6 |
5 |
353,487 |
1 |
1 |
356,439 |
334,954 |
6 |
5 |
|
Risk-weighted assets |
150,842 |
156,553 |
(4) |
nm⁸ |
155,410 |
(3) |
nm⁸ |
150,842 |
156,553 |
(4) |
nm⁸ |
|
Income return on risk-weighted |
8.2 |
7.3 |
90bps |
nm⁸ |
8.2 |
- |
nm⁸ |
8.3 |
6.7 |
160bps |
nm⁸ |
|
Underlying return on tangible |
14.7 |
14.1 |
60bps |
nm⁸ |
18.8 |
(410)bps |
nm⁸ |
17.6 |
12.2 |
540bps |
nm⁸ |
|
Cost to income ratio (%)5 |
56.7 |
57.6 |
0.9 |
0.6 |
56.2 |
(0.5) |
(0.6) |
55.9 |
60.5 |
4.6 |
4.5 |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the basis points (bps) difference between the two periods rather than the percentage change
5 Change is the percentage points difference between the two periods rather than the percentage change
6 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) Aviation Finance and (ii) DVA. No change to reported performance
7 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
8 Not meaningful
Performance highlights
• Underlying profit before tax of $1,063 million was up 1 per cent, primarily from broad based income growth offset by a 9 per cent increase in operating expenses at constant currency ("ccy") and a $118m increase in credit impairment reflecting further provisions related to the China commercial real estate portfolio
• Underlying operating income of $3,169 million was up 10 per cent, mainly strong double-digit increases across Cash Management, Retail Deposits and Wealth Management partly offset by lower Mortgage income and a loss in Treasury Markets
• The profit share from Bohai reduced by $11 million
• Loans and advances to customers were down 5 per cent and customer accounts were up 5 per cent at ccy year-on-year ("YoY")
• Risk-weighted assets down 4 per cent YoY
• RoTE increased 60 basis points to 14.7 per cent from 14.1 per cent in 3Q'22
Page 21
Supplementary financial information continued
Africa & Middle East
|
|
3Q'23 |
3Q'226 |
Change2 |
Constant currency change1,2 |
2Q'23 |
Change2 |
Constant currency change1,2 |
YTD'23 |
YTD226 |
Change2 |
Constant currency change1,2 |
|
Operating income |
677 |
616 |
10 |
19 |
765 |
(12) |
(10) |
2,118 |
1,818 |
17 |
30 |
|
Operating expenses |
(398) |
(395) |
(1) |
(9) |
(399) |
- |
(3) |
(1,194) |
(1,144) |
(4) |
(12) |
|
Operating profit before impairment losses and taxation |
279 |
221 |
26 |
38 |
366 |
(24) |
(25) |
924 |
674 |
37 |
65 |
|
Credit impairment |
(2) |
(73) |
97 |
104 |
(17) |
88 |
113 |
7 |
26 |
(73) |
(74) |
|
Other impairment |
(4) |
2 |
nm⁷ |
nm⁷ |
- |
nm⁷ |
(33) |
(5) |
1 |
nm⁷ |
nm⁷ |
|
Underlying profit before taxation |
273 |
150 |
82 |
83 |
349 |
(22) |
(21) |
926 |
701 |
32 |
54 |
|
Restructuring |
(19) |
16 |
nm⁷ |
nm⁷ |
17 |
nm⁷ |
nm⁷ |
16 |
35 |
(54) |
(6) |
|
DVA |
16 |
6 |
167 |
183 |
(10) |
nm⁷ |
nm⁷ |
13 |
21 |
(38) |
(38) |
|
Reported profit before taxation |
270 |
172 |
57 |
64 |
356 |
(24) |
(21) |
955 |
757 |
26 |
49 |
|
Total assets |
51,170 |
54,724 |
(6) |
- |
50,716 |
1 |
2 |
51,170 |
54,724 |
(6) |
- |
|
Of which: loans and advances |
22,273 |
24,705 |
(10) |
(5) |
22,498 |
(1) |
- |
22,273 |
24,705 |
(10) |
(5) |
|
Total liabilities |
41,534 |
41,116 |
1 |
6 |
40,487 |
3 |
3 |
41,534 |
41,116 |
1 |
6 |
|
Of which: customer accounts3 |
32,276 |
31,697 |
2 |
7 |
30,922 |
4 |
5 |
32,276 |
31,697 |
2 |
7 |
|
Risk-weighted assets |
38,529 |
42,746 |
(10) |
nm⁷ |
41,068 |
(6) |
nm⁷ |
38,529 |
42,746 |
(10) |
nm⁷ |
|
Income return on risk-weighted |
6.8 |
5.6 |
(120)bps |
nm⁷ |
7.6 |
(80)bps |
nm⁷ |
7.0 |
5.4 |
160bps |
nm⁷ |
|
Underlying return on tangible |
13.1 |
7.1 |
600bps |
nm⁷ |
17.9 |
(480)bps |
nm⁷ |
15.4 |
10.7 |
470bps |
nm⁷ |
|
Cost to income ratio (%)5 |
58.8 |
64.1 |
5.3 |
5.4 |
52.2 |
(6.6) |
(7.7) |
56.4 |
62.9 |
6.5 |
9.1 |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the basis points (bps) difference between the two periods rather than the percentage change
5 Change is the percentage points difference between the two periods rather than the percentage change
6 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME and (ii) DVA. No change to reported performance
7 Not meaningful
Performance highlights
• Underlying profit before tax of $273 million, was up 83 per cent at constant currency ("ccy"), driven by higher income and lower credit impairment, partly offset by a 9 per cent increase in operating expenses at ccy
• Underlying operating income of $677 million was up 19 per cent at ccy, with strong growth in Cash Management and Retail Deposit income partly offset by a loss in Treasury Markets
• Credit Impairment reduced $71 million to $2m, reflecting a non-repeat of the prior year's sovereign-related impairments
• Loans and advances to customers were down 5 per cent at ccy year-on-year ("YoY") partly due de-risking actions; Customer accounts were up 7 per cent at ccy
• Risk-weighted assets are down 10 per cent YoY
• RoTE increased 6 percentage points to 13.1 per cent from 7.1 per cent in 3Q'22
Page 22
Supplementary financial information continued
Europe & Americas
|
|
3Q'23 |
3Q'226 |
Change2 |
Constant currency change1,2 |
2Q'23 |
Change2 |
Constant currency change1,2 |
YTD'23 |
YTD226 |
Change2 |
Constant currency change1,2 |
|
Operating income |
337 |
580 |
(42) |
(44) |
437 |
(23) |
(22) |
1,187 |
1,955 |
(39) |
(40) |
|
Operating expenses |
(447) |
(371) |
(20) |
(18) |
(433) |
(3) |
(3) |
(1,313) |
(1,133) |
(16) |
(16) |
|
Operating (loss)/profit before impairment losses and taxation |
(110) |
209 |
(153) |
(149) |
4 |
nm⁷ |
nm⁷ |
(126) |
822 |
(115) |
(115) |
|
Credit impairment |
18 |
34 |
(47) |
(47) |
(6) |
nm⁷ |
nm⁷ |
14 |
65 |
(78) |
(78) |
|
Other impairment |
2 |
1 |
100 |
200 |
9 |
(78) |
(67) |
11 |
3 |
nm⁷ |
nm⁷ |
|
Underlying (loss)/profit |
(90) |
244 |
(137) |
(134) |
7 |
nm⁷ |
nm⁷ |
(101) |
890 |
(111) |
(111) |
|
Restructuring |
(6) |
18 |
(133) |
(128) |
(3) |
(100) |
(150) |
13 |
6 |
117 |
63 |
|
DVA |
5 |
27 |
(81) |
(82) |
(48) |
110 |
110 |
(9) |
89 |
(110) |
(110) |
|
Reported profit before taxation |
(91) |
289 |
(131) |
(129) |
(44) |
(107) |
(93) |
(97) |
985 |
(110) |
(110) |
|
Total assets |
267,503 |
303,617 |
(12) |
(12) |
278,561 |
(4) |
(4) |
267,503 |
303,617 |
(12) |
(12) |
|
Of which: loans and advances |
58,164 |
69,995 |
(17) |
(18) |
58,114 |
- |
1 |
58,164 |
69,995 |
(17) |
(18) |
|
Total liabilities |
202,250 |
249,771 |
(19) |
(20) |
233,442 |
(13) |
(13) |
202,250 |
249,771 |
(19) |
(20) |
|
Of which: customer accounts3 |
127,107 |
145,315 |
(13) |
(13) |
145,382 |
(13) |
(12) |
127,107 |
145,315 |
(13) |
(13) |
|
Risk-weighted assets |
48,227 |
50,779 |
(5) |
nm⁷ |
48,787 |
(1) |
nm⁷ |
48,227 |
50,779 |
(5) |
nm⁷ |
|
Income return on risk-weighted assets (%)4 |
2.7 |
4.6 |
(190)bps |
nm⁷ |
3.6 |
(90)bps |
nm⁷ |
3.2 |
5.1 |
(190)bps |
nm⁷ |
|
Underlying return on tangible |
(3.9) |
10.1 |
(1,400)bps |
nm⁷ |
0.2 |
(410)bps |
nm⁷ |
(1.5) |
12.2 |
(1,370)bps |
nm⁷ |
|
Cost to income ratio (%)5 |
132.6 |
64.0 |
(68.6) |
(69.1) |
99.1 |
(33.5) |
(32.5) |
110.6 |
58.0 |
(52.6) |
(53.1) |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the basis points (bps) difference between the two periods rather than the percentage change
5 Change is the percentage points difference between the two periods rather than the percentage change
6 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) Aviation Finance and (ii) DVA. No change to reported performance
7 Not meaningful
Performance highlights
• Underlying loss before tax of $90 million compared to profit of $244 million last year was due to lower income, higher expenses and a $16 million lower credit impairment release
• Underlying operating income down 44 per cent at constant currency ("ccy") reflecting the increased cost of hedges within Treasury, whilst strong growth in Transaction Banking income was partly offset by lower Financial Markets income with both volume and volatility remaining low
• Expenses up 18 per cent at ccy reflecting the impact of inflation and higher investment spend
• RoTE was negative 3.9 per cent down 13.9 percentage points from 10.1 per cent in 3Q'22
Page 23
Supplementary financial information continued
Central & other items (region)
|
|
3Q'23 |
3Q'225 |
Change2 |
Constant currency change1,2 |
2Q'23 |
Change2 |
Constant currency change1,2 |
YTD'23 |
YTD225 |
Change2 |
Constant currency change1,2 |
|
Operating income |
220 |
51 |
nm⁶ |
nm⁶ |
189 |
16 |
17 |
525 |
(6) |
nm⁶ |
nm⁶ |
|
Operating expenses |
(128) |
(145) |
12 |
22 |
(220) |
42 |
41 |
(443) |
(412) |
(8) |
(12) |
|
Operating profit/(loss) before impairment losses and taxation |
92 |
(94) |
198 |
178 |
(31) |
nm⁶ |
nm⁶ |
82 |
(418) |
120 |
120 |
|
Credit impairment |
1 |
- |
nm⁶ |
nm⁶ |
(5) |
120 |
120 |
6 |
4 |
50 |
100 |
|
Other impairment |
(17) |
(3) |
nm⁶ |
nm⁶ |
(69) |
75 |
75 |
(86) |
(2) |
nm⁶ |
nm⁶ |
|
Profit from associates and |
(6) |
(4) |
(50) |
(50) |
(5) |
(20) |
(50) |
(17) |
(7) |
(143) |
(113) |
|
Underlying profit/(loss) |
70 |
(101) |
169 |
155 |
(110) |
164 |
161 |
(15) |
(423) |
96 |
96 |
|
Restructuring |
54 |
(8) |
nm⁶ |
nm⁶ |
9 |
nm⁶ |
nm⁶ |
78 |
(27) |
nm⁶ |
nm⁶ |
|
Reported profit/(loss) before taxation |
124 |
(109) |
nm⁶ |
192 |
(101) |
nm⁶ |
nm⁶ |
63 |
(450) |
114 |
114 |
|
Total assets |
8,918 |
8,901 |
- |
(1) |
9,316 |
(4) |
(4) |
8,918 |
8,901 |
- |
(1) |
|
Total liabilities |
82,055 |
70,586 |
16 |
16 |
69,268 |
18 |
18 |
82,055 |
70,586 |
16 |
16 |
|
Risk-weighted assets |
3,908 |
2,215 |
76 |
nm⁶ |
3,852 |
1 |
nm⁶ |
3,908 |
2,215 |
76 |
nm⁶ |
|
Income return on risk-weighted |
22.1 |
12.3 |
80bps |
nm⁶ |
19.7 |
nm⁶ |
nm⁶ |
18.9 |
(0.4) |
1,930bps |
nm⁶ |
|
Underlying return on tangible |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
|
Cost to income ratio (%) |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
nm⁶ |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Change is the basis points (bps) difference between the two periods rather than the percentage change
4 Change is the percentage points difference between the two periods rather than the percentage change
5 Underlying performance for relevant periods in 2022 has been restated for the removal of Aviation Finance. No change to reported performance line
6 Not meaningful
Performance highlights
• Underlying profit before tax of $70 million compared to $101 million loss in 3Q'22. The return to profitability is mainly due to higher returns paid to Treasury on the equity provided to the regions in a rising interest rate environment, while expenses reduced by 22 per cent at constant currency
Page 24
Supplementary financial information continued
Underlying performance by key market
|
|
3Q'23 |
|||||||||
|
Hong Kong |
Korea |
China |
Taiwan |
Singapore |
India |
Indonesia |
UAE |
UK |
US |
|
|
Operating income |
1,067 |
275 |
291 |
144 |
635 |
309 |
61 |
191 |
19 |
211 |
|
Operating expenses |
(475) |
(181) |
(222) |
(82) |
(295) |
(242) |
(49) |
(99) |
(226) |
(160) |
|
Operating profit before impairment losses and taxation |
592 |
94 |
69 |
62 |
340 |
67 |
12 |
92 |
(207) |
51 |
|
Credit impairment |
(203) |
(21) |
(45) |
(1) |
(24) |
(9) |
(10) |
12 |
13 |
2 |
|
Other impairment |
(1) |
- |
(1) |
(1) |
(2) |
(1) |
- |
- |
(4) |
7 |
|
Profit from associates and joint ventures |
- |
- |
9 |
- |
- |
- |
- |
- |
- |
- |
|
Underlying profit before taxation |
388 |
73 |
32 |
60 |
314 |
57 |
2 |
104 |
(198) |
60 |
|
Total assets employed |
180,633 |
58,751 |
43,936 |
22,147 |
97,981 |
34,788 |
5,556 |
20,835 |
160,936 |
90,525 |
|
Of which: loans and advances |
85,199 |
32,395 |
16,590 |
11,003 |
60,754 |
14,686 |
2,547 |
7,692 |
25,722 |
27,546 |
|
Total liabilities employed |
173,346 |
49,874 |
36,085 |
20,349 |
106,455 |
27,014 |
4,327 |
18,711 |
102,747 |
82,705 |
|
Of which: customer accounts1 |
144,629 |
37,368 |
29,342 |
17,890 |
78,878 |
19,399 |
2,901 |
14,064 |
70,088 |
46,170 |
|
Underlying return on tangible equity (%) |
18.2 |
9.8 |
3.4 |
26.6 |
27.7 |
6.1 |
2.3 |
23.1 |
(14.2) |
6.4 |
|
Cost to income ratio (%) |
44.5 |
65.8 |
76.3 |
56.9 |
46.5 |
78.3 |
80.3 |
51.8 |
nm |
75.8 |
|
|
2Q'23 |
|||||||||
|
Hong Kong |
Korea |
China |
Taiwan |
Singapore |
India |
Indonesia |
UAE |
UK |
US |
|
|
Operating income |
1,055 |
270 |
310 |
142 |
625 |
316 |
61 |
207 |
108 |
218 |
|
Operating expenses |
(478) |
(179) |
(217) |
(85) |
(316) |
(211) |
(47) |
(104) |
(222) |
(154) |
|
Operating profit before impairment losses and taxation |
577 |
91 |
93 |
57 |
309 |
105 |
14 |
103 |
(114) |
64 |
|
Credit impairment |
(88) |
(8) |
(26) |
(9) |
(15) |
(1) |
3 |
7 |
(10) |
2 |
|
Other impairment |
- |
- |
- |
- |
(1) |
(1) |
- |
- |
13 |
(3) |
|
Profit from associates and joint ventures |
- |
- |
88 |
- |
- |
- |
- |
- |
- |
- |
|
Underlying profit before taxation |
489 |
83 |
155 |
48 |
293 |
103 |
17 |
110 |
(111) |
63 |
|
Total assets employed |
182,512 |
62,885 |
41,808 |
21,536 |
99,103 |
35,830 |
5,064 |
19,105 |
171,028 |
91,860 |
|
Of which: loans and advances |
85,004 |
37,764 |
14,554 |
10,838 |
64,268 |
14,980 |
2,388 |
7,519 |
34,338 |
19,284 |
|
Total liabilities employed |
170,945 |
53,204 |
34,064 |
20,448 |
103,381 |
27,937 |
3,922 |
16,742 |
132,756 |
84,648 |
|
Of which: customer accounts1 |
142,766 |
41,075 |
24,127 |
18,656 |
77,591 |
20,788 |
2,896 |
12,856 |
85,767 |
49,749 |
|
Underlying return on tangible equity (%) |
23.3 |
11.4 |
16.6 |
23.0 |
26.9 |
10.8 |
12.9 |
23.9 |
(7.9) |
7.1 |
|
Cost to income ratio (%) |
45.3 |
66.3 |
70.0 |
59.9 |
50.6 |
66.8 |
77.0 |
50.2 |
205.6 |
70.6 |
1 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
Page 25
Supplementary financial information continued
|
|
3Q'222 |
|||||||||
|
Hong Kong |
Korea |
China |
Taiwan |
Singapore |
India |
Indonesia |
UAE |
UK |
US |
|
|
Operating income |
945 |
289 |
313 |
119 |
542 |
292 |
47 |
153 |
251 |
263 |
|
Operating expenses |
(462) |
(179) |
(214) |
(82) |
(263) |
(189) |
(42) |
(91) |
(176) |
(146) |
|
Operating profit before impairment losses and taxation |
483 |
110 |
99 |
37 |
279 |
103 |
5 |
62 |
75 |
117 |
|
Credit impairment |
(145) |
(18) |
(53) |
(2) |
65 |
(11) |
2 |
25 |
10 |
12 |
|
Other impairment |
(4) |
- |
(1) |
- |
(2) |
(2) |
- |
(1) |
11 |
(2) |
|
Profit from associates and joint ventures |
- |
- |
19 |
- |
- |
- |
- |
- |
- |
- |
|
Underlying profit before taxation |
334 |
92 |
64 |
35 |
342 |
90 |
7 |
86 |
96 |
127 |
|
Total assets employed |
177,682 |
65,950 |
40,772 |
24,660 |
98,714 |
31,817 |
5,868 |
20,160 |
220,271 |
68,973 |
|
Of which: loans and advances |
86,348 |
39,854 |
15,211 |
10,938 |
60,136 |
15,029 |
2,185 |
8,186 |
46,182 |
19,962 |
|
Total liabilities employed |
167,509 |
56,038 |
36,599 |
23,529 |
109,115 |
23,998 |
4,702 |
16,035 |
162,730 |
72,122 |
|
Of which: customer accounts1 |
132,780 |
39,297 |
26,339 |
19,507 |
77,179 |
14,577 |
3,219 |
12,569 |
105,413 |
31,136 |
|
Underlying return on tangible equity (%) |
15.4 |
12.3 |
6.5 |
15.5 |
29.1 |
9.2 |
4.8 |
16.5 |
6.5 |
16.2 |
|
Cost to income ratio (%) |
48.9 |
61.9 |
68.4 |
68.9 |
48.5 |
64.7 |
89.4 |
59.5 |
70.1 |
55.5 |
1 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
2 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
Quarterly underlying operating income by product
|
|
3Q'23 |
2Q'23 |
1Q'232 |
4Q'221,2 |
3Q'221,2 |
2Q'221,2 |
1Q'221,2 |
4Q'211,2 |
|
Transaction Banking |
1,496 |
1,461 |
1,399 |
1,254 |
1,067 |
824 |
729 |
718 |
|
Trade & Working capital |
325 |
334 |
331 |
316 |
335 |
336 |
356 |
341 |
|
Cash Management |
1,171 |
1,127 |
1,068 |
938 |
732 |
488 |
373 |
377 |
|
Financial Markets |
1,253 |
1,391 |
1,414 |
1,147 |
1,386 |
1,255 |
1,557 |
900 |
|
Macro Trading |
634 |
825 |
830 |
628 |
736 |
662 |
939 |
427 |
|
Credit Markets |
472 |
462 |
460 |
436 |
455 |
396 |
474 |
462 |
|
Credit Trading |
137 |
140 |
172 |
147 |
152 |
84 |
105 |
59 |
|
Financing Solutions & Issuance2 |
335 |
322 |
288 |
289 |
303 |
312 |
369 |
403 |
|
Financing & Securities Services2 |
147 |
104 |
124 |
83 |
195 |
197 |
144 |
11 |
|
Lending & Portfolio Management |
121 |
132 |
134 |
112 |
164 |
136 |
146 |
183 |
|
Wealth Management |
526 |
495 |
511 |
358 |
454 |
456 |
528 |
464 |
|
Retail Products |
1,279 |
1,240 |
1,212 |
1,147 |
1,099 |
944 |
837 |
823 |
|
CCPL & other unsecured lending |
297 |
286 |
290 |
294 |
298 |
310 |
300 |
311 |
|
Deposits |
919 |
848 |
771 |
805 |
620 |
355 |
241 |
206 |
|
Mortgage & Auto |
31 |
74 |
114 |
12 |
140 |
235 |
246 |
260 |
|
Other Retail Products |
32 |
32 |
37 |
36 |
41 |
44 |
50 |
46 |
|
Treasury |
(274) |
(160) |
(233) |
(173) |
(5) |
201 |
314 |
150 |
|
Other |
2 |
(4) |
(41) |
(80) |
(27) |
(33) |
(35) |
(54) |
|
Total underlying operating income |
4,403 |
4,555 |
4,396 |
3,765 |
4,138 |
3,783 |
4,076 |
3,184 |
1 Restatements relating to (a) exit of seven markets in AME (b) exit of Aviation Finance Business and (c) Reporting DVA outside of Underlying Income, have been made to reflect these items below the line
2 Shipping Finance is now reported under "Financing Solutions & Issuance" which was reported under "Financing & Securities Services" in Q1 '23
Page 26
Supplementary financial information continued
Earnings per ordinary share
|
|
3Q'23 |
3Q'22¹ |
Change |
2Q'23 |
Change |
YTD'23 |
YTD'22¹ |
Change |
|
Profit for the period attributable to equity holders |
139 |
1,078 |
(87) |
1,041 |
(87) |
2,524 |
3,166 |
(20) |
|
Non-controlling interest |
6 |
9 |
(33) |
6 |
- |
9 |
10 |
(10) |
|
Dividend payable on preference shares and AT1 classified as equity |
(180) |
(123) |
(46) |
(65) |
(177) |
(423) |
(339) |
(25) |
|
Profit for the period attributable to |
(35) |
964 |
(104) |
982 |
nm⁴ |
2,110 |
2,837 |
(26) |
|
|
|
|
|
|
|
|
|
|
|
Items normalised: |
|
|
|
|
|
|
|
|
|
Restructuring |
7 |
10 |
(30) |
(8) |
nm4 |
(49) |
9 |
nm4 |
|
Goodwill and other impairment3 |
697 |
- |
nm⁴ |
- |
nm4 |
697 |
- |
nm4 |
|
DVA |
(21) |
(55) |
62 |
93 |
nm4 |
18 |
(175) |
nm4 |
|
Tax on normalised items |
(4) |
(4) |
- |
(15) |
nm4 |
(4) |
10 |
nm4 |
|
Underlying profit for the period attributable to |
644 |
915 |
(30) |
1,052 |
(39) |
2,772 |
2,681 |
3 |
|
|
|
|
|
|
|
|
|
|
|
Basic - Weighted average number of shares (millions) |
2,772 |
2,949 |
nm4 |
2,818 |
nm4 |
2,816 |
2,992 |
nm4 |
|
Diluted - Weighted average number of shares (millions) |
2,837 |
3,011 |
nm4 |
2,884 |
nm4 |
2,880 |
3,050 |
nm4 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per ordinary share (cents)2 |
(1.3) |
32.7 |
(34.0) |
34.8 |
(36.1) |
74.9 |
94.8 |
(19.9) |
|
Diluted earnings per ordinary share (cents)2 |
(1.2) |
32.0 |
(33.2) |
34.0 |
(35.2) |
73.3 |
93.0 |
(19.7) |
|
Underlying basic earnings per ordinary share (cents)2 |
23.2 |
31.0 |
(7.8) |
37.3 |
(14.1) |
98.4 |
89.6 |
8.8 |
|
Underlying diluted earnings per ordinary share (cents)2 |
22.7 |
30.4 |
(7.7) |
36.5 |
(13.8) |
96.3 |
87.9 |
8.4 |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
2 Change is the percentage points difference between the two periods rather than the percentage change
3 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai).
4 Not meaningful
Page 27
Supplementary financial information continued
Return on Tangible Equity
|
|
3Q'23 |
3Q'221 |
Change |
2Q'23 |
Change |
YTD'23 |
YTD'221 |
Change |
|
Average parent company Shareholders' Equity |
43,135 |
43,592 |
(1) |
43,964 |
(2) |
43,580 |
44,600 |
(2) |
|
Less Preference share premium |
(1,494) |
(1,494) |
- |
(1,494) |
- |
(1,494) |
(1,494) |
- |
|
Less Average intangible assets |
(5,948) |
(5,529) |
(8) |
(5,895) |
(1) |
(5,907) |
(5,511) |
(7) |
|
Average Ordinary Shareholders' Tangible Equity |
35,693 |
36,569 |
(2) |
36,575 |
(2) |
36,179 |
37,595 |
(4) |
|
|
|
|
|
|
|
|
|
|
|
Profit for the period attributable to equity holders |
139 |
1,078 |
(87) |
1,041 |
(87) |
2,524 |
3,166 |
(20) |
|
Non-controlling interests |
6 |
9 |
(33) |
6 |
- |
9 |
10 |
(10) |
|
Dividend payable on preference shares and |
(180) |
(123) |
(46) |
(65) |
(177) |
(423) |
(339) |
(25) |
|
Profit for the period attributable to |
(35) |
964 |
nm3 |
982 |
nm3 |
2,110 |
2,837 |
nm3 |
|
|
|
|
|
|
|
|
|
|
|
Items normalised: |
|
|
|
|
|
|
|
|
|
Restructuring |
7 |
10 |
(30) |
(8) |
nm3 |
(49) |
9 |
nm3 |
|
Goodwill and Other impairment2 |
697 |
- |
nm3 |
- |
nm3 |
697 |
- |
nm3 |
|
Ventures FVOCI unrealised gains/(losses) |
(11) |
(49) |
78 |
52 |
nm3 |
32 |
(57) |
nm3 |
|
DVA |
(21) |
(55) |
62 |
93 |
nm3 |
18 |
(175) |
nm3 |
|
Tax on normalised items |
(4) |
(4) |
- |
(15) |
73 |
(4) |
10 |
nm3 |
|
Underlying profit for the period attributable to ordinary shareholders |
633 |
866 |
(27) |
1,104 |
(43) |
2,804 |
2,624 |
(58) |
|
|
|
|
|
|
|
|
|
|
|
Underlying Return on Tangible Equity |
7.0% |
9.4% |
(240)bps |
12.1% |
(510)bps |
10.4% |
9.3% |
110bps |
|
Reported Return on Tangible Equity |
(0.4)% |
10.5% |
(1,090)bps |
10.8% |
(1,120)bps |
7.8% |
10.1% |
(230)bps |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
2 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
3 Not meaningful
Net Tangible Asset Value per Share
|
|
30.09.23 |
30.09.22 |
Change |
30.06.23 |
Change |
31.12.22 |
Change |
|
Parent company shareholders equity |
42,466 |
43,127 |
(2) |
43,803 |
(3) |
43,162 |
(2) |
|
Less Preference share premium |
(1,494) |
(1,494) |
- |
(1,494) |
- |
(1,494) |
- |
|
Less Intangible assets |
(5,997) |
(5,520) |
(9) |
(5,898) |
(2) |
(5,869) |
(2) |
|
Net shareholders tangible equity |
34,975 |
36,113 |
(3) |
36,411 |
(4) |
35,799 |
(2) |
|
|
|
|
|
|
|
|
|
|
Ordinary shares in issue, excluding own shares (millions) |
2,725 |
2,905 |
(6) |
2,797 |
(3) |
2,867 |
(5) |
|
Net Tangible Asset Value per share (cents)1 |
1,283 |
1,243 |
40 |
1,302 |
(19) |
1,249 |
34 |
1 Change is cents difference between the two periods rather than the percentage change
Page 28
Underlying versus reported results reconciliations
Reconciliations between underlying and reported results are set out in the tables below:
Operating income by client segment
|
|
3Q'23 |
||||
|
Corporate, Commercial & Institutional Banking |
Consumer, |
Ventures |
Central & |
Total |
|
|
Underlying operating income |
2,814 |
1,849 |
35 |
(295) |
4,403 |
|
Restructuring |
77 |
10 |
- |
12 |
99 |
|
DVA |
21 |
- |
- |
- |
21 |
|
Reported operating income |
2,912 |
1,859 |
35 |
(283) |
4,523 |
|
|
3Q'22¹ |
||||
|
Corporate, Commercial & Institutional Banking |
Consumer, |
Ventures |
Central & |
Total |
|
|
Underlying operating income |
2,572 |
1,591 |
10 |
(35) |
4,138 |
|
Restructuring |
128 |
9 |
- |
(1) |
136 |
|
DVA |
55 |
- |
- |
- |
55 |
|
Reported operating income |
2,755 |
1,600 |
10 |
(36) |
4,329 |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
Operating income by region
|
|
3Q'23 |
||||
|
Asia |
Africa & |
Europe & Americas |
Central & |
Total |
|
|
Underlying operating income |
3,169 |
677 |
337 |
220 |
4,403 |
|
Restructuring |
61 |
20 |
8 |
10 |
99 |
|
DVA |
- |
16 |
5 |
- |
21 |
|
Reported operating income |
3,230 |
713 |
350 |
230 |
4,523 |
|
|
3Q'22¹ |
||||
|
Asia |
Africa & |
Europe & |
Central & |
Total |
|
|
Underlying operating income |
2,891 |
616 |
580 |
51 |
4,138 |
|
Restructuring |
76 |
30 |
25 |
5 |
136 |
|
DVA |
22 |
6 |
27 |
- |
55 |
|
Reported operating income |
2,989 |
652 |
632 |
56 |
4,329 |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
Page 29
Underlying versus reported results reconciliations continued
Net interest income and Other income
|
|
3Q'23 |
3Q'22 |
||||||
|
Underlying |
Restructuring |
Adjustment for Financial Markets funding costs and financial guarantee fees on interest earning assets |
Reported |
Underlying |
Restructuring |
Adjustment |
Reported |
|
|
Net interest income1 |
2,388 |
(8) |
(455) |
1,925 |
2,017 |
6 |
(91) |
1,932 |
|
Other income1 |
2,015 |
128 |
455 |
2,598 |
2,121 |
185 |
91 |
2,397 |
|
Total income |
4,403 |
120 |
- |
4,523 |
4,138 |
191 |
- |
4,329 |
1 To be consistent with how we the compute Net Interest Margin, we have changed our definition of Underlying Net Interest Income (NII) and Underlying Other Income (OI). The adjustments made to NIM, including Interest expense relating to funding our trading book, will now be shown against Underlying Other Income rather than Underlying NII. There is no impact on total income
Profit before taxation (PBT)
|
|
3Q'23 |
||||
|
Underlying |
Restructuring |
Goodwill & |
DVA |
Reported |
|
|
Operating income |
4,403 |
99 |
- |
21 |
4,523 |
|
Operating expenses |
(2,770) |
(100) |
- |
- |
(2,870) |
|
Operating profit/(loss) before impairment losses and taxation |
1,633 |
(1) |
- |
21 |
1,653 |
|
Credit impairment |
(294) |
2 |
- |
- |
(292) |
|
Other impairment |
(26) |
(11) |
(697) |
- |
(734) |
|
Profit from associates and joint ventures |
3 |
3 |
- |
- |
6 |
|
Profit/(loss) before taxation |
1,316 |
(7) |
(697) |
21 |
633 |
|
|
3Q'22¹ |
||||
|
Underlying |
Restructuring |
Goodwill & |
DVA |
Reported |
|
|
Operating income |
4,138 |
136 |
- |
55 |
4,329 |
|
Operating expenses |
(2,576) |
(120) |
- |
- |
(2,696) |
|
Operating profit/(loss) before impairment losses and taxation |
1,562 |
16 |
- |
55 |
1,633 |
|
Credit impairment |
(232) |
5 |
- |
- |
(227) |
|
Other impairment |
- |
(31) |
- |
- |
(31) |
|
Profit from associates and joint ventures |
16 |
- |
- |
- |
16 |
|
Profit/(loss) before taxation |
1,346 |
(10) |
- |
55 |
1,391 |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
2 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
Page 30
Underlying versus reported results reconciliations continued
Profit before taxation (PBT) by client segment
|
|
3Q'23 |
||||
|
Corporate, Commercial & Institutional Banking |
Consumer, |
Ventures |
Central & |
Total |
|
|
Operating income |
2,814 |
1,849 |
35 |
(295) |
4,403 |
|
External |
2,084 |
1,003 |
35 |
1,281 |
4,403 |
|
Inter-segment |
730 |
846 |
- |
(1,576) |
- |
|
Operating expenses |
(1,387) |
(1,065) |
(109) |
(209) |
(2,770) |
|
Operating profit/(loss) before impairment losses and taxation |
1,427 |
784 |
(74) |
(504) |
1,633 |
|
Credit impairment |
(159) |
(115) |
(30) |
10 |
(294) |
|
Other impairment |
(13) |
- |
(9) |
(4) |
(26) |
|
Profit from associates and joint ventures |
- |
- |
(4) |
7 |
3 |
|
Underlying profit/(loss) before taxation |
1,255 |
669 |
(117) |
(491) |
1,316 |
|
Restructuring |
11 |
(17) |
- |
(1) |
(7) |
|
Goodwill & other impairment2 |
- |
- |
- |
(697) |
(697) |
|
DVA |
21 |
- |
- |
- |
21 |
|
Reported profit/(loss) before taxation |
1,287 |
652 |
(117) |
(1,189) |
633 |
|
|
3Q'22¹ |
||||
|
Corporate, Commercial & Institutional Banking |
Consumer, |
Ventures |
Central & |
Total |
|
|
Operating income |
2,572 |
1,591 |
10 |
(35) |
4,138 |
|
External |
2,232 |
1,278 |
10 |
618 |
4,138 |
|
Inter-segment |
340 |
313 |
- |
(653) |
- |
|
Operating expenses |
(1,276) |
(1,024) |
(87) |
(189) |
(2,576) |
|
Operating profit/(loss) before impairment losses and taxation |
1,296 |
567 |
(77) |
(224) |
1,562 |
|
Credit impairment |
(87) |
(86) |
(4) |
(55) |
(232) |
|
Profit from associates and joint ventures |
- |
- |
(4) |
20 |
16 |
|
Underlying profit/(loss) before taxation |
1,209 |
481 |
(85) |
(259) |
1,346 |
|
Restructuring |
18 |
(22) |
- |
(6) |
(10) |
|
DVA |
55 |
- |
- |
- |
55 |
|
Reported profit/(loss) before taxation |
1,282 |
459 |
(85) |
(265) |
1,391 |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
2 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
Page 31
Underlying versus reported results reconciliations continued
Profit before taxation (PBT) by region
|
|
3Q'23 |
||||
|
Asia |
Africa & |
Europe & Americas |
Central & |
Total |
|
|
Operating income |
3,169 |
677 |
337 |
220 |
4,403 |
|
Operating expenses |
(1,797) |
(398) |
(447) |
(128) |
(2,770) |
|
Operating profit/(loss) before impairment losses and taxation |
1,372 |
279 |
(110) |
92 |
1,633 |
|
Credit impairment |
(311) |
(2) |
18 |
1 |
(294) |
|
Other impairment |
(7) |
(4) |
2 |
(17) |
(26) |
|
Profit from associates and joint ventures |
9 |
- |
- |
(6) |
3 |
|
Underlying profit/(loss) before taxation |
1,063 |
273 |
(90) |
70 |
1,316 |
|
Restructuring |
(36) |
(19) |
(6) |
54 |
(7) |
|
Goodwill & other impairment2 |
(697) |
- |
- |
- |
(697) |
|
DVA |
- |
16 |
5 |
- |
21 |
|
Reported profit/(loss) before taxation |
330 |
270 |
(91) |
124 |
633 |
|
|
3Q'22¹ |
||||
|
Asia |
Africa & |
Europe & |
Central & |
Total |
|
|
Operating income |
2,891 |
616 |
580 |
51 |
4,138 |
|
Operating expenses |
(1,665) |
(395) |
(371) |
(145) |
(2,576) |
|
Operating profit/(loss) before impairment losses and taxation |
1,226 |
221 |
209 |
(94) |
1,562 |
|
Credit impairment |
(193) |
(73) |
34 |
- |
(232) |
|
Other impairment |
- |
2 |
1 |
(3) |
- |
|
Profit from associates and joint ventures |
20 |
- |
- |
(4) |
16 |
|
Underlying profit/(loss) before taxation |
1,053 |
150 |
244 |
(101) |
1,346 |
|
Restructuring |
(36) |
16 |
18 |
(8) |
(10) |
|
DVA |
22 |
6 |
27 |
- |
55 |
|
Reported profit/(loss) before taxation |
1,039 |
172 |
289 |
(109) |
1,391 |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
2 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
Page 32
Underlying versus reported results reconciliations continued
Return on tangible equity (RoTE)
|
|
3Q'23 |
||||
|
Corporate, Commercial & Institutional Banking |
Consumer, |
Ventures |
Central & |
Total |
|
|
Underlying RoTE |
17.9 |
27.2 |
nm² |
(38.5) |
7.0 |
|
Restructuring |
|
|
|
|
|
|
Of which: Income |
1.4 |
0.6 |
- |
0.6 |
1.2 |
|
Of which: Expenses |
(1.2) |
(1.4) |
nm² |
(0.5) |
(1.1) |
|
Of which: Credit impairment |
- |
(0.1) |
- |
0.2 |
- |
|
Of which: Other impairment |
- |
(0.1) |
- |
(0.7) |
(0.1) |
|
Of which: Profit from associates and joint ventures |
- |
- |
- |
0.2 |
- |
|
Goodwill impairment |
- |
- |
- |
(37.9) |
(7.7) |
|
Ventures FVOCI Unrealised gains / (losses) net of Taxes |
- |
- |
nm² |
- |
0.1 |
|
DVA |
0.4 |
- |
- |
- |
0.2 |
|
Tax on normalised items |
(0.1) |
0.4 |
nm² |
0.3 |
- |
|
Reported RoTE |
18.4 |
26.6 |
nm² |
(76.3) |
(0.4) |
|
|
3Q'22¹ |
||||
|
Corporate, Commercial & Institutional Banking |
Consumer, |
Ventures |
Central & |
Total |
|
|
Underlying RoTE |
16.5 |
19.2 |
nm² |
(15.9) |
9.4 |
|
Restructuring |
|
|
|
|
|
|
Of which: Income |
2.3 |
0.6 |
- |
- |
1.5 |
|
Of which: Expenses |
(1.5) |
(1.7) |
nm² |
(0.2) |
(1.3) |
|
Of which: Credit impairment |
0.1 |
- |
- |
(0.1) |
0.1 |
|
Of which: Other impairment |
(0.6) |
- |
- |
(0.1) |
(0.3) |
|
Of which: Profit from associates and joint ventures |
- |
- |
- |
0.1 |
- |
|
Ventures FVOCI Unrealised gains / (losses) net of Taxes |
- |
- |
nm² |
- |
0.5 |
|
DVA |
1.0 |
- |
- |
- |
0.6 |
|
Tax on normalised items |
(0.3) |
0.3 |
nm² |
1.0 |
- |
|
Reported RoTE |
17.5 |
18.4 |
nm² |
(15.2) |
10.5 |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
2 Not Meaningful
Page 33
Underlying versus reported results reconciliations continued
Earnings per ordinary share (EPS)
|
|
3Q'23 |
|||||
|
Underlying |
Restructuring |
DVA |
Goodwill impairment2 |
Tax on normalised items |
Reported |
|
|
Profit for the year attributable to ordinary shareholders |
644 |
(7) |
21 |
(697) |
4 |
(35) |
|
Basic - Weighted average number of shares (millions) |
2,772 |
|
|
|
|
2,772 |
|
Basic earnings per ordinary share (cents) |
23.2 |
|
|
|
|
(1.3) |
|
|
3Q'22¹ |
|||||
|
Underlying |
Restructuring |
DVA |
Goodwill impairment |
Tax on normalised items |
Reported |
|
|
Profit for the year attributable to ordinary shareholders1 |
915 |
(10) |
55 |
- |
4 |
964 |
|
Basic - Weighted average number of shares (millions) |
2,949 |
|
|
|
|
2,949 |
|
Basic earnings per ordinary share (cents) |
31.0 |
|
|
|
|
32.7 |
1 Underlying performance for relevant periods in 2022 has been restated for the removal of (i) exit markets and businesses in AME (ii) Aviation Finance and (iii) DVA. No change to reported performance
2 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
Page 34
Risk review
Credit quality by client segment
|
Amortised cost |
30.09.23 |
|||||||
|
Banks |
Customers |
Undrawn commitments |
Financial Guarantees |
|||||
|
Corporate, Commercial & Institutional Banking |
Consumer, Private & Business Banking |
Ventures |
Central & other items |
Customer Total |
||||
|
Stage 1 |
45,761 |
117,266 |
121,544 |
996 |
26,784 |
266,590 |
170,008 |
71,006 |
|
- Strong |
36,420 |
80,201 |
116,539 |
988 |
26,495 |
224,223 |
155,564 |
47,217 |
|
- Satisfactory |
9,341 |
37,065 |
5,005 |
8 |
289 |
42,367 |
14,444 |
23,789 |
|
Stage 2 |
306 |
10,034 |
2,351 |
46 |
- |
12,431 |
5,085 |
2,594 |
|
- Strong |
24 |
1,459 |
1,626 |
22 |
- |
3,107 |
1,196 |
934 |
|
- Satisfactory |
192 |
7,533 |
429 |
10 |
- |
7,972 |
3,445 |
1,270 |
|
- Higher risk |
90 |
1,042 |
296 |
14 |
- |
1,352 |
444 |
390 |
|
Of which (stage 2): |
|
|
|
|
|
|
|
|
|
- Less than 30 days past due |
- |
106 |
429 |
10 |
- |
545 |
- |
- |
|
- More than 30 days past due |
5 |
25 |
296 |
14 |
- |
335 |
- |
- |
|
Stage 3, credit-impaired financial assets |
64 |
5,932 |
1,445 |
9 |
124 |
7,510 |
19 |
580 |
|
Gross balance¹ |
46,131 |
133,232 |
125,340 |
1,051 |
26,908 |
286,531 |
175,112 |
74,180 |
|
Stage 1 |
(7) |
(110) |
(329) |
(19) |
- |
(458) |
(49) |
(16) |
|
- Strong |
(2) |
(52) |
(268) |
(19) |
- |
(339) |
(34) |
(9) |
|
- Satisfactory |
(5) |
(58) |
(61) |
- |
- |
(119) |
(15) |
(7) |
|
Stage 2 |
(9) |
(318) |
(115) |
(7) |
- |
(440) |
(48) |
(14) |
|
- Strong |
- |
(15) |
(37) |
(4) |
- |
(56) |
(5) |
- |
|
- Satisfactory |
(2) |
(225) |
(33) |
(1) |
- |
(259) |
(26) |
(4) |
|
- Higher risk |
(7) |
(78) |
(45) |
(2) |
- |
(125) |
(17) |
(10) |
|
Of which (stage 2): |
|
|
|
|
|
|
|
|
|
- Less than 30 days past due |
- |
(3) |
(33) |
(1) |
- |
(37) |
- |
- |
|
- More than 30 days past due |
- |
- |
(45) |
(2) |
- |
(47) |
- |
- |
|
Stage 3, credit-impaired financial assets |
(4) |
(3,835) |
(774) |
(7) |
(8) |
(4,624) |
(1) |
(114) |
|
Total credit impairment |
(20) |
(4,263) |
(1,218) |
(33) |
(8) |
(5,522) |
(98) |
(144) |
|
Net carrying value |
46,111 |
128,969 |
124,122 |
1,018 |
26,900 |
281,009 |
|
|
|
Stage 1 |
0.0% |
0.1% |
0.3% |
1.9% |
0.0% |
0.2% |
0.0% |
0.0% |
|
- Strong |
0.0% |
0.1% |
0.2% |
1.9% |
0.0% |
0.2% |
0.0% |
0.0% |
|
- Satisfactory |
0.1% |
0.2% |
1.2% |
0.0% |
0.0% |
0.3% |
0.1% |
0.0% |
|
Stage 2 |
2.9% |
3.2% |
4.9% |
15.2% |
0.0% |
3.5% |
0.9% |
0.5% |
|
- Strong |
0.0% |
1.0% |
2.3% |
18.2% |
0.0% |
1.8% |
0.4% |
0.0% |
|
- Satisfactory |
1.0% |
3.0% |
7.7% |
10.0% |
0.0% |
3.2% |
0.8% |
0.3% |
|
- Higher risk |
7.8% |
7.5% |
15.2% |
14.3% |
0.0% |
9.2% |
3.8% |
2.6% |
|
Of which (stage 2): |
|
|
|
|
|
|
|
|
|
- Less than 30 days past due |
0.0% |
2.8% |
7.7% |
10.0% |
0.0% |
6.8% |
0.0% |
0.0% |
|
- More than 30 days past due |
0.0% |
0.0% |
15.2% |
14.3% |
0.0% |
14.0% |
0.0% |
0.0% |
|
Stage 3, credit-impaired financial assets (S3) |
6.3% |
64.6% |
53.6% |
77.8% |
6.5% |
61.6% |
5.3% |
19.7% |
|
Cover ratio |
0.0% |
3.2% |
1.0% |
3.1% |
0.0% |
1.9% |
0.1% |
0.2% |
|
|
|
|
|
|
|
|
|
|
|
Fair value through profit or loss |
|
|
|
|
|
|
|
|
|
Performing |
34,006 |
48,367 |
16 |
- |
- |
48,383 |
- |
- |
|
- Strong |
27,395 |
31,043 |
16 |
- |
- |
31,059 |
- |
- |
|
- Satisfactory |
6,611 |
17,279 |
- |
- |
- |
17,279 |
- |
- |
|
- Higher risk |
- |
45 |
- |
- |
- |
45 |
- |
- |
|
Defaulted (CG13-14) |
- |
28 |
- |
- |
- |
28 |
- |
- |
|
Gross balance (FVTPL)2 |
34,006 |
48,395 |
16 |
- |
- |
48,411 |
- |
- |
|
Net carrying value (incl FVTPL) |
80,117 |
177,364 |
124,138 |
1,018 |
26,900 |
329,420 |
- |
- |
1 Loans and advances includes reverse repurchase agreements and other similar secured lending of $10,267 million under Customers and of $719 million under Banks, held at amortised cost
2 Loans and advances includes reverse repurchase agreements and other similar secured lending of $42,475 million under Customers and of $32,019 million under Banks, held at fair value through profit or loss
Page 35
Risk review continued
|
Amortised cost |
30.06.23 |
|||||||
|
Banks |
Customers |
Undrawn commitments |
Financial Guarantees |
|||||
|
Corporate, Commercial & Institutional Banking |
Consumer, Private & Business Banking1 |
Ventures |
Central & other items |
Customer Total |
||||
|
Stage 1 |
43,980 |
118,179 |
124,735 |
927 |
33,870 |
277,711 |
169,843 |
65,574 |
|
- Strong |
33,450 |
81,296 |
120,215 |
920 |
33,579 |
236,010 |
153,463 |
43,749 |
|
- Satisfactory |
10,530 |
36,883 |
4,520 |
7 |
291 |
41,701 |
16,380 |
21,825 |
|
Stage 2 |
565 |
8,059 |
2,012 |
39 |
- |
10,110 |
4,363 |
2,238 |
|
- Strong |
260 |
1,632 |
1,519 |
20 |
- |
3,171 |
1,091 |
263 |
|
- Satisfactory |
50 |
5,366 |
336 |
9 |
- |
5,711 |
2,785 |
1,620 |
|
- Higher risk |
255 |
1,061 |
157 |
10 |
- |
1,228 |
487 |
355 |
|
Of which (stage 2): |
|
|
|
|
|
|
|
|
|
- Less than 30 days past due |
- |
268 |
336 |
9 |
- |
613 |
- |
- |
|
- More than 30 days past due |
7 |
111 |
157 |
10 |
- |
278 |
- |
- |
|
Stage 3, credit-impaired financial assets |
78 |
6,038 |
1,450 |
6 |
193 |
7,687 |
3 |
591 |
|
Gross balance1 |
44,623 |
132,276 |
128,197 |
972 |
34,063 |
295,508 |
174,209 |
68,403 |
|
Stage 1 |
(6) |
(105) |
(332) |
(14) |
- |
(451) |
(45) |
(13) |
|
- Strong |
(4) |
(24) |
(238) |
(14) |
- |
(276) |
(26) |
(7) |
|
- Satisfactory |
(2) |
(81) |
(94) |
- |
- |
(175) |
(19) |
(6) |
|
Stage 2 |
(12) |
(280) |
(116) |
(4) |
- |
(400) |
(43) |
(20) |
|
- Strong |
(1) |
(38) |
(39) |
(2) |
- |
(79) |
(5) |
(1) |
|
- Satisfactory |
(5) |
(162) |
(28) |
(1) |
- |
(191) |
(21) |
(11) |
|
- Higher risk |
(6) |
(80) |
(49) |
(1) |
- |
(130) |
(17) |
(8) |
|
Of which (stage 2): |
|
|
|
|
|
|
|
|
|
- Less than 30 days past due |
- |
(10) |
(28) |
(1) |
- |
(39) |
- |
- |
|
- More than 30 days past due |
- |
(1) |
(49) |
(1) |
- |
(51) |
- |
- |
|
Stage 3, credit-impaired financial assets |
(3) |
(3,724) |
(779) |
(5) |
(12) |
(4,520) |
(1) |
(120) |
|
Total credit impairment |
(21) |
(4,109) |
(1,227) |
(23) |
(12) |
(5,371) |
(89) |
(153) |
|
Net carrying value |
44,602 |
128,167 |
126,970 |
949 |
34,051 |
290,137 |
|
|
|
Stage 1 |
0.0% |
0.1% |
0.3% |
1.5% |
0.0% |
0.2% |
0.0% |
0.0% |
|
- Strong |
0.0% |
0.0% |
0.2% |
1.5% |
0.0% |
0.1% |
0.0% |
0.0% |
|
- Satisfactory |
0.0% |
0.2% |
2.1% |
0.0% |
0.0% |
0.4% |
0.1% |
0.0% |
|
Stage 2 |
2.1% |
3.5% |
5.8% |
10.3% |
0.0% |
4.0% |
1.0% |
0.9% |
|
- Strong |
0.4% |
2.3% |
2.6% |
10.0% |
0.0% |
2.5% |
0.5% |
0.4% |
|
- Satisfactory |
10.0% |
3.0% |
8.3% |
11.1% |
0.0% |
3.3% |
0.8% |
0.7% |
|
- Higher risk |
2.4% |
7.5% |
31.2% |
10.0% |
0.0% |
10.6% |
3.5% |
2.3% |
|
Of which (stage 2): |
|
|
|
|
|
|
|
|
|
- Less than 30 days past due |
0.0% |
3.7% |
8.3% |
11.1% |
0.0% |
6.4% |
0.0% |
0.0% |
|
- More than 30 days past due |
0.0% |
0.9% |
31.2% |
10.0% |
0.0% |
18.3% |
0.0% |
0.0% |
|
Stage 3, credit-impaired financial assets (S3) |
3.8% |
61.7% |
53.7% |
83.3% |
6.2% |
58.8% |
33.3% |
20.3% |
|
Cover ratio |
0.0% |
3.1% |
1.0% |
2.4% |
0.0% |
1.8% |
0.1% |
0.2% |
|
|
|
|
|
|
|
|
|
|
|
Fair value through profit or loss |
|
|
|
|
|
|
|
|
|
Performing |
36,593 |
45,641 |
19 |
- |
1 |
45,661 |
- |
- |
|
- Strong |
31,754 |
29,652 |
19 |
- |
|
29,671 |
- |
- |
|
- Satisfactory |
4,839 |
15,956 |
- |
- |
- |
15,956 |
- |
- |
|
- Higher risk |
- |
33 |
- |
- |
1 |
34 |
- |
- |
|
Defaulted (CG13-14) |
- |
25 |
- |
- |
- |
25 |
- |
- |
|
Gross balance (FVTPL)2 |
36,593 |
45,666 |
19 |
- |
1 |
45,686 |
- |
- |
|
Net carrying value (incl FVTPL) |
81,195 |
173,833 |
126,989 |
949 |
34,052 |
335,823 |
- |
- |
1 Loans and advances includes reverse repurchase agreements and other similar secured lending of $10,950 million under Customers and of $1,383 million under Banks, held at amortised cost
2 Loans and advances includes reverse repurchase agreements and other similar secured lending of $40,318 million under Customers and of $34,467 million under Banks, held at fair value through profit or loss
Page 36
Risk review continued
Credit impairment charge
|
|
9 months ended 30.09.23 |
9 months ended 30.09.221 |
||||
|
Stage 1 & 2 |
Stage 3 |
Total |
Stage 1 & 2 |
Stage 3 |
Total |
|
|
Ongoing business portfolio |
|
|
|
|
|
|
|
Corporate, Commercial & Institutional Banking |
66 |
162 |
228 |
38 |
244 |
282 |
|
Consumer, Private & Business Banking |
75 |
148 |
223 |
103 |
62 |
165 |
|
Ventures |
28 |
25 |
53 |
6 |
1 |
7 |
|
Central & other items |
(35) |
(3) |
(38) |
25 |
17 |
42 |
|
Credit impairment charge / (release) |
134 |
332 |
466 |
172 |
324 |
496 |
|
Restructuring business portfolio |
|
|
|
|
|
|
|
Others |
(1) |
(12) |
(13) |
(9) |
3 |
(6) |
|
Credit impairment charge / (release) |
(1) |
(12) |
(13) |
(9) |
3 |
(6) |
|
Total credit impairment charge / (release) |
133 |
320 |
453 |
163 |
327 |
490 |
1 Underlying credit impairment has been restated for the removal of (i) exit markets and businesses in AME and (ii) Aviation Finance. No change in reported credit impairment
Vulnerable and Cyclical Sector
Maximum Exposure
|
Amortised Cost |
30.09.23 |
||||||
|
Maximum |
Collateral |
Net On Balance Sheet Exposure |
Undrawn Commitments (net of credit impairment) |
Financial Guarantees (net of credit impairment) |
Net Off Balance Sheet Exposure |
Total On & Off Balance Sheet Net Exposure |
|
|
Industry: |
|
|
|
|
|
|
|
|
Aviation1 |
2,175 |
1,196 |
979 |
1,626 |
624 |
2,250 |
3,229 |
|
Commodity Traders |
6,239 |
262 |
5,977 |
2,308 |
6,844 |
9,152 |
15,129 |
|
Metals & Mining |
3,946 |
330 |
3,616 |
3,925 |
1,276 |
5,201 |
8,817 |
|
Construction |
2,589 |
383 |
2,206 |
2,717 |
5,804 |
8,521 |
10,727 |
|
Commercial Real Estate |
14,559 |
7,386 |
7,173 |
4,993 |
330 |
5,323 |
12,496 |
|
Hotels & Tourism |
2,055 |
862 |
1,193 |
1,338 |
226 |
1,564 |
2,757 |
|
Oil & Gas |
6,956 |
550 |
6,406 |
8,105 |
6,635 |
14,740 |
21,146 |
|
Total |
38,519 |
10,969 |
27,550 |
25,012 |
21,739 |
46,751 |
74,301 |
|
Total Corporate, Commercial & Institutional Banking |
128,969 |
29,802 |
99,167 |
98,861 |
63,465 |
162,326 |
261,493 |
|
Total Group |
327,120 |
123,769 |
203,351 |
175,014 |
74,036 |
249,050 |
452,401 |
1 In addition, the Group has classified as HFS $3.4 billion of aircraft under operating leases and $0.9 billion of Aviation loans
|
Amortised Cost |
30.06.23 |
||||||
|
Maximum |
Collateral |
Net On Balance Sheet Exposure |
Undrawn Commitments (net of credit impairment) |
Financial Guarantees (net of credit impairment) |
Net Off Balance Sheet Exposure |
Total On & Off Balance Sheet Net Exposure |
|
|
Industry: |
|
|
|
|
|
|
|
|
Aviation1 |
2,939 |
1,351 |
1,588 |
1,664 |
637 |
2,301 |
3,889 |
|
Commodity Traders |
7,701 |
208 |
7,493 |
2,743 |
6,422 |
9,165 |
16,658 |
|
Metals & Mining |
3,652 |
309 |
3,343 |
3,933 |
1,419 |
5,352 |
8,695 |
|
Construction |
2,939 |
430 |
2,509 |
2,763 |
5,755 |
8,518 |
11,027 |
|
Commercial Real Estate |
15,199 |
6,707 |
8,492 |
5,788 |
335 |
6,123 |
14,615 |
|
Hotels & Tourism |
1,739 |
785 |
954 |
1,487 |
180 |
1,667 |
2,621 |
|
Oil & Gas |
6,831 |
636 |
6,195 |
7,410 |
6,290 |
13,700 |
19,895 |
|
Total |
41,000 |
10,426 |
30,574 |
25,788 |
21,038 |
46,826 |
77,400 |
|
Total Corporate, Commercial & Institutional Banking |
128,167 |
29,849 |
98,318 |
99,995 |
59,318 |
159,313 |
257,631 |
|
Total Group |
334,739 |
124,145 |
210,594 |
174,120 |
68,250 |
242,370 |
452,964 |
1 In addition, the Group has classified as HFS $3.3 billion of aircraft under operating leases and $0.9 billion of Aviation loans
Page 37
Risk review continued
Loans and advances by stage
|
Amortised Cost |
30.09.23 |
|||||||||||
|
Stage 1 |
Stage 2 |
Stage 3 |
Total |
|||||||||
|
Gross Balance |
Total Credit Impairment |
Net Carrying Amount |
Gross Balance |
Total Credit Impairment |
Net Carrying Amount |
Gross Balance |
Total Credit Impairment |
Net Carrying Amount |
Gross Balance |
Total Credit Impairment |
Net Carrying Amount |
|
|
Industry: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Aviation1 |
1,979 |
- |
1,979 |
172 |
(1) |
171 |
36 |
(11) |
25 |
2,187 |
(12) |
2,175 |
|
Commodity Traders |
6,089 |
(4) |
6,085 |
94 |
(1) |
93 |
538 |
(477) |
61 |
6,721 |
(482) |
6,239 |
|
Metals & Mining |
3,565 |
- |
3,565 |
295 |
(3) |
292 |
234 |
(145) |
89 |
4,094 |
(148) |
3,946 |
|
Construction |
2,108 |
(4) |
2,104 |
467 |
(11) |
456 |
372 |
(343) |
29 |
2,947 |
(358) |
2,589 |
|
Commercial Real Estate |
11,286 |
(12) |
11,274 |
2,957 |
(189) |
2,768 |
1,622 |
(1,105) |
517 |
15,865 |
(1,306) |
14,559 |
|
Hotels & Tourism |
1,682 |
(2) |
1,680 |
277 |
(1) |
276 |
124 |
(25) |
99 |
2,083 |
(28) |
2,055 |
|
Oil & Gas |
6,165 |
(9) |
6,156 |
451 |
(9) |
442 |
738 |
(380) |
358 |
7,354 |
(398) |
6,956 |
|
Total |
32,874 |
(31) |
32,843 |
4,713 |
(215) |
4,498 |
3,664 |
(2,486) |
1,178 |
41,251 |
(2,732) |
38,519 |
|
Total Corporate, Commercial & Institutional Banking |
117,266 |
(110) |
117,156 |
10,034 |
(318) |
9,716 |
5,932 |
(3,835) |
2,097 |
133,232 |
(4,263) |
128,969 |
|
Total Group |
312,351 |
(465) |
311,886 |
12,737 |
(449) |
12,288 |
7,574 |
(4,628) |
2,946 |
332,662 |
(5,542) |
327,120 |
1 In addition, the Group has classified as HFS $3.4 billion of aircraft under operating leases and $0.9 billion of Aviation loans
|
Amortised Cost |
30.06.23 |
|||||||||||
|
Stage 1 |
Stage 2 |
Stage 3 |
Total |
|||||||||
|
Gross Balance |
Total Credit Impairment |
Net Carrying Amount |
Gross Balance |
Total Credit Impairment |
Net Carrying Amount |
Gross Balance |
Total Credit Impairment |
Net Carrying Amount |
Gross Balance |
Total Credit Impairment |
Net Carrying Amount |
|
|
Industry: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Aviation1 |
2,706 |
- |
2,706 |
185 |
(2) |
183 |
61 |
(11) |
50 |
2,952 |
(13) |
2,939 |
|
Commodity Traders |
7,489 |
(4) |
7,485 |
61 |
(1) |
60 |
581 |
(425) |
156 |
8,131 |
(430) |
7,701 |
|
Metals & Mining |
3,261 |
- |
3,261 |
238 |
(2) |
236 |
284 |
(129) |
155 |
3,783 |
(131) |
3,652 |
|
Construction |
2,235 |
(1) |
2,234 |
638 |
(9) |
629 |
411 |
(335) |
76 |
3,284 |
(345) |
2,939 |
|
Commercial Real Estate |
13,254 |
(51) |
13,203 |
1,454 |
(113) |
1,341 |
1,600 |
(945) |
655 |
16,308 |
(1,109) |
15,199 |
|
Hotels & Tourism |
1,555 |
(2) |
1,553 |
83 |
(1) |
82 |
130 |
(26) |
104 |
1,768 |
(29) |
1,739 |
|
Oil & Gas |
5,944 |
(10) |
5,934 |
477 |
(10) |
467 |
824 |
(394) |
430 |
7,245 |
(414) |
6,831 |
|
Total |
36,444 |
(68) |
36,376 |
3,136 |
(138) |
2,998 |
3,891 |
(2,265) |
1,626 |
43,471 |
(2,471) |
41,000 |
|
Total Corporate, Commercial & Institutional Banking |
118,179 |
(105) |
118,074 |
8,059 |
(280) |
7,779 |
6,038 |
(3,724) |
2,314 |
132,276 |
(4,109) |
128,167 |
|
Total Group |
321,691 |
(457) |
321,234 |
10,675 |
(412) |
10,263 |
7,765 |
(4,523) |
3,242 |
340,131 |
(5,392) |
334,739 |
1 In addition, the Group has classified as HFS $3.3 billion of aircraft under operating leases and $0.9 billion of Aviation loans
Page 38
Capital review
Capital ratios
|
|
30.09.23 |
30.06.23 |
Change 3 |
31.12.22 |
Change 3 |
|
CET1 |
13.9% |
14.0% |
(0.1) |
14.0% |
(0.1) |
|
Tier 1 capital |
16.2% |
16.2% |
(0.0) |
16.6% |
(0.4) |
|
Total capital |
21.2% |
21.1% |
0.1 |
21.7% |
(0.5) |
Capital base1
|
|
30.09.23 |
30.06.23 |
Change 4 |
31.12.22 |
Change 4 |
|
CET1 instruments and reserves |
|
|
|
|
|
|
Capital instruments and the related share premium accounts |
5,352 |
5,389 |
(1) |
5,436 |
(2) |
|
Of which: share premium accounts |
3,989 |
3,989 |
- |
3,989 |
- |
|
Retained earnings |
25,202 |
26,549 |
(5) |
25,154 |
- |
|
Accumulated other comprehensive income (and other reserves) |
7,838 |
7,932 |
(1) |
8,165 |
(4) |
|
Non-controlling interests (amount allowed in consolidated CET1) |
215 |
190 |
13 |
189 |
14 |
|
Independently reviewed interim and year-end profits |
2,586 |
2,386 |
8 |
2,988 |
(13) |
|
Foreseeable dividends |
(446) |
(377) |
18 |
(648) |
(31) |
|
CET1 capital before regulatory adjustments |
40,747 |
42,069 |
(3) |
41,284 |
(1) |
|
CET1 regulatory adjustments |
|
|
|
|
|
|
Additional value adjustments (prudential valuation adjustments) |
(613) |
(693) |
(12) |
(854) |
(28) |
|
Intangible assets (net of related tax liability) |
(5,940) |
(5,825) |
2 |
(5,802) |
2 |
|
Deferred tax assets that rely on future profitability |
(31) |
(86) |
(64) |
(76) |
(59) |
|
Fair value reserves related to net losses on cash flow hedges |
195 |
317 |
(38) |
564 |
(65) |
|
Deduction of amounts resulting from the calculation of excess expected loss |
(710) |
(787) |
(10) |
(684) |
4 |
|
Net gains on liabilities at fair value resulting from changes in own credit risk |
203 |
203 |
- |
63 |
nm5 |
|
Defined-benefit pension fund assets |
(113) |
(134) |
(16) |
(116) |
(3) |
|
Fair value gains arising from the institution's own credit risk related to derivative liabilities |
(84) |
(64) |
31 |
(90) |
(7) |
|
Exposure amounts which could qualify for risk weighting of 1,250% |
(36) |
(52) |
(31) |
(103) |
(65) |
|
Other regulatory adjustments to CET1 capital 2 |
(49) |
(52) |
(6) |
(29) |
69 |
|
Total regulatory adjustments to CET1 |
(7,178) |
(7,173) |
- |
(7,127) |
1 |
|
CET1 capital |
33,569 |
34,896 |
(4) |
34,157 |
(2) |
|
Additional Tier 1 capital (AT1) instruments |
5,512 |
5,512 |
- |
6,504 |
(15) |
|
AT1 regulatory adjustments |
(20) |
(20) |
- |
(20) |
- |
|
Tier 1 capital |
39,061 |
40,388 |
(3) |
40,641 |
(4) |
|
|
|
|
|
|
|
|
Tier 2 capital instruments |
12,081 |
12,311 |
(2) |
12,540 |
(4) |
|
Tier 2 regulatory adjustments |
(30) |
(30) |
- |
(30) |
- |
|
Tier 2 capital |
12,051 |
12,281 |
(2) |
12,510 |
(4) |
|
Total capital |
51,112 |
52,669 |
(3) |
53,151 |
(4) |
|
Total risk-weighted assets (unaudited) |
241,506 |
249,117 |
(3) |
244,711 |
(1) |
1 Capital base is prepared on the regulatory scope of consolidation
2 Other regulatory adjustments to CET1 capital includes insufficient coverage for non-performing exposures of $(49) million
3 Change is the percentage point difference between two periods, rather than percentage change
4 Variance is increase/(decrease) comparing current reporting period to prior periods
5 Not meaningful
Page 39
Capital review continued
Movement in total capital
|
|
9 months ended 30.09.23 |
12 months ended 31.12.22 |
|
CET1 at 1 January |
34,157 |
38,362 |
|
Ordinary shares issued in the period and share premium |
- |
- |
|
Share buy-back |
(2,000) |
(1,258) |
|
Profit for the period |
2,586 |
2,988 |
|
Foreseeable dividends deducted from CET1 |
(446) |
(648) |
|
Difference between dividends paid and foreseeable dividends |
(344) |
(301) |
|
Movement in goodwill and other intangible assets |
(138) |
(1,410) |
|
Foreign currency translation differences |
(866) |
(1,892) |
|
Non-controlling interests |
26 |
(12) |
|
Movement in eligible other comprehensive income |
385 |
(1,224) |
|
Deferred tax assets that rely on future profitability |
45 |
74 |
|
Decrease/(increase) in excess expected loss |
(26) |
(104) |
|
Additional value adjustments (prudential valuation adjustment) |
241 |
(189) |
|
IFRS 9 transitional impact on regulatory reserves including day one |
(106) |
(146) |
|
Exposure amounts which could qualify for risk weighting |
67 |
(67) |
|
Fair value gains arising from the institution's own Credit Risk related to derivative liabilities |
6 |
(30) |
|
Others |
(18) |
14 |
|
CET1 at 30 September/31 December |
33,569 |
34,157 |
|
|
|
|
|
AT1 at 1 January |
6,484 |
6,791 |
|
Net issuances (redemptions) |
(1,000) |
241 |
|
Foreign currency translation difference |
8 |
9 |
|
Excess on AT1 grandfathered limit (ineligible) |
- |
(557) |
|
AT1 at 30 September/31 December |
5,492 |
6,484 |
|
|
|
|
|
Tier 2 capital at 1 January |
12,510 |
12,491 |
|
Regulatory amortisation |
1,573 |
778 |
|
Net issuances (redemptions) |
(2,042) |
(1,098) |
|
Foreign currency translation difference |
(6) |
(337) |
|
Tier 2 ineligible minority interest |
13 |
102 |
|
Recognition of ineligible AT1 |
- |
557 |
|
Other |
3 |
17 |
|
Tier 2 capital at 30 September/31 December |
12,051 |
12,510 |
|
Total capital at 30 September/31 December |
51,112 |
53,151 |
Page 40
Capital review continued
Risk-weighted assets by business
|
|
30.09.23 |
|||
|
Credit risk |
Operational risk |
Market risk |
Total risk |
|
|
Corporate, Commercial & Institutional Banking |
104,015 |
18,083 |
21,288 |
143,386 |
|
Consumer, Private & Business Banking |
41,582 |
8,783 |
- |
50,365 |
|
Ventures |
1,749 |
35 |
2 |
1,786 |
|
Central & other items |
40,948 |
960 |
4,061 |
45,969 |
|
Total risk-weighted assets |
188,294 |
27,861 |
25,351 |
241,506 |
|
|
30.06.23 |
|||
|
Credit risk |
Operational risk |
Market risk |
Total risk |
|
|
Corporate, Commercial & Institutional Banking |
109,343 |
18,083 |
19,832 |
147,258 |
|
Consumer, Private & Business Banking |
41,881 |
8,783 |
- |
50,664 |
|
Ventures |
1,888 |
35 |
2 |
1,925 |
|
Central & other items |
44,039 |
960 |
4,271 |
49,270 |
|
Total risk-weighted assets |
197,151 |
27,861 |
24,105 |
249,117 |
|
|
31.12.22 |
|||
|
Credit risk |
Operational risk |
Market risk |
Total risk |
|
|
Corporate, Commercial & Institutional Banking |
110,103 |
17,039 |
16,440 |
143,582 |
|
Consumer, Private & Business Banking |
42,091 |
8,639 |
- |
50,730 |
|
Ventures |
1,350 |
6 |
2 |
1,358 |
|
Central & other items |
43,311 |
1,493 |
4,237 |
49,041 |
|
Total risk-weighted assets |
196,855 |
27,177 |
20,679 |
244,711 |
Risk-weighted assets by geographic region
|
|
30.09.23 |
30.06.23 |
Change1 |
31.12.22 |
Change1 |
|
ASIA |
150,842 |
155,410 |
(3) |
150,816 |
- |
|
Africa & Middle East |
38,529 |
41,068 |
(6) |
40,716 |
(5) |
|
Europe & Americas |
48,227 |
48,787 |
(1) |
50,174 |
(4) |
|
Central & other items |
3,908 |
3,852 |
1 |
3,005 |
30 |
|
Total risk-weighted assets |
241,506 |
249,117 |
(3) |
244,711 |
(1) |
1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods
Page 41
Capital review continued
Movement in risk-weighted assets
|
|
Credit risk |
Operational risk |
Market risk |
Total risk |
||||
|
Corporate, Commercial & Institutional Banking |
Consumer, Private & Business Banking |
Ventures |
Central & other items |
Total |
||||
|
At 31 December 2021 |
125,813 |
42,731 |
756 |
50,288 |
219,588 |
27,116 |
24,529 |
271,233 |
|
At 1 January 2022 |
125,813 |
42,731 |
756 |
50,288 |
219,588 |
27,116 |
24,529 |
271,233 |
|
Asset growth & mix |
(13,213) |
(985) |
594 |
(10,033) |
(23,637) |
- |
- |
(23,637) |
|
Asset quality |
(4,258) |
431 |
- |
7,344 |
3,517 |
- |
- |
3,517 |
|
Risk-weighted assets efficiencies |
- |
- |
- |
- |
- |
- |
- |
- |
|
Model updates |
4,329 |
1,420 |
- |
- |
5,749 |
- |
(1,000) |
4,749 |
|
Methodology and policy changes |
2,024 |
85 |
- |
93 |
2,202 |
- |
1,500 |
3,702 |
|
Acquisitions and disposals |
- |
- |
- |
- |
- |
- |
- |
- |
|
Foreign currency translation |
(4,883) |
(1,591) |
- |
(3,376) |
(9,850) |
- |
- |
(9,850) |
|
Other, including non-credit risk movements |
291 |
- |
- |
(1,005) |
(714) |
61 |
(4,350) |
(5,003) |
|
At 31 December 2022 |
110,103 |
42,091 |
1,350 |
43,311 |
196,855 |
27,177 |
20,679 |
244,711 |
|
Asset growth & mix |
(3,506) |
843 |
399 |
(78) |
(2,342) |
- |
- |
(2,342) |
|
Asset quality |
(322) |
(14) |
- |
779 |
443 |
- |
- |
443 |
|
Risk-weighted assets efficiencies |
- |
- |
- |
(688) |
(688) |
- |
- |
(688) |
|
Model updates |
(597) |
(153) |
- |
(151) |
(901) |
- |
1,300 |
399 |
|
Methodology and policy changes |
- |
(196) |
- |
- |
(196) |
- |
(600) |
(796) |
|
Acquisitions and disposals |
- |
- |
- |
- |
- |
- |
- |
- |
|
Foreign currency translation |
(1,663) |
(989) |
- |
(2,225) |
(4,877) |
- |
- |
(4,877) |
|
Other, including non-credit risk movements |
- |
- |
- |
- |
- |
684 |
3,972 |
4,656 |
|
At 30 September 2023 |
104,015 |
41,582 |
1,749 |
40,948 |
188,294 |
27,861 |
25,351 |
241,506 |
Page 42
Capital review continued
Leverage Ratio
|
|
30.09.23 |
30.06.23 |
Change 3 |
31.12.22 |
Change 3 |
|
Tier 1 capital (transitional) |
39,061 |
40,388 |
(3) |
40,641 |
(4) |
|
Additional Tier 1 capital subject to phase out |
- |
- |
- |
- |
- |
|
Tier 1 capital (end point) |
39,061 |
40,388 |
(3) |
40,641 |
(4) |
|
Derivative financial instruments |
62,449 |
60,388 |
3 |
63,717 |
(2) |
|
Derivative cash collateral |
10,035 |
9,304 |
8 |
12,515 |
(20) |
|
Securities financing transactions (SFTs) |
85,481 |
87,118 |
(2) |
89,967 |
(5) |
|
Loans and advances and other assets |
667,868 |
681,901 |
(2) |
653,723 |
2 |
|
Total on-balance sheet assets |
825,833 |
838,711 |
(2) |
819,922 |
1 |
|
Regulatory consolidation adjustments1 |
(105,534) |
(102,523) |
3 |
(71,728) |
47 |
|
Derivatives adjustments |
|
|
|
|
|
|
Derivatives netting |
(46,329) |
(44,747) |
4 |
(47,118) |
(2) |
|
Adjustments to cash collateral |
(8,725) |
(7,267) |
20 |
(10,640) |
(18) |
|
Net written credit protection |
1,139 |
931 |
22 |
548 |
nm4 |
|
Potential future exposure on derivatives |
40,737 |
39,239 |
4 |
35,824 |
14 |
|
Total derivatives adjustments |
(13,178) |
(11,844) |
11 |
(21,386) |
(38) |
|
Counterparty risk leverage exposure measure for SFTs |
4,586 |
7,591 |
(40) |
15,553 |
(71) |
|
Off-balance sheet items |
119,136 |
120,355 |
(1) |
119,049 |
- |
|
Regulatory deductions from Tier 1 capital |
(7,297) |
(7,311) |
- |
(7,099) |
3 |
|
Total exposure measure excluding claims on central banks |
823,546 |
844,979 |
(3) |
854,311 |
(4) |
|
Leverage ratio excluding claims on central banks (%)2 |
4.7% |
4.8% |
(0.1) |
4.8% |
(0.1) |
|
Average leverage exposure measure excluding claims on |
838,666 |
842,493 |
- |
864,605 |
(3) |
|
Average leverage ratio excluding claims on central banks (%)2 |
4.7% |
4.7% |
(0.0) |
4.7% |
(0.0) |
|
Countercyclical leverage ratio buffer2 |
0.1% |
0.1% |
- |
0.1% |
- |
|
G-SII additional leverage ratio buffer2 |
0.4% |
0.4% |
- |
0.4% |
- |
1 Includes adjustment for qualifying central bank claims
2 Change is the percentage point difference two periods, rather than percentage change
3 Variance is increase/(decrease) comparing current reporting period to prior periods
4 Not meaningful
Page 43
Financial statements
Condensed consolidated interim income statement
For the nine months ended 30 September 2023
|
|
9 months ended 30.09.23 |
9 months ended 30.09.22 |
|
Interest income |
20,218 |
9,872 |
|
Interest expense |
(14,309) |
(4,302) |
|
Net interest income |
5,909 |
5,570 |
|
Fees and commission income |
3,153 |
3,062 |
|
Fees and commission expense |
(622) |
(538) |
|
Net fee and commission income |
2,531 |
2,524 |
|
Net trading income |
4,805 |
4,128 |
|
Other operating income |
405 |
332 |
|
Operating income |
13,650 |
12,554 |
|
Staff costs |
(6,255) |
(5,724) |
|
Premises costs |
(313) |
(296) |
|
General administrative expenses |
(1,149) |
(1,118) |
|
Depreciation and amortisation |
(821) |
(886) |
|
Operating expenses |
(8,538) |
(8,024) |
|
Operating profit before impairment losses and taxation |
5,112 |
4,530 |
|
Credit impairment |
(453) |
(490) |
|
Goodwill, property, plant and equipment and other impairment |
(811) |
(46) |
|
Profit from associates and joint ventures |
108 |
169 |
|
Profit before taxation |
3,956 |
4,163 |
|
Taxation |
(1,432) |
(997) |
|
Profit for the period |
2,524 |
3,166 |
|
|
|
|
|
Profit attributable to: |
|
|
|
Non-controlling interests |
(9) |
(10) |
|
Parent company shareholders |
2,533 |
3,176 |
|
Profit for the period |
2,524 |
3,166 |
|
|
cents |
cents |
|
Earnings per share: |
|
|
|
Basic earnings per ordinary share |
74.9 |
94.8 |
|
Diluted earnings per ordinary share |
73.3 |
93.0 |
Page 44
Financial statements continued
Condensed consolidated interim statement of comprehensive income
For the nine months ended 30 September 2023
|
|
9 months ended 30.09.23 |
9 months ended 30.09.22 |
|
Profit for the period |
2,524 |
3,166 |
|
Other comprehensive (loss)/income: |
|
|
|
Items that will not be reclassified to income statement: |
(84) |
88 |
|
Own credit (losses)/gains on financial liabilities designated at fair value through profit or loss |
(137) |
145 |
|
Equity instruments at fair value through other comprehensive income |
66 |
(78) |
|
Actuarial gains on retirement benefit obligations |
14 |
39 |
|
Taxation relating to components of other comprehensive income |
(27) |
(18) |
|
Items that may be reclassified subsequently to income statement: |
(364) |
(4,407) |
|
Exchange differences on translation of foreign operations: |
|
|
|
Net losses taken to equity |
(1,363) |
(3,338) |
|
Net gains on net investment hedges |
446 |
906 |
|
Share of other comprehensive loss from associates and joint ventures |
(5) |
(82) |
|
Debt instruments at fair value through other comprehensive income: |
|
|
|
Net valuation gains/(losses) taken to equity |
113 |
(1,460) |
|
Reclassified to income statement |
108 |
53 |
|
Net impact of expected credit losses |
(51) |
33 |
|
Cash flow hedges: |
|
|
|
Net movements in cash flow hedge reserve1 |
422 |
(758) |
|
Taxation relating to components of other comprehensive income |
(34) |
239 |
|
Other comprehensive loss for the period, net of taxation |
(448) |
(4,319) |
|
Total comprehensive income/(loss) for the period |
2,076 |
(1,153) |
|
|
|
|
|
Total comprehensive income/(loss) attributable to: |
|
|
|
Non-controlling interests |
(46) |
(64) |
|
Parent company shareholders |
2,122 |
(1,089) |
|
Total comprehensive income/(loss) for the period |
2,076 |
(1,153) |
1 This line item is represented in 2023 as a net balance of all movements in the cash flow hedge reserve
Page 45
Financial statements continued
Condensed consolidated interim balance sheet
As at 30 September 2023
|
|
30.09.23 |
31.12.22 |
|
Assets |
|
|
|
Cash and balances at central banks |
89,137 |
58,263 |
|
Financial assets held at fair value through profit or loss |
122,307 |
105,812 |
|
Derivative financial instruments |
62,449 |
63,717 |
|
Loans and advances to banks |
46,111 |
39,519 |
|
Loans and advances to customers |
281,009 |
310,647 |
|
Investment securities |
157,002 |
172,448 |
|
Other assets |
49,133 |
50,383 |
|
Current tax assets |
479 |
503 |
|
Prepayments and accrued income |
2,989 |
3,149 |
|
Interests in associates and joint ventures |
1,062 |
1,631 |
|
Goodwill and intangible assets |
5,997 |
5,869 |
|
Property, plant and equipment |
2,159 |
5,522 |
|
Deferred tax assets |
686 |
834 |
|
Assets classified as held for sale |
5,313 |
1,625 |
|
Total assets |
825,833 |
819,922 |
|
|
|
|
|
Liabilities |
|
|
|
Deposits by banks |
29,744 |
28,789 |
|
Customer accounts |
453,157 |
461,677 |
|
Repurchase agreements and other similar secured borrowing |
14,286 |
2,108 |
|
Financial liabilities held at fair value through profit or loss |
79,712 |
79,903 |
|
Derivative financial instruments |
63,590 |
69,862 |
|
Debt securities in issue |
68,958 |
61,242 |
|
Other liabilities |
46,893 |
43,527 |
|
Current tax liabilities |
769 |
583 |
|
Accruals and deferred income |
6,538 |
5,895 |
|
Subordinated liabilities and other borrowed funds |
11,607 |
13,715 |
|
Deferred tax liabilities |
743 |
769 |
|
Provisions for liabilities and charges |
319 |
383 |
|
Retirement benefit obligations |
140 |
146 |
|
Liabilities included in disposal groups held for sale |
1,021 |
1,307 |
|
Total liabilities |
777,477 |
769,906 |
|
|
|
|
|
Equity |
|
|
|
Share capital and share premium account |
6,846 |
6,930 |
|
Other reserves |
7,838 |
8,165 |
|
Retained earnings |
27,782 |
28,067 |
|
Total parent company shareholders' equity |
42,466 |
43,162 |
|
Other equity instruments |
5,512 |
6,504 |
|
Total equity excluding non-controlling interests |
47,978 |
49,666 |
|
Non-controlling interests |
378 |
350 |
|
Total equity |
48,356 |
50,016 |
|
Total equity and liabilities |
825,833 |
819,922 |
Page 46
Financial statements continued
Condensed consolidated statement of changes in equity
For the nine months ended 30 September 2023
|
|
Ordinary share capital and share premium account |
Preference share capital and share premium account |
Capital and merger reserves1 |
Own credit adjustment reserve |
Fair value through other comprehensive income reserve - debt |
Fair value through other comprehensive income reserve - equity |
Cash flow hedge reserve |
Translation reserve |
Retained earning |
Parent company shareholders' equity |
Other equity instruments |
Non-controlling interests |
Total |
|
As at 01 January 2022 |
5,528 |
1,494 |
17,246 |
(15) |
103 |
249 |
(34) |
(5,744) |
27,184 |
46,011 |
6,254 |
371 |
52,636 |
|
Profit/(loss) for the period |
- |
- |
- |
- |
- |
- |
- |
- |
2,948 |
2,948 |
- |
(46) |
2,902 |
|
Other comprehensive (loss)/income |
- |
- |
- |
(48) |
(1,219) |
(43) |
(530) |
(1,904) |
82 |
(3,736) |
- |
(42) |
(3,778) |
|
Distributions |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(31) |
(31) |
|
Other equity instruments issued, net of expenses |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
1,240 |
- |
1,240 |
|
Redemption of other |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(999) |
- |
(999) |
|
Treasury shares net movement |
- |
- |
- |
- |
- |
- |
- |
- |
(203) |
(203) |
- |
- |
(203) |
|
Share option expenses |
- |
- |
- |
- |
- |
- |
- |
- |
163 |
163 |
- |
- |
163 |
|
Dividends on |
- |
- |
- |
- |
- |
- |
- |
- |
(393) |
(393) |
- |
- |
(393) |
|
Dividends on preference shares and AT1 securities |
- |
- |
- |
- |
- |
- |
- |
- |
(401) |
(401) |
- |
- |
(401) |
|
Share buy-back3,4 |
(92) |
- |
92 |
- |
- |
- |
- |
- |
(1,258) |
(1,258) |
- |
- |
(1,258) |
|
Other movements |
- |
- |
- |
- |
- |
- |
- |
125 |
196 |
31 |
95 |
987 |
138 |
|
As at 31 December 2022 |
5,436 |
1,494 |
17,338 |
(63) |
(1,116) |
206 |
(564) |
(7,636) |
28,067 |
43,162 |
6,504 |
350 |
50,016 |
|
Profit/(loss) for the period |
- |
- |
- |
- |
- |
- |
- |
- |
2,533 |
2,533 |
- |
(9) |
2,524 |
|
Other comprehensive (loss)/income |
- |
- |
- |
(140) |
183 |
43 |
369 |
(880) |
142 |
(411) |
- |
(37) |
(448) |
|
Distributions |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(17) |
(17) |
|
Redemption of other |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(1,000) |
- |
(1,000) |
|
Treasury shares net movement |
- |
- |
- |
- |
- |
- |
- |
- |
23 |
23 |
- |
- |
23 |
|
Share option expenses |
- |
- |
- |
- |
- |
- |
- |
- |
140 |
140 |
- |
- |
140 |
|
Dividends on |
- |
- |
- |
- |
- |
- |
- |
- |
(569) |
(569) |
- |
- |
(569) |
|
Dividends on preference shares and AT1 securities |
- |
- |
- |
- |
- |
- |
- |
- |
(423) |
(423) |
- |
- |
(423) |
|
Share buy-back8,9 |
(84) |
- |
84 |
- |
- |
- |
- |
- |
(2,000) |
(2,000) |
- |
- |
(2,000) |
|
Other movements |
- |
- |
- |
- |
- |
- |
- |
145 |
(3) |
11 |
85 |
9110 |
110 |
|
As at 30 September 2023 |
5,352 |
1,494 |
17,422 |
(203) |
(933) |
249 |
(195) |
(8,502) |
27,782 |
42,466 |
5,512 |
378 |
48,356 |
1 Includes capital reserve of $5 million, capital redemption reserve of $306 million and merger reserve of $17,111 million
2 Comprises actuarial gain, net of taxation on Group defined benefit schemes
3 On 18 February 2022, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases were $56 million, and the total consideration paid was $754 million (including $4 million of fees and stamp duty),the buy-back completed on 19 May 2022. The total number of shares purchased was 111,295,408 representing 3.61 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account
4 On 1 August 2022, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases were $37 million, and the total consideration paid was $504 million (including $2.5 million of fees and stamp duty). The total number of shares purchased was 73,073,837 representing 2.5 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account
5 Movement related to Translation adjustment and AT1 Securities charges
6 Movements mainly related to $21 million minority interest on Power2SME Pte Limited, $8 million on Currency Fair and $(9) million AT1 securities charges
7 Movements related to non-controlling interest from Mox Bank Limited ($39 million), Trust Bank Singapore Ltd ($47 million), Zodia Market Holdings Limited ($3 million) and Power2SME ($9 million)
8 On 16 February 2023, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases was $58 million, and the total consideration paid was $1,000 million and the buy-back completed on 29 September 2023. The total number of shares purchased was 116,710,492 representing 4.03 per cent of the ordinary shares in issue at the commencement of buy-back. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account
9 On 28 July 2023, the Group announced an additional buy-back programme for a share buy-back of its ordinary shares of $0.50 each. As at Q3 2023 the buyback is ongoing, but the nominal value of share purchases was $26 million, for total consideration of $467 million and a further $533 million relating to irrevocable obligation to buy back shares recognised. The total number of shares purchased was 51,012,391 representing 1.76 per cent of the ordinary shares in issue as at commencement of buy-back announced on 16 February 2023. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account
10 Movements related to non-controlling interest from Mox Bank Limited ($27 million), Trust Bank Singapore Ltd ($33 million), Zodia Custody Limited ($27 million) and Zodia Market Holdings Limited ($3 million)
Page 47
Financial statements continued
Basis of preparation
This statement covers the results of Standard Chartered PLC together with its subsidiaries and equity accounted interest in associates and jointly controlled entities (the Group) for the nine months ended 30 September 2023. The financial information on which this statement is based, and the data set out in the appendix to this statement, are unaudited and have been prepared in accordance with the Group's accounting policies. The Group's material accounting policies are described in the Annual Report 2022, which have been prepared in accordance with UK-adopted international accounting standards and International Financial Reporting Standards (IFRS) as adopted by the European Union (EU IFRS) and in conformity with the requirements of the Companies Act 2006. There are no significant differences between UK-adopted international accounting standards and EU IFRS. The Group's Annual Report 2023 will continue to be prepared in accordance with these frameworks.
The interim financial information does not constitute a full or condensed set of financial statements under IAS 34 'Interim Financial Reporting' as contained in UK-adopted international accounting standards or EU IFRS. The interim financial information has been prepared in accordance with the recognition and measurement principles, but not the disclosure requirements under UK-adopted international accounting standards and EU IFRS.
The information in this interim financial report is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. All references to reported performance/results within this interim financial report means amounts reported under UK-adopted IAS and EU IFRS or in reference to the statutory accounts for the year ended 31 December 2022, unless otherwise stated. This document was approved by the Board on 26 October 2023. The statutory accounts for the year ended 31 December 2022 have been audited and delivered to the Registrar of Companies in England and Wales. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under sections 498(2) and 498(3) of the Companies Act 2006.
Going concern
The Directors assessed the Group's ability to continue as a going concern, including a review of the Group's forecasts, Funding and Liquidity metrics, Capital and Liquidity plans, Legal and regulatory matters, Credit impairment, macroeconomic conditions and geopolitical headwinds, and confirm they are satisfied that the Group has adequate resources to continue in business for a period of twelve months from 26 October 2023. For this reason, the Group continues to adopt the going concern basis of accounting for preparing the interim financial information.
Page 48
Other supplementary financial information
Average balance sheets and yields
Average assets
|
|
3 months ended 30.09.23 |
||||
|
Average |
Average |
Interest income |
Gross yield |
Gross yield |
|
|
Cash and balances at central banks |
9,695 |
77,108 |
856 |
4.40 |
3.91 |
|
Gross loans and advances to banks |
36,845 |
45,425 |
553 |
4.83 |
2.67 |
|
Gross loans and advances to customers |
52,375 |
292,097 |
4,249 |
5.77 |
4.89 |
|
Impairment provisions against loans and advances to banks |
- |
(5,794) |
- |
- |
- |
|
Investment securities - Treasury and Other Eligible Bills |
6,566 |
29,675 |
404 |
5.40 |
4.42 |
|
Investment securities - Debt Securities |
30,781 |
130,004 |
1,319 |
4.03 |
3.25 |
|
Investment securities - Equity Shares |
2,978 |
- |
- |
- |
- |
|
Property, plant and equipment and intangible assets |
9,376 |
- |
- |
- |
- |
|
Prepayments, accrued income and other assets |
124,890 |
11,199 |
10 |
0.35 |
0.03 |
|
Investment associates and joint ventures |
1,811 |
- |
- |
- |
- |
|
Total average assets |
275,317 |
579,713 |
7,391 |
5.06 |
3.43 |
|
|
3 months ended 30.06.23 |
||||
|
Average |
Average |
Interest income |
Gross yield |
Gross yield |
|
|
Cash and balances at central banks |
10,525 |
67,800 |
696 |
4.12 |
3.56 |
|
Gross loans and advances to banks |
36,126 |
43,650 |
504 |
4.63 |
2.53 |
|
Gross loans and advances to customers |
53,352 |
293,704 |
3,731 |
5.10 |
4.31 |
|
Impairment provisions against loans and advances to banks |
- |
(5,907) |
- |
- |
- |
|
Investment securities - Treasury and Other Eligible Bills |
6,901 |
33,193 |
402 |
4.86 |
4.02 |
|
Investment securities - Debt Securities |
27,792 |
132,144 |
1,175 |
3.57 |
2.95 |
|
Investment securities - Equity Shares |
3,132 |
- |
- |
- |
- |
|
Property, plant and equipment and intangible assets |
9,283 |
- |
- |
- |
- |
|
Prepayments, accrued income and other assets |
121,613 |
5,227 |
34 |
2.61 |
0.11 |
|
Investment associates and joint ventures |
1,864 |
- |
- |
- |
- |
|
Total average assets |
270,589 |
569,811 |
6,542 |
4.61 |
3.12 |
|
|
3 months ended 30.09.22 |
||||
|
Average |
Average |
Interest income |
Gross yield |
Gross yield |
|
|
Cash and balances at central banks |
19,499 |
53,944 |
254 |
1.87 |
1.37 |
|
Gross loans and advances to banks |
29,266 |
43,838 |
242 |
2.19 |
1.31 |
|
Gross loans and advances to customers |
61,540 |
300,575 |
2,708 |
3.57 |
2.97 |
|
Impairment provisions against loans and advances to banks |
- |
(5,101) |
- |
- |
- |
|
Investment securities - Treasury and Other Eligible Bills |
4,970 |
25,807 |
174 |
2.67 |
2.24 |
|
Investment securities - Debt Securities |
24,902 |
138,193 |
698 |
2.00 |
1.70 |
|
Investment securities - Equity Shares |
3,554 |
- |
- |
- |
- |
|
Property, plant and equipment and intangible assets |
8,938 |
- |
- |
- |
- |
|
Prepayments, accrued income and other assets |
151,323 |
5,251 |
11 |
0.83 |
0.03 |
|
Investment associates and joint ventures |
2,149 |
- |
- |
- |
- |
|
Total average assets |
306,141 |
562,507 |
4,087 |
2.88 |
1.87 |
Page 49
Other supplementary financial information continued
Average liabilities
|
|
3 months ended 30.09.23 |
||||
|
Average |
Average |
Interest expense |
Rate paid |
Rate paid |
|
|
Deposits by banks |
15,039 |
23,630 |
222 |
3.73 |
2.28 |
|
Customer accounts: |
|
|
|
|
|
|
Current accounts |
40,444 |
124,332 |
1,027 |
3.28 |
2.47 |
|
Savings deposits |
- |
111,053 |
511 |
1.83 |
1.83 |
|
Time deposits |
15,791 |
189,619 |
2,182 |
4.57 |
4.21 |
|
Other deposits |
41,916 |
6,726 |
275 |
16.20 |
2.24 |
|
Debt securities in issue |
11,499 |
64,598 |
989 |
6.07 |
5.16 |
|
Accruals, deferred income and other liabilities |
134,587 |
15,978 |
23 |
0.58 |
0.06 |
|
Subordinated liabilities and other borrowed funds |
- |
12,361 |
237 |
7.61 |
7.61 |
|
Non-controlling interests |
403 |
- |
- |
- |
- |
|
Shareholders' funds |
47,053 |
- |
- |
- |
- |
|
|
306,732 |
548,297 |
5,466 |
3.96 |
2.54 |
|
|
|
|
|
|
|
|
Adjustment for Financial Markets funding costs and financial guarantee fees on interest earning assets |
|
|
(455) |
|
|
|
Total average liabilities and shareholders' funds |
306,732 |
548,297 |
5,011 |
3.63 |
2.33 |
|
|
3 months ended 30.06.23 |
||||
|
Average |
Average |
Interest expense |
Rate paid |
Rate paid |
|
|
Deposits by banks |
15,171 |
24,910 |
345 |
5.56 |
3.45 |
|
Customer accounts: |
|
|
|
|
|
|
Current accounts |
43,112 |
121,293 |
765 |
2.53 |
1.87 |
|
Savings deposits |
- |
110,556 |
456 |
1.65 |
1.65 |
|
Time deposits |
15,373 |
189,493 |
2,058 |
4.36 |
4.03 |
|
Other deposits |
43,903 |
1,390 |
17 |
4.91 |
0.15 |
|
Debt securities in issue |
11,496 |
66,764 |
731 |
4.39 |
3.75 |
|
Accruals, deferred income and other liabilities |
125,268 |
9,649 |
47 |
1.95 |
0.14 |
|
Subordinated liabilities and other borrowed funds |
- |
12,090 |
145 |
4.81 |
4.81 |
|
Non-controlling interests |
388 |
- |
- |
- |
- |
|
Shareholders' funds |
49,544 |
- |
- |
- |
- |
|
|
304,256 |
536,145 |
4,564 |
3.41 |
2.18 |
|
|
|
|
|
|
|
|
Adjustment for Financial Markets funding costs and financial guarantee fees on interest earning assets |
|
|
(452) |
|
|
|
Total average liabilities and shareholders' funds |
304,256 |
536,145 |
4,112 |
3.08 |
1.96 |
1 Interest expense has been re-presented between account lines
Page 50
Other supplementary financial information continued
|
|
3 months ended 30.09.22 |
||||
|
Average |
Average |
Interest expense |
Rate paid |
Rate paid |
|
|
Deposits by banks |
15,714 |
25,834 |
69 |
1.06 |
0.66 |
|
Customer accounts: |
|
|
|
|
|
|
Current accounts |
50,125 |
126,991 |
429 |
1.34 |
0.96 |
|
Savings deposits |
- |
127,695 |
212 |
0.66 |
0.66 |
|
Time deposits |
11,685 |
152,130 |
853 |
2.22 |
2.07 |
|
Other deposits |
53,762 |
4,795 |
34 |
2.81 |
0.23 |
|
Debt securities in issue |
6,928 |
61,157 |
358 |
2.32 |
2.09 |
|
Accruals, deferred income and other liabilities |
153,546 |
9,234 |
21 |
0.90 |
0.05 |
|
Subordinated liabilities and other borrowed funds |
- |
14,805 |
179 |
4.80 |
4.80 |
|
Non-controlling interests |
429 |
- |
- |
- |
- |
|
Shareholders' funds |
53,816 |
- |
- |
- |
- |
|
|
346,006 |
522,641 |
2,155 |
1.64 |
0.98 |
|
|
|
|
|
|
|
|
Adjustment for Financial Markets funding costs and financial guarantee fees on interest earning assets |
|
|
(91) |
|
|
|
Total average liabilities and shareholders' funds |
346,006 |
522,641 |
2,064 |
1.57 |
0.94 |
Net Interest Margin
|
|
3Q'23 |
2Q'23 |
3Q'22 |
|
Interest income (reported) |
7,391 |
6,542 |
4,087 |
|
Average interest earning assets |
579,713 |
569,811 |
562,507 |
|
Gross yield (%) |
5.06 |
4.61 |
2.88 |
|
|
|
|
|
|
Interest expense (reported) |
5,466 |
4,564 |
2,155 |
|
Adjustment for Financial Markets funding costs and financial guarantee fees on interest |
(455) |
(452) |
(91) |
|
Interest expense adjusted for Financial Markets funding costs and financial guarantee fees on interest earning assets |
5,011 |
4,112 |
2,064 |
|
Average interest-bearing liabilities |
548,297 |
536,145 |
522,641 |
|
Rate paid (%) |
3.63 |
3.08 |
1.57 |
|
Net yield (%) |
1.43 |
1.53 |
1.31 |
|
|
|
|
|
|
Net interest income adjusted for Financial Markets funding costs and Financial guarantee fees |
2,380 |
2,430 |
2,023 |
|
Net interest margin (%) |
1.63 |
1.71 |
1.43 |
Page 51
Other supplementary financial information continued
Important Notice - Forward-looking statements
This document may contain 'forward-looking statements' that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as 'may', 'could', 'will', 'expect', 'intend', 'estimate', 'anticipate', 'believe', 'plan', 'seek', 'continue' or other words of similar meaning.
By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.
Recipients should not place reliance on, and are cautioned about relying on, any forward-looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. The factors that could cause actual results to differ materially from those described in the forward-looking statements include (but are not limited to): changes in global, political, economic, business, competitive; market forces or condition; future exchange and interest rates; changes in environmental, social or physical risks; legislative, regulatory and policy developments; the development of standards and interpretations; the ability of the Group to mitigate the impact of climate change effectively; risks arising out of health crisis and pandemics, changes in tax rates, future business combinations or dispositions; and other factors specific to the Group. Any forward-looking statement contained in this document is based on past or current trends and/or activities of the Group and should not be taken as a representation that such trends or activities will continue in the future.
No statement in this document is intended to be a profit forecast or to imply that the earnings of the Group for the current year or future years will necessarily match or exceed the historical or published earnings of the Group. Each forward-looking statement speaks only as of the date of the particular statement. Except as required by any applicable laws or regulations, the Group expressly disclaims any obligation to revise or update any forward-looking statement contained within this document, regardless of whether those statements are affected as a result of new information, future events or otherwise.
Please refer to the Group's 2022 Annual Report for a discussion of certain risks and factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.
Financial instruments
Nothing in this document shall constitute, in any jurisdiction, an offer or solicitation to sell or purchase any securities or other financial instruments, nor shall it constitute a recommendation or advice in respect of any securities or other financial instruments or any other matter.
Caution regarding climate and environment related information
Some of the climate and environment related information in this document is subject to certain limitations, and therefore the reader should treat the information provided, as well as conclusions, projections and assumptions drawn from such information, with caution. The information may be limited due to a number of factors, which include (but are not limited to): a lack of reliable data; a lack of standardisation of data; and future uncertainty. The information includes externally sourced data that may not have been verified. Furthermore, some of the data, models and methodologies used to create the information is subject to adjustment which is beyond our control, and the information is subject to change without notice.
Page 52
CONTACT INFORMATION
Global headquarters
Standard Chartered Group
1 Basinghall Avenue
London, EC2V 5DD
United Kingdom
telephone: +44 (0)20 7885 8888
facsimile: +44 (0)20 7885 9999
Shareholder enquiries
ShareCare information
website: sc.com/shareholders
helpline: +44 (0)370 702 0138
ShareGift information
website: ShareGift.org
helpline: +44 (0)20 7930 3737
Registrar information
UK
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol, BS99 6ZZ
helpline: +44 (0)370 702 0138
Hong Kong
Computershare Hong Kong Investor Services Limited
17M Floor, Hopewell Centre
183 Queen's Road East
Wan Chai
Hong Kong
website: computershare.com/hk/investors
Chinese translation
Computershare Hong Kong Investor Services Limited
17M Floor, Hopewell Centre
183 Queen's Road East
Wan Chai
Hong Kong
Register for electronic communications
website: investorcentre.co.uk
For further information, please contact:
Gregg Powell, Head of Investor Relations
+ 44 2078855172
LSE Stock code: STAN.LN
HKSE Stock code: 02888
Page 53
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