First Quarter 2022 Results

RNS Number : 6285J
Standard Chartered PLC
28 April 2022
 

 

 

 

 

Standard Chartered PLC

1Q'22 Results

28 April 2022

 

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

2

Group Chief Financial Officer's review

3

Supplementary financial information

12

Underlying versus statutory results reconciliations

26

Risk review

31

Capital review

36

Financial statements

41

Other supplementary financial information

46

 

 

 

 

 

 

 

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 the context requires, within this document, 'China' refers to the People's Republic of China and, for the purposes of this document only, excludes Hong Kong Special Administrative Region (Hong Kong), Macau Special Administrative Region (Macau) and Taiwan. 'Korea' or 'South Korea' refers to the Republic of Korea. Asia includes Australia, Bangladesh, Brunei, Cambodia, Mainland China, Hong Kong, India, Indonesia, Japan, Korea, Laos, Macau, Malaysia, Myanmar, Nepal, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam; Africa & Middle East (AME) includes Angola, Bahrain, Botswana, Cameroon, Cote d'Ivoire, Egypt, The Gambia, Ghana, Iraq, Jordan, Kenya, Lebanon, Mauritius, Nigeria, Oman, Pakistan, Qatar, Saudi Arabia, Sierra Leone, South Africa, Tanzania, the United Arab Emirates (UAE), Uganda, Zambia and Zimbabwe; and Europe & Americas (EA) includes Argentina, Brazil, Colombia, Falkland Islands, France, Germany, Ireland, Jersey, Poland, Sweden, Turkey, the UK and the US.

Within the tables in this report, blank spaces indicate that the number is not disclosed, dashes indicate that the number is zero and nm stands for not meaningful.

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

 

 

 

Standard Chartered PLC - first quarter 2022 results

All figures are presented on an underlying basis and comparisons are made to 2021 on a reported currency basis, unless otherwise stated. A reconciliation of restructuring and other items excluded from underlying results is set out on pages 26-30.

Bill Winters, Group Chief Executive, said:

"Our first quarter performance was strong despite the volatile macro environment. Our profit before tax grew 4% year on year, with strong underlying business momentum. I am also pleased by the early progress we have made against the five strategic actions we outlined in February and we are on track to deliver 10% return on tangible equity by 2024, if not earlier."

Update on strategic actions

• CCIB: drive improved returns: Income RoRWA up 1.1%pts to 6.4%; $6bn of $22bn targeted RWA optimisation initiatives executed

• CPBB: transform profitability: Added 98k mass retail partnership clients

• Seize China opportunity: China-ASEAN corridor network income up 35% YoY

• Cost discipline to create operational leverage: $72m of gross structural cost savings delivered

• Substantial shareholder distributions: $750m share buy-back ~80% completed to date

• Refocusing resources in the AME region into existing and new markets which have the greatest scale and growth potential

• Sustainability: Enhanced roadmap providing further clarity on how we will achieve net zero in our financed emissions by 2050

Selected information concerning 1Q'22 financial performance

• Return on tangible equity of 11.1%, up 30bps year-on-year

• Income up 9% to $4.3bn, or 11% YoY at constant currency (ccy); up 9% at ccy excluding debit valuation adjustment (DVA)

-  Net interest income up 10% at ccy

-  Financial Markets up $0.4bn or 27%, at ccy and excluding DVA

-  Continued positive momentum in Transaction Banking with income up 6% at ccy

-  Wealth Management down $0.1bn or 17% at ccy, with the largest market, Hong Kong, down 26% at ccy

-  Net interest margin up 10bps QoQ to 1.29%, due to the impact of the structural hedge programme and rising interest rates

• Expenses increased 6% YoY to $2.6bn, or up 8% at ccy

-  Higher performance related pay accruals and increased investment spend in strategic initiatives and in Ventures

-  Positive 1% income-to-cost jaws at ccy and excluding DVA

• Credit impairment charge of $200m, up $180m YoY; down $3m QoQ

-  Includes $160m relating to China CRE exposures and $107m for the Sri Lanka sovereign rating downgrade to Stage 3.

-  Total management overlays down $104m QoQ to $239m; COVID-19 overlay $153m and China CRE overlay $86m

-  High-risk assets are down slightly in 1Q'22, the seventh consecutive quarter of improvement

• Underlying profit before tax up 5% at ccy to $1.5bn; statutory profit before tax up 7% at ccy to $1.5bn

• Tax charge of $313m: underlying effective tax rate of 21.1% down 1.1%pts due to a change in the geographic mix of profits

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

-  Customer loans and advances down $3bn or 1% since 31.12.21; up $4bn excluding impact of RWA optimisation initiatives and FX

-  Advances-to-deposit ratio 60.0% (31.12.21: 59.1%); liquidity coverage ratio 140% (31.12.21:143%)

• Risk-weighted assets (RWA) of $261bn down $10bn since 31.12.21

-  Credit risk RWA down $9bn: $6bn adverse regulatory changes offset by $6bn CCIB optimisation actions, $7bn other efficiency actions

-  Market risk RWA down $1.5bn to $23bn; no change to Operational risk RWA

• The Group remains strongly capitalised and highly liquid

-  CET1 ratio 13.9% (31.12.21 14.1%): Profits and lower RWAs offset by 100bps of regulatory changes and share buy-back programme

• Earnings per share increased 1.3 cents or 4% to 34.8 cents

Outlook

The start to 2022 has been strong and recent geopolitical events have strengthened the outlook for rates albeit making the outlook for the pace of economic recovery less predictable. Consequently for FY'22:

• Income growth is expected to slightly exceed the previously guided 5-7% range

• Operating expenses are expected to be slightly higher than the previously guided $10.7bn as a consequence of the impact of the higher income growth expectations on performance related pay; we continue to expect to deliver positive income-to-cost jaws

• Credit impairment is expected to start to normalise towards the medium-term loan-loss rate range of 30-35bps.

• We intend to operate dynamically within the full CET1 13-14% target range

We are on track to deliver 10% return on tangible equity by 2024, if not earlier.

Page 1

 

 

Statement of results

 

1Q'22
$million

1Q'21
$million

Change¹
%

Underlying performance

 

 

 

Operating income

4,274

3,929

9

Operating expenses (including UK bank levy)

(2,636)

(2,494)

(6)

Credit impairment

(200)

(20)

nm

Other impairment

(1)

(16)

94

Profit from associates and joint ventures

63

47

34

Profit before taxation

1,500

1,446

4

Profit/(loss) attributable to ordinary shareholders²

1,060

1,053

1

Return on ordinary shareholders' tangible equity (%)

11.1

10.8

30bps

Cost to income ratio (excluding bank levy) (%)

61.7

63.5

180bps

Statutory performance

 

 

 

Operating income

4,292

3,939

9

Operating expenses

(2,665)

(2,528)

(5)

Credit impairment

(197)

(17)

nm

Goodwill impairment

‐

‐

nm

Other impairment

(6)

(28)

79

Profit from associates and joint ventures

68

47

45

Profit before taxation

1,492

1,413

6

Taxation

(313)

(314)

‐

Profit for the period

1,179

1,099

7

Profit/(loss) attributable to parent company shareholders

1,176

1,092

8

Profit/(loss) attributable to ordinary shareholders2

1,055

1,027

3

Return on ordinary shareholders' tangible equity (%)

11.1

10.6

50bps

Cost to income ratio (including bank levy) (%)

62.1

64.2

210bps

Balance sheet and capital

 

 

 

Total assets

839,117

804,903

4

Total equity

51,840

52,275

(1)

Average tangible equity attributable to ordinary shareholders2

38,614

39,464

(2)

Loans and advances to customers

295,785

292,084

1

Customer accounts

456,404

441,684

3

Risk weighted assets

260,833

276,670

(6)

Total capital

55,036

58,531

(6)

Total capital (%)

21.1

21.2

(10)bps

Common Equity Tier 1

36,296

38,711

(6)

Common Equity Tier 1 ratio (%)

13.9

14.0

(10)bps

Net Interest Margin (%) (adjusted)

1.29

1.22

7bps

Advances-to-deposits ratio (%)3

60.0

62.7

(2.7)

Liquidity coverage ratio (%)

140

150

(10)

UK leverage ratio (%)

4.4

5.1

(70)bps

Information per ordinary share

Cents

Cents

Cents

Earnings per share  - underlying4

34.8

33.5

1.3

  - statutory4

34.6

32.6

2.0

Net asset value per share5

1,460

1,433

27

Tangible net asset value per share5

1,276

1,270

6

Number of ordinary shares at period end (millions)

2,993

3,118

(4)

 

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 (%), UK leverage ratio (%). Change is cents difference between two points rather than percentage change for earnings per share, net asset value per share and tangible net asset value per share

2  Profit/(loss) attributable to ordinary shareholders is after the deduction of dividends payable to the holders of non-cumulative redeemable preference shares and Additional Tier 1 securities classified as equity

3  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

4  Represents the underlying or statutory earnings divided by the basic weighted average number of shares

5  Calculated on period end net asset value, tangible net asset value and number of shares

 

Page 2

 

Group Chief Financial Officer's review

 

 

The Group delivered a strong performance in the first quarter of 2022

Summary of financial performance

 

1Q'22
$million

1Q'21
$million

Change
%

Constant currency change¹
%

4Q'21
$million

Change
%

Constant currency change¹
%

Net interest income

1,790

1,662

8

10

1,697

5

6

Other income

2,484

2,267

10

11

1,633

52

53

Underlying operating income

4,274

3,929

9

11

3,330

28

29

Other operating expenses

(2,636)

(2,494)

(6)

(8)

(2,595)

(2)

(2)

UK bank levy

‐

‐

nm³

nm³

(94)

100

100

Underlying operating expenses

(2,636)

(2,494)

(6)

(8)

(2,689)

2

2

Underlying operating profit before impairment and taxation

1,638

1,435

14

16

641

156

159

Credit impairment

(200)

(20)

nm³

nm³

(203)

1

1

Other impairment

(1)

(16)

94

93

(295)

100

100

Profit from associates and joint ventures

63

47

34

37

(4)

nm³

nm³

Underlying profit before taxation

1,500

1,446

4

5

139

nm³

nm³

Restructuring

(8)

(33)

76

75

(285)

97

97

Other items

‐

‐

nm³

nm³

(62)

100

100

Statutory profit/(loss) before taxation

1,492

1,413

6

7

(208)

nm³

nm³

Taxation

(313)

(314)

‐

(3)

(174)

(80)

(79)

Profit/(loss) for the period

1,179

1,099

7

8

(382)

nm³

nm³

Net interest margin (%)2

1.29

1.22

7

 

1.19

10

 

Underlying return on tangible equity (%)2

11.1

10.8

30

 

(1.8)

1,290

 

Underlying earnings per share (cents)

34.8

33.5

4

 

(5.7)

nm³

 

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

Statutory financial performance summary

 

1Q'22
$million

1Q'21
$million

Change
%

Constant currency change¹
%

4Q'21
$million

Change
%

Constant currency change¹
%

Net interest income

1,788

1,658

8

10

1,696

5

6

Other income

2,504

2,281

10

12

1,613

55

56

Statutory operating income

4,292

3,939

9

11

3,309

30

30

Statutory operating expenses

(2,665)

(2,528)

(5)

(8)

(3,056)

13

12

Statutory operating profit before impairment and taxation

1,627

1,411

15

17

253

nm³

nm³

Credit impairment

(197)

(17)

nm³

nm³

(197)

‐

(1)

Other impairment

(6)

(28)

79

79

(273)

98

98

Profit from associates and joint ventures

68

47

45

37

9

nm³

nm³

Statutory profit/(loss) before taxation

1,492

1,413

6

7

(208)

nm³

nm³

Taxation

(313)

(314)

‐

(3)

(174)

(80)

(79)

Profit/(loss) for the period

1,179

1,099

7

8

(382)

nm³

nm³

Statutory return on tangible equity (%)2

11.1

10.6

50

 

(4.6)

1,570

 

Statutory earnings per share (cents)

34.6

32.6

6

 

(14.9)

nm³

 

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

 

 

 

 

Page 3

 

Group Chief Financial Officer's review continued

 

The Group delivered a strong performance in the first quarter of 2022, in volatile and challenging market conditions, with underlying profit before tax increasing 5 per cent on a constant currency basis. Income grew 9 per cent on a constant currency basis excluding positive movements in Debit Valuation Adjustment (DVA), with a record performance in Financial Markets, particularly in Macro Trading, partly offset by lower Wealth Management, reflecting less favourable market conditions compared to a record performance last year. Rising interest rates and increased hedging balances within Treasury led to the net interest margin increasing 10 basis points in the quarter, while RWA optimisation actions were the primary driver of a 1 per cent quarter-on-quarter reduction in loans and advances to customers. Expenses increased 8 per cent at constant currency, mainly due to inflation and performance related pay accruals, with underlying cost efficiencies funding increased investment spend. Credit impairment charges were equivalent to an annualised loan loss rate of 24 basis points. The Group remains well capitalised and highly liquid with a CET1 ratio of 13.9 per cent, at the top end of the 13 to 14 per cent target range, an advances-to-deposits ratio of 60 per cent and a liquidity coverage ratio of 140 per cent.

All commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2021 on a reported currency basis, unless otherwise stated.

• Operating income increased 9 per cent, or 11 per cent on a constant currency basis, and was up 9 per cent on a constant currency basis and excluding an $85 million increase in DVA. A record Financial Markets performance and an expansion in the net interest margin was partly offset by lower Wealth Management income

• Net interest income increased 8 per cent, with the net interest margin increasing 6 per cent or 7 basis points, due to rising interest rates and increased hedging balances within Treasury, and a 2 per cent increase in average interest earning assets

• Other income increased 10 per cent, but was up 6 per cent excluding the positive impact of movements in DVA, with a strong Financial Markets performance including record Macro Trading income partially offset by lower Wealth Management income and reduced realisation gains within Treasury

• Operating expenses were up 6 per cent or up 8 per cent on a constant currency basis, reflecting both an increase in and a normalisation of the phasing of performance-related pay accruals. Increased investment spend into transformational digital initiatives including Ventures was primarily funded by cost efficiency actions. The Group generated 1 per cent positive income-to-cost jaws at constant currency excluding DVA while the cost-to-income ratio excluding DVA and the UK bank levy was flat at 63 per cent

• Credit impairment increased by $180 million to $200 million and was broadly in-line with charges in the prior quarter. There was an $81 million release in Stage 1 and 2 impairments reflecting the impact of a $104 million release in management overlays, primarily relating to COVID-19. Impairment of Stage 3 assets was a $281 million charge including a $107 million impact from a sovereign ratings downgrade of Sri Lanka into stage 3, and a $160 million charge on China Commercial Real Estate exposures

• Other impairment was a $1 million charge, a $15 million reduction with the non-repeat of impairments relating to the aviation lease portfolio

• Profit from associates and joint ventures increased 34 per cent to $63 million due to increased profits at China Bohai Bank

• Charges relating to restructuring and other items decreased $25 million to $8 million

• Taxation was $313 million on a statutory basis, with an underlying year-to-date effective tax rate of 21.1 per cent compared to the prior year rate of 22.2 per cent reflecting a change in the geographic mix of profits

• Underlying return on tangible equity increased by 30 basis points to 11.1 per cent due to higher profits and lower tangible equity reflecting shareholder distributions including share buy-backs, and adverse movements in reserves due to movements in interest rates and FX

 

 

 

 

 

 

 

 

Page 4
 

Operating income by product

 

1Q'22
$million

1Q'21
$million

Change
%

Constant currency change¹
%

4Q'21
$million

Change
%

Constant currency change¹
%

Transaction Banking

740

713

4

6

730

1

2

Trade & Working capital2,3

362

347

4

6

348

4

5

Cash Management

378

366

3

5

382

(1)

(1)

Financial Markets3

1,723

1,308

32

34

1,012

70

72

Macro Trading

940

672

40

42

433

117

121

Credit Markets3

460

429

7

9

361

27

28

Credit Trading

110

131

(16)

(15)

60

83

83

Financing Solutions & Issuance3

350

298

17

20

301

16

17

Structured Finance3

94

100

(6)

(5)

104

(10)

(10)

Financing & Securities Services

144

107

35

41

97

48

48

DVA

85

‐

nm⁴

nm⁴

17

nm⁴

nm⁴

Lending & Portfolio Management2,3

146

173

(16)

(14)

184

(21)

(20)

Wealth Management

530

646

(18)

(17)

466

14

14

Retail Products

849

849

‐

3

835

2

2

CCPL & other unsecured lending

305

320

(5)

(3)

316

(3)

(3)

Deposits

248

233

6

10

213

16

18

Mortgage & Auto

247

247

‐

3

261

(5)

(5)

Other Retail Products

49

49

‐

2

45

9

11

Treasury

317

257

23

26

155

105

107

Other3

(31)

(17)

(82)

(43)

(52)

40

31

Total underlying operating income

4,274

3,929

9

11

3,330

28

29

1   Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

2   Following a reorganisation, there has been a reclassification of balances from Lending & Portfolio Management into Trade & Working capital including prior period numbers. Prior periods have been re-presented and there is no change in the total income

3   Income related to Group Special Asset Management, the Group's specialist recovery unit previously reported in Other products has been allocated to the relevant products. Prior periods have been re-presented and there is no change in total income

4   Not meaningful

Transaction Banking income increased 4 per cent. Trade & Working Capital increased 4 per cent due to double-digit growth in balances partly offset by margin compression. The margin compression reflects greater distribution activities and a shift in product mix towards lower margin but more RWA efficient products. Cash Management income increased 3 per cent with strong balance sheet and fee income growth partly offset by margin compression.

Financial Markets income increased 32 per cent and was up 25 per cent excluding positive movements in DVA. Macro Trading enjoyed a record quarter with Commodity income more than doubling, benefitting particularly from volatility in energy prices. FX and Rates income also delivered double-digit growth on the back of increased client flows. Credit Markets income increased 7 per cent with Financing Solutions & Issuance benefitting from strong performance in Project & Export Finance and Leveraged Structured Solutions partly offset by subdued activity in Capital Markets while Credit Trading was down 16 per cent, negatively impacted by widening credit spreads. Structured Finance income declined 6 per cent due to lower Aviation Finance income, while Financing & Security Services income increased 35 per cent including $94 million of gains on mark-to-market liabilities which are expected to reverse once funding spreads normalise.

Lending and Portfolio Management income decreased 16 per cent as RWA optimisation actions led to loan sale losses and lower balances.

Wealth Management income declined 18 per cent in comparison to a record performance in the first quarter of 2021, as market conditions became more volatile reducing transaction volumes, as well as from the impact of COVID-19 restrictions in particular in Hong Kong and China, resulting in a number of branch closures which negatively impacted face-to-face sales. Bancassurance income was up 9 per cent on the back of strong growth in Singapore. Excluding Bancassurance, Wealth Management income was down 26 per cent with reduced income from Managed Investments and Treasury products.

Retail Products income was flat on a reported basis and increased 3 per cent on a constant currency basis. Deposit income increased 6 per cent and 10 per cent on a constant currency basis due to higher margins, increased volumes and improved liability mix. On a constant currency basis, Mortgages & Auto income grew 3 per cent on the back of increased volumes. Credit Cards & Personal Loans income decreased 5 per cent reflecting lower fee income in Hong Kong.

Treasury income increased 23 per cent with net interest income more than doubling, benefitting from an increase in hedged balances and an increased return on assets as interest rates rose in several markets, partly offset by a $68 million reduction in realisation gains.

 

Page 5

Profit before tax by client segment and geographic region

 

1Q'22
$million

1Q'21
$million

Change
%

Constant currency change²
%

4Q'21
$million

Change
%

Constant currency change²
%

Corporate, Commercial & Institutional Banking1

1,099

885

24

26

435

153

154

Consumer, Private & Business Banking1

372

500

(26)

(25)

80

nm³

nm³

Ventures1

(77)

(39)

(97)

(100)

(76)

(1)

(1)

Central & other items (segment)1

106

100

6

8

(300)

135

136

Underlying profit before taxation

1,500

1,446

4

5

139

nm³

nm³

Asia

907

1,234

(26)

(25)

(50)

nm³

nm³

Africa & Middle East

302

190

59

66

159

90

89

Europe & Americas

512

233

120

121

146

nm³

nm³

Central & other items (region)

(221)

(211)

(5)

(7)

(116)

(91)

(79)

Underlying profit before taxation

1,500

1,446

4

5

139

nm³

nm³

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior periods have been restated

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   Not meaningful

As part of the ongoing execution of its refreshed strategy, the Group has expanded and reorganised its reporting structure with the creation of a third client segment, Ventures, effective on 1 January 2022. Ventures is a consolidation of SC Ventures and its related entities as well as the Group's two majority-owned digital banks Mox in Hong Kong and Trust in Singapore, reported alongside the current client segments; Corporate, Commercial & Institutional Banking (CCIB) serving larger companies and institutions and Consumer, Private & Business Banking (CPBB) serving individual and business banking clients. There is no change to the regional reporting structure.

Corporate, Commercial & Institutional Banking income increased 19 per cent, or 15 per cent excluding DVA, with Financial Markets income up 32 per cent. Profits grew 24 per cent with increased income partly offset by 3 per cent higher expenses and $175 million increase in credit impairment charges.

Consumer, Private & Business Banking profit declined 26 per cent, with income down 7 per cent due to an 18 per cent reduction in Wealth Management as well as a 3 per cent increase in Expenses, while credit impairments were 28 per cent lower.

Ventures loss doubled to $77 million, reflecting the Group's continued investment in transformational digital initiatives with a doubling of expenses.

Central & other items (segment) profit increased 6 per cent to $106 million with income increasing 17 per cent reflecting higher Treasury income and an increased profit share from China Bohai Bank. This was partly offset by a 20 per cent increase in expenses and a $15 million net increase in impairments due to the sovereign ratings downgrade of Sri Lanka.

Asia profits decreased 26 per cent with credit impairments increasing by $227 million and a 6 per cent increase in expenses. Income was down 1 per cent but up 1 per cent on a constant currency basis excluding movements in DVA, with higher Financial Markets income offset by lower Wealth Management and a non-repeat of realisation gains in Treasury.

Africa & Middle East profits increased 59 per cent as income increased 12 per cent or 16 per cent on a constant currency basis. Expenses increased 5 per cent on a constant currency basis while impairments were a $46 million net release in the quarter.

Europe & Americas profit more than doubled as income grew 56 per cent, or 47 per cent excluding positive movements in DVA, due to strong Financial Markets and Treasury performance. Expenses increased 4 per cent while there was a lower credit impairment release.

Central & other items (region) recorded a loss of $221 million, with expenses 11 per cent higher and a non-repeat of prior year other impairment relating to the aviation lease portfolio.

 

 

Page 6

Adjusted net interest income and margin

 

1Q'22
$million

1Q'21
$million

Change¹
%

4Q'21
$million

Change¹
%

1,809

1,670

8

1,689

7

569,220

556,331

2

565,719

1

Average interest-bearing liabilities

529,966

509,625

4

522,996

1

 

 

 

 

 

1.92

1.85

7

1.78

14

0.68

0.69

(1)

0.65

3

1.24

1.16

8

1.13

11

Net interest margin (%)3,4

1.29

1.22

7

1.19

10

1   Variance is better/(worse) other than assets and liabilities which is increase/(decrease)

2   Adjusted net interest income is statutory 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

Adjusted net interest income increased 8 per cent driven by a 6 per cent increase in the net interest margin which averaged 129 basis points in the quarter, increasing 7 basis points year-on-year and 10 basis points compared to 4Q'21:

• Average interest-earning assets increased 1 per cent in the quarter. Gross yields increased 14 basis points compared with the prior quarter due to an increase in hedged balances within Treasury and the impact of rising interest rates on customer loan pricing and on Treasury portfolio yields

• Average interest-bearing liabilities increased 1 per cent in the quarter. The rate paid on liabilities increased 3 basis points compared with the average in the prior quarter reflecting the impact of interest rate movements and a slight change in the liability mix

 

 

 

 

 

 

 

Page 7

Credit risk summary

Income Statement

 

1Q'22
$million

1Q'21
$million

Change1
%

4Q'21
$million

Change1
%

Total credit impairment charge/(release)

200

20

900

203

(1)

Of which stage 1 and 2

(81)

(35)

131

153

(153)

Of which stage 3

281

55

411

50

462

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

Balance sheet

 

31.03.22
$million

31.12.21
$million

Change1
%

31.03.21
$million

Change1
%

Gross loans and advances to customers2

301,066

304,122

(1)

298,297

1

280,021

279,178

‐

270,367

4

13,823

16,849

(18)

19,212

(28)

7,222

8,095

(11)

8,718

(17)

 

 

 

 

 

 

Expected credit loss provisions

(5,281)

(5,654)

(7)

(6,213)

(15)

(475)

(473)

‐

(486)

(2)

(430)

(524)

(18)

(683)

(37)

(4,376)

(4,657)

(6)

(5,044)

(13)

 

 

 

 

 

 

Net loans and advances to customers

295,785

298,468

(1)

292,084

1

279,546

278,705

‐

269,881

4

13,393

16,325

(18)

18,529

(28)

2,846

3,438

(17)

3,674

(23)

 

 

 

 

 

 

Cover ratio of stage 3 before/after collateral (%)3

61 / 78

58 / 75

3 / 3

58 / 77

3 / 1

Credit grade 12 accounts ($million)

988

1,730

(43)

2,197

(55)

Early alerts ($million)

6,653

5,534

20

9,779

(32)

Investment grade corporate exposures (%)3

69

69

‐

62

7

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 $12,571 million at 31 March 2022, $7,331 million at 31 December 2021 and $3,197 million at 31 March 2021

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

Asset quality remained resilient in the first quarter, with an improvement in a number of underlying credit metrics. However, the Group continues to remain alert to the challenging external environment including the continued impact of COVID-19 in key markets, idiosyncratic pressures in the China commercial real estate sector, commodity price volatility and the impact of the Russia/Ukraine military conflict which in part contributed to both commodity price volatility and the accelerated trajectory of inflation and interest rate rises across our footprint.

Credit impairment was a $200 million charge in the quarter, a $180 million increase and represents an annualised loan loss rate of 24 basis points which is below the Group's medium-term guidance of 30-35 basis points.

The $81 million release in stage 1 and 2 impairment reflects a $104 million release from management overlays, $4 million of which was is in stage 3, primarily relating to a reduction in the COVID-19 element of the overlay. Management overlay totals $239 million as at 31 March 2022, with the COVID-19 element totalling $153 million and $86 million relating to the China Commercial Real Estate sector.

Stage 3 impairments of $281 million includes $160 million relating to China Commercial Real Estate exposures and $107 million relating to the sovereign ratings downgrade of Sri Lanka, partly offset by lower charge-offs in Consumer, Private and Business Banking.

Gross stage 3 loans and advances to customers of $7.2 billion were 11 per cent lower compared to 31 December 2021 primarily due to repayments, loan sales, client upgrades and write-offs partly offset by the sovereign ratings downgrade of Sri Lankan exposures as Sri Lanka suspended external debt payments. These credit-impaired loans represented 2.4 per cent of gross loans and advances, a decrease of 26 basis points compared to 31 December 2021.

 

 

Page 8

 

The Stage 3 cover ratio of 61 per cent increased 3 percentage points compared with the position as at 31 December 2021, and the cover ratio post collateral of 78 per cent also increased by 3 percentage points, with both ratios increasing due to loan sales, increased repayments and additional stage 3 provisions.

Credit grade 12 balances have decreased 43 per cent since 31 December 2021 reflecting the impact of the sovereign ratings downgrade of Sri Lanka into stage 3 and client upgrades out of credit grade 12.

Early Alert accounts of $6.7 billion have increased by $1.1 billion since 31 December 2021, primarily in the China Commercial Real Estate and Commodity Traders sectors. The Group is continuing to monitor its exposures in the Commercial Real Estate, Commodity Traders, Metals & Mining and Oil & Gas sectors particularly carefully, given the unusual stresses caused by the effects of COVID-19 and commodity price volatility. Rising commodity prices have, however, eased credit pressure for certain other sectors.

The proportion of investment grade corporate exposures has remained stable since 31 December 2021 at 69 per cent.

Restructuring, goodwill impairment and other items

 

1Q'22

1Q'21

4Q'21

Restructuring
$million

Goodwill Impairment
$million

Other items
$million

Restructuring
$million

Goodwill Impairment
$million

Other items
$million

Restructuring
$million

Goodwill Impairment
$million

Other items
$million

Operating income

18

‐

‐

10

‐

‐

(21)

‐

‐

Operating expenses

(29)

‐

‐

(34)

‐

‐

(305)

‐

(62)

Credit impairment

3

‐

‐

3

‐

‐

6

‐

‐

Other impairment

(5)

‐

‐

(12)

‐

‐

22

‐

‐

Profit from associates and joint ventures

5

‐

‐

‐

‐

‐

13

‐

‐

Loss before taxation

(8)

‐

‐

(33)

‐

‐

(285)

‐

(62)

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

Restructuring charges of $8 million primarily reflect expenses relating to redundancies partly offset by income from the Principal Finance and Ship Leasing portfolios.

The Group has announced the exit of seven markets in the AME region and will focus solely on the CCIB segment in two more. The results from the markets and businesses being exited will be reported in restructuring from 2Q'22 onwards.

Balance sheet and liquidity

 

31.03.22
$million

31.12.21
$million

Change
%

31.03.21
$million

Change1
%

Assets

 

 

 

 

 

Loans and advances to banks

35,638

44,383

(20)

48,016

(26)

Loans and advances to customers

295,785

298,468

(1)

292,084

1

Other assets

507,694

484,967

5

464,803

9

Total assets

839,117

827,818

1

804,903

4

Liabilities

 

 

 

 

 

Deposits by banks

28,930

30,041

(4)

30,521

(5)

Customer accounts

456,404

474,570

(4)

441,684

3

Other liabilities

301,943

270,571

12

280,423

8

Total liabilities

787,277

775,182

2

752,628

5

Equity

51,840

52,636

(2)

52,275

(1)

Total equity and liabilities

839,117

827,818

1

804,903

4

 

 

 

 

 

 

Advances-to-deposits ratio (%)2

60.0%

59.1%

 

62.7%

 

Liquidity coverage ratio (%)

140%

143%

 

150%

 

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

2   The Group now excludes $11,970 million held with central banks (31.12.21: $15,168 million, 31.03.21: $15,996 million) that has been confirmed as repayable at the point of stress

 

 

 

 

Page 9

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

• Loans and advances to banks were 20 per cent or $9 billion lower from 31 December 2021 to $36 billion due to a reduction in Treasury loans and Financial Institutions Trade loans

• Loans and advances to customers decreased 1 per cent from 31 December 2021 to $296 billion reflecting the risk-weighted asset optimisation actions undertaken by CCIB in the quarter. Excluding the impact of these actions and adverse foreign exchange movements, loans and advances increased by $4 billion in the quarter, primarily from an increase in Trade balances 

• Customer accounts of $456 billion decreased 4 per cent from 31 December 2021 due to client activities and management action resulting in the rolling off of certain non-operational deposits

• Other assets increased 5 per cent in the first quarter of 2022 with increased derivative balances, unsettled trade balances and investment securities. Other liabilities increased 12 per cent from increased derivative liabilities, cash collateral liabilities and unsettled trade liabilities

The advances-to-deposits ratio increased to 60.0 per cent from 59.1 per cent at 31 December 2021 reflecting the outflow of customer accounts in the quarter. The point-in-time liquidity coverage ratio decreased 3 percentage points to 140 per cent and remains well above the minimum regulatory requirement of 100 per cent.

Risk-weighted assets 

 

31.03.22
$million

31.12.21
$million

Change1
%

31.03.21
$million

Change1
%

By risk type

 

 

 

 

 

Credit risk

210,637

219,588

(4)

226,789

(7)

Operational risk

27,177

27,116

‐

27,116

‐

Market risk

23,019

24,529

(6)

22,765

1

Total RWAs

260,833

271,233

(4)

276,670

(6)

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

Total risk-weighted assets (RWAs) decreased 4 per cent or $10.4 billion from 31 December 2021 to $260.8 billion, including the impact of $5.8 billion incremental RWA from regulatory changes and adjustments and the cessation of software relief. Excluding the impact of regulatory changes, RWAs decreased by 6 per cent or $16.2 billion in the quarter:

• Credit risk RWA decreased by $9.0 billion in the first quarter to $210.6 billion with the $5.8 billion increase from regulatory changes and underlying growth asset more than offset by a $6 billion reduction in the CCIB low-returning portfolio targeted for optimisation, $6.5 billion from other RWA efficiency actions, $4.9 billion positive credit migration and favourable movements in FX 

• Operational risk RWA was flat at $27.1 billion

• Market risk RWA decreased by $1.5 billion to $23 billion reflecting reduced standardised specific interest rate risk positions

Capital base and ratios 

 

31.03.22
$million

31.12.21
$million

Change¹
%

31.03.21
$million

Change¹
%

CET1 capital

36,296

38,362

(5)

38,711

(6)

Additional Tier 1 capital (AT1)

5,235

6,791

(23)

6,293

(17)

Tier 1 capital

41,531

45,153

(8)

45,004

(8)

Tier 2 capital

13,505

12,491

8

13,527

‐

Total capital

55,036

57,644

(5)

58,531

(6)

CET1 capital ratio (%)2

13.9

14.1

(0.2)

14.0

(0.1)

Total capital ratio (%)2

21.1

21.3

(0.2)

21.2

(0.1)

UK leverage ratio (%)2

4.4

4.9

(0.5)

5.1

(0.7)

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 23 basis points lower than at 31 December 2021, but 48 basis points above the CET1 ratio at 1 January 2022 when regulatory changes which reduced the Group's CET1 ratio came into force. The underlying 47 basis points increase reflects approximately 115 basis points uplift from the impact of RWA optimisation actions and profit accretion during the quarter despite funding a $750 million share buyback. The CET1 ratio remains 3.8 percentage points above the Group's latest regulatory minimum of 10.1 per cent and at the top of the 13-14 per cent medium-term target range.

 

 

 

Page 10

The regulatory changes which came into force on 1 January 2022, include the cessation of software relief, the impact from the IRB model repair programme and the introduction of standardised rules for counterparty credit risk on derivatives and other instruments (SA-CCR). In aggregate, these regulatory changes resulted in a decrease in the CET1 ratio of 70 basis points by reducing CET1 capital by $1.1 billion and increasing RWAs by $5.8 billion.

The CET1 ratio was reduced by 30 basis points from a reduction in reserves mainly relating to a reversal of prior year unrealised gains on debt securities as a result of higher market yields and movements in FX reducing both the translation reserve and RWAs.

The Group is part way through the $750 million share buyback programme it announced on 17 February 2022, and by 31 March 2022 had spent $433 million purchasing 64 million ordinary shares, reducing the share count by approximately 2 per cent. Even though the share buyback was still ongoing on 31 March 2022, the entire $750 million is deducted from CET1 in the period, reducing the ratio by 27 basis points.

The Group is accruing a provisional interim 2022 ordinary share dividend over the first half of the year which is calculated formulaically at one third of the ordinary dividend paid in 2021 or 4 cents a share. Half of this amount was accrued in the first quarter and combined with payments due to AT1 and preference shareholders reduced the CET1 ratio by 6 basis points.

The above CET1 ratio headwinds were predominately offset by 69 basis points uplift from an underlying reduction in RWAs, including the benefit of CCIB and other RWA efficiency actions, and 43 basis points from profit accretion in the quarter.

The Group's UK leverage ratio of 4.4 per cent is 50 basis points lower than the 4.9 per cent ratio as at 31 December 2021. This reflects lower Tier 1 capital from the reduction in both CET1 capital and a call of $1 billion of AT1 balances as well as increased leverage exposures driven by asset growth. The Group's leverage ratio remains significantly above its minimum requirement of 3.7 per cent.

Outlook

The start to 2022 has been strong and recent geopolitical events have strengthened the outlook for rates albeit making the outlook for the pace of economic recovery less predictable. Consequently for FY'22:

• Income growth to slightly exceed the previously guided 5-7% range

• Operating expenses are expected to be slightly higher than the previously guided constant-currency $10.7bn as a consequence of the impact of the higher income growth expectations on performance related pay; we continue to expect to deliver positive income-to-cost jaws

• Credit impairment is expected to start to normalise towards the medium-term loan-loss rate range of 30-35bps

• We intend to operate dynamically within the full CET1 13-14% target range

We are on track to deliver 10% return on tangible equity by 2024, if not earlier.

 

Andy Halford

Group Chief Financial Officer

28 April 2022

 

 

 

 

Page 11

 

Supplementary financial information

Underlying performance by client segment

 

1Q'22

Corporate, Commercial & Institutional Banking
$million

Consumer,
Private &
Business Banking
$million

Ventures
$million

Central &
other items
$million

Total
$million

Operating income

2,572

1,423

1

278

4,274

2,449

1,327

1

497

4,274

123

96

‐

(219)

‐

Operating expenses

(1,326)

(1,017)

(72)

(221)

(2,636)

Operating profit/(loss) before impairment losses and taxation

1,246

406

(71)

57

1,638

Credit impairment

(147)

(34)

(3)

(16)

(200)

Other impairment

‐

‐

‐

(1)

(1)

Profit from associates and joint ventures

‐

‐

(3)

66

63

Underlying profit/(loss) before taxation

1,099

372

(77)

106

1,500

Restructuring

(2)

(7)

‐

1

(8)

Statutory profit/(loss) before taxation

1,097

365

(77)

107

1,492

Total assets

420,168

138,063

1,115

279,771

839,117

Of which: loans and advances to customers2

200,625

135,333

115

27,979

364,052

135,704

135,279

115

24,687

295,785

64,921

54

‐

3,292

68,267

Total liabilities

489,720

182,197

693

114,667

787,277

Of which: customer accounts2

329,206

177,953

621

10,277

518,057

Risk-weighted assets

156,753

53,463

876

49,741

260,833

Underlying return on tangible equity (%)

14.0

14.4

nm³

0.9

11.1

Cost to income ratio (excluding bank levy) (%)

51.6

71.5

nm³

79.5

61.7

 

 

1Q'21 (Restated)¹

Corporate, Commercial & Institutional Banking1
$million

Consumer,
Private &
Business Banking1
$million

Ventures1
$million

Central &
other items1
$million

Total
$million

Operating income

2,161

1,533

(2)

237

3,929

2,057

1,428

(2)

446

3,929

104

105

‐

(209)

‐

Operating expenses

(1,288)

(986)

(36)

(184)

(2,494)

Operating profit/(loss) before impairment losses and taxation

873

547

(38)

53

1,435

Credit impairment

28

(47)

‐

(1)

(20)

Other impairment

(16)

‐

‐

‐

(16)

Profit from associates and joint ventures

‐

‐

(1)

48

47

Underlying profit/(loss) before taxation

885

500

(39)

100

1,446

Restructuring

1

(9)

‐

(25)

(33)

Statutory profit/(loss) before taxation

886

491

(39)

75

1,413

Total assets

388,719

135,259

563

280,362

804,903

Of which: loans and advances to customers2

192,953

132,602

‐

21,620

347,175

137,984

132,486

‐

21,614

292,084

54,969

116

‐

6

55,091

Total liabilities

488,661

178,183

722

85,062

752,628

Of which: customer accounts2

317,934

173,821

689

8,503

500,947

Risk-weighted assets

168,425

56,137

454

51,654

276,670

Underlying return on tangible equity (%)

11.1

18.9

nm³

2.4

10.8

Cost to income ratio (excluding bank levy) (%)

59.6

64.3

nm³

77.6

63.5

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior period has been restated

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

3   Not meaningful

 

Page 12
 

Supplementary financial information continued

Corporate, Commercial & Institutional Banking1

 

1Q'22
$million

1Q'21
$million

Change5
%

Constant currency change4,5
%

4Q'21

$million

Change5
%

Constant currency change4,5
%

Operating income

2,572

2,161

19

21

1,889

36

37

Transaction Banking

714

692

3

5

704

1

2

Trade & Working Capital2,3

346

335

3

5

333

4

5

Cash Management

368

357

3

5

371

(1)

(1)

Financial Markets

1,723

1,308

32

34

1,012

70

72

Macro Trading

940

672

40

42

433

117

121

Credit Markets3

460

429

7

9

361

27

28

Credit Trading

110

131

(16)

(15)

60

83

83

Financing Solutions & Issuance3

350

298

17

20

301

16

17

Structured Finance

94

100

(6)

(5)

104

(10)

(10)

Financing & Securities Services3

144

107

35

41

97

48

48

DVA

85

‐

nm⁹

nm⁹

17

nm⁹

nm⁹

Lending & Portfolio Management2,3

138

163

(15)

(14)

175

(21)

(21)

Retail Products

‐

‐

nm⁹

nm⁹

1

(100)

nm⁹

Other Retail Products3

‐

‐

nm⁹

nm⁹

1

(100)

nm⁹

Other

(3)

(2)

(50)

‐

(3)

‐

‐

Operating expenses

(1,326)

(1,288)

(3)

(5)

(1,392)

5

4

Operating profit before impairment losses and taxation

1,246

873

43

46

497

151

153

Credit impairment

(147)

28

nm⁹

nm⁹

(68)

(116)

(125)

Other impairment

‐

(16)

100

100

6

(100)

(100)

Underlying profit before taxation

1,099

885

24

26

435

153

154

Restructuring

(2)

1

nm⁹

(200)

(44)

95

95

Statutory profit before taxation

1,097

886

24

26

391

181

179

Total assets

420,168

388,719

8

8

405,778

4

4

Of which: loans and advances to customers6

200,625

192,953

4

5

208,729

(4)

(3)

Total liabilities

489,720

488,661

‐

1

481,397

2

2

Of which: customer accounts6

329,206

317,934

4

5

351,696

(6)

(6)

Risk-weighted assets

156,753

168,425

(7)

nm⁹

163,197

(4)

nm⁹

Underlying return on risk-weighted assets (%)7

2.7

2.1

60bps

nm⁹

1.1

160bps

nm⁹

Underlying return on tangible equity (%)7

14.0

11.1

290bps

nm⁹

5.5

850bps

nm⁹

Cost to income ratio (%)8

51.6

59.6

8.0

8.2

73.7

22.1

22.2

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior period has been restated

2   Following a reorganisation, there has been a reclassification of balances from Lending & Portfolio Management into Trade & Working capital including prior period numbers. Prior periods have been re-presented and there is no change in the total income

3   Income related to Group Special Asset Management, the Group's specialist recovery unit previously reported in Other products has been allocated to the relevant products. Prior periods have been re-presented and there is no change in total income

4   Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

5   Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

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

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

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

9   Not meaningful

Performance highlights

• Underlying profit before tax of $1,099 million was up 24 per cent driven mainly by higher income, partially offset by higher expenses and credit impairment

• Underlying operating income of $2,572 million was up 19 per cent (up 15 per cent excluding a positive DVA) primarily as a result of a very strong performance in Financial Markets, mainly from Macro Trading on the back of heightened volatility and rising commodities prices

• Higher credit impairment primarily from charges on China Commercial Real Estate exposures and the sovereign ratings downgrade of Sri Lanka, partially offset by recoveries and the $62 million release of management overlays

• Risk-weighted assets down $6 billion since 31 December 2021, mainly as a result of optimisation initiatives, partly offset by 1st January 2022 regulatory impacts

• RoTE increased to 14.0 per cent from 11.1 per cent  

 

 

Page 13

Supplementary financial information continued

Consumer, Private & Business Banking1

 

1Q'22
$million

1Q'21
$million

Change4
%

Constant currency change3,4
%

4Q'21
$million

Change4
%

Constant currency change3,4
%

Operating income

1,423

1,533

(7)

(5)

1,333

7

7

Transaction Banking

26

21

24

24

26

‐

4

Trade & Working Capital2

16

12

33

33

15

7

7

Cash Management

10

9

11

11

11

(9)

‐

Lending & Portfolio Management2

8

10

(20)

(20)

9

(11)

‐

Wealth Management

530

646

(18)

(17)

466

14

14

Retail Products

848

851

‐

2

832

2

3

CCPL & other unsecured lending

304

320

(5)

(3)

314

(3)

(3)

Deposits

249

234

6

10

214

16

17

Mortgage & Auto

247

247

‐

3

261

(5)

(5)

Other Retail Products

48

50

(4)

(2)

43

12

12

Other

11

5

120

120

‐

nm⁸

nm⁸

Operating expenses

(1,017)

(986)

(3)

(5)

(1,137)

11

10

Operating profit before impairment losses and taxation

406

547

(26)

(25)

196

107

108

Credit impairment

(34)

(47)

28

24

(116)

71

70

Other impairment

‐

‐

nm⁸

nm⁸

‐

nm⁸

nm⁸

Underlying profit before taxation

372

500

(26)

(25)

80

nm⁸

nm⁸

Restructuring

(7)

(9)

22

22

(203)

97

96

Statutory profit before taxation

365

491

(26)

(25)

(123)

nm⁸

nm⁸

Total assets

138,063

135,259

2

5

139,364

(1)

‐

Of which: loans and advances to customers5

135,333

132,602

2

5

136,477

(1)

‐

Total liabilities

182,197

178,183

2

4

182,210

‐

1

Of which: customer accounts5

177,953

173,821

2

4

178,088

‐

1

Risk-weighted assets

53,463

56,137

(5)

nm⁸

51,232

4

nm⁸

Underlying return on risk-weighted assets (%)6

2.8

3.6

(80)bps

nm⁸

0.6

220bps

nm⁸

Underlying return on tangible equity (%)6

14.4

18.9

(450)bps

nm⁸

3.2

1,120bps

nm⁸

Cost to income ratio (%)7

71.5

64.3

(7.2)

(7.3)

85.3

13.8

13.8

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior period has been restated

2   Following a reorganisation, there has been a reclassification of balances from Lending & Portfolio Management into Trade & Working capital including prior period numbers. Prior periods have been re-presented and there is no change in the total income

3   Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

4   Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

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

Performance highlights

• Underlying profit before tax of $372 million was down 26 per cent mainly driven by lower income and higher expenses, partially offset by lower credit impairment

• Underlying operating income of $1,423 million was down 7 per cent (down 5 per cent on a constant currency basis) as the macroeconomic environment in some of our key markets impacted the performance of Wealth Management. This was partially offset by a 6 per cent increase in Retail Deposit income, due to higher margins, increased volumes and improved liability mix

• RoTE decreased from 18.9 per cent to 14.4 per cent

 

 

 

 

 

 

Page 14

Supplementary financial information continued

Ventures1

 

1Q'22
$million

1Q'21
$million

Change3
%

Constant currency change2,3
%

4Q'21
$million

Change3
%

Constant currency change2,3
%

Operating income

1

(2)

150

100

4

(75)

(100)

Retail Products

1

(2)

150

150

2

(50)

(50)

CCPL & other unsecured lending

1

‐

nm⁷

nm⁷

2

(50)

(50)

Deposits

(1)

(1)

‐

‐

(1)

‐

‐

Other Retail Products

1

(1)

200

200

1

‐

‐

Other

‐

‐

nm⁷

nm⁷

2

(100)

(150)

Operating expenses

(72)

(36)

(100)

(100)

(75)

4

5

Operating loss before impairment losses and taxation

(71)

(38)

(87)

(89)

(71)

‐

‐

Credit impairment

(3)

‐

nm⁷

nm⁷

(2)

(50)

(50)

Loss from associates and joint ventures

(3)

(1)

(200)

(200)

(3)

‐

‐

Underlying loss before taxation

(77)

(39)

(97)

(100)

(76)

(1)

(1)

Restructuring

‐

‐

nm⁷

nm⁷

(3)

100

100

Statutory loss before taxation

(77)

(39)

(97)

(100)

(79)

3

3

Total assets

1,115

563

98

112

1,098

2

9

Of which: loans and advances to customers4

115

‐

nm⁷

nm⁷

88

31

31

Total liabilities

693

722

(4)

(2)

766

(10)

(8)

Of which: customer accounts4

621

689

(10)

(9)

689

(10)

(9)

Risk-weighted assets

876

454

93

nm⁷

761

15

nm⁷

Underlying return on risk-weighted assets (%)5

nm⁷

nm⁷

nm⁷

nm⁷

nm⁷

nm⁷

nm⁷

Underlying return on tangible equity (%)5

nm⁷

nm⁷

nm⁷

nm⁷

nm⁷

nm⁷

nm⁷

Cost to income ratio (%)6

nm⁷

nm⁷

nm⁷

nm⁷

nm⁷

nm⁷

nm⁷

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior period has been restated

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) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

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

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

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

7   Not meaningful

Performance highlights

• Underlying loss before tax of $77 million was up 97 per cent, driven mainly by higher expenses as we continue to invest in new and existing Ventures  

• Customer loans and advances were up 31 per cent since 31 December 2021 due to customer growth, higher utilisation rates and additional credit products being launched.

• Risk-weighted assets increased 15 per cent since 31 December 2021, mainly due to increased minority strategic investments

 

 

 

 

 

Page 15

Supplementary financial information continued

Central & other items (segment)1

 

1Q'22
$million

1Q'21
$million

Change3
%

Constant currency change2,3
%

4Q'21
$million

Change3
%

Constant currency change2,3
%

Operating income

278

237

17

22

104

167

161

Treasury

317

257

23

26

155

105

107

Other

(39)

(20)

(95)

(60)

(51)

24

15

Operating expenses

(221)

(184)

(20)

(27)

(85)

(160)

(145)

Operating profit before impairment losses and taxation

57

53

8

7

19

200

nm⁷

Credit impairment

(16)

(1)

nm⁷

nm⁷

(17)

6

12

Other impairment

(1)

‐

nm⁷

nm⁷

(301)

100

100

Profit from associates and joint ventures

66

48

38

40

(1)

nm⁷

nm⁷

Underlying profit/(loss) before taxation

106

100

6

8

(300)

135

136

Restructuring

1

(25)

104

104

(35)

103

103

Other items

‐

‐

nm⁷

nm⁷

(62)

100

100

Statutory profit/(loss) before taxation

107

75

43

45

(397)

127

128

Total assets

279,771

280,362

‐

2

281,578

(1)

1

Of which: loans and advances to customers4

27,979

21,620

29

31

24,409

15

16

Total liabilities

114,667

85,062

35

36

110,809

3

4

Of which: customer accounts4

10,277

8,503

21

24

11,982

(14)

(12)

Risk-weighted assets

49,741

51,654

(4)

nm⁷

56,043

(11)

nm⁷

Underlying return on risk-weighted assets (%)5

0.8

0.8

‐

nm⁷

(2.2)

300bps

nm⁷

Underlying return on tangible equity (%)5

0.9

2.4

(150)bps

nm⁷

(24.1)

nm⁷

nm⁷

Cost to income ratio (%) (excluding UK bank levy)6

79.5

77.6

(1.9)

(2.9)

8.7

(70.8)

(82.5)

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior period has been restated

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) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

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

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

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

7   Not meaningful

Performance highlights

• Underlying profit before tax of $106 million was up $6 million primarily from higher operating income from Treasury and a higher profit share from our associate China Bohai Bank, mostly offset by an increase in performance related pay accruals

• Underlying operating income from Treasury was up $60 million, mainly driven by improved net interest income from structural and short-term hedges and higher interest on assets repricing as rates rise, partially offset by lower realisation opportunities

• Treasury risk-weighted assets down $6 billion since 31 December 2021, due to management actions, mostly portfolio optimisation and the purchase of credit insurance for higher risk weighted central bank cash balances

 

 

 

Page 16

 

Supplementary financial information continued

Underlying performance by region

 

1Q'22

Asia
$million

 Africa &
Middle East
$million

Europe &
Americas
$million

Central &
other items
$million

Total
$million

Operating income

2,797

659

857

(39)

4,274

Operating expenses

(1,671)

(403)

(381)

(181)

(2,636)

Operating profit/(loss) before impairment losses and taxation

1,126

256

476

(220)

1,638

Credit impairment

(285)

46

36

3

(200)

Other impairment

‐

‐

‐

(1)

(1)

Profit from associates and joint ventures

66

‐

‐

(3)

63

Underlying profit/(loss) before taxation

907

302

512

(221)

1,500

Restructuring

(9)

1

3

(3)

(8)

Statutory profit/(loss) before taxation

898

303

515

(224)

1,492

Total assets

475,917

55,458

298,207

9,535

839,117

Of which: loans and advances to customers1

263,871

26,175

74,006

‐

364,052

240,809

24,606

30,370

‐

295,785

23,062

1,569

43,636

‐

68,267

Total liabilities

424,264

43,287

252,035

67,691

787,277

Of which: customer accounts1

334,813

34,705

148,539

‐

518,057

Risk-weighted assets

163,447

45,154

49,619

2,613

260,833

Underlying return on risk-weighted assets (%)2

2.1

2.6

4.1

nm⁴

2.2

Underlying return on tangible equity (%)2

11.3

13.2

21.0

nm⁴

11.1

Cost to income ratio (%)3

59.7

61.2

44.5

nm⁴

61.7

 

 

1Q'21

Asia
$million

 Africa &
Middle East
$million

Europe &
Americas
$million

Central &
other items
$million

Total
$million

Operating income

2,817

590

550

(28)

3,929

Operating expenses

(1,572)

(393)

(366)

(163)

(2,494)

Operating profit/(loss) before impairment losses and taxation

1,245

197

184

(191)

1,435

Credit impairment

(58)

(7)

47

(2)

(20)

Other impairment

‐

‐

2

(18)

(16)

Profit from associates and joint ventures

47

‐

‐

‐

47

Underlying profit/(loss) before taxation

1,234

190

233

(211)

1,446

Restructuring

(5)

(1)

(19)

(8)

(33)

Statutory profit/(loss) before taxation

1,229

189

214

(219)

1,413

Total assets

468,748

57,618

269,560

8,977

804,903

Of which: loans and advances to customers1

247,424

28,548

71,203

‐

347,175

235,572

27,110

29,402

‐

292,084

11,852

1,438

41,801

‐

55,091

Total liabilities

418,288

39,102

224,097

71,141

752,628

Of which: customer accounts1

334,908

31,465

134,574

‐

500,947

Risk-weighted assets

178,541

50,640

49,848

(2,359)

276,670

Underlying return on risk-weighted assets (%)2

2.8

1.5

1.9

nm⁴

2.1

Underlying return on tangible equity (%)2

15.1

7.9

10.0

nm⁴

10.8

Cost to income ratio (%)3

55.8

66.6

66.5

nm⁴

63.5

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   Not meaningful

 

 

 

Page 17
 

Supplementary financial information continued

Asia1

 

1Q'22
$million

1Q'21
$million

Change2
%

Constant currency change1,2
%

4Q'21
$million

Change2
%

Constant currency change1,2
%

Operating income

2,797

2,817

(1)

1

2,356

19

19

Operating expenses

(1,671)

(1,572)

(6)

(8)

(1,814)

8

8

Operating profit before impairment losses and taxation

1,126

1,245

(10)

(8)

542

108

109

Credit impairment

(285)

(58)

nm⁶

nm⁶

(303)

6

5

Other impairment

‐

‐

nm⁶

nm⁶

(283)

100

100

Profit from associates and joint ventures

66

47

40

40

(6)

nm⁶

nm⁶

Underlying profit/(loss) before taxation

907

1,234

(26)

(25)

(50)

nm⁶

nm⁶

Restructuring

(9)

(5)

(80)

(80)

(223)

96

96

Other items

‐

‐

nm⁶

nm⁶

‐

nm⁶

nm⁶

Statutory profit/(loss) before taxation

898

1,229

(27)

(26)

(273)

nm⁶

nm⁶

Total assets

475,917

468,748

2

3

483,950

(2)

(1)

Of which: loans and advances to customers3

263,871

247,424

7

9

265,744

(1)

‐

Total liabilities

424,264

418,288

1

3

434,200

(2)

(2)

Of which: customer accounts3

334,813

334,908

‐

1

355,792

(6)

(5)

Risk-weighted assets

163,447

178,541

(8)

nm⁶

170,381

(4)

nm⁶

Underlying return on risk-weighted assets (%)4

2.1

2.8

(70)bps

nm⁶

(0.1)

220bps

nm⁶

Underlying return on tangible equity (%)4

11.3

15.1

(380)bps

nm⁶

(0.3)

1,160bps

nm⁶

Cost to income ratio (%)5

59.7

55.8

(3.9)

(4.0)

77.0

17.3

17.4

1   Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

2   Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

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

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

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

6   Not meaningful

Performance highlights

• Underlying profit before tax of $907 million was down 26 per cent, primarily from higher credit impairment from the sovereign ratings downgrade of Sri Lanka and charges on China Commercial Real Estate exposures

• Underlying operating income of $2,797 million was down 1 per cent (up 1 per cent on a constant currency). A very strong Financial Markets performance was entirely offset by lower Wealth Management income as market conditions became more volatile reducing transaction volumes, as well as from the impact of COVID-19 restrictions in Greater China and North Asia, in particular in Hong Kong and China, resulting in a number of branch closures which negatively impacted face-to-face sales

• Loans and advances to customers were down 1 per cent (flat on a constant currency) and customer accounts down 6 per cent since 31 December 2021

• Risk-weighted assets were down $7 billion since 31 December 2021 as we continue to focus on RWA optimisation

• RoTE decreased from 15.1 per cent to 11.3 per cent

 

 

 

Page 18

 

Supplementary financial information continued

Africa & Middle East

 

1Q'22
$million

1Q'21
$million

Change2
%

Constant currency change1,2
%

4Q'21
$million

Change2
%

Constant currency change1,2
%

Operating income

659

590

12

16

539

22

25

Operating expenses

(403)

(393)

(3)

(5)

(407)

1

(1)

Operating profit before impairment losses and taxation

256

197

30

38

132

94

97

Credit impairment

46

(7)

nm⁶

nm⁶

27

70

59

Other impairment

‐

‐

nm⁶

nm⁶

‐

nm⁶

(100)

Underlying profit before taxation

302

190

59

66

159

90

89

Restructuring

1

(1)

200

200

(15)

107

106

Statutory profit before taxation

303

189

60

67

144

110

110

Total assets

55,458

57,618

(4)

(1)

57,405

(3)

(3)

Of which: loans and advances to customers3

26,175

28,548

(8)

(6)

27,600

(5)

(5)

Total liabilities

43,287

39,102

11

14

41,260

5

5

Of which: customer accounts3

34,705

31,465

10

14

34,701

‐

‐

Risk-weighted assets

45,154

50,640

(11)

nm⁶

48,852

(8)

nm⁶

Underlying return on risk-weighted assets (%)4

2.6

1.5

110bps

nm⁶

1.3

130bps

nm⁶

Underlying return on tangible equity (%)4

13.2

7.9

530bps

nm⁶

6.6

660bps

nm⁶

Cost to income ratio (%)5

61.2

66.6

5.4

6.2

75.5

14.3

14.2

1   Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods

2   Variance is better/(worse) other than risk-weighted assets, assets and liabilities which is increase/(decrease)

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

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

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

6   Not meaningful

Performance highlights

• Underlying profit before tax of $302 million was 59 per cent higher, mainly driven by a 12 per cent increase in income and a credit impairment release

• Underlying operating income of $659 million was 12 per cent higher (up 16 per cent on a constant currency basis), mainly due to a strong performance in Financial Markets, particularly in Macro Trading and broad-based growth across most other products

• Loans and advances to customers were down 5 per cent and customer accounts were flat since 31 December 2021

• Risk-weighted assets were down $4 billion since 31 December 2021

• RoTE increased from 7.9 per cent to 13.2 per cent

 

 

 

Page 19

 

Supplementary financial information continued

Europe & Americas

 

1Q'22
$million

1Q'21
$million

Change2
%

Constant currency change1,2
%

4Q'21
$million

Change2
%

Constant currency change1,2
%

Operating income

857

550

56

58

496

73

73

Operating expenses

(381)

(366)

(4)

(6)

(410)

7

6

Operating profit before impairment losses and taxation

476

184

159

162

86

nm⁶

nm⁶

Credit impairment

36

47

(23)

(25)

71

(49)

(49)

Other impairment

‐

2

(100)

(100)

(11)

100

100

Underlying profit before taxation

512

233

120

121

146

nm⁶

nm⁶

Restructuring

3

(19)

116

116

(22)

114

115

Statutory profit before taxation

515

214

141

142

124

nm⁶

nm⁶

Total assets

298,207

269,560

11

11

277,008

8

8

Of which: loans and advances to customers3

74,006

71,203

4

5

76,359

(3)

(3)

Total liabilities

252,035

224,097

12

13

233,915

8

8

Of which: customer accounts3

148,539

134,574

10

11

151,962

(2)

(2)

Risk-weighted assets

49,619

49,848

‐

nm⁶

50,283

(1)

nm⁶

Underlying return on risk-weighted assets (%)4

4.1

1.9

220bps

nm⁶

1.1

300bps

nm⁶

Underlying return on tangible equity (%)4

21.0

10.0

1,100bps

nm⁶

5.9

1,510bps

nm⁶

Cost to income ratio (%)5

44.5

66.5

22.0

21.9

82.7

38.2

37.5

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   Not meaningful

Performance highlights

• Underlying profit before tax of $512 million more than doubled, predominantly driven by increased income

• Underlying operating income of $857 million was up 56 per cent and up 47 per cent excluding a positive debit valuation adjustment. Income growth was driven by Financial Markets, mainly in Macro Trading

• RoTE more than doubled from 10.0 per cent to 21.0 per cent

 

 

 

 

 

Page 20

 

Supplementary financial information continued

Central & other items (region)

 

1Q'22
$million

1Q'21
$million

Change²
%

Constant currency change1,2
%

4Q'21
$million

Change²
%

Constant currency change1,2
%

Operating income

(39)

(28)

(39)

(25)

(61)

36

33

Operating expenses

(181)

(163)

(11)

(17)

(58)

nm

(178)

Operating loss before impairment losses and taxation

(220)

(191)

(15)

(18)

(119)

(85)

(76)

Credit impairment

3

(2)

nm⁵

nm⁵

2

50

nm5

Other impairment

(1)

(18)

94

94

(1)

‐

‐

Profit from associates and joint ventures

(3)

‐

nm⁵

(200)

2

nm⁵

nm⁵

Underlying loss before taxation

(221)

(211)

(5)

(7)

(116)

(91)

(79)

Restructuring

(3)

(8)

63

57

(25)

88

88

Goodwill impairment

‐

‐

nm⁵

nm⁵

‐

nm⁵

nm⁵

Other items

‐

‐

nm⁵

nm⁵

(62)

100

100

Statutory loss before taxation

(224)

(219)

(2)

(5)

(203)

(10)

(6)

Total assets

9,535

8,977

6

7

9,455

1

2

Total liabilities

67,691

71,141

(5)

(5)

65,807

3

2

Risk-weighted assets

2,613

(2,359)

nm

nm⁵

1,717

52

nm⁵

Underlying return on risk-weighted assets (%)3

nm⁵

nm⁵

nm⁵

nm⁵

nm⁵

nm⁵

nm⁵

Underlying return on tangible equity (%)3

nm⁵

nm⁵

nm⁵

nm⁵

nm⁵

nm⁵

nm⁵

Cost to income ratio (%) (excluding UK bank levy)4

nm⁵

nm⁵

nm⁵

nm⁵

nm⁵

nm⁵

nm⁵

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   Not meaningful

Performance highlights

• Underlying loss before tax of $221 million increased by $10 million due to an increase in performance related pay accruals, partially offset by non-repeat of prior year aircraft lease impairments

 

 

 

 

Page 21

 

Supplementary financial information continued

Underlying performance by key market

 

1Q'22

Hong Kong
$million

Korea
$million

China
$million

Taiwan
$million

Singapore
$million

India
$million

Indonesia
$million

UAE
$million

UK
$million

US
$million

Operating income

854

324

293

126

456

352

63

166

520

270

Operating expenses

(501)

(180)

(199)

(88)

(254)

(181)

(43)

(88)

(175)

(148)

Operating profit before impairment losses and taxation

353

144

94

38

202

171

20

78

345

122

Credit impairment

(209)

(1)

(48)

(8)

15

4

2

11

6

(1)

Other impairment

‐

‐

‐

‐

‐

‐

‐

‐

‐

‐

Profit from associates and joint ventures

‐

‐

66

‐

‐

‐

‐

‐

‐

‐

Underlying profit before taxation

144

143

112

30

217

175

22

89

351

121

Total assets employed

172,053

67,222

37,814

23,379

91,483

29,128

5,141

19,155

220,546

61,415

Of which: loans and advances to customers1

84,902

48,609

17,955

11,561

53,569

16,551

2,334

8,377

50,250

19,534

Total liabilities employed

160,099

58,248

33,918

21,986

92,828

21,252

3,988

16,805

159,270

76,831

Of which: customer accounts1

130,882

46,541

26,294

19,263

68,922

15,006

2,765

13,012

101,299

37,559

Underlying return on tangible equity (%)

6.6

18.0

10.3

12.3

18.3

16.2

13.6

15.7

21.8

17.5

Cost to income ratio (%)

58.7

55.6

67.9

69.8

55.7

51.4

68.3

53.0

33.7

54.8

 

 

1Q'21

Hong Kong
$million

Korea
$million

China
$million

Taiwan
$million

Singapore
$million

India
$million

Indonesia
$million

UAE
$million

UK
$million

US
$million

Operating income

949

284

301

137

457

312

62

137

297

192

Operating expenses

(475)

(185)

(172)

(82)

(238)

(167)

(42)

(92)

(174)

(140)

Operating profit before impairment losses and taxation

474

99

129

55

219

145

20

45

123

52

Credit impairment

(26)

13

(1)

2

35

(34)

(11)

(2)

33

15

Other impairment

‐

‐

‐

‐

‐

‐

‐

‐

2

‐

Profit from associates and joint ventures

‐

‐

47

‐

‐

‐

‐

‐

‐

‐

Underlying profit before taxation

448

112

175

57

254

111

9

43

158

67

Total assets employed

173,384

66,241

39,410

23,208

88,630

29,872

4,912

19,891

183,074

70,427

Of which: loans and advances to customers1

83,293

42,453

18,364

11,306

54,863

14,875

2,331

9,962

48,339

18,327

Total liabilities employed

162,760

57,624

35,088

21,094

85,059

21,849

3,508

13,374

142,130

69,128

Of which: customer accounts1

135,436

46,191

25,614

19,525

64,030

16,059

2,477

10,352

87,044

39,342

Underlying return on tangible equity (%)

21.5

11.7

16.6

22.5

20.3

8.7

4.6

7.3

10.1

10.0

Cost to income ratio (%)

50.1

65.1

57.1

59.9

52.1

53.5

67.7

67.2

58.6

72.9

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

 

 

 

Page 22
 

Supplementary financial information continued

Quarterly underlying operating income by product

 

1Q'22
$million

4Q'21
$million

3Q'21
$million

2Q'21
$million

1Q'21
$million

4Q'20
$million

3Q'20
$million

2Q'20
$million

Transaction Banking

740

730

734

709

713

707

721

780

Trade & Working capital1,2

362

348

389

363

347

304

311

289

Cash Management

378

382

345

346

366

403

410

491

Financial Markets

1,723

1,012

1,311

1,268

1,308

949

1,178

1,226

Macro Trading

940

433

540

571

672

435

517

756

Credit Markets2

460

357

510

465

430

404

458

470

Credit Trading

110

60

144

102

131

119

129

181

Financing Solutions & Issuance2

350

297

366

363

299

285

329

289

Structured Finance

94

104

159

128

100

102

101

88

Financing & Securities Services2

144

101

103

105

106

77

124

113

DVA

85

17

(1)

(1)

‐

(69)

(22)

(201)

Lending & Portfolio Management1,2

146

184

214

188

173

168

178

176

Wealth Management

530

466

559

554

646

442

572

440

Retail Products

849

835

828

846

849

848

859

913

CCPL & other unsecured lending

305

316

316

320

320

303

309

295

Deposits

248

213

205

209

233

271

301

413

Mortgage & Auto

247

261

260

268

247

234

211

169

Other Retail Products

49

45

47

49

49

40

38

36

Treasury

317

155

149

137

257

92

40

178

Other2

(31)

(52)

(30)

(13)

(17)

(7)

(29)

7

Total underlying operating income

4,274

3,330

3,765

3,689

3,929

3,199

3,519

3,720

1   Following a reorganisation, there has been a reclassification of balances from Lending & Portfolio Management into Trade & Working capital including prior period numbers. Prior periods have been re-presented and there is no change in the total income

2   Income related to Group Special Asset Management, the Group's specialist recovery unit previously reported in Other products has been allocated to the relevant products. Prior periods have been re-presented and there is no change in total income.

 

 

 

 

 

 

Page 23

 

Supplementary financial information continued

Earnings per ordinary share

 

1Q'22
$million

1Q'21
$million

Change
%

4Q'21
$million

Change
%

Profit/(loss) for the period attributable to equity holders

1,179

1,099

7

(382)

nm¹

(3)

(7)

57

20

nm¹

Dividend payable on preference shares and AT1 classified as equity

(121)

(65)

(86)

(95)

(27)

Profit/(loss) for the period attributable to ordinary shareholders

1,055

1,027

3

(457)

nm¹

 

 

 

 

 

 

 

 

 

 

‐

‐

nm¹

62

nm¹

8

33

(76)

285

(97)

Tax on normalised items

(3)

(7)

57

(65)

95

Underlying profit/(loss)

1,060

1,053

1

(175)

nm¹

 

 

 

 

 

3,047

3,146

nm¹

3,062

nm¹

3,098

3,200

nm¹

3,097

nm¹

 

 

 

 

 

 

Basic earnings per ordinary share (cents)²

34.6

32.6

2.0

(14.9)

49.5

Diluted earnings per ordinary share (cents)²

34.1

32.1

2.0

(14.8)

48.9

Underlying basic earnings per ordinary share (cents)²

34.8

33.5

1.3

(5.7)

40.5

Underlying diluted earnings per ordinary share (cents)²

34.2

32.9

1.3

(5.7)

39.9

1   Not meaningful

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

 

 

 

 

 

Page 24

 

Supplementary financial information continued

Return on Tangible Equity

 

1Q'22
$million

1Q'21
$million

Change
%

4Q'21
$million

Change
%

45,595

46,026

(1)

46,338

(2)

(1,494)

(1,494)

‐

(1,494)

‐

Less Average intangible assets

(5,487)

(5,068)

(8)

(5,409)

(1)

38,614

39,464

(2)

39,435

(2)

 

 

 

 

 

 

Profit/(loss) for the period attributable to equity holders

1,179

1,099

7

(382)

nm¹

(3)

(7)

57

20

nm¹

Dividend payable on preference shares and AT1 classified as equity

(121)

(65)

(86)

(95)

(27)

Profit/(loss) for the period attributable to ordinary shareholders

1,055

1,027

3

(457)

nm¹

 

 

 

 

 

 

 

 

 

 

‐

‐

-

62

nm¹

8

33

(76)

285

(97)

Tax on normalised items

(3)

(7)

57

(65)

95

Underlying profit for the period attributable to ordinary shareholders

1,060

1,053

1

(175)

nm¹

 

 

 

 

 

 

Underlying Return on Tangible Equity

11.1%

10.8%

30bps

(1.8)%

1,290bps

Statutory Return on Tangible Equity

11.1%

10.6%

50bps

(4.6)%

1,570bps

1   Not meaningful

Net Tangible Asset Value per Share

 

31.03.22
$million

31.03.21
$million

Change
%

31.12.21
$million

Change
%

45,178

46,166

(2)

46,011

(2)

(1,494)

(1,494)

‐

(1,494)

‐

Less Intangible assets

(5,502)

(5,072)

(8)

(5,471)

(1)

Net shareholders tangible equity

38,182

39,600

(4)

39,046

(2)

 

 

 

 

 

Ordinary shares in issue, excluding own shares (millions)

2,993

3,118

(4)

3,057

(2)

Net Tangible Asset Value per share (cents)1

1,276

1,270

6

1,277

(1)

1   Change is cents difference between the two periods rather than the percentage change

 

 

 

 

 

Page 25

 

Underlying versus statutory results reconciliations

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

Operating income by client segment

 

1Q'22

Corporate, Commercial & Institutional Banking
$million

Consumer,
Private &
Business Banking
$million

Ventures
$million

Central &
other items
$million

Total
$million

Underlying operating income

2,572

1,423

1

278

4,274

Restructuring

18

‐

‐

‐

18

Statutory operating income

2,590

1,423

1

278

4,292

 

 

1Q'21(Restated)¹

Corporate, Commercial & Institutional Banking¹
$million

Consumer,
Private &
Business Banking¹
$million

Ventures¹
$million

Central &
other items¹
$million

Total
$million

Underlying operating income

2,161

1,533

(2)

237

3,929

Restructuring

10

‐

‐

‐

10

Statutory operating income

2,171

1,533

(2)

237

3,939

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022 Prior periods have been restated

Operating income by region

 

1Q'22

Asia
$million

 Africa &
Middle East
$million

Europe &
Americas
$million

Central &
other items
$million

Total
$million

Underlying operating income

2,797

659

857

(39)

4,274

Restructuring

7

1

‐

10

18

Statutory operating income

2,804

660

857

(29)

4,292

 

 

1Q'21

Asia
$million

 Africa &
Middle East
$million

Europe &
Americas
$million

Central &
other items
$million

Total
$million

Underlying operating income

2,817

590

550

(28)

3,929

Restructuring

10

1

‐

(1)

10

Statutory operating income

2,827

591

550

(29)

3,939

 

 

 

 

Page 26

 

Underlying versus statutory results reconciliations continued

Profit before taxation (PBT) 

 

1Q'22

Underlying
$million

Restructuring
$million

Statutory
$million

Operating income

4,274

18

4,292

Operating expenses

(2,636)

(29)

(2,665)

Operating profit/(loss) before impairment losses and taxation

1,638

(11)

1,627

Credit impairment

(200)

3

(197)

Other impairment

(1)

(5)

(6)

Profit from associates and joint ventures

63

5

68

Profit/(loss) before taxation

1,500

(8)

1,492

 

 

1Q'21

Underlying
$million

Restructuring
$million

Statutory
$million

Operating income

3,929

10

3,939

Operating expenses

(2,494)

(34)

(2,528)

Operating profit/(loss) before impairment losses and taxation

1,435

(24)

1,411

Credit impairment

(20)

3

(17)

Other impairment

(16)

(12)

(28)

Profit from associates and joint ventures

47

‐

47

Profit/(loss) before taxation

1,446

(33)

1,413

 

 

 

 

 

Page 27

 

Underlying versus statutory results reconciliations continued

Profit before taxation (PBT) by client segment

 

1Q'22

Corporate, Commercial & Institutional Banking
$million

Consumer,
Private &
Business Banking
$million

Ventures
$million

Central &
other items
$million

Total
$million

Operating income

2,572

1,423

1

278

4,274

2,449

1,327

1

497

4,274

123

96

‐

(219)

‐

Operating expenses

(1,326)

(1,017)

(72)

(221)

(2,636)

Operating profit/(loss) before impairment losses and taxation

1,246

406

(71)

57

1,638

Credit impairment

(147)

(34)

(3)

(16)

(200)

Other impairment

‐

‐

‐

(1)

(1)

Profit from associates and joint ventures

‐

‐

(3)

66

63

Underlying profit/(loss) before taxation

1,099

372

(77)

106

1,500

Restructuring

(2)

(7)

‐

1

(8)

Statutory profit/(loss) before taxation

1,097

365

(77)

107

1,492

 

 

1Q'21 (Restated)¹

Corporate, Commercial & Institutional Banking1
$million

Consumer,
Private &
Business Banking1
$million

Ventures
$million

Central & other items1
$million

Total
$million

Operating income

2,161

1,533

(2)

237

3,929

2,057

1,428

(2)

446

3,929

104

105

‐

(209)

‐

Operating expenses

(1,288)

(986)

(36)

(184)

(2,494)

Operating profit/(loss) before impairment losses and taxation

873

547

(38)

53

1,435

Credit impairment

28

(47)

‐

(1)

(20)

Other impairment

(16)

‐

‐

‐

(16)

Profit from associates and joint ventures

‐

‐

(1)

48

47

Underlying profit/(loss) before taxation

885

500

(39)

100

1,446

Restructuring

1

(9)

‐

(25)

(33)

Statutory profit/(loss) before taxation

886

491

(39)

75

1,413

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022 Prior periods have been restated 

 

 

 

 

Page 28

Underlying versus statutory results reconciliations continued

Profit before taxation (PBT) by region

 

1Q'22

Asia
$million

 Africa &
Middle East
$million

Europe &
Americas
$million

Central &
other items
$million

Total
$million

Operating income

2,797

659

857

(39)

4,274

Operating expenses

(1,671)

(403)

(381)

(181)

(2,636)

Operating profit/(loss) before impairment losses and taxation

1,126

256

476

(220)

1,638

Credit impairment

(285)

46

36

3

(200)

Other impairment

‐

‐

‐

(1)

(1)

Profit from associates and joint ventures

66

‐

‐

(3)

63

Underlying profit/(loss) before taxation

907

302

512

(221)

1,500

Restructuring

(9)

1

3

(3)

(8)

Statutory profit/(loss) before taxation

898

303

515

(224)

1,492

 

 

1Q'21

Asia
$million

 Africa &
Middle East
$million

Europe &
Americas
$million

Central &
other items
$million

Total
$million

Operating income

2,817

590

550

(28)

3,929

Operating expenses

(1,572)

(393)

(366)

(163)

(2,494)

Operating profit/(loss) before impairment losses and taxation

1,245

197

184

(191)

1,435

Credit impairment

(58)

(7)

47

(2)

(20)

Other impairment

‐

‐

2

(18)

(16)

Profit from associates and joint ventures

47

‐

‐

‐

47

Underlying profit/(loss) before taxation

1,234

190

233

(211)

1,446

Restructuring

(5)

(1)

(19)

(8)

(33)

Statutory profit/(loss) before taxation

1,229

189

214

(219)

1,413

 

 

 

 

 

 

Page 29
 

Underlying versus statutory results reconciliations continued

Return on tangible equity (RoTE)

 

1Q'22

Corporate, Commercial & Institutional Banking
%

Consumer,
Private &
Business Banking
%

Ventures
%

Central &
Other Items
%

Total
%

Underlying RoTE

14.0

14.4

nm

0.9

11.1

Restructuring

 

 

 

 

 

Of which: Income

0.3

‐

‐

‐

0.2

Of which: Expenses

(0.3)

(0.4)

‐

(0.3)

(0.3)

Of which: Credit impairment

0.1

‐

‐

‐

‐

Of which: Other impairment

(0.1)

‐

‐

0.1

(0.1)

Of which: Profit from associates and joint ventures

‐

‐

‐

0.3

0.1

Tax on normalised items

‐

0.2

‐

(0.1)

0.1

Statutory RoTE

14.0

14.2

nm

0.9

11.1

 

 

1Q'21 (Restated)¹

Corporate, Commercial & Institutional Banking1
%

Consumer,
Private &
Business Banking1
%

Ventures1
%

Central &
Other Items
%

Total
%

Underlying RoTE

11.1

18.9

nm

2.4

10.8

Restructuring

 

 

 

 

 

Of which: Income

0.2

‐

‐

‐

0.1

Of which: Expenses

(0.2)

(0.5)

‐

(0.7)

(0.3)

Of which: Credit impairment

0.1

‐

‐

‐

‐

Of which: Other impairment

‐

‐

‐

(0.7)

(0.1)

Of which: Profit from associates and joint ventures

‐

‐

‐

‐

‐

Tax on normalised items

(0.1)

0.1

‐

0.3

0.1

Statutory RoTE

11.1

18.5

nm

1.3

10.6

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior periods have been restated

Earnings per ordinary share (EPS)

 

1Q'22

Underlying
$ million

Restructuring
$ million

Tax on
normalised items
$ million

Statutory
$ million

Profit for the year attributable to ordinary shareholders

1,060

(8)

3

1,055

 

 

 

 

 

Basic - Weighted average number of shares (millions)

3,047

 

 

3,047

Basic earnings per ordinary share (cents)

34.8

 

 

34.6

 

 

1Q'21

Underlying
$ million

Restructuring
$ million

Tax on
normalised items
$ million

Statutory
$ million

Profit for the year attributable to ordinary shareholders

1,053

(33)

7

1,027

 

 

 

 

 

Basic - Weighted average number of shares (millions)

3,146

 

 

3,146

Basic earnings per ordinary share (cents)

33.5

 

 

32.6

 

 

 

 

Page 30

 

Risk review

Credit quality by client segment

Amortised cost

31.03.22

Banks
$million

Customers

Undrawn commitments
$million

Financial Guarantees
$million

Corporate, Commercial & Institutional Banking
$million

Consumer, Private & Business Banking
$million

Ventures
$million

Central & other items
$million

Customer Total
$million

Stage 1

35,099

122,176

133,011

102

24,732

280,021

152,081

55,256

- Strong

22,977

77,241

128,362

101

24,685

230,389

134,497

37,448

- Satisfactory

12,122

44,935

4,649

1

47

49,632

17,584

17,808

Stage 2

369

11,697

2,081

18

27

13,823

8,195

2,726

- Strong

182

1,709

1,442

16

‐

3,167

2,608

465

- Satisfactory

160

9,055

302

1

‐

9,358

4,794

1,826

- Higher risk

27

933

337

1

27

1,298

793

435

Of which (stage 2):

 

 

 

 

 

 

 

 

- Less than 30 days past due

‐

329

288

1

‐

618

‐

‐

- More than 30 days past due

‐

137

337

1

‐

475

‐

‐

Stage 3, credit-impaired financial assets

240

5,668

1,554

‐

‐

7,222

7

721

Gross balance¹

35,708

139,541

136,646

120

24,759

301,066

160,283

58,703

Stage 1

(9)

(100)

(374)

(1)

‐

(475)

(36)

(10)

- Strong

(3)

(54)

(266)

(1)

‐

(321)

(22)

(4)

- Satisfactory

(6)

(46)

(108)

‐

‐

(154)

(14)

(6)

Stage 2

(5)

(273)

(153)

(3)

(1)

(430)

(47)

(20)

- Strong

(1)

(22)

(87)

(3)

‐

(112)

(11)

(2)

- Satisfactory

(4)

(209)

(29)

‐

‐

(238)

(33)

(9)

- Higher risk

‐

(42)

(37)

‐

(1)

(80)

(3)

(9)

Of which (stage 2):

 

 

 

 

 

 

 

 

- Less than 30 days past due

‐

(9)

(29)

‐

‐

(38)

‐

‐

- More than 30 days past due

‐

‐

(37)

‐

‐

(37)

‐

‐

Stage 3, credit-impaired financial assets

(56)

(3,599)

(777)

‐

‐

(4,376)

(5)

(202)

Total credit impairment

(70)

(3,972)

(1,304)

(4)

(1)

(5,281)

(88)

(232)

Net carrying value

35,638

135,569

135,342

116

24,758

295,785

 

 

Stage 1

0.0%

0.1%

0.3%

1.0%

0.0%

0.2%

0.0%

0.0%

- Strong

0.0%

0.1%

0.2%

1.0%

0.0%

0.1%

0.0%

0.0%

- Satisfactory

0.0%

0.1%

2.3%

0.0%

0.0%

0.3%

0.1%

0.0%

Stage 2

1.4%

2.3%

7.4%

16.7%

3.7%

3.1%

0.6%

0.7%

- Strong

0.5%

1.3%

6.0%

18.8%

0.0%

3.5%

0.4%

0.4%

- Satisfactory

2.5%

2.3%

9.6%

0.0%

0.0%

2.5%

0.7%

0.5%

- Higher risk

0.0%

4.5%

11.0%

0.0%

3.7%

6.2%

0.4%

2.1%

Of which (stage 2):

 

 

 

 

 

 

 

 

- Less than 30 days past due

0.0%

2.7%

10.1%

0.0%

0.0%

6.1%

0.0%

0.0%

- More than 30 days past due

0.0%

0.0%

11.0%

0.0%

0.0%

7.8%

0.0%

0.0%

Stage 3, credit-impaired financial assets (S3)

23.3%

63.5%

50.0%

0.0%

0.0%

60.6%

71.4%

28.0%

Cover ratio

0.2%

2.8%

1.0%

3.3%

0.0%

1.8%

0.1%

0.4%

 

 

 

 

 

 

 

 

 

Fair value through profit or loss

 

 

 

 

 

 

 

 

Performing

26,481

64,921

54

‐

3,292

68,267

‐

‐

- Strong

22,940

51,441

54

‐

3,290

54,785

‐

‐

- Satisfactory

3,541

13,421

‐

‐

2

13,423

‐

‐

- Higher risk

‐

59

‐

‐

‐

59

‐

‐

Defaulted (CG13-14)

‐

‐

‐

‐

‐

‐

‐

‐

Gross balance (FVTPL)2

26,481

64,921

54

‐

3,292

68,267

‐

‐

 

 

 

 

 

 

 

 

 

Net carrying value (incl FVTPL)

62,119

200,490

135,396

116

28,050

364,052

‐

‐

1   Loans and advances includes reverse repurchase agreements and other similar secured lending of $12,571 million under Customers and of $2,038 million under Banks, held at amortised cost

2   Loans and advances includes reverse repurchase agreements and other similar secured lending of $59,298 million under Customers and of $22,096 million under Banks, held at fair value through profit or loss

Page 31
 

Risk review continued

Amortised cost

31.12.21 (Restated)1

 

Customers

 

 

Banks
$million

Corporate, Commercial & Institutional Banking
$million

Consumer, Private & Business Banking1
$million

Ventures1
$million

Central & other items
$million

Customer Total
$million

Undrawn commitments
$million

Financial Guarantees
$million

Stage 1

43,776

122,368

134,289

82

22,439

279,178

149,530

54,923

- Strong

30,813

77,826

129,486

82

22,333

229,727

132,274

37,418

- Satisfactory

12,963

44,542

4,803

‐

106

49,451

17,256

17,505

Stage 2

580

14,818

1,912

9

110

16,849

8,993

2,813

- Strong

126

2,366

1,253

‐

‐

3,619

2,786

714

- Satisfactory

105

11,180

308

‐

‐

11,488

5,235

1,546

- Higher risk

349

1,272

351

9

110

1,742

972

553

Of which (stage 2):

 

 

 

 

 

 

 

 

- Less than 30 days past due

‐

77

308

‐

‐

385

‐

‐

- More than 30 days past due

‐

49

360

‐

‐

409

‐

‐

Stage 3, credit-impaired financial assets

54

6,520

1,575

‐

‐

8,095

‐

799

Gross balance2

44,410

143,706

137,776

91

22,549

304,122

158,523

58,535

Stage 1

(12)

(103)

(369)

(1)

‐

(473)

(42)

(15)

- Strong

(4)

(58)

(282)

(1)

‐

(341)

(23)

(5)

- Satisfactory

(8)

(45)

(87)

‐

‐

(132)

(19)

(10)

Stage 2

(4)

(341)

(181)

(2)

‐

(524)

(60)

(22)

- Strong

(2)

(62)

(104)

‐

‐

(166)

(6)

(1)

- Satisfactory

(2)

(179)

(32)

‐

‐

(211)

(46)

(9)

- Higher risk

‐

(100)

(45)

(2)

‐

(147)

(8)

(12)

Of which (stage 2):

 

 

 

 

 

 

 

 

- Less than 30 days past due

‐

(2)

(32)

‐

‐

(34)

‐

‐

- More than 30 days past due

‐

(3)

(47)

‐

‐

(50)

‐

‐

Stage 3, credit-impaired financial assets

(11)

(3,861)

(796)

‐

‐

(4,657)

‐

(207)

Total credit impairment

(27)

(4,305)

(1,346)

(3)

‐

(5,654)

(102)

(244)

Net carrying value

44,383

139,401

136,430

88

22,549

298,468

‐

‐

Stage 1

0.0%

0.1%

0.3%

1.2%

0.0%

0.2%

0.0%

0.0%

- Strong

0.0%

0.1%

0.2%

1.2%

0.0%

0.1%

0.0%

0.0%

- Satisfactory

0.1%

0.1%

1.8%

0.0%

0.0%

0.3%

0.1%

0.1%

Stage 2

0.7%

2.3%

9.5%

22.2%

0.0%

3.1%

0.7%

0.8%

- Strong

1.6%

2.6%

8.3%

0.0%

0.0%

4.6%

0.2%

0.1%

- Satisfactory

1.9%

1.6%

10.4%

0.0%

0.0%

1.8%

0.9%

0.6%

- Higher risk

0.0%

7.9%

12.8%

22.2%

0.0%

8.4%

0.8%

2.2%

Of which (stage 2):

 

 

 

 

 

 

 

 

- Less than 30 days past due

0.0%

2.6%

10.4%

0.0%

0.0%

8.8%

0.0%

0.0%

- More than 30 days past due

0.0%

6.1%

13.1%

0.0%

0.0%

12.2%

0.0%

0.0%

Stage 3, credit-impaired financial assets (S3)

20.4%

59.2%

50.5%

0.0%

0.0%

57.5%

0.0%

25.9%

Cover ratio

0.1%

3.0%

1.0%

3.3%

0.0%

1.9%

0.1%

0.4%

 

 

 

 

 

 

 

 

 

Fair value through profit or loss

 

 

 

 

 

 

 

 

Performing

22,574

69,356

67

‐

1,774

71,197

‐

‐

- Strong

20,132

53,756

67

‐

1,772

55,595

‐

‐

- Satisfactory

2,442

15,600

‐

‐

2

15,602

‐

‐

- Higher risk

‐

‐

‐

‐

‐

‐

‐

‐

Defaulted (CG13-14)

‐

38

‐

‐

‐

38

‐

‐

Gross balance (FVTPL)3

22,574

69,394

67

‐

1,774

71,235

‐

‐

 

 

 

 

 

 

 

 

 

Net carrying value (incl FVTPL)

66,957

208,795

136,497

88

24,323

369,703

‐

‐

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior period has been restated.

2   Loans and advances includes reverse repurchase agreements and other similar secured lending of $7,331 million under Customers and of $1,079 million under Banks, held at amortised cost

3   Loans and advances includes reverse repurchase agreements and other similar secured lending of $61,282 million under Customers and of $18,727 million under Banks, held at fair value through profit or loss

Page 32
 

Risk review continued

Credit impairment charge

 

1Q'22

1Q'21 (Restated)1, 2

Stage 1 & 2
$million

Stage 3
$million

Total
$million

Stage 1 & 2
$million

Stage 3
$million

Total
$million

Ongoing business portfolio

 

 

 

 

 

 

Corporate, Commercial & Institutional Banking2

(77)

224

147

(27)

(1)

(28)

Consumer, Private & Business Banking2

8

26

34

(10)

57

47

Ventures1

3

‐

3

‐

‐

‐

Central & other items

(15)

31

16

2

(1)

1

Credit impairment charge

(81)

281

200

(35)

55

20

Restructuring business portfolio

 

 

 

 

 

 

Others

(2)

(1)

(3)

(1)

(2)

(3)

Credit impairment charge

(2)

(1)

(3)

(1)

(2)

(3)

Total credit impairment charge

(83)

280

197

(36)

53

17

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior period has been restated.

2   Following the Group's change in organisational structure in 2021, certain clients have been moved between the two new client segments, Corporate, Commercial & Institutional Banking and Consumer, Private & Business Banking. Prior period has been restated

COVID-19 relief measures

Segment1

Total

Asia

Africa & Middle East

Outstanding
$million

% of portfolio2

Outstanding
$million

% of portfolio2

Outstanding
$million

% of portfolio2

Credit card & Personal loans

162

1.1%

24

0.2%

138

7.5%

Mortgages & Auto

88

0.1%

79

0.1%

9

0.3%

Business Banking

103

1.0%

103

1.0%

 

 

Total Consumer, Private & Business Banking
at 31 March 2022

353

0.3%

206

0.2%

147

2.9%

Total Consumer, Private & Business Banking
at 31 December 2021

1,182

0.9%

1,029

0.9%

153

3.1%

1   Outstanding relief balance for Corporate, Commercial and Institutional Banking are less than $100 million (31 December 2021: $511 million) at Q1 2022 and $nil (31 December 2021: $nil) for Ventures3

2   Percentage of portfolio represents the outstanding amount as a percentage of the gross loans and advances to customers by product and segment

3   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate segment in 2022

 

 

 

 

 

 

Page 33

Risk review continued

Vulnerable sectors

Maximum Exposure

Amortised Cost

31.03.22

Maximum on Balance Sheet Exposure
(net of credit impairment)
$million

Collateral
$million

Net On Balance Sheet Exposure
$million

Undrawn Commitments
(net of credit impairment)
$million

Financial Guarantees
(net of credit impairment)
$million

Net Off Balance Sheet Exposure
$million

Total On & Off Balance Sheet Net Exposure
$million

Industry:

 

 

 

 

 

 

 

Aviation¹

3,254

1,816

1,438

1,451

504

1,955

3,393

Commodity Traders

9,834

306

9,528

2,990

7,306

10,296

19,824

Metals & Mining

3,936

380

3,556

3,453

935

4,388

7,944

Commercial Real Estate

18,447

6,893

11,554

6,122

246

6,368

17,922

Hotels & Tourism

2,153

664

1,489

1,396

134

1,530

3,019

Oil & Gas

7,180

927

6,253

7,518

6,275

13,793

20,046

Total

44,804

10,986

33,818

22,930

15,400

38,330

72,148

Total Corporate, Commercial & Institutional Banking

135,569

23,619

111,950

97,273

50,954

148,227

260,177

Total Group

331,423

138,088

193,335

160,194

58,472

218,666

412,001

 

Amortised Cost

31.12.21

Maximum On Balance Sheet Exposure
(net of credit impairment)
$million

Collateral
$million

Net On Balance Sheet Exposure
$million

Undrawn Commitments
(net of credit impairment)
$million

Financial Guarantees
(net of credit impairment)
$million

Net Off Balance Sheet Exposure
$million

Total On & Off Balance Sheet Net Exposure
$million

Industry:

 

 

 

 

 

 

 

Aviation¹

3,458

2,033

1,425

1,914

431

2,345

3,770

Commodity Traders

8,732

262

8,470

2,434

6,832

9,266

17,736

Metals & Mining

3,616

450

3,166

3,387

637

4,024

7,190

Commercial Real Estate

19,847

7,290

12,557

7,192

291

7,483

20,040

Hotels & Tourism

2,390

789

1,601

1,363

121

1,484

3,085

Oil & Gas

6,826

1,029

5,797

8,842

6,013

14,855

20,652

Total

44,869

11,853

33,016

25,132

14,325

39,457

72,473

Total Corporate, Commercial & Institutional Banking

139,401

26,294

113,107

96,406

49,666

146,072

259,179

Total Group

342,851

138,564

204,287

158,421

58,291

216,712

420,999

1   In addition to the aviation sector loan exposures, the Group owns $3.0 billion (31 December 2021: $3.1 billion) of aircraft under operating leases.

 

 

 

 

Page 34
 

Risk review continued

Loans and advances by stage

Amortised Cost

31.03.22

Stage 1

Stage 2

Stage 3

Total

Gross Balance
 

Total Credit Impairment
$million

Net Carrying Amount
$million

Gross Balance
$million

Total Credit Impairment
$million

Net Carrying Amount
$million

Gross Balance
$million

Total Credit Impairment

$million

Net Carrying Amount
$million

Gross Balance
$million

Total Credit Impairment
$million

Net Carrying Amount
$million

Industry:

 

 

 

 

 

 

 

 

 

 

 

 

Aviation

1,572

(4)

1,568

1,531

(8)

1,523

213

(50)

163

3,316

(62)

3,254

Commodity Traders

9,602

(6)

9,596

192

(5)

187

628

(576)

52

10,422

(587)

9,835

Metals & Mining

3,484

(3)

3,481

379

(16)

363

215

(123)

92

4,078

(142)

3,936

Commercial Real Estate

16,240

(14)

16,226

1,981

(96)

1,885

766

(431)

335

18,987

(541)

18,446

Hotels & Tourism

1,421

(2)

1,419

648

(7)

641

159

(66)

93

2,228

(75)

2,153

Oil & Gas

6,112

(6)

6,106

855

(23)

832

475

(233)

242

7,442

(262)

7,180

Total

38,431

(35)

38,396

5,586

(155)

5,431

2,456

(1,479)

977

46,473

(1,669)

44,804

Total Corporate, Commercial & Institutional Banking

122,176

(100)

122,076

11,697

(273)

11,424

5,668

(3,599)

2,069

139,541

(3,972)

135,569

Total Group

315,120

(484)

314,636

14,192

(435)

13,757

7,462

(4,432)

3,030

336,774

(5,351)

331,423

 

Amortised Cost

31.12.21

Stage 1

Stage 2

Stage 3

Total

Gross Balance
$million

Total Credit Impairment
$million

Net Carrying Amount
$million

Gross Balance
$million

Total Credit Impairment
$million

Net Carrying Amount
$million

Gross Balance
$million

Total Credit Impairment
$million

Net Carrying Amount
$million

Gross Balance
$million

Total Credit Impairment
$million

Net Carrying Amount
$million

Industry:

 

 

 

 

 

 

 

 

 

 

 

 

Aviation

1,120

‐

1,120

2,174

(11)

2,163

239

(64)

175

3,533

(75)

3,458

Commodity Traders

8,482

(4)

8,478

195

(5)

190

713

(649)

64

9,390

(658)

8,732

Metals & Mining

3,083

(1)

3,082

450

(17)

433

219

(118)

101

3,752

(136)

3,616

Commercial Real Estate

17,680

(43)

17,637

1,787

(75)

1,712

833

(335)

498

20,300

(453)

19,847

Hotels & Tourism

1,562

(1)

1,561

722

(9)

713

182

(66)

116

2,466

(76)

2,390

Oil & Gas

4,999

(5)

4,994

1,595

(34)

1,561

486

(215)

271

7,080

(254)

6,826

Total

36,926

(54)

36,872

6,923

(151)

6,772

2,672

(1,447)

1,225

46,521

(1,652)

44,869

Total Corporate, Commercial & Institutional Banking

122,368

(103)

122,265

14,818

(341)

14,477

6,520

(3,861)

2,659

143,706

(4,305)

139,401

Total Group

322,954

(485)

322,469

17,429

(528)

16,901

8,149

(4,668)

3,481

348,532

(5,681)

342,851

 

 

 

 

 

Page 35

 

Capital review

Capital ratios

 

31.03.22

31.12.21

Change4

31.03.21

Change4

CET1

13.9%

14.1%

(0.2)

14.0%

(0.1)

Tier 1 capital

15.9%

16.6%

(0.7)

16.3%

(0.4)

Total capital

21.1%

21.3%

(0.2)

21.2%

(0.1)

 

CRD Capital base1

 

31.03.22
$million

31.12.21
$million

Change5
%

31.03.21
$million

Change5
%

CET1 instruments and reserves

 

 

 

 

 

Capital instruments and the related share premium accounts

5,496

5,528

(1)

5,545

(1)

3,989

3,989

‐

3,989

‐

Retained earnings2

26,472

24,968

6

26,062

2

Accumulated other comprehensive income (and other reserves)

10,625

11,805

(10)

12,175

(13)

Non-controlling interests (amount allowed in consolidated CET1)

221

201

10

193

15

Independently reviewed interim and year-end profits

1,184

2,346

(50)

1,091

9

Foreseeable dividends

(524)

(493)

6

(573)

(9)

CET1 capital before regulatory adjustments

43,474

44,355

(2)

44,493

(2)

CET1 regulatory adjustments

 

 

 

 

 

Additional value adjustments (prudential valuation adjustments)

(672)

(665)

1

(641)

5

Intangible assets (net of related tax liability)3

(5,430)

(4,392)

24

(4,041)

34

Deferred tax assets that rely on future profitability (excludes those arising from temporary differences)

(157)

(150)

5

(146)

8

Fair value reserves related to net losses on cash flow hedges

238

34

600

7

3,300

Deduction of amounts resulting from the calculation of excess expected loss

(773)

(580)

33

(819)

(6)

Net gains on liabilities at fair value resulting from changes in own credit risk

(92)

15

(713)

59

(256)

Defined-benefit pension fund assets

(173)

(159)

9

(54)

220

Fair value gains arising from the institution's own credit risk related to derivative liabilities

(27)

(60)

(55)

(48)

(44)

Exposure amounts which could qualify for risk weighting of 1,250%

(92)

(36)

156

(99)

(7)

Total regulatory adjustments to CET1

(7,178)

(5,993)

20

(5,782)

24

CET1 capital

36,296

38,362

(5)

38,711

(6)

Additional Tier 1 capital (AT1) instruments

5,255

6,811

(23)

6,313

(17)

AT1 regulatory adjustments

(20)

(20)

‐

(20)

‐

Tier 1 capital

41,531

45,153

(8)

45,004

(8)

 

 

 

 

 

 

13,535

12,521

8

13,557

‐

(30)

(30)

‐

(30)

‐

Tier 2 capital

13,505

12,491

8

13,527

‐

Total capital

55,036

57,644

(5)

58,531

(6)

Total risk-weighted assets (unaudited)

260,833

271,233

(4)

276,670

(6)

1   CRD capital is prepared on the regulatory scope of consolidation

2   Retained earnings includes IFRS9 capital relief (transitional) of $133 million, including dynamic relief of $28 million

3  Increase in Intangible assets fully deducted, resulting from exclusion of software relief not available from 1 January 2022

4  Change is the percentage point difference between the two periods, rather than percentage change

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

 

 

 

Page 36

 

Capital review continued

Movement in total capital

 

3 months ended 31.03.22
$million

12 months ended 31.12.21
$million

CET1 at 1 January

38,362

38,779

Ordinary shares issued in the period and share premium

‐

‐

Share buy-back

(753)

(506)

Profit for the period

1,184

2,346

Foreseeable dividends deducted from CET1

(524)

(493)

Difference between dividends paid and foreseeable dividends

372

(303)

Movement in goodwill and other intangible assets

(1,038)

(118)

Foreign currency translation differences

(313)

(652)

Non-controlling interests

20

21

Movement in eligible other comprehensive income

(651)

(306)

Deferred tax assets that rely on future profitability

(7)

(12)

Decrease/(increase) in excess expected loss

(193)

121

Additional value adjustments (prudential valuation adjustment)

(7)

(175)

IFRS 9 transitional impact on regulatory reserves including day one

(119)

(142)

Exposure amounts which could qualify for risk weighting

(56)

(10)

Fair value gains arising from the institution's own Credit Risk related to derivative liabilities

33

(12)

Other

(14)

(176)

CET1 at 31 March/31 December

36,296

38,362

 

 

 

AT1 at 1 January

6,791

5,612

Net issuances (redemptions)

(999)

1,736

Foreign currency translation difference

‐

(2)

Excess on AT1 grandfathered limit (ineligible)

(557)

(555)

AT1 at 31 March/31 December

5,235

6,791

 

 

 

Tier 2 capital at 1 January

12,491

12,657

Regulatory amortisation

764

(1,035)

Net issuances (redemptions)

(298)

573

Foreign currency translation difference

51

(181)

Tier 2 ineligible minority interest

(60)

(81)

Recognition of ineligible AT1

557

555

Other

‐

3

Tier 2 capital at 31 March/31 December

13,505

12,491

Total capital at 31 March/31 December

55,036

57,644

 

 

 

 

Page 37

 

Capital review continued

Risk-weighted assets by business

 

31.03.22

Credit risk
$million

Operational risk
$million

Market risk
$million

Total risk
$million

Corporate, Commercial & Institutional Banking

120,626

17,038

19,089

156,753

Consumer, Private & Business Banking

44,824

8,639

‐

53,463

Ventures

870

6

‐

876

Central & other items

44,317

1,494

3,930

49,741

Total risk-weighted assets

210,637

27,177

23,019

260,833

 

 

31.12.21

Credit risk
$million

Operational risk
$million

Market risk
$million

Total risk
$million

Corporate, Commercial & Institutional Banking1, 2

125,813

16,595

20,789

163,197

Consumer, Private & Business Banking1

42,731

8,501

‐

51,232

Ventures1

756

5

‐

761

Central & other items1

50,288

2,015

3,740

56,043

Total risk-weighted assets

219,588

27,116

24,529

271,233

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior periods have been restated.

2   Following the Group's change in organisational structure in 2021, certain clients have been moved between the two new client segments, Corporate, Commercial & Institutional Banking and Consumer, Private & Business Banking. Prior period has been restated.

 

 

31.03.21

Credit risk
$million

Operational risk
$million

Market risk
$million

Total risk
$million

Corporate, Commercial & Institutional Banking1, 2

129,190

16,595

22,640

168,425

Consumer, Private & Business Banking1, 2

47,636

8,501

‐

56,137

Ventures1

449

5

‐

454

Central & other items1

49,514

2,015

125

51,654

Total risk-weighted assets

226,789

27,116

22,765

276,670

1   Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior periods have been restated.

2   Following the Group's change in organisational structure in 2021, certain clients have been moved between the two new client segments, Corporate, Commercial & Institutional Banking and Consumer, Private & Business Banking. Prior period has been restated.

Risk-weighted assets by geographic region

 

31.03.22
$million

31.12.21
$million

Change1
%

31.03.21
$million

Change1
%

ASIA

163,447

170,381

(4)

178,541

(8)

Africa & Middle East

45,154

48,852

(8)

50,640

(11)

Europe & Americas

49,619

50,283

(1)

49,848

‐

Central & other items

2,613

1,717

52

(2,359)

(211)

Total risk-weighted assets

260,833

271,233

(4)

276,670

(6)

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

 

 

 

 

 

 

 

Page 38

Capital review continued

Movement in risk-weighted assets

 

Credit risk

Operational risk
$million

Market risk
$million

Total risk
$million

Commercial, Corporate & Institutional Banking1
$million

Consumer, Private & Business Banking1
$million

Ventures1
$million

Central & other items1
$million

Total
$million

31 December 2020

 127,581

 44,755

289

47,816

 220,441

 26,800

 21,593

 268,834

Assets growth mix

2,269

3,612

467

3,894

10,242

‐

‐

10,242

Asset quality

(1,537)

(662)

‐

13

(2,186)

‐

‐

(2,186)

Risk-weighted assets efficiencies

(415)

(30)

‐

(657)

(1,102)

‐

‐

(1,102)

Model, methodology and policy changes

‐

(3,701)

‐

‐

(3,701)

‐

 2,065

(1,636)

Acquisitions/Disposals

‐

‐

‐

‐

‐

‐

‐

‐

Foreign currency translation

(2,085)

(1,243)

‐

(1,106)

(4,434)

‐

‐

(4,434)

Other, non-credit risk movements

‐

‐

‐

328

328

 316

 871

1,515

31 December 2021

125,813

42,731

756

50,288

219,588

27,116

24,529

271,233

Assets growth mix

(3,772)

(263)

114

(4,073)

(7,994)

‐

‐

(7,994)

Asset quality

(4,967)

46

‐

(15)

(4,936)

‐

‐

(4,936)

Risk-weighted assets efficiencies

‐

‐

‐

‐

‐

‐

‐

‐

Model, methodology and policy changes

4,097

2,713

‐

41

6,851

‐

(400)

6,451

Acquisitions/Disposals

‐

‐

‐

‐

‐

‐

‐

‐

Foreign currency translation

(931)

(403)

‐

(919)

(2,253)

‐

‐

(2,253)

Other, non-credit risk movements

386

-

‐

(1,005)

(619)

61

(1,110)

(1,668)

31 March 2022

120,626

44,824

870

44,317

210,637

27,177

23,019

260,833

1  Following the increased strategic importance and reporting of Ventures to management, this has been established as a separate operating segment in 2022. Prior periods have been restated.

 

 

 

Page 39

 

Capital review continued

UK leverage ratio

 

31.03.22
$million

31.12.21
$million

Change2
%

31.03.21
$million

Change2
%

Tier 1 capital (transitional)

41,531

45,153

(8)

45,004

(8)

Additional Tier 1 capital subject to phase out

‐

(557)

(100)

(557)

(100)

Tier 1 capital (end point)

41,531

44,596

(7)

44,447

(7)

Derivative financial instruments

62,360

52,445

19

59,872

4

Derivative cash collateral

11,307

9,217

23

9,860

15

Securities financing transactions (SFTs)

96,002

88,418

9

69,560

38

Loans and advances and other assets

669,448

677,738

(1)

665,611

1

Total on-balance sheet assets

839,117

827,818

1

804,903

4

Regulatory consolidation adjustments1

(61,820)

(63,704)

(3)

(65,121)

(5)

Derivatives adjustments

 

 

 

 

 

(35,936)

(34,819)

3

(38,602)

(7)

(9,070)

(17,867)

(49)

(18,260)

(50)

1,712

1,534

12

1,999

(14)

44,305

50,857

(13)

47,527

(7)

Total derivatives adjustments

1,011

(295)

(443)

(7,336)

(114)

Counterparty risk leverage exposure measure for SFTs

20,152

13,724

47

9,505

112

Off-balance sheet items

144,398

139,505

4

129,403

12

Regulatory deductions from Tier 1 capital

(7,031)

(5,908)

19

(5,710)

23

UK leverage exposure (end point)

935,827

911,140

3

865,644

8

UK leverage ratio (end point)2

4.4%

4.9%

(0.5)

5.1%

(0.7)

UK leverage exposure quarterly average

927,282

897,992

3

864,008

7

UK leverage ratio quarterly average2

4.6%

5.0%

(0.4)

5.1%

(0.5)

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

 

 

 

 

 

 

 

 

 

 

 

 

Page 40

 

Financial statements

Condensed consolidated interim income statement

For the three months ended 31 March 2022

 

3 months ended 31.03.22
$million

3 months ended 31.03.21
$million

Interest income

2,693

2,532

Interest expense

(905)

(874)

Net interest income

1,788

1,658

Fees and commission income

1,093

1,181

Fees and commission expense

(179)

(168)

Net fee and commission income

914

1,013

Net trading income

1,451

999

Other operating income

139

269

Operating income

4,292

3,939

Staff costs

(1,914)

(1,826)

Premises costs

(92)

(89)

General administrative expenses

(355)

(320)

Depreciation and amortisation

(304)

(293)

Operating expenses

(2,665)

(2,528)

Operating profit before impairment losses and taxation

1,627

1,411

Credit impairment

(197)

(17)

Goodwill, property, plant and equipment and other impairment

(6)

(28)

Profit from associates and joint ventures

68

47

Profit before taxation

1,492

1,413

Taxation

(313)

(314)

Profit for the period

1,179

1,099

 

 

 

Profit attributable to:

 

 

Non-controlling interests

3

7

Parent company shareholders

1,176

1,092

Profit for the period

1,179

1,099

 

 

cents

cents

Earnings per share:

 

 

Basic earnings per ordinary share

34.6

32.6

Diluted earnings per ordinary share

34.1

32.1

 

 

 

 

 

 

 

 

 

 

Page 41

Financial statements continued

Condensed consolidated interim statement of comprehensive income

For the three months ended 31 March 2022

 

3 months ended 31.03.22
$million

3 months ended 31.03.21
$million

Profit for the period

1,179

1,099

Other comprehensive income

 

 

Items that will not be reclassified to income statement:

137

177

Own credit gains/(losses) on financial liabilities designated at fair value through profit or loss

128

(9)

Equity instruments at fair value through other comprehensive income

‐

117

Actuarial gains on retirement benefit obligations

35

79

Taxation relating to components of other comprehensive income

(26)

(10)

Items that may be reclassified subsequently to income statement:

(1,345)

(632)

Exchange differences on translation of foreign operations:

 

 

Net losses taken to equity

(540)

(414)

Net gains on net investment hedges

212

119

Share of other comprehensive loss from associates and joint ventures

(82)

(4)

Debt instruments at fair value through other comprehensive income

 

 

Net valuation losses taken to equity

(748)

(303)

Reclassified to income statement

(31)

(126)

Net impact of expected credit losses

(15)

2

Cash flow hedges:

 

 

Net (losses)/gains taken to equity

(248)

37

Reclassified to income statement

8

15

Taxation relating to components of other comprehensive income

99

42

Other comprehensive income for the period, net of taxation

(1,208)

(455)

Total comprehensive income for the period

(29)

644

 

 

 

Total comprehensive income attributable to:

 

 

Non-controlling interests

(13)

9

Parent company shareholders

(16)

635

Total comprehensive income for the period

(29)

644

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 42

Financial statements continued

Condensed consolidated interim balance sheet

As at 31 March 2022

 

31.03.22
$million

31.12.21
$million

Assets

 

 

Cash and balances at central banks

69,580

72,663

Financial assets held at fair value through profit or loss

126,535

129,121

Derivative financial instruments

62,360

52,445

Loans and advances to banks

35,638

44,383

Loans and advances to customers

295,785

298,468

Investment securities

169,119

163,437

Other assets

62,820

49,932

Current tax assets

639

766

Prepayments and accrued income

2,156

2,176

Interests in associates and joint ventures

2,150

2,147

Goodwill and intangible assets

5,502

5,471

Property, plant and equipment

5,460

5,616

Deferred tax assets

864

859

Assets classified as held for sale

509

334

Total assets

839,117

827,818

 

 

 

Liabilities

 

 

Deposits by banks

28,930

30,041

Customer accounts

456,404

474,570

Repurchase agreements and other similar secured borrowing

3,400

3,260

Financial liabilities held at fair value through profit or loss

86,893

85,197

Derivative financial instruments

63,278

53,399

Debt securities in issue

63,496

61,293

Other liabilities

63,765

44,314

Current tax liabilities

414

348

Accruals and deferred income

3,725

4,651

Subordinated liabilities and other borrowed funds

15,610

16,646

Deferred tax liabilities

763

800

Provisions for liabilities and charges

420

453

Retirement benefit obligations

179

210

Total liabilities

787,277

775,182

 

 

 

Equity

 

 

Share capital and share premium account

6,990

7,022

Other reserves

10,625

11,805

Retained earnings

27,562

27,184

Total parent company shareholders' equity

45,177

46,011

Other equity instruments

6,254

6,254

Total equity excluding non-controlling interests

51,431

52,265

Non-controlling interests

409

371

Total equity

51,840

52,636

Total equity and liabilities

839,117

827,818

 

 

 

 

 

Page 43

 

Financial statements continued

Condensed consolidated statement of changes in equity

For the three months ended 31 March 2022

 

Ordinary share capital and share premium account
$million

Preference share capital and share premium account
$million

Capital and merger reserves1
$million

Own credit adjustment reserve
$million

Fair value through other comprehensive income reserve - debt
$million

Fair value through other comprehensive income reserve - equity
$million

Cash flow hedge reserve
$million

Translation reserve
$million

Retained earnings
$million

Parent company shareholders' equity
$million

Other
equity
instruments
$million

Non-controlling
interests
$million

Total
$million

As at 01 January 2021

5,564

1,494

17,207

(52)

529

148

(52)

(5,092)

26,140

45,886

4,518

325

50,729

Profit/(loss) for the period

‐

‐

‐

‐

‐

‐

‐

‐

2,315

2,315

‐

(2)

2,313

Other comprehensive income/(loss)

‐

‐

‐

37

(426)

101

18

(662)

1752

(757)

‐

(15)

(772)

Distributions

‐

‐

‐

‐

‐

‐

‐

‐

‐

‐

‐

(31)

(31)

Other equity instruments issued, net of expenses

‐

‐

‐

‐

‐

‐

‐

‐

‐

‐

2,728

‐

2,728

Redemption of other equity instruments

‐

‐

‐

‐

‐

‐

‐

‐

(51)

(51)

(992)

‐

(1,043)

Treasury shares purchased

‐

‐

‐

‐

‐

‐

‐

‐

(242)

(242)

‐

‐

(242)

Treasury shares issued

‐

‐

‐

‐

‐

‐

‐

‐

7

7

‐

‐

7

Share option expenses

‐

‐

‐

‐

‐

‐

‐

‐

147

147

‐

‐

147

Dividends on ordinary shares

‐

‐

‐

‐

‐

‐

‐

‐

(374)

(374)

‐

‐

(374)

Dividends on preference shares and AT1 securities

‐

‐

‐

‐

‐

‐

‐

‐

(410)

(410)

‐

‐

(410)

Share buy-back3,4

(39)

‐

39

‐

‐

‐

‐

‐

(506)

(506)

‐

‐

(506)

Other movements

3

‐

‐

‐

‐

‐

‐

10

(17)5

(4)

‐

946

90

As at 31 December 2021

5,528

1,494

17,246

(15)

103

249

(34)

(5,744)

27,184

46,011

6,254

371

52,636

Profit for the period

‐

‐

‐

‐

‐

‐

‐

‐

1,176

1,176

‐

3

1,179

Other comprehensive income/(loss)

‐

‐

‐

107

(814)

12

(204)

(313)

202

(1,192)

‐

(16)

(1,208)

Distributions

‐

‐

‐

‐

‐

‐

‐

‐

‐

‐

‐

(2)

(2)

Share option expenses

‐

‐

‐

‐

‐

‐

‐

‐

58

58

‐

‐

58

Dividends on preference shares and AT1 securities

‐

‐

‐

‐

‐

‐

‐

‐

(121)

(121)

‐

‐

(121)

Share buy-back7

(32)

‐

32

‐

‐

‐

‐

‐

(753)

(753)

‐

‐

(753)

Other movements

‐

‐

‐

‐

‐

‐

‐

‐

(2)8

(2)

‐

539

51

As at 31 March 2022

5,496

1,494

17,278

92

(711)

261

(238)

(6,057)

27,562

45,177

6,254

409

51,840

1  Includes capital reserve of $5 million, capital redemption reserve of $162 million and merger reserve of $17,111 million

2  Comprises actuarial gain, net of taxation on Group defined benefit schemes

3  On 25 February 2021, 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 $19 million, and the total consideration paid was $255 million (including $2 million of fees and stamp duty). The total number of shares purchased was 37,148,399 representing 1.18 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 3 August 2021, the Group announced the buy-back programme for a share buy-back of its ordinary shares of $0.50 each. Nominal value of share purchases was $20 million, and the total consideration paid was $251 million (including $1 million of fees and stamp duty). The total number of shares purchased was 39,914,763 representing 1.28 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 related to non-controlling interest from Mox Bank Limited ($21 million), Trust Bank Singapore Ltd ($70 million) and Zodia Markets Holdings Ltd ($3 million)

7  On 18th February 2022, the Group announced the buy-back programme ($750 million) for a share buy-back of its ordinary shares of $0.50 each. As at Q1 2022 the buyback is ongoing but the total number of shares purchased was 63,908,272 representing 2.08% per cent of the ordinary shares in issue. The total consideration paid for the buyback till 31st March 2022, was $433 million (including $2.5 million of fees and stamp duty), and a further $320 million relating to irrevocable obligation to buy back shares under the current buy-back programme has been recognised. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account

8  Movement related to AT1 Securities charges

9  Movements related to non-controlling interest from Mox Bank Limited ($29 million), Trust Bank Singapore Ltd ($24 million)

 

 

 

 

 

 

 

 

 

Page 44
 

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 three months ended 31 March 2022. 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 significant accounting policies are described in the Annual Report 2021, 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 2022 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 document does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2021, which contained an unqualified audit report under Section 495 of the Companies Act 2006 (which did not make any statements under Section 498 of the Companies Act 2006) have been delivered to the Registrar of Companies in accordance with Section 441 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, the impact of COVID 19, 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 28 April 2022. For this reason, the Group continues to adopt the going concern basis of accounting for preparing the interim financial information.

 

 

 

 

 

 

 

 

Page 45

 

Other supplementary financial information

Average balance sheets and yields

Average assets

 

3 months ended 31.03.22

Average
non-interest earning balance
$million

Average interest earning balance
$million

Interest income
$million

Gross yield interest earning balance
%

Gross yield total balance
%

Cash and balances at central banks

24,377

55,336

40

0.29

0.20

Gross loans and advances to banks

27,908

44,546

155

1.41

0.87

Gross loans and advances to customers

64,134

307,108

1,888

2.49

2.06

Impairment provisions against loans and advances to banks and customers

‐

(5,697)

‐

‐

‐

Investment securities

33,811

167,927

610

1.47

1.23

Property, plant and equipment and intangible assets

8,689

‐

‐

-

-

Prepayments, accrued income and other assets

119,626

‐

‐

-

-

Investment associates and joint ventures

2,201

‐

‐

-

-

Total average assets

280,746

569,220

2,693

1.92

1.28

 

 

3 months ended 31.12.21

Average
non-interest earning balance
$million

Average interest earning balance
$million

Interest income
$million

Gross yield interest earning balance
%

Gross yield total balance
%

Cash and balances at central banks

25,591

51,923

23

0.18

0.12

Gross loans and advances to banks

18,842

45,544

121

1.05

0.75

Gross loans and advances to customers

62,368

309,420

1,853

2.38

1.98

Impairment provisions against loans and advances to banks and customers

‐

(4,942)

‐

‐

‐

Investment securities

33,746

163,774

544

1.32

1.09

Property, plant and equipment and intangible assets

8,730

‐

‐

-

-

Prepayments, accrued income and other assets

113,787

‐

‐

-

-

Investment associates and joint ventures

2,428

‐

‐

-

-

Total average assets

265,492

565,719

2,541

1.78

1.21

 

 

3 months ended 31.03.21

Average
non-interest earning balance
$million

Average interest earning balance
$million

Interest income
$million

Gross yield interest earning balance
%

Gross yield total balance
%

Cash and balances at central banks

21,459

53,521

19

0.14

0.10

Gross loans and advances to banks

23,919

52,248

148

1.15

0.79

Gross loans and advances to customers

50,958

299,535

1,845

2.50

2.13

Impairment provisions against loans and advances to banks and customers

‐

(6,654)

‐

‐

‐

Investment securities

31,704

157,681

520

1.34

1.11

Property, plant and equipment and intangible assets

9,120

‐

‐

-

-

Prepayments, accrued income and other assets

117,035

‐

‐

-

-

Investment associates and joint ventures

2,213

‐

‐

-

-

Total average assets

256,408

556,331

2,532

1.85

1.26

 

 

 

 

 

Page 46

Other supplementary financial information continued

Average liabilities

 

3 months ended 31.03.22

Average
non-interest bearing balance
$million

Average interest bearing balance
$million

Interest expense
$million

Rate paid bearing balance
%

Rate paid total balance
%

Deposits by banks

17,492

28,865

38

0.53

0.33

Customer accounts:

 

 

 

 

 

Current accounts and savings deposits

55,118

272,366

238

0.35

0.29

Time and other deposits

66,052

149,785

365

0.99

0.69

Debt securities in issue

6,331

61,990

138

0.90

0.82

Accruals, deferred income and other liabilities

127,208

1,075

12

4.53

0.04

Subordinated liabilities and other borrowed funds

‐

15,885

114

2.91

2.91

Non-controlling interests

391

‐

‐

-

-

Shareholders' funds

52,011

‐

‐

-

-

 

324,603

529,966

905

0.69

0.43

 

 

 

 

 

 

Adjustment for Financial Markets funding costs

 

 

(41)

 

 

Financial guarantee fees on interest earning assets

 

 

20

 

 

Total average liabilities and shareholders' funds

324,603

529,966

884

0.68

0.42

 

 

3 months ended 31.12.21

Average
non-interest bearing balance
$million

Average interest bearing balance
$million

Interest expense
$million

Rate paid bearing balance
%

Rate paid total balance
%

Deposits by banks

16,682

29,990

32

0.42

0.27

Customer accounts:

 

 

 

 

 

Current accounts and savings deposits

54,567

270,504

242

0.35

0.30

Time and other deposits

61,228

148,323

300

0.80

0.57

Debt securities in issue

6,143

56,550

141

0.99

0.89

Accruals, deferred income and other liabilities

116,572

1,104

13

4.67

0.04

Subordinated liabilities and other borrowed funds

‐

16,525

119

2.86

2.86

Non-controlling interests

284

‐

‐

-

-

Shareholders' funds

50,365

‐

‐

-

-

 

305,841

522,996

847

0.64

0.41

 

 

 

 

 

 

Adjustment for Financial Markets funding costs

 

 

(20)

 

 

Financial guarantee fees on interest earning assets

 

 

26

 

 

Total average liabilities and shareholders' funds

305,841

522,996

853

0.65

0.41

 

 

 

 

Page 47

 

Other supplementary financial information  continued

 

3 months ended 31.03.21

Average
non-interest bearing balance
$million

Average interest bearing balance
$million

Interest expense
$million

Rate paid bearing balance
%

Rate paid total balance
%

Deposits by banks

16,816

31,562

27

0.35

0.23

Customer accounts:

 

 

 

 

 

Current accounts and savings deposits

48,825

252,807

186

0.30

0.25

Time and other deposits

53,391

148,789

375

1.02

0.75

Debt securities in issue

5,967

59,388

151

1.03

0.94

Accruals, deferred income and other liabilities

122,026

1,081

13

4.88

0.04

Subordinated liabilities and other borrowed funds

‐

15,998

122

3.09

3.09

Non-controlling interests

338

‐

‐

-

-

Shareholders' funds

51,163

‐

‐

-

-

 

298,526

509,625

874

0.70

0.44

 

 

 

 

 

 

Adjustment for Financial Markets funding costs

 

 

(35)

 

 

Financial guarantee fees on interest earning assets

 

 

23

 

 

Total average liabilities and shareholders' funds

298,526

509,625

862

0.69

0.43

 

 

 

 

 

 

 

 

Page 48

 

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 2021 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 49

 

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 (0) 20 7885 5172

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

 

 

 

Page 50

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