Interim Results-Part 2
Standard Chartered PLC
2 August 2000
PART 2
Standard Chartered PLC
Notes
1. Segmental information
By geographic segment
6 months ended 30.6.00
Asia Pacific Middle
Hong Other East &
Kong countries Africa S Asia
£m £m £m £m
Interest receivable 732 653 140 247
Interest payable (458) (408) (72) (161)
Net interest income 274 245 68 86
Fees and commissions
receivable, net 71 93 35 33
Dealing profits and
exchange 15 40 14 15
Other operating income 1 5 1 3
Net revenue 361 383 118 137
Costs (166) (236) (69) (63)
Amortisation of goodwill - - - -
Year 2000 costs - - - -
Total operating expenses (166) (236) (69) (63)
Profit before provisions 195 147 49 74
Charge for debts (33) (44) (24) (15)
Profit before taxation 162 103 25 59
Loans and advances to
customers - average 10,956 10,011 715 2,207
Net interest margin (%) 2.9 2.6 8.7 3.9
6 months ended 30.6.00
UK &
Group
Head
Americas Office Total
£m £m £m
Interest receivable 209 734 2,715
Interest payable (171) (594) (1,864)
Net interest income 38 140 851
Fees and commissions
receivable, net 24 6 262
Dealing profits and
exchange 14 17 115
Other operating income 1 15 26
Net revenue 77 178 1,254
Costs (57) (116) (707)
Amortisation of goodwill - (16) (16)
Year 2000 costs - (11) (11)
Total operating expenses (57) (143) (734)
Profit before provisions 20 35 520
Charge for debts (20) (28) (164)
Profit before taxation - 7 356
Loans and advances to
customers - average 1,708 4,786 30,383
Net interest margin (%) 1.2 2.4 3.3
a)Total interest receivable and total interest payable include intra-
group interest of £674 million.
b)Group central expenses and other overhead costs have been distributed
between segments in proportion to their direct costs and the benefit
of the Group s capital has been distributed between segments in
proportion to their risk weighted assets.
c)Business acquisitions have been made as part of the Group s growth
strategy. These activities are a result of corporate decisions made
at the centre and the amortisation of purchased goodwill is included
in the UK & Group Head Office segment.
d)The resolution of Year 2000 related technology issues has been managed
from the centre as a global project and all expenses are included in
the UK & Group Head Office segment.
1. Segmental information
By geographic segment (continued)
30.6.00
Asia Pacific Middle
Hong Other East &
Kong countries Africa S Asia
£m £m £m £m
Mortgages 7,170 2,997 12 27
Other retail 1,037 1,115 87 539
Other 3,547 6,251 549 1,787
Loans and advances to 11,754 10,363 648 2,353
customers
Loans and advances to banks 2,763 3,966 98 664
Total assets employed 22,131 22,678 1,837 5,081
Total risk weighted assets
and contingents 10,495 12,816 814 3,189
Gross non-performing loans
and advances 536 1,463 55 152
Specific provisions for bad
and doubtful debts (204) (423) (28) (95)
Interest in suspense (67) (102) (16) (25)
265 938 11 32
30.6.00
UK &
Group
Head
Americas Office Total
£m £m £m
Mortgages - 216 10,422
Other retail 3 74 2,855
Other 1,881 4,497 18,512
Loans and advances to 1,884 4,787 31,789
customers
Loans and advances to banks 1,373 4,407 13,271
Total assets employed 7,439 14,412 73,578
Total risk weighted assets
and contingents 3,294 8,865 39,473
Gross non-performing loans
and advances 172 205 2,583
Specific provisions for bad
and doubtful debts (73) (65) (888)
Interest in suspense (4) (13) (227)
95 127 1,468
e)Total assets employed include intra-group items of £12,666 million and
balances of £1,158 million which are netted in the summarised
consolidated balance sheet. Total risk weighted assets and
contingents include balances of £337 million which are netted in
note 17 on capital ratios.
f)Gross non-performing loans and advances in other Asia Pacific
countries include £579 million of non-performing loans from the
acquisition of Nakornthon Bank (now renamed Standard Chartered
Nakornthon Bank) in September 1999, against which provisions of £69
million are held. (See note 12).
g)Assets held at the centre have been distributed between geographic
segments in proportion to their total assets employed.
1. Segmental information
By geographic segment (continued)
6 months ended 30.6.99
Asia Pacific Middle
Hong Other East &
Kong countries Africa S Asia
£m £m £m £m
Interest receivable 665 637 116 199
Interest payable (398) (407) (54) (125)
Net interest income 267 230 62 74
Fees and commissions
receivable, net 66 72 26 26
Dealing profits and
exchange 16 45 18 12
Other operating income 1 4 4 1
Net revenue 350 351 110 113
Costs (161) (173) (58) (77)
Amortisation of goodwill - - - -
Year 2000 costs - - - -
Total operating expenses (161) (173) (58) (77)
Profit before provisions 189 178 52 36
Charge for debts (108) (80) (2) (30)
Profit before taxation 81 98 50 6
Loans and advances to
customers-average 9,984 8,573 723 1,745
Net interest margin (%) 3.2 3.0 8.7 3.4
6 months ended 30.6.99
UK &
Group
Head
Americas Office Total
£m £m £m
Interest receivable 132 634 2,383
Interest payable (96) (485) (1,565)
Net interest income 36 149 818
Fees and commissions
receivable, net 21 (2) 209
Dealing profits and
exchange 13 28 132
Other operating income 2 7 19
Net revenue 72 182 1,178
Costs (47) (113) (629)
Amortisation of goodwill - (8) (8)
Year 2000 costs - (30) (30)
Total operating expenses (47) (151) (667)
Profit before provisions 25 31 511
Charge for debts (10) (10) (240)
Profit before taxation 15 21 271
Loans and advances to
customers-average 1,287 4,309 26,621
Net interest margin (%) 1.4 1.8 3.5
h)Total interest receivable and total interest payable include intra-
group interest of £538 million.
i)See notes (b), (c) and (d) on page 15.
1. Segmental information
By geographic segment (continued)
30.6.99
Asia Pacific Middle
Hong Other East &
Kong countries Africa S Asia
£m £m £m £m
Mortgages 6,459 2,704 12 13
Other retail 912 694 87 358
Other 3,486 5,622 662 1,499
Loans and advances to 10,857 9,020 761 1,870
customers
Loans and advances to banks 1,855 4,331 92 634
Total assets employed 20,704 19,767 1,800 4,520
Total risk weighted assets
and contingents 9,438 11,213 949 2,756
Gross non-performing loans
and advances 448 920 74 136
Specific provisions for bad
and doubtful debts (178) (341) (20) (66)
Interest in suspense (30) (103) (29) (16)
240 476 25 54
30.6.99
UK &
Group
Head
Americas Office Total
£m £m £m
Mortgages - 171 9,359
Other retail 6 65 2,122
Other 1,261 4,395 16,925
Loans and advances to 1,267 4,631 28,406
customers
Loans and advances to banks 1,324 4,380 12,616
Total assets employed 6,084 14,203 67,078
Total risk weighted assets
and contingents 3,052 8,243 35,651
Gross non-performing loans
and advances 101 214 1,893
Specific provisions for bad
and doubtful debts (31) (62) (698)
Interest in suspense (1) (18) (197)
69 134 998
j)Total assets employed include intra-group items of £11,636 million and
balances of £735 million which are netted in the summarised
consolidated balance sheet. Total risk weighted assets and
contingents include balances of £153 million which are netted in
note 17 on capital ratios.
k)Assets held at the centre have been distributed between geographic
segments in proportion to their total assets employed.
1. Segmental information
By geographic segment (continued)
6 months ended 31.12.99
Asia Pacific Middle
Hong Other East &
Kong countries Africa S Asia
£m £m £m £m
Interest receivable 684 631 142 205
Interest payable (422) (402) (73) (136)
Net interest income 262 229 69 69
Fees and commissions
receivable, net 61 80 32 30
Dealing profits and
exchange 14 44 18 11
Other operating income 3 9 4 1
Net revenue 340 362 123 111
Costs (155) (208) (64) (66)
Amortisation of goodwill - - - -
Year 2000 costs - - - -
Total operating expenses (155) (208) (64) (66)
Profit before provisions 185 154 59 45
Charge for debts (70) (108) (4) (40)
Profit before taxation 115 46 55 5
Loans and advances to
customers - average 10,662 10,213 745 1,873
Net interest margin (%) 2.8 2.6 8.1 4.2
6 months ended 31.12.99
UK &
Group
Head
Americas Office Total
£m £m £m
Interest receivable 147 670 2,479
Interest payable (107) (521) (1,661)
Net interest income 40 149 818
Fees and commissions
receivable, net 21 5 229
Dealing profits and
exchange 10 17 114
Other operating income 5 17 39
Net revenue 76 188 1,200
Costs (56) (116) (665)
Amortisation of goodwill - (14) (14)
Year 2000 costs - (30) (30)
Total operating expenses (56) (160) (709)
Profit before provisions 20 28 491
Charge for debts (6) (27) (255)
Profit before taxation 14 1 236
Loans and advances to
customers - average 1,537 4,469 29,499
Net interest margin (%) 1.2 2.3 3.3
l)Total interest receivable and total interest payable include intra-
group interest of £594 million.
m)See notes (b), (c) and (d) on page 15.
1. Segmental information
By geographic segment (continued)
31.12.99
Asia Pacific Middle
Hong Other East &
Kong countries Africa S Asia
£m £m £m £m
Mortgages 6,396 2,684 13 13
Other retail 913 1,097 100 457
Other 3,119 5,771 667 1,452
Loans and advances to 10,428 9,552 780 1,922
customers
Loans and advances to banks 1,646 3,052 105 550
Total assets employed 20,328 18,967 1,905 4,304
Total risk weighted assets
and contingents 9,113 11,186 1,005 2,871
Gross non-performing loans
and advances 529 1,546 48 137
Specific provisions for bad
and doubtful debts (203) (445) (9) (88)
Interest in suspense (49) (115) (14) (16)
277 986 25 33
31.12.99
UK &
Group
Head
Americas Office Total
£m £m £m
Mortgages - 226 9,332
Other retail 3 26 2,596
Other 1,594 4,266 16,869
Loans and advances to 1,597 4,518 28,797
customers
Loans and advances to banks 2,100 3,948 11,401
Total assets employed 7,550 13,920 66,974
Total risk weighted assets
and contingents 2,949 8,209 35,333
Gross non-performing loans
and advances 128 210 2,598
Specific provisions for bad
and doubtful debts (50) (69) (864)
Interest in suspense (3) (11) (208)
75 130 1,526
n)Total assets employed include intra-group items of £12,218 million and
balances of £624 million which are netted in the summarised
consolidated balance sheet. Total risk weighted assets and
contingents include balances of £130 million which are netted in
note 17 on capital ratios.
o)Gross non-performing loans and advances in other Asia Pacific
countries include £596 million of non-performing loans from the
acquisition of Nakornthon Bank (now renamed Standard Chartered
Nakornthon Bank) in September 1999, against which provisions of £63
million are held. (See note 12)
p)Assets held at the centre have been distributed between geographic
segments in proportion to their total assets employed.
2. Segmental information
By class of business
6 months 6 months 6 months
ended ended ended
30.6.00 30.6.99 31.12.99
£m £m £m
Consumer Banking
Profit before provisions 301 274 266
New provisions (90) (98) (98)
Recoveries/provisions no longer required 34 25 30
Net charge (56) (73) (68)
Trading profit 245 201 198
Corporate and Institutional Banking
Profit before provisions 165 161 187
New provisions (142) (185) (240)
Recoveries/provisions no longer required 33 19 51
Net charge (109) (166) (189)
Trading profit/(loss) 56 (5) (2)
Treasury
Profit before provisions 81 114 82
New provisions - (1) -
Recoveries/provisions no longer required 1 - 2
Net release/(charge) 1 (1) 2
Trading profit 82 113 84
Amortisation of goodwill (16) (8) (14)
Year 2000 costs (11) (30) (30)
Profit before taxation 356 271 236
Total assets employed:
Consumer Banking 23,488 20,225 21,377
Corporate and Institutional Banking 24,026 21,012 22,972
Treasury 26,064 25,841 22,625
73,578 67,078 66,974
a)Group central expenses and other overhead costs have been distributed
between classes of business in proportion to their direct costs and
the benefit of the Group s capital has been distributed between
classes of business in proportion to their risk weighted assets.
b)See notes (c) and (d) on amortisation of goodwill and Year 2000 costs
on page 15.
c)Total assets employed include intra-group items of £12,666 million (30
June 1999: £11,636 million; 31 December 1999: £12,218 million) and
balances which are netted in the summarised consolidated balance sheet
of £1,158 million (30 June 1999: £735 million; 31 December 1999: £624
million).
d)Assets held at the centre have been distributed between classes of
business in proportion to their total assets employed.
3. Dealing profits and exchange
6 months 6 months 6 months
ended ended ended
30.6.00 30.6.99 31.12.99
£m £m £m
Income from foreign exchange dealing 108 114 104
Profits less losses on dealing securities 7 11 6
Other dealing profits and exchange - 7 4
115 132 114
4. Other operating income
6 months 6 months 6 months
ended ended ended
30.6.00 30.6.99 31.12.99
£m £m £m
Other operating income includes:
Share of profits arising on securitised
instalment credit agreements 13 7 17
Profits less losses on disposal of
investment securities 4 2 1
Dividend income 1 - 6
5. Taxation
6 months 6 months 6 months
ended ended ended
30.6.00 30.6.99 31.12.99
£m £m £m
United Kingdom corporation tax at 30.00%
(30 June 1999: 30.25%; 31 December 1999: 66 56 40
30.25%)
Relief for overseas tax (50) (27) (24)
16 29 16
Overseas tax 98 51 53
114 80 69
Effective tax rate 32.0% 29.5% 29.2%
6. Dividends on preference shares
6 months 6 months 6 months
ended ended ended
30.6.00 30.6.99 31.12.99
£m £m £m
Non-cumulative irredeemable preference
shares:
73/8% preference shares of £1 each 4 4 4
81/4% preference shares of £1 each 4 4 4
8 8 8
7. Dividends on ordinary shares
6 months ended 6 months ended
30.6.00 30.6.99
Pence per Pence per
share £m share £m
Interim 7.425p 80 6.75p 71
Final - - - -
7.425p 80 6.75p 71
6 months ended
31.12.99
Pence per
share £m
Interim - -
Final 16.10p 171
16.10p 171
The 2000 interim dividend of 7.425 pence per share will be paid on 13
October 2000 to shareholders on the register of members at close of
business on 18 August 2000. Shareholders will be entitled, if they wish,
to elect to receive shares credited as fully paid instead of the interim
dividend (or part thereof). Details will be sent to shareholders on or
around 31 August 2000.
8. Earnings per ordinary share
6 months ended 30.6.00 6 months ended 30.6.99
Average Per Average Per
number of share number of share
Profit shares amount Profit shares amount
£m ( 000) Pence £m ( 000) Pence
Basic EPS
Profit attributable
to ordinary
shareholders 223 1,064,197 21.0 177 1,032,200 17.1
Effect of dilutive
potential ordinary
shares
Convertible bonds 5 17,244 - -
Options - 7,229 - 9,465
Diluted EPS 228 1,088,670 20.9 177 1,041,665 17.0
6 months ended 31.12.99
Average Per
number of share
Profit shares amount
£m ( 000) Pence
Basic EPS
Profit attributable
to ordinary
shareholders 151 1,060,164 14.2
Effect of dilutive
potential ordinary
shares
Convertible bonds - -
Options - 10,707
Diluted EPS 151 1,070,871 14.1
Headline earnings per ordinary share
The Institute of Investment Management and Research Statement of
Investment Practice No 1 provides a definition of headline earnings, a
measure which has gained widespread acceptance. As this differs from
earnings defined in Financial Reporting Standard 14, the table below
provides a reconciliation.
6 months 6 months 6 months
ended ended ended
30.6.00 30.6.99 31.12.99
£m £m £m
Profit attributable to shareholders after
preference dividends 223 177 151
Amortisation of goodwill 16 8 14
Profits less losses on disposal of
investment securities (4) (2) (1)
Headline earnings 235 183 164
Headline earnings per ordinary share 22.1p 17.7p 15.5p
9. Called up share capital
30.6.00 30.6.99 31.12.99
£m £m £m
Equity capital
Ordinary shares of 25p each 268 265 265
Non-equity capital
Non-cumulative irredeemable preference
shares:
73/8% preference shares of £1 each 100 100 100
81/4% preference shares of £1 each 100 100 100
468 465 465
10. Shareholders funds
Share Premises Profit Total
Share premium revaluat and loss sharehol
capital account ion account ders
£m £m reserve £m funds
£m £m
At 1 January 2000 465 814 38 2,049 3,366
Exchange translation - - (1) 46 45
differences
Shares issued 3 11 - 87 101
Retained profit - - - 143 143
Capitalised on exercise
of share options - 8 - (8) -
Other - - - (5) (5)
At 30 June 2000 468 833 37 2,312 3,650
11. Provisions for bad and doubtful debts
Loans and advances are stated after deducting the following provisions
for bad and doubtful debts:
6 months ended 6 months ended
30.6.00 30.6.99
Specific General Specific General
£m £m £m £m
Provisions held at beginning of
period 940 271 641 269
Exchange translation 50 19 29 12
differences
Amounts written off (199) - (133) -
Recoveries of amounts
previously written off 17 - 16 -
Acquisition of subsidiary - - - -
Other (2) - (11) -
New provisions 232 - 284 -
Recoveries/provisions no longer
required (68) - (44) -
Net charge against profit 164 - 240 -
Provisions held at period end 970 290 782 281
Total provisions held at period
end against:
Loans and advances to banks 13 - 4 -
Loans and advances to customers 957 290 778 281
970 290 782 281
6 months ended
31.12.99
Specific General
£m £m
Provisions held at beginning of
period 782 281
Exchange translation (23) (10)
differences
Amounts written off (169) -
Recoveries of amounts
previously written off 36 -
Acquisition of subsidiary 63 -
Other (4) -
New provisions 338 -
Recoveries/provisions no longer
required (83) -
Net charge against profit 255 -
Provisions held at period end 940 271
Total provisions held at period
end against:
Loans and advances to banks 11 -
Loans and advances to customers 929 271
940 271
Specific provisions for bad and doubtful debts include £82 million (30
June 1999: £84 million; 31 December 1999: £76 million) of provisions
against enhanced and other performing emerging markets debt.
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