Final Results - Part 2

Standard Chartered PLC 20 February 2002 PART 2 STANDARD CHARTERED PLC - NOTES 1. Segmental information by geographic segment The following tables set out profit and loss information, average loans and advances to customers, net interest margin and selected balance sheet information by geographic segment for the years 2001 and 2000. 2001 Asia Pacific Other Hong Asia Pacific Kong Singapore Malaysia $m $m $m $m Interest receivable 2,377 913 385 892 Interest payable (1,267) (601) (214) (573) Net interest income 1,110 312 171 319 Fees and commissions receivable, net 301 95 47 121 Dealing profits and exchange 50 40 20 90 Other operating income (3) - 3 6 Net revenue 1,458 447 241 536 Costs (679) (205) (131) (404) Amortisation of goodwill Total operating expenses (679) (205) (131) (404) Operating profit before provisions 779 242 110 132 Charge for debts, contingent liabilities and commitments (257) (51) (130) (86) Operating profit before taxation 522 191 (20) 46 Loans and advances to customers - average 21,233 6,311 3,555 5,520 Net interest margin (%) 3.2 1.9 2.7 2.3 Loans and advances to customers - period end 21,145 6,828 3,705 5,842 Loans and advances to banks - period end 1,227 2,315 607 3,184 Total assets employed 39,504 15,084 6,222 14,578 Total risk weighted assets and contingents 19,320 8,933 3,630 7,446 2001 Americas Middle UK & East & Group Other Head India Africa Total S Asia Office $m $m $m $m $m Interest receivable 572 749 339 2,479 8,706 Interest payable (370) (462) (133) (2,127) (5,747) Net interest income 202 287 206 352 2,959 Fees and commissions receivable, net 78 96 86 153 977 Dealing profits and exchange 42 55 62 111 470 Other operating income 36 4 2 10 58 Net revenue 358 442 356 626 4,464 Costs (209) (207) (226) (384) (2,445) Amortisation of goodwill (140) (140) Total operating expenses (209) (207) (226) (524) (2,585) Operating profit before provisions 149 235 130 102 1,879 Charge for debts, contingent liabilities and commitments (27) (39) (13) (128) (731) Operating profit before taxation 122 196 117 (26) 1,148 Loans and advances to customers - average 1,909 4,102 1,007 9,198 52,835 Net interest margin (%) 4.0 4.0 8.2 1.0 3.1 Loans and advances to customers - period end 1,923 4,117 969 8,476 53,005 Loans and advances to banks - period end 398 1,704 325 9,818 19,578 Total assets employed 5,993 9,603 3,487 41,190 135,661 Total risk weighted assets and contingents 3,590 5,802 1,343 19,778 69,842 a. Total interest receivable and total interest payable include intra-group interest of $2,287 million. b. Group central expenses have been distributed between segments in proportion to their direct costs and the benefit of the Group's capital has been distributed between segments in proportion to their risk weighted assets. c. Business acquisitions have been made as part of the Group's growth strategy. These activities are a result of corporate decisions made at the centre and the amortisation of purchased goodwill is included in the Americas, UK and Group Head Office segment. (d) Total assets employed include intra-group items of $24,724 million and balances of $3,558 million which are netted in the Summarised Consolidated Balance Sheet. Total risk weighted assets and contingents include $500 million of balances and other supervisory adjustments which are netted in calculating capital ratios. (e) Assets held at the centre have been distributed between geographic segments in proportion to their total assets employed. STANDARD CHARTERED PLC - NOTES 1. Segmental information by geographic segment (continued) 2000 Asia Pacific Other Hong Asia Kong Singapore Malaysia Pacific $m $m $m $m Interest receivable 2,501 825 347 972 Interest payable (1,595) (528) (154) (672) Net interest income 906 297 193 300 Fees and commissions receivable, net 243 104 48 138 Dealing profits and exchange 44 35 19 72 Other operating income 3 - 3 7 Net revenue 1,196 436 263 517 Costs (553) (176) (116) (448) Amortisation of goodwill Restructuring charge Year 2000 costs Total operating expenses (553) (176) (116) (448) Operating profit before provisions 643 260 147 69 Charge for debts, contingent liabilities and commitments (126) (20) (25) (60) Operating profit 517 240 122 9 Profit on disposal of subsidiary undertakings Profit before taxation 517 240 122 9 Loans and advances to customers - average 18,157 6,279 3,744 5,389 Net interest margin (%) 2.9 2.2 3.6 2.5 Loans and advances to customers - period end 20,615 6,294 4,091 5,504 Loans and advances to banks - period end 2,122 3,390 414 3,089 Total assets employed 38,290 14,233 6,222 13,549 Total risk weighted assets and contingents 17,958 8,310 3,677 7,244 2000 Americas Middle UK & East & Group Other Head India Africa Total S Asia Office $m $m $m $m $m Interest receivable 383 618 408 2,969 9,023 Interest payable (240) (429) (203) (2,493) (6,314) Net interest income 143 189 205 476 2,709 Fees and commissions receivable, net 55 71 104 125 888 Dealing profits and exchange 21 38 55 93 377 Other operating income 54 5 4 40 116 Net revenue 273 303 368 734 4,090 Costs (132) (155) (212) (505) (2,297) Amortisation of goodwill (71) (71) Restructuring charge (323) (323) Year 2000 costs (23) (23) Total operating expenses (132) (155) (212) (922) (2,714) Operating profit before provisions 141 148 156 (188) 1,376 Charge for debts, contingent liabilities and commitments (31) (28) (50) (130) (470) Operating profit 110 120 106 (318) 906 Profit on disposal of subsidiary undertakings 532 532 Profit before taxation 110 120 106 214 1,438 Loans and advances to customers - average 1,389 4,073 1,084 9,398 49,513 Net interest margin (%) 4.1 2.8 8.5 1.5 3.1 Loans and advances to customers - period end 1,760 4,262 1,071 8,285 51,882 Loans and advances to banks - period end 393 1,308 198 12,845 23,759 Total assets employed 4,447 9,321 2,863 37,761 126,686 Total risk weighted assets and contingents 3,415 5,673 1,302 17,451 65,030 f. Total interest receivable and total interest payable include intra-group interest of $2,118 million. g. Group central expenses have been distributed between segments in proportion to their direct costs and the benefit of the Group's capital has been distributed between segments in proportion to their risk weighted assets. h. Business acquisitions have been made as part of the Group's growth strategy. These activities are a result of corporate decisions made at the centre and the amortisation of purchased goodwill is included in the Americas, UK and Group Head Office segment. The restructuring programme and the resolution of Year 2000 related technology issues have been managed from the centre as global projects and all expenses are included in the Americas, UK and Group Head Office segments. (i) Total assets employed include intra-group items of $21,790 million and balances of $2,616 million which are netted in the Summarised Consolidated Balance Sheet. Total risk weighted assets and contingents include balances of $564 million which are netted in calculating Capital ratios. Assets held at the centre have been distributed between geographic segments in proportion to their total assets employed. STANDARD CHARTERED PLC - NOTES 1. Segmental information by geographic segment (continued) The following table sets out the structure of Standard Chartered's deposits by principal geographic region where it operates at 31 December 2001 and 31 December 2000. 2001 Asia Pacific Other Hong Asia Pacific Kong Singapore Malaysia $m $m $m $m Non interest bearing current and demand accounts 1,207 901 728 439 Interest bearing current and demand accounts 10,002 1,622 107 1,301 Savings deposits 582 437 579 1,042 Time deposits 16,687 7,078 2,824 4,565 Other deposits 4 253 303 1,099 Total 28,482 10,291 4,541 8,446 Deposits by banks 1,001 1,028 472 2,051 Customer accounts 27,481 9,263 4,069 6,395 28,482 10,291 4,541 8,446 Debt securities in issue 1,305 81 245 363 Total 29,787 10,372 4,786 8,809 2001 Americas Middle UK & East & Group Total Other Head India Africa Deposits S Asia Office $m $m $m $m $m Non interest bearing current and demand accounts 672 980 714 669 6,310 Interest bearing current and demand accounts 5 767 711 2,228 16,743 Savings deposits 518 1,040 372 220 4,790 Time deposits 2,798 3,672 461 9,831 47,916 Other deposits 57 205 190 1,673 3,784 Total 4,050 6,664 2,448 14,621 79,543 Deposits by banks 1,115 1,298 67 4,656 11,688 Customer accounts 2,935 5,366 2,381 9,965 67,855 4,050 6,664 2,448 14,621 79,543 Debt securities in issue 82 - 3 1,627 3,706 Total 4,132 6,664 2,451 16,248 83,249 2000 Asia Pacific Other Hong Asia Kong Singapore Malaysia Pacific $m $m $m $m Non interest bearing current and demand accounts 1,002 813 935 383 Interest bearing current and demand accounts 7,850 1,487 133 2,283 Savings deposits 924 449 597 916 Time deposits 18,482 6,385 2,472 4,447 Other deposits 3 2 591 512 Total 28,261 9,136 4,728 8,541 Deposits by banks 1,594 478 555 2,335 Customer accounts 26,667 8,658 4,173 6,206 28,261 9,136 4,728 8,541 Debt securities in issue 1,838 84 21 372 Total 30,099 9,220 4,749 8,913 2000 Americas Middle UK & East & Group Total Other Head India Africa Deposits S Asia Office $m $m $m $m $m Non interest bearing current and demand accounts 599 809 452 394 5,387 Interest bearing current and demand accounts 2 584 763 2,226 15,328 Savings deposits 473 882 341 15 4,597 Time deposits 2,466 3,292 417 9,363 47,324 Other deposits 106 200 34 2,056 3,504 Total 3,646 5,767 2,007 14,054 76,140 Deposits by banks 831 795 69 4,446 11,103 Customer accounts 2,815 4,972 1,938 9,608 65,037 3,646 5,767 2,007 14,054 76,140 Debt securities in issue 85 1 13 2,119 4,533 Total 3,731 5,768 2,020 16,173 80,673 STANDARD CHARTERED PLC - NOTES 2. Segmental information by class of business 2001 2000 Consumer Wholesale Consumer Wholesale Banking Banking Total Banking Banking Total $m $m $m $m $m $m Net interest income 1,720 1,239 2,959 1,618 1,091 2,709 Other income 520 985 1,505 453 928 1,381 Net revenue 2,240 2,224 4,464 2,071 2,019 4,090 Costs (1,254) (1,191) (2,445) (1,124) (1,173) (2,297) Amortisation of goodwill (140) (71) Restructuring charge - (323) Year 2000 costs - (23) Total operating expenses (1,254) (1,191) (2,585) (1,124) (1,173) (2,714) Operating profit before provisions 986 1,033 1,879 947 846 1,376 Charge for debts, contingent liabilities and commitments (330) (401) (731) (182) (288) (470) Operating profit 656 632 1,148 765 558 906 Profit on sale of subsidiary undertakings - 532 Profit before taxation 1,148 1,438 Total assets employed 44,988 90,673 135,661 42,729 83,957 126,686 a. Group central expenses and other overhead costs have been distributed between classes of business in proportion to their direct costs and the benefit of the Group's capital has been distributed between classes of business in proportion to their risk weighted assets. b. See note 1(c) and 1(h) on amortisation of goodwill, restructuring charge and Year 2000 costs on pages 38 and 39. c. Total assets employed include intra-group items of $24,724 million (2000: $21,790 million) and balances which are netted in the summarised consolidated balance sheet of $3,558 million (2000: $2,616 million). d. Assets held at the centre have been distributed between classes of business in proportion to their total assets employed. STANDARD CHARTERED PLC - NOTES 3. Consolidated profit and loss account First half and second half 2001 2nd Half 1st Half 2001 2001 $m $m Interest receivable 3,019 3,400 Interest payable (1,488) (1,972) Net interest income 1,531 1,428 Fees and commissions receivable, net 500 477 Dealing profits and exchange 221 249 Other operating income 25 33 746 759 Net revenue 2,277 2,187 Administrative expenses: Staff (624) (617) Premises (135) (150) Other (387) (348) Depreciation and amortisation, of which: (172) (152) Amortisation of goodwill (72) (68) Other (100) (84) Total operating expenses (1,318) (1,267) Operating profit before provisions 959 920 Provisions for bad and doubtful debts (463) (269) Provisions for contingent liabilities and commitments 1 - Profit before taxation 497 651 Taxation (160) (218) Profit after taxation 337 433 Minority interests (equity) (6) (6) Minority interests (non-equity) (36) (23) Profit for the period attributable to shareholders 295 404 Dividends on non-equity preference shares (56) (12) Dividends on ordinary equity shares (329) (145) Retained profit (90) 247 STANDARD CHARTERED PLC - NOTES 4. Dealing profits and exchange 2001 2000 $m $m Income from foreign exchange dealing 374 325 Profits less losses on dealing securities 22 26 Other dealing profits and exchange 74 26 470 377 5. Other operating income 2000 2001 $m $m Other operating income includes: Share of profits arising on securitised instalment credit agreements - 26 Profits less losses on disposal of investment securities 23 11 Dividend income 3 6 6. Taxation 2000 2001 $m $m United Kingdom corporation tax at 30% (2000: 30%) 211 194 Relief for overseas tax (179) (150) 32 44 Overseas tax 346 333 378 377 Effective tax rate 32.9% 26.2% There is no tax chargeable against the profit on sale of subsidiary undertakings of $532 million recognised in the year ended 31 December 2000. STANDARD CHARTERED PLC - NOTES 7. Dividends on preference shares 2001 2000 $m $m Non-cumulative irredeemable preference shares: 7 3/8% preference shares of £1 each 11 12 8 1/4% preference shares of £1 each 12 12 8.9% preference shares of $5 each 45 - 68 24 8. Dividends on ordinary shares 2001 2000 Cents per share Cents per $m share $m Interim 12.82 145 11.651 126 Final 29.10 329 26.454 298 41.92 474 38.105 424 The 2001 final dividend of 29.10 cents per share will be paid in sterling, unless shareholders elect to be paid in US dollars, on 17 May 2002 to shareholders on the register of members at the close of business on 1 March 2002. It is intended that shareholders will be able to elect to receive shares credited as fully paid instead of the final dividend (or part thereof). Details will be sent to shareholders on or around 18 March 2002. STANDARD CHARTERED PLC - NOTES 9. Earnings per ordinary share 2001 2000 Average Average Per share Per share number of amount number of Profit Cents Profit amount shares shares $m $m Cents ('000) ('000) Basic EPS Profit attributable to ordinary shareholders 631 1,128,407 55.9c 1,002 1,086,619 92.2c Effect of dilutive potential ordinary shares: Convertible Bonds 16 34,488 14 25,866 Options - 4,478 - 7,009 Diluted EPS 647 1,167,373 55.4c 1,016 1,119,494 90.7c Headline earnings per ordinary share The Institute of Investment Management and Research Statement of Investment Practice No 1 provides a definition of headline earnings. As this differs from earnings defined in Financial Reporting Standard 14 the table below provides a reconciliation. 2000 2001 $m $m Profit attributable to shareholders after preference dividends 631 1,002 Amortisation of goodwill 140 71 Profits less losses on disposal of investment securities (23) (11) Profit on disposal of subsidiaries - (532) Headline earnings 748 530 66.3c Headline earnings per ordinary share 66.3c 48.8c Normalised earnings per ordinary share The following table shows the calculation of normalised earnings per share, i.e. based on the Group's results excluding profits on disposal of subsidiary undertakings and the charge for restructuring. 2000 2001 $m $m Profit attributable to shareholders after preference dividends 631 1,002 Amortisation of goodwill 140 71 Profits less losses on disposal of investment securities (23) (11) Profit on disposal of subsidiary undertakings - (532) Restructuring charge - 323 Tax credit relating to restructuring charge - (81) Normalised earnings 748 772 Normalised earnings per ordinary share 66.3c 71.1c STANDARD CHARTERED PLC - NOTES 10. Provisions for bad and doubtful debts 2001 2000 Specific General Specific General $m $m $m $m Provisions held at 1 January 1,146 468 1,519 439 Exchange translation differences (12) - (27) - Amounts written off (1,001) - (1,005) - Recoveries of amounts previously written off 51 - 52 - Acquisitions of subsidiary undertakings - - 165 32 Disposal of subsidiary undertakings - - (68) (3) Other 35 48 - New provisions 994 - 705 - Recoveries/provisions no longer required (262) - (243) - Net charge against profit 732 - 462 - Provisions held at 31 December 951 468 1,146 468 Corporate loans and advances to customers against which provisions have been outstanding for 2 years or more are written down to their net realisable value. 11. Non-performing loans and advances 2000 2001 SCNB Other Total SCNB Other Total $m $m $m $m $m $m Loans and advances on which interest is suspended 753 2,440 3,193 796 2,557 3,353 Specific provisions for bad and doubtful debts (69) (882) (951) (72) (1,074) (1,146) Interest in suspense - (225) (225) - (322) (322) 684 1,333 2,017 724 1,161 1,885 The Group acquired Standard Chartered Nakornthon Bank (SCNB) (formerly Nakornthon Bank) in September 1999. Under the terms of the acquisition, net non-performing loans (NPLs) of $753 million are subject to a Loan Management Agreement (LMA) with the Financial Institutions Development Fund (FIDF), a Thai Government agency. Under the LMA, the FIDF has guaranteed the recovery of a principal amount of the NPLs of $520 million. The LMA also provides, inter alia, for loss sharing arrangements whereby the FIDF will bear up to 85 per cent of losses in excess of the guaranteed amount. The carrying cost of the NPLs is reimbursable by the FIDF to SCNB, every half year, for a period of five years from the date of acquisition. Excluding the SCNB non-performing loan portfolio, specific provisions and interest in suspense together cover 45 per cent (2000: 55 per cent) of total non-performing lending to customers. If lending and provisions are adjusted for the cumulative amounts written off, the effective cover is 67 per cent (2000: 69 per cent). STANDARD CHARTERED PLC - NOTES 12. Called up share capital 2001 2000 $m $m Equity capital Ordinary shares of $0.50 each 566 - Ordinary shares of £0.25 each - 421 Non-equity capital Non-cumulative irredeemable preference shares: 7 3/8% preference shares of £1 each 145 149 81/4% preference shares of £1 each 145 149 8.9% preference shares of $5 each 5 - 861 719 Under the terms of the share conversion on 18 January 2001, each ordinary shareholder of the Company received one new ordinary share of $0.50 for each ordinary share of £0.25 that they held before the conversion. The ordinary shares of £0.25 each were cancelled and share certificates for those shares are no longer valid. On 26 June 2001 the Company issued 1 million Non-cumulative Preference Shares with a nominal value of $5 each, at a price of $1,000 per Preference Share. The Preference Shares rank pari passu inter se with the existing preference shares and in priority to the ordinary shares. Subject to certain conditions, all or part of the Preference Shares may be redeemed at the option of the issuer, at dividend payment dates on or after October 2006. 13. Shareholders' funds 2001 2000 Share Premises Profit Total Total Share Capital premium revaluation and loss shareholders' shareholders' capital reserve account reserve account funds funds $m $m $m $m $m $m $m At 1 January 719 1,907 - 49 3,678 6,353 5,453 Exchange translation (9) - - (2) (108) (119) (543) differences Transfer from share premium as a result of capital 144 (149) 5 - - - - conversion Shares issued, net of 7 984 - - - 991 840 expenses Goodwill previously written off against reserves 25 Retained profit - - - - 157 157 578 Capitalised on exercise of share options - 19 - - (19) - - Realised on disposal of premises - - - (2) 2 - - At 31 December 861 2,761 5 45 3,710 7,382 6,353 Equity interests 6,123 6,055 Non-equity interests 1,259 298 At 31 December 7,382 6,353 STANDARD CHARTERED PLC - NOTES 14. Consolidated cash flow statement Reconciliation between operating profit before taxation and net cash inflow from operating activities: 2001 2000 $m $m Operating profit 1,148 906 Items not involving cash flow: Amortisation of goodwill 140 71 Depreciation and amortisation of premises and equipment 184 226 Amortisation of investments (11) (27) Charge for bad and doubtful debts and contingent liabilities 731 470 Debts written off, net of recoveries (950) (953) (Decrease)/increase in accruals and deferred income (66) 159 Decrease/(increase) in prepayments and accrued income 236 (340) Adjustments for items shown separately: Interest paid on subordinated loan capital 285 202 Net cash inflow from trading activities 1,697 714 Net increase in cheques in the course of collection (71) (58) Net decrease/(increase) in treasury bills and other eligible bills 1 (103) Net decrease/(increase) in loans and advances to banks and customers 1,282 (5,630) Net increase in deposits from banks, customer accounts and debt securities in issue 3,805 7,525 Net increase in dealing securities (606) (47) Net decrease/(increase) in mark-to-market adjustment 63 (106) Net (decrease)/increase in other accounts (95) 1,479 Net cash inflow from operating activities 6,076 3,774 Analysis of changes in cash Balance at beginning of period 4,278 2,245 Exchange translation differences (121) (236) Net cash (outflow)/inflow (608) 2,269 Balance at end of period 3,549 4,278 The financial information included herein has been derived from the audited and unaudited information contained in the Group's Report and Accounts for the year ended 31 December 2001 and 2000. Statutory accounts for 2000 have been delivered to the Registrar of Companies. The auditors have reported on these accounts; their report was unqualified and did not contain a statement under Section 237 (2) (accounting records or returns inadequate or accounts not agreeing with records and returns) or 237(3) (failure to obtain necessary information and explanation) of the Companies Act 1985. Financial Calendar Ex-dividend date 27 February 2002 Record date 1 March 2002 Posting to shareholders of 2001 Report and Accounts 18 March 2002 Annual General Meeting 2 May 2002 Payment date - final dividend on ordinary shares 17 May 2002 Copies of this statement are available from Investor Relations, Standard Chartered PLC, 1 Aldermanbury Square, London, EC2V 7SB or from our website on www.standardchartered.com/investor For further information please contact: Pamela McGann, Group Head of External Affairs on (020) 7280 7245 or Tim Halford, Director of Corporate Affairs on (020) 7280 7159 or Steve Seagrove, Head of Investor Relations on (020) 7280 7164 An interview with Mervyn Davies in video/audio and text is available at www.standardchartered.com/investor or www.cantos.com Images of Standard Chartered and the new logo are available for the media at www.newscast.co.uk This information is provided by RNS The company news service from the London Stock Exchange
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