SCB Yearend Results (2 of 3)
Standard Chartered PLC
21 February 2001
Standard Chartered PLC
SCB Yearend Results (2 of 3)
STANDARD CHARTERED PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
First half and second half 2000
2nd half 1st half
2000 2000
£m £m
Interest receivable 2,514 2,041
Interest payable (1,578) (1,190)
Net interest income 936 851
Fees and commissions receivable, net 324 262
Dealing profits and exchange 134 115
Other operating income 50 26
508 403
Net revenue 1,444 1,254
Administrative expenses:
Staff (536) (379)
Premises (112) (87)
Other (283) (197)
Depreciation and amortisation (125) (71)
Total expenses - ongoing (843) (734)
- restructuring (213) -
Total operating expenses (1,056) (734)
Operating profit before provisions 388 520
Provisions for bad and doubtful debts (141) (164)
Provisions for liabilities and commitments (5) -
Operating profit 242 356
Profit on disposal of subsidiary undertakings 351 -
Profit before taxation 593 356
Taxation (135) (114)
Profit after taxation 458 242
Minority interests (equity) - (4)
Minority interests (non-equity) (12) (7)
Profit for the period attributable to shareholders 446 231
Dividends on non-equity preference shares (8) (8)
Dividends on ordinary equity shares (200) (80)
Retained profit 238 143
STANDARD CHARTERED PLC
SUMMARISED CONSOLIDATED BALANCE SHEET
31 December 2000
2000 1999
Notes £m £m
Assets
Cash, balances at central banks and cheques 601 643
in course of collection
Treasury bills and other eligible bills 2,657 2,701
Loans and advances to banks 1 15,935 11,401
Loans and advances to customers 1 34,797 28,797
Debt securities and equity shares 6,673 5,114
Intangible fixed assets 1,561 366
Tangible fixed assets 655 599
Prepayments, accrued income and other assets 5,720 4,511
Total assets 68,599 54,132
Liabilities
Deposits by banks 7,447 5,555
Customer accounts 43,620 35,149
Debt securities in issue 3,040 2,665
Accruals, deferred income and other 7,121 5,429
liabilities
Subordinated liabilities:
Undated loan capital 1,219 954
Dated loan capital 1,514 945
Minority interests 377 69
Shareholders funds 11 4,261 3,366
Total liabilities and shareholders funds 68,599 54,132
Exchange rate US$/£ - period end 1.49 1.62
STANDARD CHARTERED PLC
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 31 December 2000
2000 1999
£m £m
Profit attributable to shareholders 677 344
Exchange translation differences (67) 13
Unrealised net deficit on revaluation of premises - (10)
Total recognised gains and losses 610 347
HISTORICAL COST PROFITS AND LOSSES
For the year ended 31 December 2000
There is no material difference between the results as reported and the
results that would have been reported on a historical cost basis.
Accordingly, no note of historical cost profits and losses has been included.
STANDARD CHARTERED PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2000
2000 1999
£m £m
Net cash inflow from operating activities (see note 2,397 981
17)
Returns on investment and servicing of finance
Interest paid on subordinated loan capital (133) (102)
Subordinated loan capital issue expenses (19) (4)
Dividends paid to minority shareholders of (14) (22)
subsidiary undertakings
Dividends paid on preference shares (16) (16)
Net cash outflow from returns on investment and (182) (144)
servicing of finance
Taxation
UK taxes paid (31) (61)
Overseas taxes paid (166) (168)
Total taxes paid (197) (229)
Capital expenditure and financial investment
Purchases of tangible fixed assets (157) (219)
Acquisitions of treasury bills held for investment (6,849) (5,699)
purposes
Acquisitions of debt securities held for investment (8,173) (7,091)
purposes
Acquisitions of equity shares held for investment (41) (5)
purposes
Disposals of tangible fixed assets 21 15
Disposals and maturities of treasury bills held for 6,954 6,014
investment purposes
Disposals and maturities of debt securities held 7,508 5,798
for investment purposes
Disposals of equity shares held for investment 5 19
purposes
Net cash outflow from capital expenditure and (732) (1,168)
financial investment
Net cash inflow/(outflow) before acquisitions and
disposals, equity dividends paid and financing 1,286 (560)
Acquisitions and disposals
Purchases of interests in subsidiary undertakings (1,657) (203)
Purchase of subordinated debt in subsidiary (123) -
undertaking
Disposals of interests in subsidiary undertakings 616 -
Purchases of other businesses - (129)
Net cash outflow from acquisitions and disposals (1,164) (332)
Equity dividends paid to members of the Company (158) (152)
Financing
Proceeds from issue of ordinary share capital 477 399
Share issue expenses (5) (4)
Proceeds from issue of preferred securities 304 -
Proceeds from issue of subordinated loan capital 769 728
Repayment of subordinated liabilities (12) -
Net cash inflow from financing 1,533 1,123
Increase in cash in the year 1,497 79
STANDARD CHARTERED PLC
NOTES
1. Segmental information
By geographic segment
2000
Asia Pacific
Hong Other
Kong countries Africa
£m £m £m
Interest receivable 1,650 1,414 269
Interest payable (1,052) (893) (134)
Net interest income 598 521 135
Fees and commissions
receivable, net 160 191 69
Dealing profits and
exchange 29 83 36
Other operating income 2 7 3
Net revenue 789 802 243
Costs (365) (488) (140)
Amortisation of goodwill - - -
Restructuring charge - - -
Year 2000 costs - - -
Total operating expenses (365) (488) (140)
Profit before provisions 424 314 103
Charge for debts and (83) (69) (33)
contingent liabilities
Operating profit 341 245 70
Disposal of subsidiaries - - -
Profit before taxation 341 245 70
Loans and advances to 11,977 10,166 715
customers - average
Net interest margin (%) 2.9 2.6 8.5
2000
Americas
UK &
Middle Group
East & Head
S Asia Office Total
£m £m £m
Interest receivable 660 1,959 5,952
Interest payable (441) (1,645) (4,165)
Net interest income 219 314 1,787
Fees and commissions
receivable, net 83 83 586
Dealing profits and
exchange 39 62 249
Other operating income 39 25 76
Net revenue 380 484 2,698
Costs (189) (333) (1,515)
Amortisation of goodwill - (47) (47)
Restructuring charge - (213) (213)
Year 2000 costs - (15) (15)
Total operating expenses (189) (608) (1,790)
Profit before provisions 191 (124) 908
Charge for debts and (39) (86) (310)
contingent liabilities
Operating profit 152 (210) 598
Disposal of subsidiaries - 351 351
Profit before taxation 152 141 949
Loans and advances to 3,603 6,199 32,660
customers - average
Net interest margin (%) 3.2 1.5 3.1
a) Total interest receivable and total interest payable include intra-
group interest of £1,397 million.
b) Group central expenses have been distributed between segments in
proportion to their direct costs and the benefit of the Group s
capital has been distributed between segments in proportion to their
risk weighted assets.
c) Business acquisitions have been made as part of the Group s growth
strategy. These activities are a result of corporate decisions made
at the centre and the amortisation of purchased goodwill is included
in the Americas, UK & Group Head Office segment.
d) The restructuring programme and the resolution of Year 2000 related
technology issues have been managed from the centre as global
projects and all expenses are included in the Americas, UK & Group
Head Office segment.
1. Segmental information
By geographic segment (continued)
2000
Asia Pacific
Hong Other
Kong countries Africa
£m £m £m
Residential mortgages 8,107 3,365 12
Other retail 1,973 1,179 86
Other 3,746 5,953 620
Loans and advances to 13,826 10,497 718
customers
Loans and advances to banks 1,423 4,623 133
Total assets employed 25,681 22,806 1,920
Total risk weighted assets
and contingents 12,044 12,898 873
Gross non-performing loans
and advances 435 1,200 74
Specific provisions for bad
and doubtful debts (152) (304) (35)
Interest in suspense (61) (82) (22)
222 814 17
2000
Americas
UK &
Middle Group
East & Head
S Asia Office Total
£m £m £m
Residential mortgages 99 301 11,884
Other retail 1,072 81 4,391
Other 2,868 5,335 18,522
Loans and advances to 4,039 5,717 34,797
customers
Loans and advances to 1,141 8,615 15,935
banks
Total assets employed 9,234 25,326 84,967
Total risk weighted assets
and contingents 6,095 11,705 43,615
Gross non-performing loans
and advances 311 229 2,249
Specific provisions for
bad and doubtful debts (176) (102) (769)
Interest in suspense (41) (10) (216)
94 117 1,264
e) Total assets employed include intra-group items of £14,614 million
and balances of £1,754 million which are netted in the Summarised
Consolidated Balance Sheet. Total risk weighted assets and
contingents include balances of £378 million which are netted in
note 16 on Capital ratios.
f) 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)
1999
Asia Pacific
Hong Other
Kong countries Africa
£m £m £m
Interest receivable 1,349 1,268 258
Interest payable (820) (809) (127)
Net interest income 529 459 131
Fees and commissions
receivable, net 127 152 58
Dealing profits and exchange 30 89 36
Other operating income 4 13 8
Net revenue 690 713 233
Costs (316) (381) (122)
Amortisation of goodwill - - -
Year 2000 costs - - -
Total operating expenses (316) (381) (122)
Profit before provisions 374 332 111
Charge for debts (178) (188) (6)
Profit before taxation 196 144 105
Loans and advances to
customers - average 10,323 9,393 734
Net interest margin (%) 3.0 2.8 8.4
1999
Americas
UK &
Middle Group
East & Head
S Asia Office Total
£m £m £m
Interest receivable 404 1,583 4,862
Interest payable (261) (1,209) (3,226)
Net interest income 143 374 1,636
Fees and commissions
receivable, net 56 45 438
Dealing profits and exchange 23 68 246
Other operating income 2 31 58
Net revenue 224 518 2,378
Costs (143) (332) (1,294)
Amortisation of goodwill - (22) (22)
Year 2000 costs - (60) (60)
Total operating expenses (143) (414) (1,376)
Profit before provisions 81 104 1,002
Charge for debts (70) (53) (495)
Profit before taxation 11 51 507
Loans and advances to
customers - average 1,809 5,801 28,060
Net interest margin (%) 3.8 2.0 3.4
g) Total interest receivable and total interest payable include intra-
group interest of £1,132 million.
h) See notes (b), (c) and (d) on page 28.
1. Segmental information
By geographic segment (continued)
1999
Asia Pacific
Hong Other
Kong countries Africa
£m £m £m
Residential mortgages 6,396 2,684 13
Other retail 913 1,097 100
Other 3,119 5,771 667
Loans and advances to 10,428 9,552 780
customers
Loans and advances to banks 1,646 3,052 105
Total assets employed 20,328 18,967 1,905
Total risk weighted assets and 9,113 11,186 1,005
contingents
Gross non-performing loans and
advances 529 1,546 48
Specific provisions for bad
and doubtful debts (203) (445) (9)
Interest in suspense (49) (115) (14)
277 986 25
1999
Americas
UK &
Middle Group
East & Head
S Asia Office Total
£m £m £m
Residential mortgages 13 226 9,332
Other retail 457 29 2,596
Other 1,452 5,860 16,869
Loans and advances to 1,922 6,115 28,797
customers
Loans and advances to banks 550 6,048 11,401
Total assets employed 4,304 21,470 66,974
Total risk weighted assets and 2,871 11,158 35,333
contingents
Gross non-performing loans and
advances 137 338 2,598
Specific provisions for bad
and doubtful debts (88) (119) (864)
Interest in suspense (16) (14) (208)
33 205 1,526
i) 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 16 on Capital ratios.
j) 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
2000
Consumer Wholesale
Banking Banking Total
£m £m £m
Net interest income 1,067 720 1,787
Other income 299 612 911
Net revenue 1,366 1,332 2,698
Costs (741) (774) (1,515)
Amortisation of goodwill - - (47)
Restructuring charge - - (213)
Year 2000 costs - - (15)
Total operating
expenses (741) (774) (1,790)
Profit before provisions
625 558 908
Charge for debts and
contingent liabilities (121) (189) (310)
Operating profit 504 369 598
Profit on sale of
subsidiary undertakings 351
Profit before taxation 949
Total assets employed 28,658 56,309 84,967
1999
Consumer Wholesale
Banking Banking Total
£m £m £m
Net interest income 946 690 1,636
Other income 206 536 742
Net revenue 1,152 1,226 2,378
Costs (612) (682) (1,294)
Amortisation of goodwill - - (22)
Restructuring charge - - -
Year 2000 costs - - (60)
Total operating
expenses (612) (682) (1,376)
Profit before provisions
540 544 1,002
Charge for debts and
contingent liabilities (141) (354) (495)
Operating profit 399 190 507
Profit on sale of
subsidiary undertakings -
Profit before taxation 507
Total assets employed 21,377 45,597 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, restructuring
charge and Year 2000 costs on page 28.
c) Total assets employed include intra-group items of £14,614 million
(1999:£12,218 million) and balances which are netted in the
summarised consolidated balance sheet of £ 1,754 million (1999: £624
million).
d) Assets held at the centre have been distributed between classes of
businesses in proportion to their total assets employed.
3. Restructuring
In August 2000 the Group announced a major productivity programme to
improve efficiency and customer service. This involves a major
restructuring and re-shaping of the Group s business. The restructuring
costs incurred during the year in connection with this programme have
been included within Total operating expenses and are analysed by
programme below.
Centralis-
ion of Operational Integration
processing of
and systems efficiencies acquisit- Total
ions
£m £m £m £m
Administrative
expenses:
Staff 25 68 55 148
Premises 4 5 6 15
Other 9 1 10 20
Depreciation and 30 - - 30
amortisation
Charge against profit 68 74 71 213
during the year
4. Dealing profits and exchange
2000 1999
£m £m
Income from foreign exchange dealing 215 218
Profits less losses on dealing securities 17 17
Other dealing profits and exchange 17 11
249 246
5. Other operating income
2000 1999
£m £m
Other operating income includes:
Share of profits arising on securitised 17 24
instalment credit agreements
Profits less losses on disposal of investment 7 3
securities
Dividend income 4 6
6. Taxation
2000 1999
£m £m
United Kingdom corporation tax at 30% (1999: 128 96
30.25%)
Relief for overseas tax (99) (51)
29 45
Overseas tax 220 104
249 149
Effective tax rate 26.2% 29.4%
There is no tax chargeable against the profit on sale of subsidiary
undertakings of £351 million.
7. Dividends on preference shares
2000 1999
£m £m
Non-cumulative irredeemable preference shares:
73/8% preference shares of £1 each 8 8
81/4% preference shares of £1 each 8 8
16 16
8. Dividends on ordinary shares
2000 1999
Pence per Pence per
share £m share £m
Interim 7.425p 80 6.75p 71
Final 17.710p 200 16.10p 171
25.135p 280 22.85p 242
The 2000 final dividend of 17.71 pence per share will be paid on 25 May
2001 to shareholders on the register at close of business on 2 March
2001. Shareholders will be entitled, if they wish, to elect to receive
shares credited as fully paid instead of the final dividend (or part
thereof). Details will be sent to shareholders on or around 19 March
2001.
9. Earnings per ordinary share
2000
Average
number of Per share
Profit shares amount
£m ( 000) Pence
Basic EPS
Profit attributable
to ordinary
shareholders 661 1,086,619 60.8p
Effect of dilutive
potential ordinary
shares
Convertible bonds 9 25,866
Options - 7,009
Diluted EPS 670 1,119,494 59.8p
1999
Average
number of Per share
Profit shares amount
£m ( 000) Pence
Basic EPS
Profit attributable
to ordinary
shareholders 328 1,046,182 31.4p
Effect of dilutive
potential ordinary
shares
Convertible bonds
Options - 10,086
Diluted EPS 328 1,056,268 31.1p
Headline earnings per ordinary share
The Institute of Investment Management and Research Statement of
Investment Practice No 1 provides a definition of headline earnings. As
this differs from earnings defined in Financial Reporting Standard 14
the table below provides a reconciliation.
2000 1999
£m £m
Profit attributable to shareholders after 661 328
preference dividends
Amortisation of goodwill 47 22
Profits less losses on disposal of investment (7) (3)
securities
Profit on disposal of subsidiaries (351) -
Tax charge relating to the above items - -
Headline earnings 350 347
Headline earnings per ordinary share 32.2p 33.2p
Normalised earnings per ordinary share
The following table shows the calculation of normalised headline
earnings per share, i.e. based on the Group s results excluding profits
on disposal of subsidiary undertakings and the charge for restructuring.
2000 1999
£m £m
Profit attributable to shareholders after 661 328
preference dividends
Amortisation of goodwill 47 22
Profits less losses on disposal of investment (7) (3)
securities
Profit on disposal of subsidiary undertakings (351) -
Restructuring charge 213 -
Tax credit relating to restructuring charge (53) -
Normalised earnings 510 347
Normalised earnings per ordinary share 46.9p 33.2p
10. Called up share capital
2000 1999
£m £m
Equity capital
Ordinary shares of 25p each 281 265
Non-equity capital
Non-cumulative irredeemable preference shares:
73/8% preference shares of £1 each 100 100
81/4% preference shares of £1 each 100 100
481 465
Under the terms of the share conversion on 18 January 2001, each
shareholder of Standard Chartered PLC received one new ordinary share of
US$0.50 for each ordinary share of £0.25 that they held before the
conversion. The ordinary shares of £0.25 each have been cancelled and
share certificates for these shares are no longer valid.
11. Shareholders funds
Share
Share premium
capital account
£m £m
At 1 January 2000 465 814
Exchange translation
differences - -
Shares issued 17 456
Goodwill previously written
off against reserves
- -
Retained profit - -
Capitalised on exercise of
share options - 9
Realised on disposal of
premises - -
At 31 December 2000 482 1,279
Premises Profit Total
revaluation and loss Shareholders
reserve account funds
£m £m £m
At 1 January 2000 38 2,049 3,366
Exchange translation
differences (2) (65) (67)
Shares issued - 92 565
Goodwill previously
written off against
reserves - 16 16
Retained profit - 381 381
Capitalised on
exercise of share - (9) -
options
Realised on disposal
of premises (3) 3 -
At 31 December 2000 33 2,467 4,261
12. Provisions for bad and doubtful debts
2000
Specific General Total
£m £m £m
Provisions held at beginning of
period 940 271 1,211
Exchange translation
differences 57 23 80
Amounts written off (663) - (663)
Recoveries of amounts
previously written off 34 - 34
Business acquisitions 109 22 131
Business disposal (45) (2) (47)
Other 32 32
New provisions 465 - 465
Recoveries/provisions no longer
required (160) - (160)
Net charge against profit 305 - 305
Provisions held at period end 769 314 1,083
1999
Specific General Total
£m £m £m
Provisions held at beginning of
period 641 269 910
Exchange translation
differences 6 2 8
Amounts written off (302) - (302)
Recoveries of amounts
previously written off 52 - 52
Business acquisitions 63 - 63
Business disposal - - -
Other (15) - (15)
New provisions 622 - 622
Recoveries/provisions no longer
required (127) - (127)
Net charge against profit 495 - 495
Provisions held at period end 940 271 1,211
Corporate loans and advances to customers against which provisions have
been outstanding for 2 years or more are written down to their net
realisable value.
Specific provisions for bad and doubtful debts at 31 December 1999
include £76 million of provisions against enhanced and other performing
emerging markets debt (31 December 2000: £nil).
13. Non-performing loans and advances
2000
SCNB Other Total
£m £m £m
Loans and advances on which
interest is suspended 534 1,715 2,249
Specific provisions for bad and
doubtful debts (48) (721) (769)
Interest in suspense - (216) (216)
486 778 1,264
1999
SCNB Other Total
£m £m £m
Loans and advances on which
interest is suspended 596 2,002 2,598
Specific provisions for bad and
doubtful debts (63) (801) (864)
Interest in suspense - (208) (208)
533 993 1,526
The Group acquired Standard Chartered Nakornthon Bank (SCNB) (formerly
Nakornthon Bank) in September 1999. At 31 December 2000, under the terms
of the acquisition, net non-performing loans (NPLs) of £477 million are
subject to a Loan Management Agreement (LMA) with the Financial
Institutions Development Fund (FIDF), a Thai Government agency. Under
the LMA, the FIDF has guaranteed the recovery of a principal amount of
the NPLs of £356 million. The LMA also provides, inter alia, for loss
sharing arrangements whereby the FIDF will bear up to 85 per cent of
losses in excess of the guaranteed amount. The carrying cost of the
NPLs is reimbursable by the FIDF to SCNB for a period of five years from
the date of acquisition.
Excluding the SCNB non-performing loan portfolio, specific provisions and
interest in suspense together cover 55 per cent (1999: 54 per cent,
including provisions held against enhanced and other performing emerging
markets debt) of total non-performing lending to customers. If lending
and provisions are adjusted for the cumulative amounts written off, the
effective cover is 69 per cent (1999: 60 per cent, including provisions
held against enhanced and other performing emerging markets debt).
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