Interim Results 2009 - Part 4

RNS Number : 8072W

Standard Chartered PLC

04 August 2009

Standard Chartered PLC - Notes

1. Basis of preparation

The Group condensed consolidated interim financial statements (interim financial statements) consolidate those of Standard Chartered PLC (the Company) and its subsidiaries (together referred to as the Group), equity account the Group's interest in associates and proportionately consolidate interests in jointly controlled entities.

These interim financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the FSA and with IAS 34 'Interim Financial Reporting' as adopted by the European Union (EU). They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2008, which were prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretation Committee (IFRIC) interpretations as adopted by the EU.

These interim financial statements were approved by the Board of Directors on 4 August 2009.

Except as noted below, the accounting policies applied by the Group in these interim financial statements are the same as those applied by the Group in its consolidated financial statements as at, and for, the year ended 31 December 2008.

From 1 January 2009 the Group retrospectively adopted IAS 1 'Presentation of Financial Statements' (revised 2007) and a consequential amendment to IAS 34. As a result, in the Group's interim financial statements certain terminology has changed and a statement of changes in equity has been included as a primary statement.

On 1 January 2009 the Group retrospectively adopted IFRS 8 'Operating Segments' which did not have a material impact on the Group's interim financial statements.

On 1 January 2009 the Group retrospectively adopted IFRIC 13 'Customer Loyalty Programmes', IFRIC 16 'Hedges of a Net Investment in a Foreign Operation', amendments to IFRS 2 'Share Based Payment: Vesting Conditions and Cancellations', amendment to IAS 27 'Consolidated and Separate Financial Statements', IAS 23 (revised) 'Borrowing Costs' and amendment to IAS 32 'Financial Instruments: Presentation', none of which had a material impact on the Group's interim financial statements.

On 1 January 2009 the Group prospectively adopted amendments to IFRS 7 'Financial Instruments: Disclosures', and the required disclosures will be presented in the Group's 2009 Annual Report.

On 1 January 2009, the Group adopted Improvements to IFRSs (2008), a collection of amendments to a number of IFRSs. The amendments to IAS 19, IAS 20, IAS 28, IAS 31, IAS 32, and IAS 40 were applied on a prospective basis and the amendments to IAS 1, IAS 7, IAS 16, IAS 19, IAS 23, IAS 27, IAS 29, IAS 36, IAS 38 and IAS 39 were applied on a retrospective basis. None of these amendments has had a material impact on the Group's interim financial statements. However, the amendment to IAS 7 resulted in a reclassification in the cash flow statement of cash flows between investing and operating activities. Further details are provided in note 37.

In July 2009, the IASB proposed issuing an exposure draft amending IAS 32 to permit rights issues denominated in a foreign currency to be accounted for within equity, rather than creating a derivative liability. This exposure draft is expected to permit retrospective application and to be finalised in late September 2009. Subject to EU endorsement, this would enable the $233 million rights issue option recognised in the income statement in 2008 (see note 7) to be restated and reclassified into equity in the Group's 2009 Annual Report.

The condensed consolidated balance sheet at 30 June 2008 has also been restated to reflect the re-presentation of deferred tax balances as explained in note 37.

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgements made by management in applying the Group's accounting policies and key sources of uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2008.

A summary of the Group's significant accounting policies will be included in the 2009 Annual Report.

2. Segmental information

The Group is organised on a worldwide basis for management and reporting purposes into two main business segments: Consumer Banking and Wholesale Banking. The Group evaluates segmental performance on the basis of profit or loss before taxation, excluding corporate items not allocated. The types of products and services within these segments are set out in the table below. Corporate items not allocated are not aggregated into products because of the one-off nature of these items. The details of a substantial proportion of items included within this segment is provided in note 4. The Group's entity-wide disclosure comprises geographic areas, classified by the location of the customer.

By class of business

	30.06.09					30.06.08
	Consumer Banking $million	Wholesale Banking $million	Total reportable segments $million	Corporate items not allocated $million	Total $million	Consumer Banking $million	Wholesale Banking $million	Total reportable segments $million	Corporate items not allocated $million	Total $million
Internal income	(33)	33	-	-	-	(31)	31	-	-	-
Net interest income	1,902	1,798	3,700	-	3,700	2,178	1,532	3,710	-	3,710
Non-interest income	816	3,196	4,012	248	4,260	1,030	2,101	3,131	146	3,277
Operating income	2,685	5,027	7,712	248	7,960	3,177	3,664	6,841	146	6,987
Operating expenses	(1,780)	(2,247)	(4,027)	-	(4,027)	(1,961)	(1,939)	(3,900)	-	(3,900)
Operating profit before impairment losses and taxation	905	2,780	3,685	248	3,933	1,216	1,725	2,941	146	3,087
Impairment losses on loans and advances and other credit risk provisions	(563)	(525)	(1,088)	-	(1,088)	(412)	(53)	(465)	-	(465)
Other impairment	6	(6)	-	(15)	(15)	(2)	(24)	(26)	-	(26)
Profit/(loss) from associates	-	-	-	8	8	-	-	-	(10)	(10)
Profit before taxation	348	2,249	2,597	241	2,838	802	1,648	2,450	136	2,586
Total assets employed,*	93,094	316,315	409,409	1,811	411,220	91,380	303,778	395,158	1,662	396,820
Total liabilities employed*	138,974	247,588	386,562	768	387,330	122,827	252,262	375,089	826	375,915
Other segment items:
Capital expenditure+	78	559	637	-	637	157	742	899	-	899
Depreciation	86	62	148	-	148	74	36	110	-	110
Investments in associates	-	-	-	487	487	-	-	-	271	271
Amortisation of intangible assets	40	47	87	-	87	36	55	91	-	91

*	Amounts have been restated as explained in note 37.
**	Interests in associates for 30 June 2008 amounting $271 million previously allocated by business has now been included in 'Corporate items not allocated.'
+	Includes capital expenditure in Wholesale Banking of $464 million in respect of operating lease assets (30 June 2008: $605 million).

2. Segmental information continued

	31.12.08
	Consumer Banking $million	Wholesale Banking $million	Total reportable segments $million	Corporate items not allocated $million	Total $million
Internal income	(47)	47	-	-	-
Net interest income	2,046	1,631	3,677	-	3,677
Non-interest income	776	2,147	2,923	381	3,304
Operating income	2,775	3,825	6,600	381	6,981
Operating expenses	(1,882)	(1,829)	(3,711)	-	(3,711)
Operating profit before impairment losses and taxation	893	1,996	2,889	381	3,270
Impairment losses on loans and advances and other credit risk provisions	(525)	(331)	(856)	-	(856)
Other impairment	(54)	(312)	(366)	(77)	(443)
Profit from associates	-	-	-	11	11
Operating profit	314	1,353	1,667	315	1,982
Rights issue option	-	-	-	233	233
Profit before taxation	314	1,353	1,667	548	2,215
Total assets employed*	86,402	346,731	433,133	1,935	435,068
Total liabilities employed	129,029	282,656	411,685	688	412,373
Other segment items:
Capital expenditure+	218	465	683	-	683
Depreciation	83	57	140	-	140
Investments in associates	-	-	-	511	511
Amortisation of intangible assets	57	27	84	-	84

*	interests in associates for 31 December 2008 amounting $511 million previously allocated by business has now been included in 'Corporate items not allocated.'
+	Includes capital expenditure in Wholesale Banking of $247 million in respect of operating lease assets.

The following table details entity-wide operating income by product:

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Consumer Banking
Cards, Personal Loans and unsecured Lending	954	1,089	1,017
Wealth Management and Deposits	1,100	1,500	1,289
Mortgages and Auto Finance	540	515	413
Other	91	73	56
Total operating income by product	2,685	3,177	2,775
Wholesale Banking
Lending and Portfolio Management	412	246	305
Transaction Banking	1,272	1,249	1,414
Global Markets
Financial Markets	2,036	1,213	1,152
Asset and Liability Management (ALM)	557	514	398
Corporate Finance	615	365	380
Principal Finance	135	77	176
Total Global Markets	3,343	2,169	2,106
Total operating income by product	5,027	3,664	3,825

2. Segmental information continued

Entity-wide information by geographical area

The Group manages its reportable business segments on a global basis. The operations are based in eight main geographical areas. The UK is the home country of the Company.

	30.06.09
	Asia Pacific
	Hong Kong $million	Singapore $million	Korea $million	Other Asia Pacific* $million	India $million	Middle East & Other S Asia $million	Africa $million	Americas UK & Europe** $million	Total $million
Internal income	8	(30)	(37)	42	82	13	30	(108)	-
Net interest income	695	341	431	731	344	537	232	389	3,700
Fees and commission income, net	225	180	98	213	337	264	165	203	1,685
Net trading income	252	240	154	281	110	234	112	357	1,740
Other operating income	43	152	59	247	31	95	19	189	835
Operating income	1,223	883	705	1,514	904	1,143	558	1,030	7,960
Operating expenses	(567)	(430)	(439)	(932)	(287)	(463)	(269)	(640)	(4,027)
Operating profit before impairment losses and taxation	656	453	266	582	617	680	289	390	3,933
Impairment losses on loans and advances and other credit risk provisions	(88)	(23)	(185)	(191)	(97)	(460)	(24)	(20)	(1,088)
Other impairment	10	-	-	14	6	-	-	(45)	(15)
(Loss)/profit from associates	(2)	-	-	11	-	-	-	(1)	8
Profit before taxation	576	430	81	416	526	220	265	324	2,838
Loans and advances to customers - average	28,113	23,538	30,809	37,285	8,285	17,561	3,380	26,699	175,670
Net interest margins (%)	1.8	1.3	1.6	2.1	3.3	3.1	4.7	0.4	2.4
Loans and advances to customers - period end	29,203	26,294	31,505	37,731	8,217	18,113	3,743	30,146	184,952
Loans and advances to banks - period end	18,288	7,115	2,665	5,830	323	1,774	637	9,644	46,276
Total assets employed+	88,112	65,855	68,440	78,293	29,656	49,258	13,817	101,373	494,804
Capital expenditure++	23	63	16	12	15	8	17	483	637

*	Other APR includes Malaysia: operating income of $270 million; operating expenses of $(104) million, impairment losses on loans and advances and other credit risk provisions of $(28) million and profit before taxation of $138 million; Total assets employed $13,864 million.
**	Americas UK & Europe includes operating income of $584 million and total assets employed of $69,519 million in respect of the UK, the Company's country of domicile.
+	Total assets employed includes intra-group items of $84,908 million and excludes tax assets of $1,324 million.
++	Includes capital expenditure in Americas, UK & Europe of $464 million in respect of operating lease assets.

2. Segmental information continued

	30.06.08
	Asia Pacific
	Hong Kong $million	Singapore $million	Korea $million	Other Asia Pacific* $million	India $million	Middle East & Other S Asia $million	Africa $million	Americas UK & Europe** $million	Total $million
Internal income	8	55	(54)	9	6	9	-	(33)	-
Net interest income	642	179	690	797	370	488	247	297	3,710
Fees and commission income, net	297	135	114	284	276	251	108	216	1,681
Net trading income	230	133	93	387	163	139	78	(72)	1,151
Other operating income	42	144	24	56	160	1	1	17	445
Operating income	1,219	646	867	1,533	975	888	434	425	6,987
Operating expenses	(498)	(324)	(568)	(828)	(322)	(422)	(274)	(664)	(3,900)
Operating profit before impairment losses and taxation	721	322	299	705	653	466	160	(239)	3,087
Impairment losses on loans and advances and other credit risk provisions	(55)	(5)	(90)	(183)	(47)	(80)	(2)	(3)	(465)
Other impairment	-	-	-	(18)	-	-	(1)	(7)	(26)
(Loss)/profit from associates	(10)	-	-	1	-	-	-	(1)	(10)
Profit/(loss) before taxation	656	317	209	505	606	386	157	(250)	2,586
Loans and advances to customers - average	25,344	18,997	37,973	39,484	8,711	14,938	2,475	28,998	176,920
Net interest margins (%)	2.3	1.6	2.3	2.4	3.9	3.3	4.8	0.1	2.5
Loans and advances to customers - period end	26,267	19,221	35,116	40,176	8,738	15,160	3,722	28,820	177,220
Loans and advances to banks - period end	11,728	4,689	3,312	5,977	376	2,839	560	23,745	53,226
Total assets employed+,#	62,720	51,626	73,258	80,995	32,080	37,943	12,504	124,877	476,003
Capital expenditure++	13	59	11	104	19	23	19	651	899

*	Other APR includes Malaysia: operating income of $278 million; operating expenses of $(104) million, impairment losses on loans and advances and other credit risk provisions of $(22) million and profit before taxation of $152 million. Total assets employed $16,320 million.
**	Americas UK & Europe includes operating income of $37 million and total assets employed of $92,092 million in respect of the UK, the Company's country of domicile.
+	Total assets employed includes intra-group items of $80,574 million and excludes tax assets of $1,391 million.
++	Includes capital expenditure in Americas, UK & Europe of $605 million in respect of operating lease assets.
#	Amounts have been restated as explained in note 37.

2. Segmental information continued

	31.12.08
	Asia Pacific
	Hong Kong $million	Singapore $million	Korea $million	Other Asia Pacific* $million	India $million	Middle East & Other S Asia $million	Africa $million	Americas UK & Europe** $million	Total $million
Internal income	(7)	50	(55)	16	6	7	2	(19)	-
Net interest income	654	185	544	778	354	503	256	403	3,677
Fees and commission income, net	210	111	69	217	174	201	119	159	1,260
Net trading income	139	335	98	307	187	119	88	(19)	1,254
Other operating income	52	99	53	102	50	16	10	408	790
Operating income	1,048	780	709	1,420	771	846	475	932	6,981
Operating expenses	(519)	(313)	(387)	(893)	(324)	(391)	(290)	(594)	(3,711)
Operating profit before impairment losses and taxation	529	467	322	527	447	455	185	338	3,270
Impairment losses on loans and advances and other credit risk provisions	(128)	(10)	(173)	(253)	(86)	(105)	(31)	(70)	(856)
Other impairment	(52)	(30)	-	(84)	(24)	-	1	(254)	(443)
(Loss)/profit from associates	9	-	-	3	-	-	-	(1)	11
Operating profit/(loss)	358	427	149	193	337	350	155	13	1,982
Rights issue option	-	-	-	-	-	-	-	233	233
Profit/(loss) before taxation	358	427	149	193	337	350	155	246	2,215
Loans and advances to customers - average	27,862	20,216	31,795	40,741	8,514	17,132	3,700	30,931	180,891
Net interest margins (%)	2.0	0.6	2.6	2.4	3.0	2.8	4.2	0.7	2.4
Loans and advances to customers - period end	28,004	20,349	31,763	38,366	7,863	17,476	3,642	31,049	178,512
Loans and advances to banks - period end	18,963	9,283	1,594	5,201	291	1,504	587	10,523	47,946
Total assets employed+	76,162	57,422	70,438	82,667	31,362	38,194	12,154	147,934	516,333
Capital expenditure++	12	81	48	66	159	17	12	288	683

*	Other APR includes Malaysia: operating income of $237 million; operating expenses of $(108) million, impairment losses on loans and advances and other credit risk provisions of $(46) million and profit before taxation of $83 million. Total assets employed $13,935 million.
**	Americas UK & Europe includes operating income of $517 million and total assets employed of $110,211 million in respect of the UK, the Company's country of domicile.
+	Total assets employed includes intra-group items of $82,689 million and excludes tax assets of $1,424 million.
++	Includes capital expenditure in Americas, UK & Europe of $247 million in respect of operating lease assets.

Apart from the entities that have been acquired in the last two years, Group central expenses have been distributed between reportable segments and geographic areas in proportion to their direct costs, and the benefit of the Group's capital has been distributed between reportable segments and geographic areas in proportion to their average risk weighted assets. In the year in which an acquisition is made the Group does not charge or allocate the benefit of the Group's capital. The distribution of central expenses is phased in over two years, based on an estimate of central management costs associated with the acquisition.

For the six months ended 30 June 2009, corporate items not allocated to the businesses relates to the gain on buy back of subordinated debt, impairment of associates and profit from associates.

Assets held at the centre have been distributed between geographic areas in proportion to their total assets employed.

Capital expenditure comprises additions to property and equipment, and software related intangibles, including any post-acquisition additions made by acquired entities.

2. Segmental information continued

The following tables set out the structure of the Group's deposits by principal geographic areas as at 30 June 2009, 30 June 2008 and 31 December 2008.

By geographic area

	30.06.09
	Asia Pacific
	Hong Kong $million	Singapore $million	Korea $million	Other Asia Pacific* $million	India $million	Middle East & Other S Asia $million	Africa $million	Americas UK & Europe $million	Total $million
Non interest bearing current and demand accounts	4,433	3,837	69	3,382	2,204	5,874	1,867	2,575	24,241
Interest bearing current accounts and savings deposits	37,148	13,139	15,796	23,890	1,798	3,092	3,688	12,425	110,976
Time deposits	25,365	20,064	13,283	27,865	5,827	10,260	1,727	25,335	129,726
Other deposits	51	108	517	1,178	165	604	139	2,233	4,995
Total	66,997	37,148	29,665	56,315	9,994	19,830	7,421	42,568	269,938
Deposits by banks	1,961	1,755	8,591	4,532	84	1,000	523	15,520	33,966
Customer accounts	65,036	35,393	21,074	51,783	9,910	18,830	6,898	27,048	235,972
	66,997	37,148	29,665	56,315	9,994	19,830	7,421	42,568	269,938
Debt securities in issue	252	1,546	11,406	1,987	543	114	257	8,557	24,662
Total	67,249	38,694	41,071	58,302	10,537	19,944	7,678	51,125	294,600

*	Other APR includes Malaysia: deposits by banks $590 million; customer accounts $8,406 million; debt securities in issue $395 million.

	30.06.08
	Asia Pacific
	Hong Kong $million	Singapore $million	Korea $million	Other Asia Pacific* $million	India $million	Middle East & Other S Asia $million	Africa $million	Americas UK & Europe $million	Total $million
Non interest bearing current and demand accounts	4,059	3,137	121	2,939	2,729	5,631	2,154	3,267	24,037
Interest bearing current accounts and savings deposits	20,704	9,415	11,860	19,880	1,945	3,820	2,867	18,671	89,162
Time deposits	23,743	14,821	13,971	31,576	4,482	11,310	1,425	29,971	131,299
Other deposits	30	92	673	667	519	771	415	3,567	6,734
Total	48,536	27,465	26,625	55,062	9,675	21,532	6,861	55,476	251,232
Deposits by banks	838	5,367	7,266	8,848	182	2,348	598	15,025	40,472
Customer accounts	47,698	22,098	19,359	46,214	9,493	19,184	6,263	40,451	210,760
	48,536	27,465	26,625	55,062	9,675	21,532	6,861	55,476	251,232
Debt securities in issue	120	1,698	18,749	3,181	1,357	27	65	11,166	36,363
Total	48,656	29,163	45,374	58,243	11,032	21,559	6,926	66,642	287,595

*	Other APR includes Malaysia: deposits by banks $924 million; customer accounts $9,220 million; debt securities in issue $1,257 million.

2. Segmental information continued

	31.12.08
	Asia Pacific
	Hong Kong $million	Singapore $million	Korea $million	Other Asia Pacific* $million	India $million	Middle East & Other S Asia $million	Africa $million	Americas UK & Europe $million	Total $million
Non interest bearing current and demand accounts	4,947	3,550	64	3,299	2,215	5,313	2,031	2,776	24,195
Interest bearing current accounts and savings deposits	27,131	9,340	14,094	22,030	1,634	2,888	2,632	13,343	93,092
Time deposits	31,471	20,875	13,187	32,725	5,313	9,574	1,335	30,726	145,206
Other deposits	52	92	1,079	727	677	1,320	75	8,062	12,084
Total	63,601	33,857	28,424	58,781	9,839	19,095	6,073	54,907	274,577
Deposits by banks	1,140	1,701	8,478	4,748	254	1,687	193	17,785	35,986
Customer accounts	62,461	32,156	19,946	54,033	9,585	17,408	5,880	37,122	238,591
	63,601	33,857	28,424	58,781	9,839	19,095	6,073	54,907	274,577
Debt securities in issue	530	1,291	12,656	1,849	622	29	145	9,947	27,069
Total	64,131	35,148	41,080	60,630	10,461	19,124	6,218	64,854	301,646

*	Other APR includes Malaysia: deposits by banks $593 million; customer accounts $8,665 million; debt securities in issue $617 million.

3. Net trading income

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Gains less losses on instruments held for trading:
Foreign currency	916	1,076	1,520
Trading securities	224	(10)	248
Interest rate derivatives	361	61	(463)
Credit and other derivatives	253	72	(102)
	1,754	1,199	1,203
Gains less losses from fair value hedging:
Gains less losses from fair value hedged items	511	397	(1,536)
Gains less losses from fair value hedging instruments	(542)	(413)	1,558
	(31)	(16)	22
Gains less losses on instruments designated at fair value:
Financial assets designated at fair value through profit or loss	(56)	14	136
Financial liabilities designated at fair value through profit or loss	42	(52)	(66)
Derivatives managed with financial instruments designated at fair value through profit or loss	31	6	(41)
	17	(32)	29
	1,740	1,151	1,254

4. Other operating income

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Other operating income includes:
Gains less losses on available-for-sale financial assets:
On disposal	391	154	168
Writedowns on asset backed securities	-	(49)	-
Dividend income	85	85	118
Gains arising on repurchase of subordinated liabilities	248	-	384
Gains arising on assets fair valued at acquisition	18	47	33
Initial recognition of Visa Inc. shares	-	17	-
Rental income from operating lease assets	67	16	51
(Loss)/profit on sale of businesses	(2)	146	-

Profit on sale of businesses in the six months ended 30 June 2008 represents the gain on sale of the Group's Indian asset management business.

5. Depreciation and amortisation

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Premises	57	44	54
Equipment	91	66	86
Intangibles:
Software	53	50	44
Acquired on business combinations	34	41	40
	235	201	224

6. Other impairment

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Impairment losses on available-for-sale financial assets	30	19	398
Impairment of investment in associates	15	-	46
Other	2	7	(1)
	47	26	443
Recovery of impairment on disposal of equity investments	(32)	-	-
	15	26	443

Impairment losses on available-for-sale financial assets includes $7 million (30 June 2008: $18 million and 31 December 2008: $297 million) in relation to impairment of equity investments, $23 million (30 June 2008: $1 million and 31 December 2008: $40 million) impairment of asset backed securities, and $nil million (30 June 2008: $nil million and 31 December 2008: $61 million) on other debt securities. Recoveries of impairments of $32 million at 30 June 2009 are in respect of private and strategic equity investments sold during the six months to 30 June 2009 which had impairment provisions raised against them during 2008.

7. Rights issue option

On 26 November 2008, the Company invited shareholders to participate in a 30 for 91 rights issue of 470,014,830 shares at 390 pence each. The Company's functional currency is denominated in US dollars, whilst the capital raised through the rights issue was Sterling based. The Company was not therefore able to assert that it was delivering a fixed number of shares for a fixed amount of US dollar proceeds. As such, under IAS 32, the rights issue was an option, which was classified as a financial liability and not as a component of equity.

As the option was out-of-the-money at inception, an initial liability was established based on the difference between the share price when the documents were posted (as this created the legal obligation on the Company) and the rights price, with a corresponding charge to equity.

The option was fair valued through the income statement from this date until the rights issue closed for registration on 17 December 2008. This generated a gain of $233 million.

The net liability on settlement was credited to equity following its realisation by issuing shares of the Company. As a result, there was no overall impact on the Group or Company's shareholders' equity or the Company's distributable reserves.

As detailed in note 1, the IASB has proposed issuing an exposure draft amending IAS 32 in respect of the accounting for rights issues denominated in a foreign currency.

8. Taxation

Analysis of taxation charge in the period:

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
The charge for taxation based upon the profits for the period comprises:
Current tax:
United Kingdom corporation tax at 28 per cent (30 June 2008 and 31 December 2008: 28.5 per cent):
Current tax on income for the period	510	240	534
Adjustments in respect of prior periods (including double taxation relief)	34	(81)	(54)
Double taxation relief	(344)	(240)	(362)
Foreign tax:
Current tax on income for the period	694	720	501
Adjustments in respect of prior periods	14	(117)	-
	908	522	619
Deferred tax:
(Reversal)/origination of temporary differences	(50)	57	32
Adjustments in respect of prior periods	(11)	119	(59)
	(61)	176	(27)
Tax on profits on ordinary activities	847	698	592
Effective tax rate	29.8%	27.0%	26.7%

Foreign tax includes taxation on Hong Kong profits of $83 million (30 June 2008: $104 million, 31 December 2008: $52 million) provided at a rate of 16.5 per cent (30 June 2008: 16.5 per cent, 31 December 2008: 16.5 per cent) on the profits assessable in Hong Kong. From 1 April 2008, the United Kingdom corporation tax rate was reduced from 30 per cent to 28 per cent, which gave a blended 28.5 per cent tax rate for 2008.

9. Dividends

	6 months ended 30.06.09		6 months ended 30.06.08
Ordinary equity shares	Post-rights issue cents per share	$million	Post-rights issue cents per share*	Pre-rights issue cents per share	$million
Final dividend declared and paid during the period	42.32	801	42.27	56.23	793

	6 months ended 31.12.08
Ordinary equity shares	Post-rights issue cents per share*	Pre-rights issue cents per share	$million
Interim dividend declared and paid during the period	19.30	25.67	364

*	On a post-rights basis, the dividend has been adjusted by the ratio of shares outstanding immediately before the rights issue to the number of shares outstanding immediately following the rights issue.

Preference shares	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Non-cumulative irredeemable preference shares:
7 3/8 per cent preference shares of £1 each*	6	7	8
8 1/4 per cent preference shares of £1 each*	7	8	8
Non-cumulative redeemable preference shares:
8.125 per cent preference shares of $5 each*	38	5	27
7.014 per cent preference shares of $5 each	26	35	27
6.409 per cent preference shares of $5 each	24	24	24

*	Instruments classified as liabilities with dividends recorded as interest expense and accrued accordingly.

Dividends on ordinary equity and redeemable preference shares are recorded in the period in which they are declared and, in respect of the final dividend, have been approved by the shareholders. The 2008 interim dividend of 19.30 cents per ordinary share was paid to eligible shareholders on 9 October 2008 and the final dividend of 42.32 cents per ordinary share was paid to eligible shareholders on 15 May 2009.

The 2009 interim dividend of 21.23 cents per ordinary share will be paid in either sterling, Hong Kong dollars or US dollars on 8 October 2009 to shareholders on the UK register of members at the close of business on 14 August 2009 and to shareholders on the Hong Kong branch register of members at the opening of business in Hong Kong (9:00am Hong Kong time) on 17 August 2009.

It is intended that shareholders will be able to elect to receive ordinary shares credited as fully paid instead of all or part of the interim cash dividend. Details of the dividend arrangements will be sent to shareholders on or around 1 September 2009.

10. Earnings per ordinary share

	6 months ended 30.06.09			6 months ended 30.06.08
	Profit* $million	Weighted average number of shares ('000)	Per share amount cents	Profit* $million	Weighted average number of shares ('000)	Per share amount cents
Basic earnings per ordinary share
Pre-rights issue bonus earnings per ordinary share	1,883	1,906,239	98.8	1,785	1,413,387	126.3
Impact of rights issue bonus+	-	-	-	-	201,321	-
Post-rights issue bonus basic earnings per ordinary share	1,883	1,906,239	98.8	1,785	1,614,708	110.6
Effect of dilutive potential ordinary shares:
Options**	-	15,300	-	-	15,909	-
Diluted earnings per ordinary share	1,883	1,921,539	98.0	1,785	1,630,617	109.5

	6 months ended 31.12.08
	Profit* $million	Weighted average number of shares ('000)	Per share amount cents
Basic earnings per ordinary share
Pre-rights issue bonus earnings per ordinary share	1,513	1,423,531	106.3
Impact of rights issue bonus+	-	224,203	-
Post-rights issue bonus basic earnings per ordinary share	1,513	1,647,734	91.8
Effect of dilutive potential ordinary shares:
Options**	-	5,836	-
Diluted earnings per ordinary share	1,513	1,653,570	91.5

+	As required by IAS 33 'Earnings per Share' prior periods basic and diluted earnings per share have been re-presented to include the impact of the bonus element within the rights issue.
*	The profit amounts represent the profit attributable to ordinary shareholders and is therefore after the deduction of dividends payable to the holders of the non-cumulative redeemable preference shares (see note 9).
**	The impact of anti-dilutive options has been excluded from this amount as required by IAS 33 'Earnings per Share'.

There were no ordinary shares issued after the balance sheet date that would have significantly affected the number of ordinary shares used in the above calculations had they been issued prior to the end of the balance sheet period.

Normalised earnings per ordinary share

The Group measures earnings per share on a normalised basis. This differs from earnings defined in IAS 33 'Earnings per share'. The table below provides a reconciliation.

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Profit attributable to ordinary shareholders*	1,883	1,785	1,513
Amortisation of intangible assets arising on business combinations	34	41	40
Profit on sale of property, plant and equipment	(10)	(2)	(8)
Gains arising on repurchase of subordinated liabilities	(248)	-	(384)
Loss/(profit) on sale of businesses	2	(146)	-
Loss on PEM Group structured notes	170	-	-
Pre-incorporation costs of Korean financial holding company	5	-	-
Day one investment loss on strategic investments	-	-	3
Impairment of associates and other strategic investments	15	-	77
Rights issue option (see note 7)	-	-	(233)
Tax on normalised items	(41)	24	140
Normalised earnings	1,810	1,702	1,148
Normalised earnings per ordinary share (cents) - post rights+	95.0	105.4	69.8
Normalised diluted earnings per share (cents) - post rights+	94.2	103.1	69.5

*	The profit amounts represent the profit attributable to ordinary shareholders and is therefore after the deduction of dividends payable to the holders of the non-cumulative redeemable preference shares (see note 9).
+	Represented to include the impact of the bonus element within the rights issue.

11. Financial instruments classification summary

Financial instruments are classified between five recognition principles; held at fair value through profit or loss (comprising trading and designated), available-for-sale, loans and receivables and held-to-maturity and for financial liabilities, amortised cost. Instruments that are held for trading purposes and those that the Group has elected to hold at fair value are combined on the face of the balance sheet and disclosed as financial assets or liabilities held at fair value through profit or loss.

The Group's classification of its principal financial assets and liabilities (excluding derivatives which are classified as trading and are disclosed in note 13) is summarised below. Cash and balances at central banks of $12,141 million (30 June 2008: $10,471 million, 31 December 2008: $24,161 million) are deemed to be held at amortised cost (equivalent to a loans and receivables classification).

Assets	Trading $million	Designated at fair value through profit or loss $million	Available- for-sale $million	Loans and receivables $million	Held-to- maturity $million	Total $million
Loans and advances to banks	905	5	-	45,366	-	46,276
Loans and advances to customers	2,010	194	-	182,748	-	184,952
Treasury bills and other eligible bills	3,821	275	17,670	-	-	21,766
Debt securities	8,236	240	47,072	6,223	31	61,802
Equity shares	305	459	1,620	-	-	2,384
Total at 30 June 2009	15,277	1,173	66,362	234,337	31	317,180
Loans and advances to banks	3,610	441	-	49,175	-	53,226
Loans and advances to customers	1,734	751	-	174,735	-	177,220
Treasury bills and other eligible bills	3,321	597	14,226	-	-	18,144
Debt securities	11,706	428	44,107	3,837	46	60,124
Equity shares	199	283	2,043	-	-	2,525
Total at 30 June 2008	20,570	2,500	60,376	227,747	46	311,239
Loans and advances to banks	1,351	12	-	46,583	-	47,946
Loans and advances to customers*	4,103	231	-	174,178	-	178,512
Treasury bills and other eligible bills	2,502	205	16,713	-	-	19,420
Debt securities	6,193	203	43,543	7,456	37	57,432
Equity shares	165	460	1,593	-	-	2,218
Total at 31 December 2008	14,314	1,111	61,849	228,217	37	305,528

Liabilities	Trading $million	Designated at fair value through profit or loss $million	Amortised cost $million	Total $million
Deposits by banks	260	72	33,634	33,966
Customer accounts	487	5,338	230,147	235,972
Debt securities in issue	2,659	1,143	20,860	24,662
Short positions	6,988	-	-	6,988
Total at 30 June 2009	10,394	6,553	284,641	301,588
Deposits by banks	2,000	83	38,389	40,472
Customer accounts	2,385	2,836	205,539	210,760
Debt securities in issue	2,119	1,733	32,511	36,363
Short positions	3,494	-	-	3,494
Total at 30 June 2008	9,998	4,652	276,439	291,089
Deposits by banks*	4,028	49	31,909	35,986
Customer accounts	1,207	3,376	234,008	238,591
Debt securities in issue	2,128	1,494	23,447	27,069
Short positions	3,196	-	-	3,196
Total at 31 December 2008	10,559	4,919	289,364	304,842

* Trading deposits by banks at 31 December 2008 includes $3,093 million in respect of a repo transaction which was eligible for netting under IAS 32 with balances within trading loans and advances to customers. At 30 June 2009, the net balance of $62 million has been presented within trading loans to banks.

11. Financial instruments classification summary continued

Reclassification of financial assets

In 2008, the Group reclassified certain financial assets classified as held for trading into the available-for-sale (AFS) category as they were no longer considered to be held for the purpose of selling or repurchasing in the near term. At the time of transfer, the Group identified the rare circumstances permitting such a transfer as the impact of the ongoing credit crisis in financial markets, particularly from the beginning of 2008, which significantly impacted the liquidity in certain markets. The Group also reclassified certain eligible financial assets from the trading and available-for-sale categories to loans and receivables as set out below. In total, assets with a notional value of $8.3 billion were reclassified. No assets have been reclassified in the six months to 30 June 2009.

The following table provides details of the remaining balance of assets reclassified during 2008 as at 30 June 2009 and 31 December 2008:

			If assets had not been reclassified, fair value loss from 1 January 2009 to 30 June 2009 which would have been recognised within
Assets reclassified:	Carrying amount at 30.06.09 $million	Fair value at 30.06.09 $million	Income $million	AFS reserve $million	Income recognised in income statement $million	Effective interest rate at date of reclassification %
From trading to AFS	1,127	1,127	(56)*	-	51	6.3
From trading to loans and receivables	2,583	2,354	25	-	40	4.6
From AFS to loans and receivables	1,498	1,206	-	(34)	7	5.2
	5,208	4,687	(31)	(34)	98
Of which asset backed securities:
reclassified to AFS	133	133	(45)*	-	-
reclassified to loans and receivables	2,388	1,957	(61)	(34)	10

* Post reclassification, the loss is recognised within the available-for-sale reserve.

			If assets had not been reclassified, fair value loss from the date of reclassification to 31 December 2008 which would have been recognised within
Assets reclassified:	Carrying amount at 31.12.08 $million	Fair value at 31.12.08 $million	Income $million	AFS reserve $million	Income recognised in income statement $million	Effective interest rate at date of reclassification %
From trading to AFS	2,485	2,485	(83)*	-	12	6.2
From trading to loans and receivables	2,754	2,456	(298)	-	15	5.2
From AFS to loans and receivables	2,095	1,685	-	(410)	11	5.5
	7,334	6,626	(381)	(410)	38
Of which asset backed securities:
reclassified to AFS	171	171	(66)*	-	2
reclassified to loans and receivables	3,044	2,532	(102)	(410)	15

* Post-reclassification, the loss is recognised within the available-for-sale reserve.

12. Financial assets held at fair value through profit or loss

For certain loans and advances and debt securities with fixed rates of interest, interest rate swaps have been acquired with the intention of significantly reducing interest rate risk. Derivatives are recorded at fair value whereas loans and advances are usually recorded at amortised cost. To significantly reduce the accounting mismatch between fair value and amortised cost, these loans and advances and debt securities have been designated at fair value through profit or loss. The Group ensures the criteria under IAS 39 are met by matching the principal terms of interest rate swaps to the corresponding loans and debt securities.

The changes in fair value of both the underlying loans and advances and debt securities and interest rate swaps are monitored in a similar manner to trading book portfolios.


	30.06.09 $million	30.06.08 $million	31.12.08 $million
Loans and advances to banks	910	4,051	1,363
Loans and advances to customers	2,204	2,485	4,334
Treasury bills and other eligible bills	4,096	3,918	2,707
Debt securities	8,476	12,134	6,396
Equity shares	764	482	625
	16,450	23,070	15,425

Debt securities

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Issued by public bodies:
Government securities	4,124	6,240	4,346
Other public sector securities	136	17	17
	4,260	6,257	4,363
Issued by banks:
Certificates of deposit	618	380	33
Other debt securities	695	1,494	798
	1,313	1,874	831
Issued by corporate entities and other issuers:
Other debt securities	2,903	4,003	1,202
Total debt securities	8,476	12,134	6,396
Of which:
Listed on a recognised UK exchange	195	505	14
Listed elsewhere	3,418	4,405	2,216
Unlisted	4,863	7,224	4,166
	8,476	12,134	6,396

Equity securities

Listed	320	196	197
Unlisted	444	286	428
Total equity shares	764	482	625

13. Derivative financial instruments

Derivatives are financial instruments that derive their value in response to changes in interest rates, financial instrument prices, commodity prices, foreign exchange rates, credit risk and indices. The types of derivatives used by the Group are set out below.

All derivatives are classified as trading and recognised and subsequently measured at fair value, with all revaluation gains recognised in the income statement (except where cash flow hedging and net investment hedging has been achieved, in which case the effective portion of changes in fair value go through reserves).

These tables analyse the notional principal amounts and the positive and negative fair values of the Group's derivative financial instruments. Notional principal amounts are the amount of principal underlying the contract at the reporting date.

The Group limits its exposure to credit losses in the event of default by entering into master netting agreements with certain market counterparties. At 30 June 2009, $23,684 million (30 June 2008: $25,558 million; 31 December 2008: $45,896 million) is available for offset as a result of master netting agreements which do not, however, meet the criteria under IAS 32 to enable these balances to be presented on a net basis in these accounts as in the ordinary course of business they are not intended to be settled net.

	30.06.09			30.06.08
Total derivatives	Notional principal amounts $million	Assets $million	Liabilities $million	Notional principal amounts $million	Assets $million	Liabilities $million

Foreign exchange derivative contracts:
Forward foreign exchange contracts	802,304	12,422	10,218	1,295,242	13,377	12,834
Currency swaps and options	485,810	11,261	10,891	646,226	12,514	11,544
Exchange traded futures and options	920	-	-	39	-	-
	1,289,034	23,683	21,109	1,941,507	25,891	24,378
Interest rate derivative contracts:
Swaps	1,055,433	15,328	15,507	1,108,571	14,143	14,704
Forward rate agreements and options	188,407	3,312	3,128	159,802	686	851
Exchange traded futures and options	701,075	519	592	353,814	250	204
	1,944,915	19,159	19,227	1,622,187	15,079	15,759
Credit derivatives	33,294	680	643	24,764	372	700
Equity and stock index options	1,249	310	332	867	62	91
Commodity derivative contracts	21,684	1,991	1,798	15,614	1,434	1,233
Total derivatives	3,290,176	45,823	43,109	3,604,939	42,838	42,161

	31.12.08
Total derivatives	Notional principal amounts $million	Assets $million	Liabilities $million

Foreign exchange derivative contracts:
Forward foreign exchange contracts	832,915	23,096	21,017
Currency swaps and options	528,215	18,760	19,253
Exchange traded futures and options	742	-	-
	1,361,872	41,856	40,270
Interest rate derivative contracts:
Swaps	1,089,407	21,992	21,451
Forward rate agreements and options	170,700	1,076	1,451
Exchange traded futures and options	242,694	557	429
	1,502,801	23,625	23,331
Credit derivatives	29,033	926	961
Equity and stock index options	1,075	219	233
Commodity derivative contracts	16,200	3,031	2,980
Total derivatives	2,910,981	69,657	67,775

13. Derivative financial instruments continued

The Group uses derivatives primarily to mitigate interest rate and foreign exchange risk. Hedge accounting is applied to derivatives designated as hedging instruments and hedged items when the criteria under IAS 39 have been met. The table below lists the types of derivatives that the Group holds for hedge accounting.

	30.06.09			30.06.08
Derivatives used for hedging	Notional principal amounts $million	Assets $million	Liabilities $million	Notional principal amounts $million	Assets $million	Liabilities $million

Derivatives designated as fair value hedges:
Swaps	26,139	1,313	210	19,218	345	534
	26,139	1,313	210	19,218	345	534
Derivatives designated as cash flow hedges:
Swaps	11,662	52	20	6,516	25	53
Forward foreign exchange contracts	1,603	5	91	1,905	34	22
Options	888	35	-	-	-	-
	14,153	92	111	8,421	59	75
Derivatives designated as net investment hedges:
Forward foreign exchange contracts	1,891	1	126	-	-	-
Total derivatives held for hedging	42,183	1,406	447	27,639	404	609

	31.12.08
Derivatives used for hedging	Notional principal amounts $million	Assets $million	Liabilities $million
Derivatives designated as fair value hedges:
Swaps	18,376	1,393	251
	18,376	1,393	251
Derivatives designated as cash flow hedges:
Swaps	4,514	92	13
Forward foreign exchange contracts	1,015	6	210
Options	-	-	-
	5,529	98	223
Derivatives designated as net investment hedges:
Forward foreign exchange contracts	600	-	89
Total derivatives held for hedging	24,505	1,491	563

14. Loans and advances

	30.06.09		30.06.08		31.12.08
	Loans to banks $million	Loans to customers $million	Loans to banks $million	Loans to customers $million	Loans to banks $million	Loans to customers $million
Loans and advances	46,297	187,545	53,246	179,044	47,969	180,470
Individual impairment provision	(16)	(1,843)	(2)	(1,229)	(17)	(1,307)
Portfolio impairment provision	(5)	(750)	(18)	(595)	(6)	(651)
	46,276	184,952	53,226	177,220	47,946	178,512
Of which: loans and advances held at fair value through profit or loss	(910)	(2,204)	(4,051)	(2,485)	(1,363)	(4,334)
	45,366	182,748	49,175	174,735	46,583	174,178

The Group's exposure to credit risk is concentrated in Hong Kong, Korea, Singapore, Other Asia Pacific region and the Americas, UK and Europe. The Group is affected by the general economic conditions in the territories in which it operates. The Group sets limits on the exposure to any counterparty and credit risk is spread over a variety of different personal and commercial customers.

The Group has outstanding residential mortgage loans to Korea residents of $17.6 billion (30 June 2008: $19.6 billion, 31 December 2008: $17.1 billion) and Hong Kong residents of approximately $13.5 billion (30 June 2008: $12.3 billion, 31 December 2008: $13.0 billion).

Loans and advances to customers include $48 million (30 June 2008: $nil million, 31 December 2008: $nil million) of loans sold subject to sale and repurchase transactions.

The following table shows the movement in impairment provisions for 2009 and 2008:

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Provisions held at beginning of period	1,981	1,809	1,844
Exchange translation differences	22	(10)	(169)
Acquisitions	-	89	20
Amounts written off	(590)	(528)	(591)
Recoveries of acquisition fair values	(14)	(47)	(31)
Recoveries of amounts previously written off	85	92	88
Discount unwind	(30)	(24)	(16)
Other	75	1	12
New provisions	1,397	691	1,105
Recoveries/provisions no longer required	(312)	(229)	(281)
Net charge against profit	1,085	462	824
Provisions held at end of period	2,614	1,844	1,981

Of which:	30.06.09 $million	30.06.08 $million	31.12.08 $million
Individual impairment provision	1,859	1,231	1,324
Portfolio impairment provision	755	613	657
Provisions held at end of period	2,614	1,844	1,981

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Net charge against profit:
Individual impairment charge	991	444	724
Portfolio impairment charge	94	18	100
	1,085	462	824
Provisions related to credit commitments	3	4	23
Impairment (releases)/charges relating to debt securities classified as loans	-	(1)	9
Total impairment charge and other credit risk provisions	1,088	465	856

15. Non-performing loans and advances

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Non-performing loans and advances	4,088	2,290	3,007
Impairment provisions	(2,614)	(1,844)	(1,981)
	1,474	446	1,026

Net non-performing loans and advances comprises loans and advances to banks $78 million (30 June 2008: $7 million, 31 December 2008: $21 million) and loans and advances to customers $1,396 million (30 June 2008: $439 million, 31 December 2008: $1,005 million).

Impairment provisions cover 65 per cent of non-performing lending to customers (30 June 2008: 81 per cent, 31 December 2008: 66 per cent). The impairment provisions above include $755 million (30 June 2008: $613 million, 31 December 2008: $657 million) of portfolio impairment provisions.

16. Investment securities

	30.06.09
	Debt Securities
	Held-to- maturity $million	Available- for-sale $million	Loans and receivables $million	Equity securities $million	Treasury bills $million	Total $million
Issued by public bodies:
Government securities	31	15,080	396
Other public sector securities	-	1,892	-
	31	16,972	396
Issued by banks:
Certificates of deposit	-	8,182	1,137
Other debt securities	-	15,835	740
	-	24,017	1,877
Issued by corporate entities and other issuers:
Other debt securities	-	6,083	3,950
Total debt securities	31	47,072	6,223

Listed on a recognised UK exchange	-	5,599	807	70	-	6,476
Listed elsewhere	29	15,753	2,434	469	5,375	24,060
Unlisted	2	25,720	2,982	1,081	12,295	42,080
	31	47,072	6,223	1,620	17,670	72,616
Market value of listed securities	29	21,352	3,148	539	5,375	30,443

16. Investment securities continued

	30.06.08
	Debt Securities
	Held-to- maturity $million	Available- for-sale $million	Loans and receivables $million	Equity securities $million	Treasury bills $million	Total $million
Issued by public bodies:
Government securities	46	13,963	-
Other public sector securities	-	1,079	-
	46	15,042	-
Issued by banks:
Certificates of deposit	-	8,175	2,998
Other debt securities	-	14,785	411
	-	22,960	3,409
Issued by corporate entities and other issuers:
Other debt securities	-	6,105	428
Total debt securities	46	44,107	3,837

Listed on a recognised UK exchange	-	2,613	-	41	-	2,654
Listed elsewhere	44	18,494	82	1,071	5,185	24,876
Unlisted	2	23,000	3,755	931	9,041	36,729
	46	44,107	3,837	2,043	14,226	64,259
Market value of listed securities	44	21,107	82	1,112	5,185	27,530

	31.12.08
	Debt Securities
	Held-to- maturity $million	Available- for-sale $million	Loans and receivables $million	Equity securities $million	Treasury bills $million	Total $million
Issued by public bodies:
Government securities	37	17,849	389
Other public sector securities	-	1,864	-
	37	19,713	389
Issued by banks:
Certificates of deposit	-	6,771	1,969
Other debt securities	-	13,597	735
	-	20,368	2,704
Issued by corporate entities and other issuers:
Other debt securities	-	3,462	4,363
Total debt securities	37	43,543	7,456

Listed on a recognised UK exchange	-	4,096	1,217	35	-	5,348
Listed elsewhere	35	15,479	2,750	586	5,711	24,561
Unlisted	2	23,968	3,489	972	11,002	39,433
	37	43,543	7,456	1,593	16,713	69,342
Market value of listed securities	35	19,575	3,903	621	5,711	29,845

16. Investment securities continued

The change in the carrying amount of investment securities comprised:

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Balances held at beginning of period	69,342	55,274	64,259
Exchange translation differences	657	(1,113)	(4,473)
Acquisitions	1	2,721	237
Additions	58,501	53,974	55,964
Reclassifications	-	-	5,211
Disposals on sale of business	-	-	(9)
Maturities and disposals	(56,331)	(45,423)	(52,333)
Impairments, net of recoveries on disposal (see note 6)	2	(19)	(406)
Changes in fair value (including the effect of fair value hedging)	(39)	(1,016)	363
Amortisation of discounts and premiums	483	(139)	529
Balances held at end of period	72,616	64,259	69,342

Treasury bills and other eligible bills include $948 million (30 June 2008: $747 million, 31 December 2008: $1,445 million) of bills sold subject to sale and repurchase transactions. Debt securities include $734 million (30 June 2008: $1,948 million, 31 December 2008: $1,855 million) of securities sold subject to sale and repurchase transactions.

At 30 June 2009, unamortised (discount)/premiums on debt securities held for investment purposes amounted to $517 million (30 June 2008: $40 million, 31 December 2008: $271 million) and unamortised discounts amounted to $(713) million (30 June 2008: $344 million, 31 December 2008: $743 million).

Income from listed equity shares amounted to $6 million (30 June 2008: $12 million, 31 December 2008: $8 million) and income from unlisted equity shares amounted to $79 million (30 June 2008: $73 million, 31 December 2008: $90 million).

The Group had taken advantage of the Term Auction Facility (TAF) introduced by the Federal Reserve Bank of New York, by borrowing $nil million (30 June 2008: $nil million, 31 December 2008: $2,850 million). Under the TAF, no single security is earmarked as collateral for the borrowing. The value of securities that was considered to be encumbered in relation to this borrowing is $nil million (30 June 2008: $nil million, 31 December 2008: $3,197 million) and the borrowing was included as a sale and repurchase transaction within customer accounts.

17. Business combinations

2009 acquisitions

On 30 January 2009, the Group acquired 100 per cent of the share capital of Cazenove Asia Limited, a leading Asian equity capital markets, corporate finance and institutional brokerage business.

On 30 June 2009, the Group acquired the remaining 75 per cent minority interest in First Africa, for a consideration of $13 million.

Goodwill of $5 million was recognised and $5 million of customer relationship intangibles identified.

If the acquisition had occurred on 1 January 2009 the operating income of the Group would have been approximately $7,960 million and profit before taxation would have been approximately $2,834 million.

The assets and liabilities arising from the acquisition of Cazenove Asia Limited were as follows:


	Fair value $million	Acquiree's carrying amount $million
Loans and advances to banks	34	34
Investment securities	1	1
Intangibles other than goodwill	9	-
Property, plant and equipment	1	1
Other assets	45	45
Total assets	90	81
Other liabilities	39	39
Accruals and deferred income	7	7
Retirement benefit obligations	2	2
Total liabilities	48	48
Net assets acquired	42	33
Purchase consideration settled in cash	(73)
Cash and cash equivalents in subsidiary acquired	31
Cash outflow on acquisition	(42)
Purchase consideration:
- cash paid	73
- direct costs relating to the acquisition	-
Total purchase consideration	73
Less: Fair value of net assets acquired	(42)
Goodwill	31
Intangible assets acquired:
Customer relationships	9
Total	9
Contribution from acquisition to 30.06.09:
Operating income	12
Loss before taxation	(5)

The fair value amounts contain some provisional balances which will be finalised within 12 months of the acquisition date. Goodwill arising on the acquisitions are attributable to the synergies expected to arise from their integration with the Group.

17. Business combinations continued

2008 acquisitions

On 25 February 2008, the Group acquired 100 per cent of the share capital of Yeahreum Mutual Savings Bank (Yeahreum), a Korean banking company.

On 29 February 2008, the Group acquired 100 per cent of the share capital of American Express Bank Limited (AEB), a financial services company. The Group also entered into a put and call option agreement with American Express, exercisable 18 months from the acquisition of AEB, to purchase 100 per cent of American Express International Deposit Corporation at a purchase price equivalent to its net asset value at the time of exercise.

On 27 December 2008, the Group acquired the 'good bank' portion of Asia Trust and Investment Corporation, a Taiwanese banking company.

If the acquisitions had occurred on 1 January 2008, the operating income of the Group would have been approximately $14,093 million and profit before taxation would have been approximately $4,809 million.

During 2008, the Group acquired the remaining 20 per cent minority of A Brain for a consideration of $8 million, generating additional goodwill of $5 million.

The assets and liabilities arising from the acquisitions were as follows:

	AEB		Other acquisitions
	Fair value $million	Acquiree's carrying amount $million	Fair value $million	Acquiree's carrying amount $million
Cash and balances at central banks*	1,041	1,041	131	131
Derivative financial instruments	511	511	-	-
Loans and advances to banks	7,142	7,143	639	667
Loans and advances to customers	4,781	4,783	233	233
Investment securities	2,864	2,883	87	88
Intangibles other than goodwill	88	4	-	-
Property, plant and equipment	27	34	30	23
Deferred tax assets	10	-	4	-
Other assets	527	544	21	23
Total assets	16,991	16,943	1,145	1,165
Derivative financial instruments	514	514	-	-
Deposits by banks	5,519	5,519	-	-
Customer accounts	8,392	8,392	1,192	1,192
Other liabilities	1,848	1,829	47	43
Provisions for liabilities and charges	55	-	-	-
Retirement benefit obligations	46	46	-	-
Subordinated liabilities and other borrowed funds	190	190	-	-
Total liabilities	16,564	16,490	1,239	1,235
Net assets acquired	427	453	(94)	(70)
Purchase consideration settled in cash	(823)		(161)
Cash and cash equivalents in subsidiary acquired	6,700		551
Cash inflow on acquisition	5,877		390
Purchase consideration:
- cash paid	798		160
- direct costs relating to the acquisition	25		1
Total purchase consideration	823		161
Less: Fair value of net assets/(liabilities) acquired/(assumed)	427		(94)
Goodwill	396		255
Intangible assets acquired:
Customer relationships	84		-
Capitalised software	4		-
Total	88		-
Contribution from acquisition to 31 December 2008 :
Operating income	552		1
Loss before taxation	(124)		(9)

* Cash and balances at central banks include amounts subject to regulatory restrictions

17. Business combinations continued

Goodwill arising on the acquisition of AEB is attributable to the significant synergies expected to arise from their development within the Group and to those intangibles which are not recognised separately, such as the distribution network and acquired workforce. Goodwill arising on other acquisitions is attributable to those intangibles which are not recognised separately, such as the distribution network.

18. Other assets

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Hong Kong SAR Government certificates of indebtedness	3,206	2,918	3,097
Acceptances and endorsements	2,712	3,397	2,574
Cash collateral	5,369	3,318	9,102
Other	8,366	6,284	5,601
	19,653	15,917	20,374

19. Deposits by banks

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Deposits by banks	33,634	38,389	31,909
Deposits by banks included within:
Financial liabilities held at fair value through profit or loss (note 21)	332	2,083	4,077
	33,966	40,472	35,986

20. Customer accounts

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Customer accounts	230,147	205,539	234,008
Customer accounts included within:
Financial liabilities held at fair value through profit or loss (note 21)	5,825	5,221	4,583
	235,972	210,760	238,591

21. Financial liabilities held at fair value through profit or loss

	30.06.09			30.06.08
	Trading $million	Designated at fair value through profit or loss $million	Total $million	Trading $million	Designated at fair value through profit or loss $million	Total $million
Deposits by banks	260	72	332	2,000	83	2,083
Customer accounts	487	5,338	5,825	2,385	2,836	5,221
Debt securities in issue	2,659	1,143	3,802	2,119	1,733	3,852
Short positions	6,988	-	6,988	3,494	-	3,494
	10,394	6,553	16,947	9,998	4,652	14,650

	31.12.08
	Trading $million	Designated at fair value through profit or loss $million	Total $million
Deposits by banks	4,028	49	4,077
Customer accounts	1,207	3,376	4,583
Debt securities in issue	2,128	1,494	3,622
Short positions	3,196	-	3,196
	10,559	4,919	15,478

22. Debt securities in issue

	30.06.09			30.06.08
	Certificates of deposit of $100,000 or more $million	Other debt securities in issue $million	Total $million	Certificates of deposit of $100,000 or more $million	Other debt securities in issue $million	Total $million
Debt securities in issue	6,400	14,460	20,860	17,505	15,006	32,511
Debt securities in issue within:
Financial liabilities held at fair value through profit or loss (note 21)	348	3,454	3,802	507	3,345	3,852
	6,748	17,914	24,662	18,012	18,351	36,363

	31.12.08
	Certificates of deposit of $100,000 or more $million	Other debt securities in issue $million	Total $million
Debt securities in issue	13,284	10,163	23,447
Debt securities in issue within:
Financial liabilities held at fair value through profit or loss (note 21)	460	3,162	3,622
	13,744	13,325	27,069

23. Other liabilities

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Notes in circulation	3,206	2,918	3,097
Acceptances and endorsements	2,700	3,321	2,539
Cash collateral	2,684	1,512	3,765
Cash-settled share based payments	37	95	31
Other liabilities	11,971	11,057	7,931
	20,598	18,903	17,363

Hong Kong currency notes in circulation of $3,206 million (30 June 2008: $2,918 million, 31 December 2008: $3,097 million) which are secured by the government of Hong Kong certificates of indebtedness of the same amount included in other assets (note 18).

24. Subordinated liabilities and other borrowed funds

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Subordinated liabilities and other borrowed funds	16,922	18,745	16,986

All subordinated liabilities are unsecured, unguaranteed and subordinated to the claims of other creditors including without limitation, customer deposits and deposits by banks. The Group has the right to settle these debt instruments in certain circumstances as set out in the contractual agreements.

Of total subordinated liabilities and other borrowings, $10,243 million is at fixed interest rates (30 June 2008: $12,489 million, 31 December 2008: $11,865 million).

On 21 April 2009, Standard Chartered First Bank Korea Limited (SCFB) issued KRW300 billion Lower Tier 2 Notes with a coupon of 7.05 per cent maturing due 2019, callable 2014.

On 22 April 2009, Standard Chartered Bank (SCB) bought back $151 million 8 per cent subordinated notes due May 2031.

On 27 April 2009, £281 million fixed to floating step up subordinated notes callable 14 July 2020 issued by SCB were exchanged for £198 million senior notes due 2014 issued by Standard Chartered PLC.

On 15 June 2009, SCB issued perpetual $1,500 million Tier 1 Notes with a coupon of 9.5 per cent step-up after five years.

On 17 June 2009, PT Bank Permata Tbk issued IDR510 trillion Tier 1 Notes with a coupon of 9.75 per cent maturing June 2021, of which the Group's share is IDR283 trillion.

During 2009, £30 million floating rate notes, €600 million 5.375 per cent notes, £300 million 6.75 per cent notes and KRW205 billion subordinated debt were matured.

25. Retirement benefit obligations

Retirement benefit obligations comprise:

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Total market value of assets	1,916	2,424	1,721
Present value of the schemes' liabilities	(2,445)	(2,905)	(2,154)
Defined benefit schemes obligation	(529)	(481)	(433)
Defined contribution schemes	(13)	(7)	(14)
Net book amount	(542)	(488)	(447)

Retirement benefit charge/(credit) comprises:

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Defined benefit schemes	(12)	53	(8)
Defined contribution schemes	48	55	72
	36	108	64

The pension cost for defined benefit schemes was:

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Current service cost	41	48	40
Past service (benefit)/cost	(32)	-	5
Gain on settlement and curtailments	(23)	-	(54)
Expected return on pension scheme assets	(51)	(70)	(70)
Interest on pension scheme liabilities	53	75	71
Total (credit)/charge to profit before deduction of taxation	(12)	53	(8)

Actual less expected return on assets	(13)	122	211
Experience loss/(credit) on liabilities	140	-	(104)
Loss recognised in statement of comprehensive income, before taxation	127	122	107
Deferred taxation	(38)	(33)	(27)
Loss after taxation	89	89	80

26. Share capital

	Number of ordinary shares (millions)	Ordinary share capital $million	Preference share capital $million	Total $million
At 1 January 2008	1,410	705	-	705
Capitalised on scrip dividend	8	4	-	4
Shares issued, net of expenses	4	2	-	2
At 30 June 2008	1,422	711	-	711
Capitalised on scrip dividend	3	2	-	2
Shares issued, net of expenses	471	235	-	235
At 31 December 2008	1,896	948	-	948
Capitalised on scrip dividend	32	16	-	16
Shares issued, net of expenses	6	3	-	3
At 30 June 2009	1,934	967	-	967

On 15 May 2009, the Company issued 32,270,731 new ordinary shares instead of the 2008 final dividend.

During the period, 6,352,118 ordinary shares were issued under the employee share plans at prices between nil and 1088 pence.

As at 30 June 2009, 477,500 $5 non-cumulative redeemable preference shares were in issue, of which 462,500 are classified within subordinated liabilities and other borrowed funds. The £150 million irredeemable preference shares of £1 each are also classified as other borrowed funds as required by IAS 32.

27. Own shares

Shares of the Group held for the beneficiaries of the
Group's share based payment schemes

Bedell Cristin Trustees Limited is trustee of both the 1995 Employees' Share Ownership Plan Trust (the 1995 trust), which is an employee benefit trust used in conjunction with some of the Group's employee share schemes, and of the Standard Chartered 2004 Employee Benefit Trust (the 2004 trust) which is an employee benefit trust used in conjunction with the Group's deferred bonus plan. The trustee has agreed to satisfy a number of awards made under the employee share schemes and the deferred bonus plan through the relevant employee benefit trust. As part of these arrangements, Group companies fully fund the trust, from time to time, to enable the trustee to acquire shares of the Company to satisfy these awards. All shares have been acquired through the London Stock Exchange. Except as disclosed, neither the Company nor any of its subsidiaries has bought, sold or redeemed any securities of the Company listed on The Stock Exchange of Hong Kong Limited during the period ended 30 June 2009. Details of the shares purchased and held by the trusts are set out below:

	1995 trust			2004 trust			Total
Number of shares	30.06.09	30.06.08	31.12.08	30.06.09	30.06.08	31.12.08	30.06.09	30.06.08	31.12.08
Shares purchased:
- 9 March 2009	-	-	-	357,909	-	-	357,909	-	-
- 25 June 2009	4,025,000	-	-	-	-	-	4,025,000	-	-
Total	4,025,000	-	-	357,909	-	-	4,382,909	-	-
- 6 March 2008	-	-	-	-	307,849	-	-	307,849	-
- 9 March 2008	-	1,650,000	-	-	-	-	-	1,650,000	-
- 9 October 2008	-	-	375,000	-	-	-	-	-	375,000
- 18 December 2008 (rights issue)	-	-	731,296	-	-	119,049	-	-	850,345
Total	-	1,650,000	1,106,296	-	307,849	119,049	-	1,957,849	1,225,345
Market price of shares purchased ($million)	78	54	12	4	10	10	82	64	22
Shares held at the end of the period	6,962,766	1,846,267	2,949,563	498,127	361,859	480,166	7,460,893	2,208,126	3,429,729
Maximum number of shares held during period	-	-	-	-	-	-	7,463,776	2,575,901	3,429,729

28. Minority interests

	$300m 7.267% Hybrid Tier 1 Securities $million	Other minority interests $million	Total $million
At 1 January 2008	330	271	601
Income/expenses in equity attributable to minority interests	-	(58)	(58)
Other profits attributable to minority interests	9	35	44
Comprehensive income	9	(23)	(14)
Distributions	(10)	(84)	(94)
Other increases*	-	100	100
At 30 June 2008	329	264	593
Income/expenses in equity attributable to minority interests	-	(48)	(48)
Other profits attributable to minority interests	10	49	59
Comprehensive income	10	1	11
Distributions	(12)	(41)	(53)
Other increases	-	4	4
At 31 December 2008	327	228	555
Income/expenses in equity attributable to minority interests	-	7	7
Other profits attributable to minority interests	10	48	58
Comprehensive income	10	55	65
Distributions	(12)	(42)	(54)
Other decreases	-	(3)	(3)
At 30 June 2009	325	238	563

* Other increases at 30 June 2008 primarily relates to the consolidation of a private equity investment

29. Cash flow statement

Adjustment for non-cash items and other accounts

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Depreciation and amortisation	235	201	224
Gain on disposal of property, plant and equipment	(10)	(2)	(8)
Gain on disposal of investment securities and loans and receivable financial assets	(391)	(154)	(168)
Gain arising on repurchase of subordinated liabilities	(248)	-	(384)
Rights issue option	-	-	(233)
Gain arising on initial recognition and partial redemption of Visa Inc. shares	-	(17)	-
Writedowns relating to asset backed securities	-	49	-
Movement in fair value hedges on available-for-sale assets	4	65	(39)
Amortisation of discounts and premiums of investment securities	(483)	139	(529)
Pension costs for defined benefit schemes	(12)	53	(8)
Impairment losses on loans and advances and other credit risk provisions	1,088	465	856
Other impairment	15	26	443
Loss/(profit) on sale of businesses	2	(146)	-
Recoveries of acquisition fair values and discount unwind	(48)	(71)	(49)
Interest expense on subordinated liabilities	261	587	462
Total	413	1,195	567

29. Cash flow statement continued

Change in operating assets

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Net decrease/(increase) in derivative financial instruments	23,438	(17,347)	(29,791)
Net (increase)/decrease in debt securities, treasury bills and equity shares held at fair value through profit or loss	(4,096)	1,352	6,238
Net (increase) in loans and advances to banks and customers	(8,127)	(21,237)	(17,923)
(Increase)/decrease in prepayments and accrued income	(755)	(646)	859
Net decrease/(increase) in other assets	463	795	(10,403)
Total	10,923	(37,083)	(51,020)

Change in operating liabilities

	6 months ended 30.06.09 $million	6 months ended 30.06.08 $million	6 months ended 31.12.08 $million
Net (decrease)/increase in derivative financial instruments	(24,262)	16,551	28,392
Net (decrease)/increase in deposits from banks, customer accounts, debt securities in issue and short positions	(3,267)	33,520	26,278
(Decrease)/increase in accruals and deferred income	(632)	195	830
Net increase/(decrease) in other liabilities	3,289	665	(518)
Total	(24,872)	50,931	54,982

30. Cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents comprise of the following balances with less than three months maturity from the date of acquisition. Restricted balances comprise minimum balances to be held at central banks.

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Cash and balances with central banks	12,141	10,471	24,161
Less restricted balances	(4,847)	(6,064)	(4,615)
Treasury bills and other eligible bills	9,389	9,273	9,303
Loans and advances to banks	31,425	43,665	33,913
Trading securities	11,102	14,706	10,937
Total	59,210	72,051	73,699

31. Net interest margin and interest spread

	6 months ended 30.06.09 %	6 months ended 30.06.08 %	6 months ended 31.12.08 %
Net interest margin	2.4	2.5	2.4
Interest spread	2.3	2.2	2.2

	$million	$million	$million
Average interest earning assets	312,358	297,126	301,329
Average interest bearing liabilities	294,741	270,998	280,940

32. Remuneration

The Group employed 70,521 staff at 30 June 2009 made up of 40,112 in Consumer Banking; 15,814 in Wholesale Banking; 14,595 in Support Services (30 June 2008: 74,565 made up of 44,317 in Consumer Banking; 13,600 in Wholesale Banking; 16,648 in Support Services, 31 December 2008: 73,802 made up of 42,691 in Consumer Banking; 14,914 in Wholesale Banking; 16,197 in Support Services).

Within the authority delegated by the Board of Directors, the Board Remuneration Committee is involved in determining the remuneration policy of the Group and specifically for agreeing the individual remuneration packages for executive directors and other highly remunerated individuals. No executive directors are involved in deciding their own remuneration. The Group's remuneration policy is to:

• Support a strong performance-oriented culture and ensure that individual rewards and incentives relate directly to the performance of the individual, the operations and functions for which they are responsible, the Group as a whole and the interests of the shareholders; and

• Maintain competitive rewards that reflect the international nature of the Group and enable it to attract and retain talented employees of the highest quality internationally.

The success of the Group depends upon the performance and commitment of talented employees. In terms of applying this policy:

• Base salaries are set at the median of the Group's key international competitors; and

• Annual bonus awards are made on the basis of Group and individual performance and also an individual's adherence to the Group's values.

The Group believes strongly in encouraging employee share ownership at all levels in the organisation. The Group operates certain discretionary share plans, which are designed to provide competitive long-term incentives. Of these plans, the Performance Share Plan and the Executive Share Option Scheme are only exercisable upon the achievement of pre-determined performance criteria. In addition, the Group operates three all-employee sharesave schemes in which 33 per cent (30 June 2008: 37 per cent, 31 December 2008: 37 per cent) of employees participate.

33. Contingent liabilities and commitments

The table below shows the contract or underlying principal amounts, and risk weighted amounts of unmatured off-balance sheet transactions at the balance sheet date. The contract or underlying principal amounts indicate the volume of business outstanding and do not represent amounts at risk.

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Contingent liabilities*:
Guarantees and irrevocable letters of credit	28,373	29,471	28,051
Other contingent liabilities	9,247	11,727	11,494
	37,620	41,198	39,545
Commitments*:
Documentary credits and short term trade-related transactions	6,152	10,204	5,270
Forward asset purchases and forward deposits placed	251	1,769	40
Undrawn formal standby facilities, credit lines and other commitments to lend:
One year and over	16,569	16,014	14,450
Less than one year	14,245	16,656	14,903
Unconditionally cancellable	41,497	38,038	42,388
	78,714	82,681	77,051
Risk weighted amount:
Contingent liabilities	16,281	18,443	19,625
Commitments	8,109	10,288	7,258

* Includes amounts relating to the Group's share of its joint ventures.

34. Repurchase and reverse repurchase agreements

The Group enters into collateralised reverse repurchase and repurchase agreements and securities borrowing and lending transactions. It also receives securities as collateral for commercial lending.

Balance sheet assets

	30.06.09 Reverse repurchase agreements $million	30.06.08 Reverse repurchase agreements $million	31.12.08 Reverse repurchase agreements $million
Banks	1,083	178	1,578
Customers	2,492	963	4,833
	3,575	1,141	6,411

Under these reverse repurchase and securities borrowing arrangements, the Group obtains securities on terms which permit it to repledge or resell the securities to others. Amounts on such terms are:

	30.06.09 $million	30.06.08 $million	31.12.08 $million
Securities and collateral which can be repledged or sold (at fair value)	2,731	1,112	5,707
Thereof repledged/transferred to others for financing activities, to satisfy commitments under short sale transactions or liabilities under sale and repurchase agreements (at fair value)	493	160	4,030

Balance sheet liabilities

	30.06.09 Repurchase agreements $million	30.06.08 Repurchase agreements $million	31.12.08 Repurchase agreements $million
Banks	1,273	2,378	5,053
Customers	561	1,886	5,177
	1,834	4,264	10,230

Collateral pledged against these liabilities is disclosed in the table above and in notes 14 and 16. The terms and conditions relating to the collateral pledged typically permits the collateral to be sold or repledged, subject to the obligation to return the collateral at the end of the agreement.

35. Liquidity risk

This table analyses assets and liabilities into relevant maturity groupings based on the remaining period to the contractual maturity date as at the balance sheet date, on a discounted basis. Contractual maturities do not necessarily reflect actual repayments or cash flow.

The Risk section explains the Group's risk management with respect to asset and liability management.

	30.06.09
	Three months or less $million	Between three months and one year $million	Between one year and five years $million	More than five years $million	Total $million
Assets
Cash and balances at central banks	7,294	-	-	4,847	12,141
Derivative financial instruments	7,849	11,515	20,027	6,432	45,823
Loans and advances to banks*	31,425	12,492	2,213	146	46,276
Loans and advances to customers*	64,029	27,940	41,016	51,967	184,952
Investment securities*	20,810	30,677	24,154	10,311	85,952
Other assets	10,169	661	55	25,191	36,076
Total assets	141,576	83,285	87,465	98,894	411,220

Liabilities
Deposits by banks*	28,151	4,945	780	90	33,966
Customer accounts*	201,518	29,133	4,240	1,081	235,972
Derivative financial instruments	9,371	9,686	18,480	5,572	43,109
Debt securities in issue*	6,152	7,505	9,901	1,104	24,662
Other liabilities*	17,758	2,533	734	11,674	32,699
Subordinated liabilities and other borrowed funds	94	873	864	15,091	16,922
Total liabilities	263,044	54,675	34,999	34,612	387,330
Net liquidity gap	(121,468)	28,610	52,466	64,282	23,890

* Amounts include financial instruments held at fair value through profit or loss (see note 12 and note 21).

	30.06.08
	Three months or less $million	Between three months and one year $million	Between one year and five years $million	More than five years $million	Total $million
Assets
Cash and balances at central banks	4,407	-	-	6,064	10,471
Derivative financial instruments	8,650	13,071	16,851	4,266	42,838
Loans and advances to banks*	43,665	6,596	2,703	262	53,226
Loans and advances to customers*	64,221	31,086	33,602	48,311	177,220
Investment securities*	24,752	22,601	21,060	12,380	80,793
Other assets	3,280	1,296	190	27,506	32,272
Total assets **	148,975	74,650	74,406	98,789	396,820

Liabilities
Deposits by banks*	35,565	3,955	677	275	40,472
Customer accounts*	183,073	16,961	4,278	6,448	210,760
Derivative financial instruments	8,052	9,863	12,340	11,906	42,161
Debt securities in issue*	15,516	12,084	7,432	1,331	36,363
Other liabilities*	10,418	1,344	365	15,287	27,414
Subordinated liabilities and other borrowed funds	97	191	2,661	15,796	18,745
Total liabilities**	252,721	44,398	27,753	51,043	375,915
Net liquidity gap	(103,746)	30,252	46,653	47,746	20,905

* Amounts include financial instruments held at fair value through profit or loss (see note 12 and note 21).

** Restated as set out in note 37.

35. Liquidity risk continued

	31.12.08
	Three months or less $million	Between three months and one year $million	Between one year and five years $million	More than five years $million	Total $million
Assets
Cash and balances at central banks	19,546	-	-	4,615	24,161
Derivative financial instruments	13,791	18,743	27,821	9,302	69,657
Loans and advances to banks*	33,913	11,749	2,132	152	47,946
Loans and advances to customers*	63,829	27,541	38,044	49,098	178,512
Investment securities*	20,736	28,137	21,758	8,439	79,070
Other assets	12,791	1,231	27	21,673	35,722
Total assets	164,606	87,401	89,782	93,279	435,068

Liabilities
Deposits by banks*	31,168	3,382	1,359	77	35,986
Customer accounts*	210,449	21,674	4,824	1,644	238,591
Derivative financial instruments	15,004	18,207	25,430	9,134	67,775
Debt securities in issue*	12,568	5,801	5,695	3,005	27,069
Other liabilities*	12,163	1,707	503	11,593	25,966
Subordinated liabilities and other borrowed funds	845	1,304	2,189	12,648	16,986
Total liabilities	282,197	52,075	40,000	38,101	412,373
Net liquidity gap	(117,591)	35,326	49,782	55,178	22,695

* Amounts include financial instruments held at fair value through profit or loss (see note 12 and note 21).

36. Fair value of financial assets and liabilities

The following table summarises the carrying amounts and fair values of those financial assets and liabilities not presented on the Group's balance sheet at fair value.

	30.06.09		30.06.08		31.12.08
	Book amount $million	Fair value $million	Book amount $million	Fair value $million	Book amount $million	Fair value $million
Assets
Cash and balances at central banks	12,141	12,141	10,471	10,471	24,161	24,161
Loans and advances to banks	45,366	45,082	49,175	48,722	46,583	45,855
Loans and advances to customers	182,748	183,209	174,735	174,483	174,178	170,410
Investment securities	6,254	5,680	3,883	3,882	7,493	6,729

Liabilities
Deposits by banks	33,634	33,407	38,389	38,382	31,909	31,713
Customer accounts	230,147	230,453	205,539	205,277	234,008	230,558
Debt securities in issue	20,860	21,543	32,511	32,243	23,447	23,097
Subordinated liabilities and other borrowed funds	16,922	15,631	18,745	18,107	16,986	13,903

37. Restatement of prior periods

Balance sheet

A re-presentation was made within the Group's balance sheet at 30 June 2008 in respect of the deferred tax asset to show the deferred tax asset and liability separately. Details of the re-presentation are set out below:

	As reported at 30.06.08 $million	Re-presentation $million	As restated at 30.06.08 $million
Deferred tax assets	563	93	656
Total assets	396,727	93	396,820
Deferred tax liabilities	-	93	93
Total liabilities	375,822	93	375,915
Total equity and liabilities	396,727	93	396,820

Cash flow statement

Following an amendment to IAS 7, Cash flow statements, cash paid to acquire assets leased to customers is required to be presented as part of cash flows from operating activities and not cash flows from investing activities. In addition, the contributions to defined benefit schemes has been presented separately. Details of the re-presentation are set out below:

	As reported 6 months ended 30.06.08 $million	Re-presentation $million	As restated 6 months ended 30.06.08 $million
Change in operating assets	(36,478)	(605)	(37,083)
Purchase of property, plant and equipment	(790)	605	(185)
Change in operating liabilities	50,904	27	50,931
Contributions to defined benefit scheme	6	(27)	(21)

For information, the impact of the above amendments on the cash flow statement for the 6 months ended 31 December 2008 is presented below:

	As reported 6 months ended 31.12.08 $million	Re-presentation $million	As restated 6 months ended 31.12.08 $million
Change in operating assets	(50,773)	(247)	(51,020)
Purchase of property, plant and equipment	(641)	247	(394)
Change in operating liabilities	54,906	76	54,982
Contributions to defined benefit scheme	2	(76)	(74)

38. Special purpose entities

The Group uses Special Purpose Entities (SPEs) in the normal course of business across a variety of activities. SPEs are established for specific limited purposes and take a number of legal forms. The main types of activities for which the Group utilises SPEs cover synthetic credit default swaps for portfolio management purposes, managed investment funds (including specialised principal finance funds) and structured finance. SPEs are consolidated into the Group's financial statements where the Group bears the majority of the residual risk or reward. Most of the Group's consolidated SPEs are in respect of the Group's securitised portfolios of residential mortgages.

The total assets of unconsolidated SPEs in which the Group has an interest are set out below.

	30.06.09		30.06.08		31.12.08
	Total assets $million	Maximum exposure $million	Total assets $million	Maximum exposure $million	Total assets $million	Maximum exposure $million
Portfolio management vehicles	1,694	249	1,279	155	1,694	252
Principal Finance Funds*	931	170	300	52	898	124
Global Liquidity Fund	-	-	463	76	-	-
AEB Funds	-	-	905	41	2,487	4
Structured Finance	-	-	290	-	290	-
	2,625	419	3,237	324	5,369	380

* Committed capital for these funds is $375 million (30 June 2008: $300 million; 31 December 2008: $375 million), of which $170 million have been drawn down; 30 June 2008: $52 million; 31 December 2008: $124 million).

For the purposes of portfolio management, the Group has entered into synthetic credit default swaps with note-issuing SPEs. The referenced assets remain on the Group's balance sheet as the credit risk is not transferred to these SPEs. The Group's exposure arises from (a) the capitalised start-up costs in respect of the swap vehicles and (b) interest in the first loss notes and investment in a minimal portion of the mezannine and senior rated notes issued by the note issuing SPEs. The proceeds of the notes issuance are typically invested in AAA-rated Government securities, which are used to collateralize the SPE's swap obligations to the Group, and to repay the principal to investors at maturity. The SPEs reimburse the Group on actual losses incurred, through the realization of the collateral security. Correspondingly, the SPEs write down the notes issued by an equal amount of the losses incurred, in reverse order of seniority. All the funding is committed for the life of these vehicles and hence the Group has no indirect exposure in respect of the vehicles' liquidity position.

The remainder of the Group's exposure represents committed or invested capital in unleveraged investment funds. Standard Chartered Bank was the Investment Manager and Distributor of the US Dollar Liquidity Fund, the single sub fund of Standard Chartered Global Liquidity Funds p.l.c., which closed on 7 July 2008.

Following the acquisition of AEB, the Group was also the investment manager for a number of AEB's investment funds, in which it had a limited amount of capital invested. During the six months to 30 June 2009, these funds were sold and at 30 June 2009, the Group had no capital invested in these funds.

The Group has reputational risk in respect of certain portfolio management vehicles and investment funds either because the Group is the arranger and lead manager or because the SPEs have Standard Chartered branding.

39. Related party transactions

Mr Sunil Mittal, an independent non-executive director of Standard Chartered PLC, is Chairman and Group CEO of the Bharti Enterprises Group. Due to his significant voting power in the Bharti Enterprises Group, it is a related party of Standard Chartered PLC. As at 30 June 2009, and in the normal course of business, the Group has loans to the Bharti Enterprises Group of $114 million (30 June 2008: $41 million, 31 December 2008: $137 million), guarantees of $38 million (30 June 2008: $44 million, 31 December 2008: $39 million), and foreign exchange deals with a notional value of $43 million (30 June 2008: $68 million, 31 December 2008: $103 million).

Other than as disclosed there has been no significant change in related party transactions of directors as previously disclosed in the Group's 2008 Annual Report and Accounts.

Joint ventures

The Group has loans and advances to PT Bank Permata Tbk totalling $12 million at 30 June 2009 (30 June 2008: $6 million, 31 December 2008: $12 million), and deposits of $22 million at 30 June 2009 (30 June 2008: $2 million, 31 December 2008: $36 million).

The Group has investments in sub debt issued by PT Bank Permata Tbk for $50 million at 30 June 2009 (30 June 2008: nil million, 31 December 2008: nil million).

The Group has loans and advances to Standard Chartered STCI Capital Markets at 30 June 2009 totalling $nil million and deposits of $13 million. (30 June 2008: loans and advances of $nil million and deposits of $13 million; 31 December 2008: loans and advances of $nil million and deposits of $12 million).

Associates

At 30 June 2009, the Group has loans to Merchant Solutions amounting to $20 million (30 June 2008: $61 million and 31 December 2008: $nil million). Except as disclosed, at 30 June 2009, 31 December 2008 and 30 June 2008 the Group did not have any amounts due to or from associate investments.

40. Post balance sheet events

On 4 August 2009, the Directors declared an interim dividend of 21.23 cents per share.

On 4 August 2009 the Company announced a placing to raise approximately £1 billion ($1.6 billion) through the issue of new ordinary shares (the Placing). The Placing will be effected by way of an accelerated book build. The number of shares to be issued will be dependant on the Placing price. This will be determined at the close of the accelerated book building period and details will be announced as soon as practicable after the close of the book building exercise. The Placing shares will be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of $0.50 each in the capital of the Company including the right to receive all dividends and other distributions declared, made or paid after the date of issue. The Placing shares will be eligible for the interim dividends declared on 4 August 2009.

41. Statutory accounts

The information in this interim statement is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. This document was approved by the Board on 4 August 2009. The comparative figures for the financial year ended 31 December 2008 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 of the Companies Act 2006.

42. Corporate governance

The directors confirm that, throughout the period, the Company has complied with the provisions of Appendix 14 of the Listing Rules of the Hong Kong Stock Exchange Limited (HK Listing Rules). The directors also confirm that the announcement of these results has been reviewed by the Company's Audit and Risk Committee.

The Company confirms that it has adopted a code of conduct regarding securities transactions by directors on terms no less exacting than required by Appendix 10 of the Listing Rules of the Hong Kong Stock Exchange, and that the directors of the Company have complied with this code of conduct throughout the period.

Standard Chartered PLC - Statement of directors' responsibilities

The directors confirm that this condensed consolidated interim financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting', as adopted by the European Union (EU) and that the interim management report includes a fair review of the information required by the Disclosure and Transparency Rules 4.2.7 and 4.2.8, namely:

(a) an indication of important events that have occurred during the first six months and their impact on the condensed Interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

(b) material related party transactions in the first six months ended 30 June 2009 and any material changes in the related party transactions described in the last annual report of the Group.

By order of the Board

R H Meddings

Group Finance Director

4 August 2009

Independent review report by KPMG Audit Plc to Standard Chartered PLC

Introduction

We have been engaged by the Company to review the financial information set out on pages 45 to 85, which comprises the condensed consolidated interim balance sheet as at 30 June 2009 and the condensed consolidated interim income statement, condensed consolidated interim statement of comprehensive income, condensed consolidated interim statement of changes in equity and condensed consolidated interim cash flow statement for the six months then ended, and the related explanatory notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules (the DTR) of the UK's Financial Services Authority (the UK FSA). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half yearly financial report is the responsibility of and has been approved by the directors. The directors are responsible for preparing the half yearly financial report in accordance with the DTR of the UK FSA.

As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Review work performed

We conducted our review in accordance with the International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the financial information.

Review conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2009 is not prepared, in all material aspects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.

M StJ Ashley

for and on behalf of KPMG Audit Plc

Chartered Accountants

London

4 August 2009

Standard Chartered PLC - Additional information

Risk weighted assets

Segmental information by business

	30.06.09					30.06.08
	Consumer Banking $million	Wholesale Banking $million	Total reportable segments $million	Corporate items not allocated $million	Total $million	Consumer Banking $million	Wholesale Banking $million	Total reportable segments $million	Corporate items not allocated $million	Total $million
Total risk weighted assets	51,761	153,255	205,016	-	205,016	56,552	147,809	204,361	-	204,361

	31.12.08
	Consumer Banking $million	Wholesale Banking $million	Total reportable segments $million	Corporate items not allocated $million	Total $million
Total risk weighted assets	52,124	136,697	188,821	-	188,821

Information by geographic area

	30.06.09
	Asia Pacific
	Hong Kong $million	Singapore $million	Korea $million	Other Asia Pacific* $million	India $million	Middle East & Other S Asia $million	Africa $million	Americas UK & Europe $million	Total $million
Total risk weighted assets**	19,293	19,525	27,577	43,480	16,144	27,569	7,675	50,280	211,543

* Other APR includes Malaysia $7,432 million.

** Total risk weighted assets include $6,527 million of intra-group balances which are netted in calculating capital ratios.

	30.06.08
	Asia Pacific
	Hong Kong $million	Singapore $million	Korea $million	Other Asia Pacific* $million	India $million	Middle East & Other S Asia $million	Africa $million	Americas UK & Europe $million	Total $million
Total risk weighted assets**	21,261	15,402	31,823	43,537	20,204	22,588	7,475	49,806	212,096

* Other APR includes Malaysia $7,479 million.

** Total risk weighted assets include $7,736 million of intra-group balances which are netted in calculating capital ratios.

	31.12.08
	Asia Pacific
	Hong Kong $million	Singapore $million	Korea $million	Other Asia Pacific* $million	India $million	Middle East & Other S Asia $million	Africa $million	Americas UK & Europe $million	Total $million
Total risk weighted assets**	21,072	15,064	27,020	37,053	15,578	22,070	7,247	51,744	196,848

* Other APR includes Malaysia $6,314 million.

** Total risk weighted assets include $8,027 million of intra-group balances which are netted in calculating capital ratios.

Share awards

2000 Executive Share Option Scheme (2000 ESOS)

No share awards were granted during 2009.

A reconciliation of option movements over the period to 30 June 2009 is shown below:

	2009
	No. of shares	Weighted average exercise price
Outstanding at 1 January	7,485,925	£7.18
Lapsed	(3,487)	£8.19
Exercised	(901,275)	£6.83
Outstanding at 30 June	6,581,163	£7.23
Exercisable at 30 June	6,581,163	£7.23

	2009
Range of exercise price for options outstanding	Weighted average exercise price	Weighted average remaining contractual life
£6.05/£9.10	£7.23	3.6 years

The weighted average share price at the time the options were exercised during the current period was £11.64.

2001 Performance Share Plan (2001 PSP)

A reconciliation of option movements over the period to 30 June 2009 is shown below:

	2009
	No. of shares	Weighted average exercise price
Outstanding at 1 January	8,458,895	-
Granted	4,553,738	-
Lapsed	(276,628)	-
Exercised	(1,341,121)	-
Outstanding at 30 June	11,394,884	-
Exercisable at 30 June	1,195,858	-

	2009
Range of exercise price for options outstanding	Weighted average exercise price	Weighted average remaining contractual life
n/a	-	8.6 years

The weighted average share price at the time the options were exercised during the current period was £10.45.

1997/2006 Restricted Share Scheme (1997/2006 RSS)

A reconciliation of option movements over the period to 30 June 2009 is shown below:

	2009
	No. of shares	Weighted average exercise price
Outstanding at 1 January	7,285,927	-
Granted	12,507,182	-
Lapsed	(180,558)	-
Exercised	(1,156,659)	-
Outstanding at 30 June	18,455,892	-
Exercisable at 30 June	2,472,576	-

	2009
Range of exercise price for options outstanding	Weighted average exercise price	Weighted average remaining contractual life
n/a	-	6.0 years

The weighted average share price at the time the options were exercised during the current period was £9.79.

2006 Supplementary Restricted Share Scheme (2006 SRSS)

A reconciliation of option movements over the period to 30 June 2009 is shown below:

	2009
	No. of shares	Weighted average exercise price
Outstanding at 1 January	2,442,096	-
Granted	4,405,419	-
Lapsed	(27,846)	-
Exercised	(8,116)	-
Outstanding at 30 June	6,811,553	-
Exercisable at 30 June	2,196	-

	2009
Range of exercise price for options outstanding	Weighted average exercise price	Weighted average remaining contractual life
n/a	-	6.4 years

The weighted average price when the options were exercised was £10.85.

1994/1996 UK and International Sharesave Scheme

A reconciliation of option movements over the period to 30 June 2009 is shown below:

	2009
	No. of shares	Weighted average exercise price
Outstanding at 1 January	162,982	£5.61
Lapsed	-	-
Exercised	(123,476)	£6.11
Outstanding at 30 June	39,506	£6.27
Exercisable at 30 June	39,506	£6.27

	2009
Range of exercise price for options outstanding	Weighted average exercise price	Weighted average remaining contractual life
£5.613/£6.41	£6.27	-

The weighted average share price at the time the options were exercised during the current period was £10.28 for 1994 UK Sharesave schemes and £10.74 for 1996 International Sharesave schemes.

2008 Irish Sharesave Scheme

The first awards under this scheme were made on 29 September 2008.

Valuation

A reconciliation of option movements over the year to 30 June 2009 is shown below:

	2009
	No. of shares	Weighted average exercise price
Outstanding at 1 January	14,290	£10.18
Granted	-	-
Lapsed	-	-
Exercised	-	-
Outstanding at 30 June	14,290	£10.18
Exercisable at 30 June	-	-

	2009
Range of exercise price for options outstanding	Weighted average exercise price	Weighted average remaining contractual life
£10.18	£10.18	4.8 years

There are no vested 2008 Irish sharesave awards as at 30 June 2009.

2004 UK and International Sharesave Schemes

A reconciliation of option movements over the period to 30 June 2009 is shown below:

	2009
	No. of shares	Weighted average exercise price
Outstanding at 1 January	20,229,858	£9.69
Lapsed	(1,648,128)	£10.06
Exercised	(2,829,190)	£8.61
Outstanding at 30 June	15,752,540	£9.78
Exercisable at 30 June	1,273,787	£8.72

	2009
Range of exercise price for options outstanding	Weighted average exercise price	Weighted average remaining contractual life
£6.51/£10.18	£9.78	1.4 years

The weighted average share price at the time the options were exercised during the current period was £11.78 for the UK Sharesave scheme and £11.34 for the International Sharesave scheme.

2004 Deferred Bonus Plan

A reconciliation of share movements over the period to 30 June 2009 is shown below:

				2009
				No. of Shares
Outstanding at 1 January				352,857
Shares vested				(347,836)
Shares awarded				352,633
Shares lapsed				(7,073)
Outstanding at 30 June				350,581

Notes:

a) Market value of shares on date of awards (6 March) was £698.5 pence.

b) The shares vest one year after the date of award.

Valuation of options

Details of the valuation models used in determining the fair values of options granted are detailed in the Group's 2008 Annual Report and Accounts.

Directors' interests in ordinary shares

Director	At 1 January 2009* Total interests	Personal interests	Family interests	At 30 June 2009** Total interests
J W Peace	6,648	6,648	-	6,648
P A Sands	108,237	230,486	-	230,486
S P Bertamini	40,659	42,123	-	42,123
G R Bullock	180,471	200,000	-	200,000
J F T Dundas	2,792	2,792	-	2,792
V F Gooding	2,753	2,753	-	2,753
R H P Markham	3,312	3,431	-	3,431
R Markland	2,997	3,106	-	3,106
R H Meddings	208,030	233,611	-	233,611
S B Mittal	2,000	2,000	-	2,000
J G H Paynter	2,659	2,659	-	2,659
P D Skinner	5,328	7,199	-	7,199
O H J Stocken	14,221	15,820	-	15,820
Lord Davies	33,184	33,184	-	33,184

* or at date of appointment to the Board, if later.

** or at date of resignation from the Board, if earlier.

The beneficial interests of directors and their families in the ordinary shares of the Company are set out above. The directors do not have any non-beneficial interests in the Company's shares.

Lord Davies resigned from the Board with effect from 14 January 2009

No director had an interest in the Company's preference shares or loan stock, nor the shares or loan stocks of any subsidiary or associated undertaking of the Group.

No director had any corporate interests in the Company's ordinary shares.

2004 Deferred Bonus Plan

Director	Shares held in trust at 1 January 2009*	Shares awarded during the period(a)	Shares awarded in respect of notional dividend	Shares vested during the period(a)	Shares held in trust at 30 June 2009**
P A Sands	34,270	70,532	338	34,608	70,532
S P Bertamini	-	170,081	-	-	170,081
G R Bullock	17,820	28,283	175	17,995	28,283
R H Meddings	23,303	35,923	229	23,532	35,923

* or at date of appointment to the Board, if later.

** or date of resignation from Board if earlier.

Notes

(a) Market value on date of awards (9 March 2009) was 698.5 pence.

Deferred Bonus Plan

Under the 2004 Deferred Bonus Plan, shares are conditionally awarded instead of all or part of the executive directors' and certain senior executives' annual performance award. The shares are held in an employee benefit trust and automatically vest one year after the date of acquisition. No exercise is necessary. A notional scrip dividend accrues on the shares held in the trust. The dividend is delivered in the form of shares and is released on vesting.

Long term incentives - Share options

Director	Scheme	Grant date	As at 1 January 2009*	Exercise price (pence)	Exercised	Lapsed	At 30 June 2009**	Period of exercise
P A Sands	2000 ESOS	20 May 2002	234,638	754.35	-	-	234,638	2009-2012
	2000 ESOS	5 March 2003	223,357	604.41	-	-	223,357	2009-2013
	2000 ESOS	4 March 2004	109,908	818.86	-	-	109,908	2009-2014
	2000 ESOS	9 March 2005	111,772	849.94	-	-	111,772	2009-2015
	Sharesave	26 September 2007	1,543	1,088.03	-	-	1,543	2010-2011
G R Bullock	Sharesave	29 September 2008	943	1,017.12	-	-	943	2011-2012
R H Meddings	2000 ESOS	4 March 2004	74,798	818.86	-	-	74,798	2009-2014
	Sharesave	8 September 2006	1,003	931.34	-	-	1,003	2009-2010
Lord Davies	2000 ESOS	9 March 2005	3,662	818.86	-	-	3,662	2009-2010

* or at date of appointment to the Board or date of grant, if later.

** or at date of resignation from the Board if earlier.

2000 Executive Share Option Scheme (2000 ESOS)

It is proposed that no further awards will be made under the 2000 ESOS. However, the scheme will be retained for use in exceptional circumstances or if there is a subsequent change in policy in response to future market trends. Under the 2000 ESOS, options to acquire the Company's ordinary shares are exercisable after the third, but before the tenth, anniversary of the date of grant. The exercise price per share is the share price at the date of grant and options can normally only be exercised if a performance condition is satisfied.

(Sharesave)

Sharesave comprises all employee share schemes in which staff across the Group, including the executive directors, are eligible to participate. The Group has operated UK and International Sharesave schemes since 1984 and 1996 respectively; the latter being specifically launched to allow all non UK based employees to participate. In 2008, the Company introduced an Irish Sharesave Scheme for employees.

Under Sharesave, employees are invited to open a three-year or a five-year savings contract. Within a period of six months after the third or fifth anniversary, employees may purchase ordinary shares in the Company at a price which is at a discount of up to 20 per cent on the share price at the date of invitation. There are no performance conditions attached to options granted under all the employee Sharesave schemes.

Long term incentives - Shares

Director	Scheme	Grant date	As at 1 January 2009*	Exercised	Lapsed	As at 30 June 2009**	Period of exercise
P A Sands	PSP	9 June 2004	41,863	41,863(a)	-	-	-
	PSP	9 March 2005	111,772	111,772(b)	-	-	-
	PSP	14 March 2006	83,592	71,052(c)	12,540(d)	-	-
	PSP	11 May 2006	41,079	32,452(c)	8,627(d)	-	-
	PSP	12 March 2007	162,389	-	-	162,389	2010-2017
	PSP	11 March 2008	184,774	-	-	184,774	2011-2018
	PSP	11 March 2009	356,481	-	-	356,481	2012-2019
	RSS	11 March 2009	84,231	-	-	84,231	2011-2016
S P Bertamini	PSP	16 Sept 2008	59,337	-	-	59,337	2011-2018
	PSP	11 March 2009	159,033	-	-	159,033	2012-2019
	RSS	11 March 2009	28,437	-	-	28,437	2011-2016
G R Bullock	PSP	14 March 2006	55,728	47,368(a)	8,360(d)	-	-
	PSP	11 May 2006	20,539	16,226(c)	4,313(d)	-	-
	PSP	12 March 2007	93,102	-	-	93,102	2010-2017
	PSP	11 March 2008	108,665	-	-	108,665	2011-2018
	PSP	11 March 2009	146,604	-	-	146,604	2012-2019
	RSS	11 March 2009	31,292	-	-	31,292	2011-2016
R H Meddings	PSP	14 March 2006	68,466	58,196(a)	10,270(d)	-	-
	PSP	11 May 2006	25,235	19,935(c)	5,300(d)	-	-
	PSP	12 March 2007	100,385	-	-	100,385	2010-2017
	PSP	11 March 2008	125,646	-	-	125,646	2011-2018
	PSP	11 March 2009	220,370	-	-	220,370	2012-2019
	RSS	11 March 2009	53,514	-	-	53,514	2011-2016
Lord Davies	PSP	14 March 2006	127,379	-	-	127,379	2009-2010
	PSP	11 May 2006	93,898	-	-	93,898	2009-2010
	PSP	12 March 2007	204,708	-	-	204,708	2010

* or at date of appointment to the Board or date of grant if later.

** or at date of resignation from the Board, if earlier.

Notes

(a) Market value on date of exercise (17 March 2009) was 859.94 pence

(b) Market value on date of exercise (30 June 2009) was 1152.9 pence

(d) The performance conditions were partially met for those PSP awards granted in March and May 2006. Therefore the number of shares lapsed indicates the portion of the award which did not satisfy the performance conditions.

2001 Performance Share Plan (2001 PSP)

Under the 2001 PSP awards of nil price options to acquire shares are granted to the director and will normally be exercised between three and ten years after the date of grant.

Before any award can be exercised under the 2001 PSP, certain performance conditions need to be met. The performance conditions are set at the time of the award. 50 per cent of each award is subject to the satisfaction of a relative total shareholder return performance target. The remaining 50 per cent of the award is subject to the satisfaction of an EPS performance target.

Restricted Share Scheme (RSS)

The RSS is used as a vehicle for deferring part of the annual performance awards for certain employees and as an incentive plan to motivate and retain high performing staff at any level of the organisation. Except where used for deferral purposes, executive directors are not generally eligible to participate in the RSS. Fifty per cent of the award vests two years after the date of grant and the remainder after three years. There are no performance conditions attached to awards under the Restricted Share Scheme.

Further details of the share schemes mentioned above, can be found in the Company's 2008 Report and Accounts, which is available on the Company's website:

http://investors.standardchartered.com

Share price information

The middle market price of an ordinary share at the close of business on 30 June 2009 was 1140 pence. The share price range during the first half of 2009 was 556 pence to 1288 pence (based on the closing middle market prices).

Substantial shareholders

The Company and its shareholders have been granted partial exemption from the disclosure requirements under Part XV of the Securities and Futures Ordinance (SFO).

As a result of this exemption, shareholders no longer have an obligation under the SFO to notify the Company of substantial shareholding interests, and the Company is no longer required to maintain a register of interests of substantial shareholders under section 336 of the SFO. The Company is, however, required to file with the Hong Kong Stock Exchange any disclosure of interests made in the UK.

2009 Interim dividend
Ex dividend date	12 August 2009
Record date for dividend	14 August 2009
Dividend payment date	8 October 2009

2009 Final dividend	(provisional only)
Results and dividend announced	3 March 2010
Preference shares	Next half-yearly dividend
7 3/8 per cent Non-Cumulative Irredeemable preference shares of £1 each	1 October 2009
8 ¼ per cent Non-Cumulative Irredeemable preference shares of £1 each	1 October 2009
6.409 per cent Non-Cumulative preference shares of $5 each	30 July 2009
7.014 per cent Non-Cumulative preference shares of $5 each	30 July 2009
8.125 per cent Non-Cumulative preference shares of $5 each	27 November 2009

Previous dividend payments (not adjusted for rights issue)

Dividend and financial year	Payment date	Cash dividend per ordinary share	Cost of one new ordinary share under the share dividend scheme
Interim 1999	15 October 1999	6.75p	860.8p
Final 1999	26 May 2000	16.10p	797.9p
Interim 2000	13 October 2000	7.425p	974.3p
Final 2000	25 May 2001	17.71p	No offer
Interim 2001	12 October 2001	12.82c/8.6856p	No offer
Final 2001	17 May 2002	29.10c/19.91p	£8.43/$12.32
Interim 2002	15 October 2002	14.10c/9.023p	£6.537/$10.215
Final 2002	13 May 2003	32.9c/20.692p/ HK$2.566	£6.884/$10.946
Interim 2003	10 October 2003	15.51c/9.3625p/HK$1.205	£8.597/$14.242
Final 2003	14 May 2004	36.49c/20.5277p/HK$2.8448	£8.905/$15.830
Interim 2004	8 October 2004	17.06c/9.4851p/HK$1.3303	£9.546/$17.16958
Final 2004	13 May 2005	40.44c/21.145p/HK$3.15156	£9.384/$17.947
Interim 2005	14 October 2005	18.94c/10.7437p/HK$1.46911	£11.878/$21.3578
Final 2005	12 May 2006	45.06c/24.9055p/HK$3.49343	£14.276/$24.77885
Interim 2006	11 October 2006	20.83c/11.14409p/HK$1.622699	£13.2360/$25.03589
Final 2006	11 May 2007	50.21c/25.17397p/HK$3.926106	£14.2140/$27.42591
Interim 2007	10 October 2007	23.12c/11.39043p/HK$1.794713	£15.2560/$30.17637
Final 2007	16 May 2008	56.23c/28.33485p/HK$4.380092	£16.2420/$32.78447
Interim 2008	9 October 2008	25.67c/13.96133p/HK$1.995046	£14.00/$26.0148
Final 2008	15 May 2009	42.32c/28.4693p/HK$3.279597	£8.342/$11.7405

ShareCare

ShareCare is available to shareholders on the Company's United Kingdom register who have a United Kingdom address and bank account, and allows you to hold your Standard Chartered shares in a nominee account. Your shares will be held in electronic form so you will no longer have to worry about keeping your share certificates safe. If you join ShareCare you will still be invited to attend the Company's AGM and you will still receive your dividend at the same time as everyone else. ShareCare is free to join and there are no annual fees to pay. If you would like to receive more information please visit our website at http://investors.standardchartered.com/mypage.cfm or contact the shareholder helpline on 0870 702 0138.

Donating shares to ShareGift

Shareholders who have a small number of shares often find it uneconomical to sell them. An alternative is to consider donating them to the charity ShareGift (registered charity 1052686), which collects donations of unwanted shares until there are enough to sell and uses the proceeds to support UK charities. Further information can be obtained from the Company's Registrars or from ShareGift on 020 7930 3737 or from www.sharegift.org. There is no implication for Capital Gains Tax (no gain no loss) when you donate shares to charity and UK tax payers may be able to claim income tax relief on the value of their donation.

Bankers' Automated Clearing System (BACS)

Dividends can be paid straight into your bank or building society account. Please register online at www.investorcentre.co.uk contact our registrar for a mandate form.

Registrars and shareholder enquiries

If you have any enquiries relating to your shareholding and you hold your shares on the United Kingdom register, please contact our registrar Computershare Investor Services PLC at The Pavilions, Bridgwater Road, Bristol, BS99 7ZY. There is a shareholder helpline on 0870 702 0138.

If you hold your shares on the Hong Kong branch register and you have enquiries, please contact Computershare Hong Kong Investor Services Limited, Rooms 1806-1807, 18th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong. You can check your shareholding at: www.investorcentre.co.uk

Chinese translation

If you would like a Chinese version of this Half Year Report please contact: Computershare Hong Kong Investor Services Limited at Rooms 1806-1807, 18th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong.

本半年報告之中文譯本可向香港中央證券登記有限公司索取，地址：香港灣仔皇后大道東183號合和中心18 樓1806-1807 室。

Shareholders on the Hong Kong branch register who have asked to receive corporate communications in either Chinese or English can change this election by contacting Computershare.

If there is a dispute between any translation and the English version of this Half Year Report, the English text shall prevail.

Taxation

Information on taxation applying to dividends paid to you if you are a shareholder in the United Kingdom, Hong Kong and the United States will be sent to you with your dividend documents.

Financial calendar

Ex-dividend date	12 August 2009
Record date	14 August 2009
Expected posting to shareholders of 2009 Half Year Report	1 September 2009
Payment date - interim dividend on ordinary shares	8 October 2009

Copies of this statement are available from:

Investor Relations, Standard Chartered PLC, 1 Basinghall Avenue, London, EC2V 5DD or from our website on

http://investors.standardchartered.com

For further information please contact:

Gavin Laws, Group Head of Corporate Affairs

+44 20 7885 7168

Stephen Atkinson, Head of Investor Relations

+44 20 7885 7245

Ashia Razzaq, Head of Investor Relations, Asia Pacific

+852 2820 3958

Tim Baxter, Head of Corporate Communications

+44 20 7885 5573

Arjit De, Head of Media Relations

+44 20 7885 7163

The following information will be available on our website

Interim results video interview with Peter Sands, Group chief executive and Richard Meddings, Group finance director

Interim results presentation in pdf format

A live webcast of the interim results analyst presentation

The archived podcast, webcast and Q/A session of analyst presentation in London

Images of Standard Chartered are available for the media at

http://www.standardchartered.com/global/mc/plib/directors_p01.html

Information regarding the Group's commitment to Sustainability is available at

http://www.standardchartered.com/sustainability

Forward looking statements

It is possible that this document could or 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 anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because, by their very nature, they 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.

There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking statements. Among the factors that could cause actual results to differ materially from those described in the forward looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions.

The Group undertakes no 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.

Disclaimer

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933 (the 'U.S. Securities Act') and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. No public offering of the Placing Shares will be made in the United States.

Standard Chartered PLC - Index

	Page		Page

Asset backed securities	35	Liquidity risk	40, 81
Balance sheet	47	Loans and advances and impairment	67
Business combinations	71	Market risk	37-39
Capital base and ratios	42-44	Minority interests	77
Cash flow statement	49	Net interest margin and spread	53, 78
Cash equivalents	78	Normalised earnings	61
Changes in equity	48	Operational risk	41
Comprehensive income	46	Other operating income	58
Consumer Banking:		Post balance sheet events	40
• Financial review	12-14	Principal risks and uncertainties	19
• Loan impairment coverage ratio	28	Regulatory risk	41
Contingent liabilities and commitments	79	Remuneration	79
Country risk	36	Reputational risk	41
Credit risk management	21	Restatement of prior periods	83
Derivatives	39, 65-66	Retirement benefit obligations	75
Dividends	60	Risk management framework	20
Earnings per share	61	Segmental information by business	51-52
Financial calendar	97	Segmental information by geography	53-55
Financial instruments classification	62	Segmental information of deposits	56-57
Financial review of Group	10-11	Share capital	76
Hedging	39-40	Shares held by share scheme trust	76
Highlights	1	Special purpose entities	84
Impairment losses on loans and advances:		Subordinated debt	75
• Total individual impairment	33-34	Summary of results	3
• Consumer Banking	28-30	Taxation	59
• Wholesale Banking	30-32	Trading income	57
Income statement	45	Wholesale Banking:
Industry concentration in loans and advances	24-26	• Financial review	15-17
Investment securities	68-70	• Loan impairment coverage ratio	31

This information is provided by RNS

The company news service from the London Stock Exchange

END

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