SCPLC Half Year Results 2024 - Part 2

Standard Chartered PLC

30 July 2024

 

Standard Chartered PLC - Half Year Results 2024 - Part 2

Table of content

Risk review	2
Capital review	59
Financial statements	65
Other supplementary information	120
Glossary	133

Unless another currency is specified, the word 'dollar' or symbol '$' in this document means US dollar and the word 'cent' or symbol 'c' means one-hundredth of one US dollar.

The information within this report is unaudited.

Unless the context requires, within this document, 'China' refers to the People's Republic of China and, for the purposes of this document only, excludes Hong Kong Special Administrative Region (Hong Kong), Macau Special Administrative Region (Macau) and Taiwan. 'Korea' or 'South Korea' refers to the Republic of Korea.

Within the tables in this report, blank spaces indicate that the number is not disclosed, dashes indicate that the number is zero and nm stands for not meaningful. Standard Chartered PLC is incorporated in England and Wales with limited liability. Standard Chartered PLC is headquartered in London.

The Group's head office provides guidance on governance and regulatory standards. Standard Chartered PLC stock codes are: HKSE 02888 and LSE STAN.LN.

Page 1

Risk review and Capital review

Risk Index
Risk profile	Credit risk
	Basis of preparation
	Credit risk overview
	Impairment model
	Staging of financial instruments
	IFRS 9 expected credit loss principles and approaches
	Summary of Credit Risk Performance
	Maximum exposure to Credit risk
	Analysis of financial instrument by stage
	Credit quality analysis
	•  Credit quality by client segment
	•  Loans and advances by client segment credit quality analysis by key geography
	Movement in gross exposures and credit impairment for loans and advances, debt securities, undrawn commitments and financial guarantees
	Movement of debt securities, additional tier one and other eligible bills
	Analysis of stage 2 balances
	Credit impairment charge
	Problem credit management and provisioning
	•  Forborne and other modified loans by client segment
	•  Forborne and other modified loans by country
	Credit risk mitigation
	•  Collateral held on loans and advances
	•  Collateral - Corporate & Investment Banking
	•  Collateral - Wealth & Retail Banking
	•  Mortgage loan-to-value ratios by country
	•  Collateral and other credit enhancements possessed or called upon
	•  Other Credit risk mitigation
	Other portfolio analysis
	•  Credit quality by industry
	•  Industry analysis of loans and advances by key geography
	•  Vulnerable, cyclical and high carbon sectors
	•  China commercial real estate
	•  Debt securities and other eligible bills
	IFRS 9 expected credit loss methodology
	Traded risk
	Market risk movements
	Counterparty Credit risk
	Derivative financial instruments Credit risk mitigation
	Liquidity and Funding risk
	Liquidity and Funding risk metrics
	Liquidity analysis of the Group's balance sheet
	Interest Rate risk in the Banking Book
	Operational and Technology risk
	Operational and Technology risk profile
Capital	Capital summary
	•  Capital ratio
	•  Capital base
	•  Movement in total capital
	Risk-weighted asset
	Leverage ratio

Page 2

The following parts of the Risk review and Capital review form part of these financial statements and are reviewed by the external auditors:

a) Risk review: Disclosures marked as 'reviewed' from the start of Credit risk section to the end of Operational and Technology risk in the same section; and

b) Capital review: Tables marked as 'reviewed' from the start of 'Capital base' to the end of 'Movement in total capital', excluding 'Total risk-weighted assets'

Page 3

Risk review

Credit Risk (reviewed)

Basis of preparation

Unless otherwise stated the balance sheet and income statement information presented within this section is based on the Group's management view. This is principally the location from which a client relationship is managed, which may differ from where it is financially booked and may be shared between businesses and/or regions. This view reflects how the client segments and regions are managed internally.

Loans and advances to customers and banks held at amortised cost in this 'Risk profile' section include reverse repurchase agreement balances held at amortised cost, per Note 16 Reverse repurchase and repurchase agreements including other similar secured lending and borrowing.

Credit Risk overview

Credit Risk is the potential for loss due to the failure of a counterparty to meet its contractual obligations to pay the Group. Credit exposures arise from both the banking and trading books.

Impairment model

IFRS 9 mandates an impairment model that requires the recognition of expected credit losses (ECL) on all financial debt instruments held at amortised cost, Fair Value through Other Comprehensive Income (FVOCI), undrawn loan commitments and financial guarantees.

Staging of financial instruments

Financial instruments that are not already credit-impaired are originated into stage 1 and a 12-month expected credit loss provision is recognised.

Instruments will remain in stage 1 until they are repaid, unless they experience significant credit deterioration (stage 2) or they become credit-impaired (stage 3).

Instruments will transfer to stage 2 and a lifetime expected credit loss provision is recognised when there has been a significant change in the Credit Risk compared to what was expected at origination.

The framework used to determine a Significant increase in Credit Risk (SICR) is set out below.

Stage 1

• 12-month ECL

• Performing

Stage 2

• Lifetime expected credit loss

• Performing but has exhibited significant increase in Credit Risk (SICR)

Stage 3

• Credit-impaired

• Non-performing

Page 4

IFRS 9 expected credit loss principles and approaches

The main methodology principles and approach adopted by the Group are set out in the following table.

Title	Supplementary Information
Approach for determining expected credit losses	IFRS 9 methodology Determining lifetime expected credit loss for revolving products Post model adjustments
Incorporation of forward-looking information	Incorporation of forward-looking information Forecast of key macroeconomic variables underlying the expected credit loss calculation and the impact of non-linearity Judgemental adjustments and sensitivity to macroeconomic variables
SICR	Quantitative and qualitative criteria
Assessment of credit-impaired financial assets	Consumer and Business Banking clients Corporate and Investment Banking (CIB) and Private Banking clients Write-offs
Transfers between stages	Movement in loan exposures and expected credit losses
Modified financial assets	Forbearance and other modified loans
Governance and application of expert credit judgement in respect of expected credit losses

Summary of Credit Risk Performance

Maximum exposure

The Group's on-balance sheet maximum exposure to Credit Risk increased by $9.1 billion to $807 billion (31 December 2023: $798 billion). Cash and balances at Central bank decreased by $5.8 billion to $64 billion (31 December 2023: $70 billion) due to reduced placements with a Central Bank. Loans to banks held at amortised cost remained stable at $45 billion (31 December 2023: $45 billion). Fair Value through profit and loss increased by $32 billion to $176 billion (31 December 2023: $144 billion), largely due to an increase in debt securities and reverse repos. This was partly offset by a $11 billion decrease in loans and advances to customers to $276 billion (31 December 2023: $287 billion) of which $5 billion was due to a reduction in mortgages in Korea and Hong Kong due to low new business driven by the higher interest rate environment, as well as a $4.2 billion reduction in Central and other items mainly due to matured loan exposures. Debt securities decreased by $8.7 billion to $152 billion (31 December 2023: $160 billion). Off-balance sheet instruments increased by $7.9 billion to $265 billion (31 December 2023: $257 billion), due to an increase in financial guarantees and other equivalents, which were driven by new business.

Further details can be found in the 'Maximum exposure to Credit Risk' section.

Loans and Advances

94 per cent (31 December 2023: 94 per cent) of the Group's gross loans and advances to customers remain in stage 1 at $281 billion (31 December 2023: $292 billion), reflecting our continued focus on high-quality origination.

Stage 1 loans and advances decreased by $9.4 billion to $264 billion (31 December 2023: $274 billion). For Wealth and Retail Banking (WRB), stage 1 balances decreased by $5.4 billion to $118 billion (31 December 2023: $123 billion), of which $5 billion was mainly due to a decrease in mortgages. This was driven by a slowdown in sales in Korea and Hong Kong, due to the high interest rate environment. For Corporate and Investment Banking (CIB), stage 1 balances remained stable at $121 billion (31 December 2023: $121 billion). For Central and other items, stage 1 balances decreased by $4.5 billion to $24 billion (31 December 2023: $28 billion) due to a reduction in reverse repos. Stage 1 cover ratio remained stable at 0.2 per cent (31 December 2023: 0.2 per cent).

Stage 2 loans and advances to customers decreased by $1.2 billion to $10 billion (31 December 2023: $11.2 billion). For WRB, stage 2 balances decreased by $0.5 billion to $1.8 billion (31 December 2023: $2.3 billion). This was mainly driven by the lower new bookings of the mortgage portfolio in Korea and Hong Kong, due to the high interest rate environment. Higher risk exposure net decrease of $1 billion to $0.1 billion (31 December 2023: $1 billion) from Central and other items, was  due to the maturity of short-term loan exposures being replaced with debt securities in the Middle East. Total stage 2 cover ratio decreased by 0.1 per cent to 3.6 per cent (31 December 2023: 3.7 per cent). The decrease was driven by China commercial real estate (CRE) overlay releases in CIB largely due to repayments, which was partly offset by an increase in WRB due to exposure reductions. Ventures cover ratio increased by 7 per cent to 46 per cent (31 December 2023: 39 per cent) due to higher levels of delinquencies in Q1 2024, however this improved during Q2 2024 following credit measures being put in place in Q4 2023.

Page 5

Stage 3 loans and advances decreased by $0.6 billion to $6.6 billion (31 December 2023: $7.2 billion) due to repayments, debt sales and write-offs in CIB. The CIB stage 3 cover ratio increased by 4 per cent to 68 per cent (31 December 2023: 64 per cent) as a result of repayments and write-offs. The WRB stage 3 loans remains broadly stable at $1.5 billion (31 December 2023: $1.5 billion). The WRB stage 3 cover ratio decreased by 5 per cent to 46 per cent (31 December 2023: 51 per cent) driven by reduction in personal loan provisions in Malaysia due to unsecured assets reclassified as held for sale. Stage 3 Central and other items decreased by $160 million to $0.1 billion (31 December 2023: $0.2 billion) as funds were reinvested into debt securities for liquidity purposes. Total stage 3 cover ratio increased by 3 per cent to 63 per cent (31 December 2023: 60 per cent) due to a decrease in exposures. The cover ratio after collateral increased by 6 per cent to 82 per cent (31 December 2023: 76 per cent).

Further details can be found in the 'Analysis of financial instruments by stage' section in pages 42 and 43; 'Credit quality by client segment' section; and 'Credit quality by industry' section,

Analysis of stage 2

The key SICR driver which caused exposures to be classified as stage 2 remains an increase in probability of default (PD). The proportion of exposures in CIB in stage 2 decreased due to a reduction in clients placed on non-purely precautionary early alert that have not breached PD thresholds. In WRB, the proportion of loans in stage 2 from 30 days past due trigger remained stable. In Central and other items, the decrease in CG12 was due to the maturity of short-term loan exposures being replaced with debt securities in the Middle East.

Further details can be found in the 'Analysis of stage 2 balances' section.

Credit impairment charges

The Group's ongoing credit impairment was a net charge of $249 million (30 June 2023: $172 million).

For CIB, stage 1 and 2 impairment charges decreased by $71 million to a net release of $38 million (30 June 2023: $33 million), due to $55 million China CRE overlay releases driven by repayments, and sovereign upgrades. This was partly offset by portfolio movements.

CIB stage 3 impairment charges decreased by $33 million to $3 million (30 June 2023: $36 million) due to a number of recoveries, which was partly offset by additional impairments on the China CRE portfolio including one new downgrade.

For WRB, stage 1 and 2 impairment charges increased by $120 million to $135 million (30 June 2023: $15 million) mainly due to the release of COVID-19 overlays and other one-off releases present in 2023. Growth in the Digital Partnership portfolio has also resulted in an increase in ECL.

WRB stage 3 impairment charges increased by $54 million to $147 million (30 June 2023: $93 million). This was driven by gross charge-offs in credit cards and personal loans (mainly in China, Hong Kong, Singapore and Korea) on account of the higher interest rate environment impacting customer affordability, as well as maturation of digital partnerships (in China, Indonesia, and Vietnam).

For Ventures, total impairment charges increased by $20 million to $43 million (30 June 2023: $23 million). Of the $43 million charge, Mox Bank accounts for $33 million. Stage 1 and 2 impairment charges decreased by $5 million to $7 million (30 June 2023: $12 million). Out of the $7 million charge, $2 million was from Mox Bank and $5 million was from Trust Bank. Mox Bank's delinquency and flow rates have improved on both the new and legacy books as new credit control measures have taken effect over the course of 2024.

Ventures stage 3 impairment charges increased by $25 million to $36 million (30 June 2023: $11 million). Of the $36 million, $30 million was from Mox Bank due to gross charge-offs and bankruptcy-related charges. These charges declined as we progressed through H1 2024.

For Central and other items, stage 1 and 2 impairment charges decreased by $4 million to a net release of $31 million (30 June 2023: net release of $27 million) due to sovereign upgrades, driven by improvements in the macroeconomic environment. The charges also declined due to a portfolio of debt securities maturing, which were being held by Treasury and accounted for under FVOCI.

Central and other items stage 3 impairment charges decreased by $9 million to a net release of $10 million (30 June 2023: net release of $1 million) due to an upgrade in a sovereign's local currency position to CG12C (higher risk).

Further details can be found in the 'Credit impairment charge' section.

Page 6

Vulnerable and cyclical sectors

Total net on-balance sheet exposure to vulnerable and cyclical sectors increased by $4.8 billion to $33 billion (31 December 2023: $29 billion) largely due to increases in the Oil and Gas and Commodity Traders sectors in stage 1. Stage 2 vulnerable and cyclical sector loans decreased by $0.3 billion to $3.1 billion (31 December 2023: $3.4 billion) mainly due to CRE. Stage 3 vulnerable and cyclical sector loans decreased by $0.3 billion to $3.3 billion (31 December 2023: $3.6 billion) mainly due to a loan sales in the CRE sector, which was partly offset by one new downgrade.

The Group provides loans to CRE counterparties of which $8.9 billion is to counterparties in CIB where the source of repayment is substantially derived from rental or sale of real estate and is secured by real estate collateral. The remaining CRE loans comprise working capital loans to real estate corporates, loans with non-property collateral, unsecured loans and loans to real estate entities of diversified conglomerates. The average LTV ratio of the performing book CRE portfolio has increased to 53 per cent (31 December 2023: 52 per cent). The proportion of loans with an LTV greater than 80 per cent has increased to 4 per cent (31 December 2023: 3 per cent).

Further details can be found in the 'Vulnerable, cyclical and high carbon sectors' section.

China commercial real estate

Total exposure to China CRE decreased by $0.4 billion to $2.2 billion (31 December 2023: $2.6 billion) mainly from repayments. The proportion of credit impaired amortised cost loans to customers increased to 67 per cent (31 December 2023: 58 per cent) largely due to repayments in the performing portfolio and a downgrade. Stage 3 provision coverage increased to 77 per cent (31 December 2023: 72 per cent) reflecting increased provisions made during the period. The proportion of the loan book rated as higher risk was stable at 0.4 per cent (31 December 2023: 0.3 per cent).

The Group continues to hold a judgemental management overlay in respect of the performing portfolio, which decreased by $55 million to $86 million (31 December 2023: $141 million) due to repayments and a downgrade to stage 3.

The Group is further indirectly exposed to China CRE through its associate investment in China Bohai Bank.

Further details can be found in the 'China commercial real estate' section.

Page 7

Maximum exposure to Credit Risk (reviewed)

The table below presents the Group's maximum exposure to Credit Risk for its on-balance sheet and off-balance sheet financial instruments as at 30 June 2024, before and after taking into account any collateral held or other Credit Risk mitigation.

Further details can be found in the 'Summary of Credit Risk performance' section.

	30.06.24				31.12.23
	Maximum exposure $million	Credit risk management		Net exposure $million	Maximum exposure $million	Credit risk management		Net exposure $million
		Collateral8 $million	Master netting agreements $million			Collateral8 $million	Master netting agreements $million
On-balance sheet
Cash and balances at central banks	64,086			64,086	69,905			69,905
Loans and advances to banks1	45,231	3,991		41,240	44,977	1,738		43,239
of which - reverse repurchase agreements and other similar secured lending7	3,991	3,991		-	1,738	1,738		-
Loans and advances to customers1	275,896	115, 872		160,024	286,975	118,492		168,483
of which - reverse repurchase agreements and other similar secured lending7	7,788	7,788		-	13,996	13,996		-
Investment securities - Debt securities and other eligible bills2	151,580			151,580	160,263			160,263
Fair value through profit or loss3, 7	176,460	93,202	-	83,258	144,276	81,847	-	62,429
Loans and advances to banks	2,193			2,193	2,265			2,265
Loans and advances to customers	6,877			6,877	7,212			7,212
Reverse repurchase agreements and other similar lending7	93,202	93,202		-	81,847	81,847		-
Investment securities - Debt securities and other eligible bills2	74,188			74,188	52,952			52,952
Derivative financial instruments4, 7	48,647	11,285	34,398	2,964	50,434	8,440	39,293	2,701
Accrued income	2,786			2,786	2,673			2,673
Assets held for sale9	517			517	701			701
Other assets5	42,206			42,206	38,140			38,140
Total balance sheet	807,409	224,350	34,398	548,661	798,344	210,517	39,293	548,534
Off-balance sheet6
Undrawn Commitments	178,568	3,078		175,490	182,390	2,940		179,450
Financial Guarantees and other equivalents	86,094	2,351		83,743	74,414	2,590		71,824
Total off-balance sheet	264,662	5,429	-	259,233	256,804	5,530	-	251,274
Total	1,072,071	229,779	34,398	807,894	1,055,148	216,047	39,293	799,808

1. An analysis of credit quality is set out in the credit quality analysis section. Further details of collateral held by client segment and stage are set out in the collateral analysis section

2. Excludes equity and other investments of $823 million (31 December 2023: $992 million). Further details are set out in Note 13 financial instruments

3. Excludes equity and other investments of $5,264 million (31 December 2023: $2,940 million). Further details are set out in Note 13 financial instruments

4   The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the counterparty through netting the sum of the positive and negative mark-to-market values of applicable derivative transactions

5. Other assets include Hong Kong certificates of indebtedness, cash collateral, and acceptances, in addition to unsettled trades and other financial assets

6. Excludes ECL allowances which are reported under Provisions for liabilities and charges

7. Collateral capped at maximum exposure (over-collateralised)

8. Adjusted for over-collateralisation, which has been determined with reference to the drawn and undrawn component as this best reflects the effect on the amount arising from expected credit losses

9. The amount is after ECL. Further details are set out in Note 20 Assets held for sale and associated liabilities

Page 8

Analysis of financial instruments by stage (reviewed)

The table below presents the gross and credit impairment balances by stage for the Group's amortised cost and FVOCI financial instruments as at 30 June 2024.

Further details can be found in the 'Summary of Credit Risk performance' section.

	30.06.24
	Stage 1			Stage 2			Stage 3			Total
	Gross balance1 $million	Total credit impairment $million	Net carrying value $million	Gross balance1 $million	Total credit impairment $million	Net carrying value $million	Gross balance1 $million	Total credit impairment $million	Net carrying value $million	Gross balance1 $million	Total credit impairment $million	Net carrying value $million
Cash and balances at central banks	63,238	-	63,238	339	-	339	522	(13)	509	64,099	(13)	64,086
Loans and advances to banks (amortised cost)	44,793	(4)	44,789	392	(3)	389	57	(4)	53	45,242	(11)	45,231
Loans and advances to customers (amortised cost)	264,249	(480)	263,769	10,005	(362)	9,643	6,639	(4,155)	2,484	280,893	(4,997)	275,896
Debt securities and other eligible bills⁵	149,422	(23)		1,787	(10)		387	(16)		151,596	(49)
Amortised cost	55,961	(16)	55,945	396	-	396	62	-	62	56,419	(16)	56,403
FVOCI2	93,461	(7)		1,391	(10)		325	(16)		95,177	(33)
Accrued income (amortised cost)4	2,786		2,786			-			-	2,786	-	2,786
Assets held for sale⁴	429	-	429	50	(1)	49	114	(75)	39	593	(76)	517
Other assets	42,209	(3)	42,206	-	-	-	3	(3)	-	42,212	(6)	42,206
Undrawn commitments3	173,625	(46)		4,935	(47)		8	-		178,568	(93)
Financial guarantees, trade credits and irrevocable letter of credits3	83,957	(12)		1,423	(6)		714	(142)		86,094	(160)
Total	824,708	(568)		18,931	(429)		8,444	(4,408)		852,083	(5,405)

1   Gross carrying amount for off-balance sheet refers to notional values

2   These instruments are held at fair value on the balance sheet. The ECL provision in respect of debt securities measured at FVOCI is held within the OCI reserve

3   These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a financial liability and therefore there is no "net carrying amount". ECL allowances on off-balance sheet instruments are held as liability provisions to the extent that the drawn and undrawn components of loan exposures can be separately identified. Otherwise they will be reported against the drawn component

4   Stage 1 ECL is not material

5   Stage 3 gross includes $23 million (31 December 2023: $80 million) originated credit-impaired debt securities with impairment of $nil million (31 December 2023: $14 million)

Page 9

	31.12.23
	Stage 1			Stage 2			Stage 3			Total
	Gross balance1 $million	Total credit impairment $million	Net carrying value $million	Gross balance1 $million	Total credit impairment $million	Net carrying value $million	Gross balance1 $million	Total credit impairment $million	Net carrying value $million	Gross balance1 $million	Total credit impairment $million	Net carrying value $million
Cash and balances at central banks	69,313	-	69,313	207	(7)	200	404	(12)	392	69,924	(19)	69,905
Loans and advances to banks (amortised cost)	44,384	(8)	44,376	540	(10)	530	77	(6)	71	45,001	(24)	44,977
Loans and advances to customers (amortised cost)	273,692	(430)	273,262	11,225	(420)	10,805	7,228	(4,320)	2,908	292,145	(5,170)	286,975
Debt securities and other eligible bills5	158,314	(26)		1,860	(34)		164	(61)		160,338	(121)
Amortised cost	56,787	(16)	56,771	103	(2)	101	120	(57)	63	57,010	(75)	56,935
FVOCI2	101,527	(10)		1,757	(32)		44	(4)		103,328	(46)
Accrued income (amortised cost)4	2,673		2,673			-			-	2,673	-	2,673
Assets held for sale4	661	(33)	628	76	(4)	72	1	-	1	738	(37)	701
Other assets	38,139	-	38,139	-	-	-	4	(3)	1	38,143	(3)	38,140
Undrawn commitments3	176,654	(52)		5,733	(39)		3	-		182,390	(91)
Financial guarantees, trade credits and irrevocable letter of credits3	70,832	(10)		2,910	(14)		672	(112)		74,414	(136)
Total	834,662	(559)		22,551	(528)		8,553	(4,514)		865,766	(5,601)

1   Gross carrying amount for off-balance sheet refers to notional values

2   These instruments are held at fair value on the balance sheet. The ECL provision in respect of debt securities measured at FVOCI is held within the OCI reserve

3   These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a financial liability and therefore there is no "net carrying amount". ECL allowances on off-balance sheet instruments are held as liability provisions to the extent that the drawn and undrawn components of loan exposures can be separately identified. Otherwise they will be reported against the drawn component

4   Stage 1 ECL is not material

5   Stage 3 gross includes $80 million originated credit-impaired debt securities with impairment of $14 million

Page 10

Credit quality analysis

Credit quality by client segment (reviewed)

For CIB, exposures are analysed by credit grade (CG), which plays a central role in the quality assessment and monitoring of risk. All loans are assigned a CG, which is reviewed periodically and amended in light of changes in the borrower's circumstances or behaviour. CGs 1 to 12 are assigned to stage 1 and stage 2 (performing) clients or accounts, while CGs 13 and 14 are assigned to stage 3 (credit-impaired) clients. Consumer and Business Banking portfolios are analysed by days past due and Private Banking by the type of collateral held.

Mapping of credit quality

The Group uses the following internal risk mapping to determine the credit quality for loans.

Credit quality description	Corporate & Investment Banking			Private Banking1	Wealth & Retail Banking5
	Internal grade mapping	S&P external ratings equivalent	Regulatory PD range (%)	Internal ratings	Internal grade mapping
Strong	1A to 5B	AAA/AA+ to BBB-/BB+²	0 to 0.425	Class I and Class IV	Current loans (no past dues nor impaired)
Satisfactory	6A to 11C	BB+/BB to B-/CCC+³	0.426 to 15.75	Class II and Class III	Loans past due till 29 days
Higher risk	Grade 12	CCC+ to C⁴	15.751 to 99.999	Stressed Assets Group (SAG) managed	Past due loans 30 days and over till 90 days

1   For Private Banking, classes of risk represent the type of collateral held. Class I represents facilities with liquid collateral, such as cash and marketable securities. Class II represents unsecured/partially secured facilities and those with illiquid collateral, such as equity in private enterprises. Class III represents facilities with residential or commercial real estate collateral. Class IV covers margin trading facilities

2   Banks' rating: AAA/AA+ to BB+. Sovereigns' rating: AAA to BB+

3   Banks' rating: BB to "CCC+ to C". Sovereigns' rating: BB+/BB to B-/CCC+

4   Banks' rating: CCC+ to C. Sovereigns' rating: CCC+ to "CCC+ to C"

5   Wealth & Retail Banking excludes Private Banking. Medium enterprise clients within Business Banking are managed using the same internal credit grades as CIB

The table below sets out the gross loans and advances held at amortised cost, expected credit loss provisions and
expected credit loss coverage by business segment and stage. Expected credit loss coverage represents the expected
credit loss reported for each segment and stage as a proportion of the gross loan balance for each segment and stage.

Further details can be found in the 'Summary of Credit Risk performance' section.

Page 11

Loans and advances by client segment (reviewed)

Amortised cost	30.06.24
	Banks $million	Customers					Undrawn commitments $million	Financial Guarantees $million
		Corporate & Investment Banking $million	Wealth & Retail Banking $million	Ventures $million	Central & other items $million	Customer Total $million
Stage 1	44,793	121,272	118,064	1,103	23,810	264,249	173,625	83,957
- Strong	35,029	83,625	112,547	1,088	23,424	220,684	158,620	56,826
- Satisfactory	9,764	37,647	5,517	15	386	43,565	15,005	27,131
Stage 2	392	7,980	1,848	48	129	10,005	4,935	1,423
- Strong	173	1,129	1,333	32	-	2,494	1,768	303
- Satisfactory	161	6,074	172	5	-	6,251	2,953	912
- Higher risk	58	777	343	11	129	1,260	214	208
Of which (stage 2):
- Less than 30 days past due	-	228	172	5	-	405	-	-
- More than 30 days past due	3	7	343	11	-	361	-	-
Stage 3, credit-impaired financial assets	57	5,048	1,518	9	64	6,639	8	714
Gross balance¹	45,242	134,300	121,430	1,160	24,003	280,893	178,568	86,094
Stage 1	(4)	(110)	(350)	(20)	-	(480)	(46)	(12)
- Strong	(2)	(70)	(274)	(19)	-	(363)	(30)	(3)
- Satisfactory	(2)	(40)	(76)	(1)	-	(117)	(16)	(9)
Stage 2	(3)	(206)	(134)	(22)	-	(362)	(47)	(6)
- Strong	(2)	(15)	(49)	(16)	-	(80)	(9)	(1)
- Satisfactory	(1)	(144)	(27)	(3)	-	(174)	(26)	(2)
- Higher risk	-	(47)	(58)	(3)	-	(108)	(12)	(3)
Of which (stage 2):
- Less than 30 days past due	-	(15)	(27)	(3)	-	(45)	-	-
- More than 30 days past due	-	-	(58)	(3)	-	(61)	-	-
Stage 3, credit-impaired financial assets	(4)	(3,449)	(697)	(9)	-	(4,155)	-	(142)
Total credit impairment	(11)	(3,765)	(1,181)	(51)	-	(4,997)	(93)	(160)
Net carrying value	45,231	130,535	120,249	1,109	24,003	275,896
Stage 1	0.0%	0.1%	0.3%	1.8%	0.0%	0.2%	0.0%	0.0%
- Strong	0.0%	0.1%	0.2%	1.7%	0.0%	0.2%	0.0%	0.0%
- Satisfactory	0.0%	0.1%	1.4%	6.7%	0.0%	0.3%	0.1%	0.0%
Stage 2	0.8%	2.6%	7.3%	45.8%	0.0%	3.6%	1.0%	0.4%
- Strong	1.2%	1.3%	3.7%	50.0%	0.0%	3.2%	0.5%	0.3%
- Satisfactory	0.6%	2.4%	15.7%	60.0%	0.0%	2.8%	0.9%	0.2%
- Higher risk	0.0%	6.0%	16.9%	27.3%	0.0%	8.6%	5.6%	1.4%
Of which (stage 2):
- Less than 30 days past due	0.0%	6.6%	15.7%	60.0%	0.0%	11.1%	0.0%	0.0%
- More than 30 days past due	0.0%	0.0%	16.9%	27.3%	0.0%	16.9%	0.0%	0.0%
Stage 3, credit-impaired financial assets (S3)	7.0%	68.3%	45.9%	100.0%	0.0%	62.6%	0.0%	19.9%
- Stage 3 Collateral	2	635	664	-	-	1,299	-	47
- Stage 3 Cover ratio (after collateral)	10.5%	80.9%	89.7%	100.0%	0.0%	82.2%	0.0%	26.5%
Cover ratio	0.0%	2.8%	1.0%	4.4%	0.0%	1.8%	0.1%	0.2%
Fair value through profit or loss
Performing	42,461	59,769	9	-	-	59,778	-	-
- Strong	37,129	40,917	6	-	-	40,923	-	-
- Satisfactory	5,332	18,801	3	-	-	18,804	-	-
- Higher risk	-	51	-	-	-	51	-	-
Defaulted (CG13-14)	-	33	-	-	-	33	-	-
Gross balance (FVTPL)2	42,461	59,802	9	-	-	59,811	-	-
Net carrying value (incl FVTPL)	87,692	190,337	120,258	1,109	24,003	335,707	-	-

1   Loans and advances includes reverse repurchase agreements and other similar secured lending of $7,788 million under Customers and of $3,991 million under Banks, held at amortised cost

2   Loans and advances includes reverse repurchase agreements and other similar secured lending of $52,934 million under Customers and of $40,268 million under Banks, held at fair value through profit or loss

Page 12

Amortised cost	31.12.23
	Banks $million	Customers					Undrawn commitments $million	Financial Guarantees $million
		Corporate & Investment Banking $million	Wealth & Retail Banking $million	Ventures $million	Central & other items $million	Customer Total $million
Stage 1	44,384	120,886	123,486	1,015	28,305	273,692	176,654	70,832
- Strong	35,284	84,248	118,193	1,000	27,967	231,408	162,643	47,885
- Satisfactory	9,100	36,638	5,293	15	338	42,284	14,011	22,947
Stage 2	540	7,902	2,304	54	965	11,225	5,733	2,910
- Strong	55	1,145	1,761	34	-	2,940	1,090	830
- Satisfactory	212	5,840	206	7	-	6,053	4,169	1,823
- Higher risk	273	917	337	13	965	2,232	474	257
Of which (stage 2):
- Less than 30 days past due	-	78	206	7	-	291	-	-
- More than 30 days past due	-	10	337	13	-	360	-	-
Stage 3, credit-impaired financial assets	77	5,508	1,484	12	224	7,228	3	672
Gross balance1	45,001	134,296	127,274	1,081	29,494	292,145	182,390	74,414
Stage 1	(8)	(101)	(314)	(15)	-	(430)	(52)	(10)
- Strong	(3)	(34)	(234)	(14)	-	(282)	(31)	(2)
- Satisfactory	(5)	(67)	(80)	(1)	-	(148)	(21)	(8)
Stage 2	(10)	(257)	(141)	(21)	(1)	(420)	(39)	(14)
- Strong	(1)	(18)	(65)	(14)	-	(97)	(5)	-
- Satisfactory	(2)	(179)	(22)	(3)	-	(204)	(23)	(7)
- Higher risk	(7)	(60)	(54)	(4)	(1)	(119)	(11)	(7)
Of which (stage 2):
- Less than 30 days past due	-	(2)	(22)	(3)	-	(27)	-	-
- More than 30 days past due	-	(1)	(54)	(4)	-	(59)	-	-
Stage 3, credit-impaired financial assets	(6)	(3,533)	(760)	(12)	(15)	(4,320)	-	(112)
Total credit impairment	(24)	(3,891)	(1,215)	(48)	(16)	(5,170)	(91)	(136)
Net carrying value	44,977	130,405	126,059	1,033	29,478	286,975	-	-
Stage 1	0.0%	0.1%	0.3%	1.5%	0.0%	0.2%	0.0%	0.0%
- Strong	0.0%	0.0%	0.2%	1.4%	0.0%	0.1%	0.0%	0.0%
- Satisfactory	0.1%	0.2%	1.5%	6.7%	0.0%	0.4%	0.1%	0.0%
Stage 2	1.9%	3.3%	6.1%	38.9%	0.1%	3.7%	0.7%	0.5%
- Strong	1.8%	1.6%	3.7%	41.2%	0.0%	3.3%	0.5%	(0.0)%
- Satisfactory	0.9%	3.1%	10.7%	42.9%	0.0%	3.4%	0.6%	0.4%
- Higher risk	2.6%	6.5%	16.0%	30.8%	0.1%	5.3%	2.3%	2.7%
Of which (stage 2):
- Less than 30 days past due	0.0%	2.6%	10.7%	42.9%	0.0%	9.3%	0.0%	0.0%
- More than 30 days past due	0.0%	10.0%	16.0%	30.8%	0.0%	16.4%	0.0%	0.0%
Stage 3, credit-impaired financial assets (S3)	7.8%	64.1%	51.2%	100.0%	6.7%	59.8%	0.0%	16.7%
- Stage 3 Collateral	2	621	554	-	-	1,175	-	34
- Stage 3 Cover ratio (after collateral)	10.4%	75.4%	88.5%	100.0%	6.7%	76.0%	0.0%	21.7%
Cover ratio	0.1%	2.9%	1.0%	4.4%	0.1%	1.8%	0.0%	0.2%
Fair value through profit or loss
Performing	32,813	58,465	13	-	-	58,478	-	-
- Strong	28,402	38,014	13	-	-	38,027	-	-
- Satisfactory	4,411	20,388	-	-	-	20,388	-	-
- Higher risk	-	63	-	-	-	63	-	-
Defaulted (CG13-14)	-	33	-	-	-	33	-	-
Gross balance (FVTPL)2	32,813	58,498	13	-	-	58,511	-	-
Net carrying value (incl FVTPL)	77,790	188,903	126,072	1,033	29,478	345,486	-	-

1   Loans and advances includes reverse repurchase agreements and other similar secured lending of $13,996 million under Customers and of $1,738 million under Banks, held at amortised cost

2   Loans and advances includes reverse repurchase agreements and other similar secured lending of $51,299 million under Customers and of $30,548 million under Banks, held at fair value through profit or loss

Page 13

Loans and advances by client segment credit quality analysis

Credit grade	Regulatory 1 year PD range (%)	S&P external ratings equivalent	Corporate & Investment Banking
			30.06.24
			Gross				Credit impairment
			Stage 1 $million	Stage 2 $million	Stage 3 $million	Total $million	Stage 1 $million	Stage 2 $million	Stage 3 $million	Total $million	Total Coverage %
Strong			83,625	1,129	-	84,754	(70)	(15)	-	(85)	0.1%
1A-2B	0 - 0.045	A+ and Above	11,929	28	-	11,957	(2)	-	-	(2)	0.0%
3A-4A	0.046 - 0.110	A/A- to BBB+/BBB	33,470	559	-	34,029	(7)	(3)	-	(10)	0.0%
4B-5B	0.111 - 0.425	BBB to BBB-/BB+	38,226	542	-	38,768	(61)	(12)	-	(73)	0.2%
Satisfactory			37,647	6,074	-	43,721	(40)	(144)	-	(184)	0.4%
6A-7B	0.426 - 1.350	BB+/BB to BB-	24,516	2,010	-	26,526	(19)	(80)	-	(99)	0.4%
8A-9B	1.351 - 4.000	BB-/B+ to B	8,614	2,557	-	11,171	(12)	(49)	-	(61)	0.5%
10A-11C	4.001 - 15.75	B/B- to B-/CCC+	4,517	1,507	-	6,024	(9)	(15)	-	(24)	0.4%
Higher risk			-	777	-	777	-	(47)	-	(47)	6.0%
12	15.751 - 99.999	CCC+/C	-	777	-	777	-	(47)	-	(47)	6.0%
Credit-impaired			-	-	5,048	5,048	-	-	(3,449)	(3,449)	68.3%
13-14	100	Defaulted	-	-	5,048	5,048	-	-	(3,449)	(3,449)	68.3%
Total			121,272	7,980	5,048	134,300	(110)	(206)	(3,449)	(3,765)	2.8%

Credit grade	Regulatory 1 year PD range (%)	S&P external ratings equivalent	Corporate & Investment Banking
			31.12.23
			Gross				Credit impairment
			Stage 1 $million	Stage 2 $million	Stage 3 $million	Total $million	Stage 1 $million	Stage 2 $million	Stage 3 $million	Total $million	Total Coverage %
Strong			84,248	1,145	-	85,393	(34)	(18)	-	(52)	0.1%
1A-2B	0 - 0.045	A+ and Above	10,891	81	-	10,972	(1)	-	-	(1)	0.0%
3A-4A	0.046 - 0.110	A/A- to BBB+/BBB	31,974	558	-	32,532	(3)	-	-	(3)	0.0%
4B-5B	0.111 - 0.425	BBB to BBB-/BB+	41,383	506	-	41,889	(30)	(18)	-	(48)	0.1%
Satisfactory			36,638	5,840	-	42,478	(67)	(179)	-	(246)	0.6%
6A-7B	0.426 - 1.350	BB+/BB to BB-	24,296	1,873	-	26,169	(38)	(77)	-	(115)	0.4%
8A-9B	1.351 - 4.000	BB-/B+ to B	8,196	2,273	-	10,469	(13)	(90)	-	(103)	1.0%
10A-11C	4.001 - 15.75	B/B- to B-/CCC+	4,146	1,694	-	5,840	(16)	(12)	-	(28)	0.5%
Higher risk			-	917	-	917	-	(60)	-	(60)	6.5%
12	15.751 - 99.999	CCC+/C	-	917	-	917	-	(60)	-	(60)	6.5%
Credit-impaired			-	-	5,508	5,508	-	-	(3,533)	(3,533)	64.1%
13-14	100	Defaulted	-	-	5,508	5,508	-	-	(3,533)	(3,533)	64.1%
Total			120,886	7,902	5,508	134,296	(101)	(257)	(3,533)	(3,891)	2.9%

Page 14

Loans and advances by client segment credit quality analysis by key geography

Corporate & Investment Banking

	Corporate & Investment Banking
	30.06.24
	Gross									Credit impairment
	Stage 1			Stage 2				Stage 3		Stage 1			Stage 2				Stage 3		Coverage
	Strong $million	Satis-factory $million	Total $million	Strong $million	Satis-factory $million	Higher Risk $million	Total $million	De-faulted $million	Total $million	Strong $million	Satis-factory $million	Total $million	Strong $million	Satis-factory $million	Higher Risk $million	Total $million	De-faulted $million	Total $million	%
Hong Kong	31,685	10,144	41,829	199	1,065	27	1,291	1,371	44,491	(36)	(7)	(43)	(2)	(70)	(3)	(75)	(1,111)	(1,229)	2.8%
Corporate Lending	14,459	6,614	21,073	162	853	27	1,042	1,361	23,476	(36)	(4)	(40)	(1)	(70)	(3)	(74)	(1,111)	(1,225)	5.2%
Non Corporate Lending¹	2,848	1,685	4,533	-	212	-	212	10	4,755	-	(2)	(2)	-	-	-	-	-	(2)	0.0%
Banks	14,378	1,845	16,223	37	-	-	37	-	16,260	-	(1)	(1)	(1)	-	-	(1)	-	(2)	0.0%
Singapore	15,821	7,122	22,943	352	665	9	1,026	283	24,252	(5)	(5)	(10)	-	(18)	(3)	(21)	(90)	(121)	0.5%
Corporate Lending	8,421	3,348	11,769	319	515	9	843	236	12,848	(5)	(4)	(9)	-	(13)	(3)	(16)	(90)	(115)	0.9%
Non Corporate Lending¹	1,395	572	1,967	30	144	-	174	-	2,141	-	(1)	(1)	-	(5)	-	(5)	-	(6)	0.3%
Banks	6,005	3,202	9,207	3	6	-	9	47	9,263	-	-	-	-	-	-	-	-	-	0.0%
UK	16,196	3,489	19,685	189	2,085	117	2,391	349	22,425	(7)	-	(7)	(7)	(34)	-	(41)	(198)	(246)	1.1%
Corporate Lending	6,957	835	7,792	188	1,670	-	1,858	224	9,874	(7)	-	(7)	(7)	(31)	-	(38)	(173)	(218)	2.2%
Non Corporate Lending¹	7,096	1,023	8,119	1	353	110	464	121	8,704	-	-	-	-	(3)	-	(3)	(21)	(24)	0.3%
Banks	2,143	1,631	3,774	-	62	7	69	4	3,847	-	-	-	-	-	-	-	(4)	(4)	0.1%
US	14,367	4,151	18,518	104	269	13	386	4	18,908	(4)	(2)	(6)	-	-	-	-	(4)	(10)	0.1%
Corporate Lending	5,706	2,056	7,762	-	264	-	264	1	8,027	(3)	(2)	(5)	-	-	-	-	(1)	(6)	0.1%
Non Corporate Lending¹	7,640	441	8,081	18	5	-	23	3	8,107	(1)	-	(1)	-	-	-	-	(3)	(4)	0.0%
Banks	1,021	1,654	2,675	86	-	13	99	-	2,774	-	-	-	-	-	-	-	-	-	0.0%
China	11,005	2,641	13,646	-	174	21	195	249	14,090	(3)	(1)	(4)	-	-	(2)	(2)	(131)	(137)	1.0%
Corporate Lending	4,976	2,069	7,045	-	174	21	195	246	7,486	(1)	(1)	(2)	-	-	(2)	(2)	(131)	(135)	1.8%
Non Corporate Lending¹	3,515	309	3,824	-	-	-	-	-	3,824	(1)	-	(1)	-	-	-	-	-	(1)	0.0%
Banks	2,514	263	2,777	-	-	-	-	3	2,780	(1)	-	(1)	-	-	-	-	-	(1)	0.0%
Other	29,580	19,864	49,444	458	1,977	648	3,083	2,849	55,376	(17)	(27)	(44)	(8)	(23)	(39)	(70)	(1,919)	(2,033)	3.7%
Corporate Lending	16,478	15,285	31,763	394	1,160	610	2,164	2,740	36,667	(9)	(21)	(30)	(7)	(22)	(39)	(68)	(1,813)	(1,911)	5.2%
Non Corporate Lending¹	4,134	3,410	7,544	17	724	-	741	106	8,391	(7)	(5)	(12)	-	-	-	-	(106)	(118)	1.4%
Banks	8,968	1,169	10,137	47	93	38	178	3	10,318	(1)	(1)	(2)	(1)	(1)	-	(2)	-	(4)	0.0%
Total	118,654	47,411	166,065	1,302	6,235	835	8,372	5,105	179,542	(72)	(42)	(114)	(17)	(145)	(47)	(209)	(3,453)	(3,776)	2.1%

1   Include financing, insurance and non-banking corporations and governments

Page 15

	Corporate & Investment Banking
	31.12.23
	Gross									Credit impairment
	Stage 1			Stage 2				Stage 3		Stage 1			Stage 2				Stage 3		Coverage
	Strong $million	Satis-factory $million	Total $million	Strong $million	Satis-factory $million	Higher Risk $million	Total $million	De-faulted $million	Total $million	Strong $million	Satis-factory $million	Total $million	Strong $million	Satis-factory $million	Higher Risk $million	Total $million	De-faulted $million	Total $million	%
Hong Kong	32,997	10,151	43,148	167	937	30	1,134	1,284	45,566	(7)	(23)	(30)	(4)	(118)	(3)	(125)	(1,025)	(1,180)	2.6%
Corporate Lending	14,401	6,289	20,690	165	855	30	1,050	1,219	22,959	(5)	(20)	(25)	(3)	(118)	(3)	(124)	(1,024)	(1,173)	5.1%
Non Corporate Lending¹	2,544	2,458	5,002	1	81	-	82	65	5,149	(1)	(2)	(3)	-	-	-	-	(1)	(4)	0.1%
Banks	16,052	1,404	17,456	1	1	-	2	-	17,458	(1)	(1)	(2)	(1)	-	-	(1)	-	(3)	0.0%
Singapore	13,180	6,046	19,226	361	509	36	906	285	20,417	(4)	(4)	(8)	(11)	(14)	(4)	(29)	(75)	(112)	0.5%
Corporate Lending	5,766	2,334	8,100	304	504	36	844	221	9,165	(4)	(3)	(7)	(11)	(13)	(4)	(28)	(74)	(109)	1.2%
Non Corporate Lending¹	1,687	510	2,197	57	2	-	59	-	2,256	-	(1)	(1)	-	-	-	-	-	(1)	0.0%
Banks	5,727	3,202	8,929	-	3	-	3	64	8,996	-	-	-	-	(1)	-	(1)	(1)	(2)	0.0%
UK	8,364	4,171	12,535	56	785	83	924	257	13,716	(5)	(5)	(10)	-	(14)	(7)	(21)	(209)	(240)	1.7%
Corporate Lending	5,407	1,559	6,966	52	539	71	662	250	7,878	(4)	(5)	(9)	-	(13)	(7)	(20)	(202)	(231)	2.9%
Non Corporate Lending¹	558	1,244	1,802	-	160	-	160	3	1,965	(1)	-	(1)	-	(1)	-	(1)	(3)	(5)	0.3%
Banks	2,399	1,368	3,767	4	86	12	102	4	3,873	-	-	-	-	-	-	-	(4)	(4)	0.1%
US	14,550	4,742	19,292	219	176	19	414	5	19,711	(2)	(2)	(4)	-	-	-	-	(5)	(9)	0.0%
Corporate Lending	7,487	2,765	10,252	146	130	-	276	1	10,529	(1)	(2)	(3)	-	-	-	-	(1)	(4)	0.0%
Non Corporate Lending¹	6,181	425	6,606	25	4	-	29	4	6,639	(1)	-	(1)	-	-	-	-	(4)	(5)	0.1%
Banks	882	1,552	2,434	48	42	19	109	-	2,543	-	-	-	-	-	-	-	-	-	0.0%
China	9,737	2,733	12,470	31	298	8	337	262	13,069	(3)	(4)	(7)	-	-	-	-	(125)	(132)	1.0%
Corporate Lending	4,723	2,179	6,902	31	297	8	336	259	7,497	(2)	(1)	(3)	-	-	-	-	(125)	(128)	1.7%
Non Corporate Lending¹	3,254	318	3,572	-	-	-	-	-	3,572	(1)	-	(1)	-	-	-	-	-	(1)	0.0%
Banks	1,760	236	1,996	-	1	-	1	3	2,000	-	(3)	(3)	-	-	-	-	-	(3)	0.2%
Other	40,704	17,895	58,599	366	3,347	1,014	4,727	3,492	66,818	(16)	(34)	(50)	(4)	(35)	(53)	(92)	(2,100)	(2,242)	3.4%
Corporate Lending	16,189	15,034	31,223	345	2,322	678	3,345	3,335	37,903	(8)	(27)	(35)	(3)	(28)	(46)	(77)	(2,012)	(2,124)	5.6%
Non Corporate Lending¹	16,051	1,523	17,574	19	946	94	1,059	151	18,784	(6)	(6)	(12)	(1)	(6)	-	(7)	(87)	(106)	0.6%
Banks	8,464	1,338	9,802	2	79	242	323	6	10,131	(2)	(1)	(3)	-	(1)	(7)	(8)	(1)	(12)	0.1%
Total	119,532	45,738	165,270	1,200	6,052	1,190	8,442	5,585	179,297	(37)	(72)	(109)	(19)	(181)	(67)	(267)	(3,539)	(3,915)	2.2%

1   Include financing, insurance and non-banking corporations and governments

Page 16

Wealth & Retail Banking

	Wealth & Retail Banking
	30.06.24
	Gross									Credit impairment
	Stage 1			Stage 2				Stage 3		Stage 1			Stage 2				Stage 3		Coverage
	Strong $million	Satis-factory $million	Total $million	Strong $million	Satis-factory $million	Higher Risk $million	Total $million	De-faulted $million	Total $million	Strong $million	Satis-factory $million	Total $million	Strong $million	Satis-factory $million	Higher Risk $million	Total $million	De-faulted $million	Total $million	%
Hong Kong	41,284	196	41,480	351	44	36	431	189	42,100	(28)	(29)	(57)	(12)	(10)	(10)	(32)	(49)	(138)	0.3%
Mortgages	31,424	151	31,575	142	30	13	185	65	31,825	-	-	-	-	-	-	-	(4)	(4)	0.0%
Credit cards	3,300	28	3,328	43	10	14	67	9	3,404	(14)	(28)	(42)	(4)	(9)	(5)	(18)	(9)	(69)	2.0%
Others	6,560	17	6,577	166	4	9	179	115	6,871	(14)	(1)	(15)	(8)	(1)	(5)	(14)	(36)	(65)	0.9%
Singapore	26,551	73	26,624	207	39	36	282	301	27,207	(14)	(15)	(29)	-	(5)	(5)	(10)	(249)	(288)	1.1%
Mortgages	14,287	21	14,308	161	31	15	207	20	14,535	-	-	-	-	-	-	-	(4)	(4)	0.0%
Credit cards	1,617	21	1,638	10	5	16	31	10	1,679	(4)	(15)	(19)	-	(5)	(4)	(9)	(8)	(36)	2.1%
Others	10,647	31	10,678	36	3	5	44	271	10,993	(10)	-	(10)	-	-	(1)	(1)	(237)	(248)	2.3%
Korea	18,532	180	18,712	368	10	21	399	105	19,216	(26)	(2)	(28)	(11)	(2)	(2)	(15)	(29)	(72)	0.4%
Mortgages	13,230	133	13,363	280	8	17	305	57	13,725	-	-	-	-	-	-	-	(1)	(1)	0.0%
Credit cards	64	1	65	1	-	-	1	-	66	(1)	-	(1)	-	-	-	-	-	(1)	1.5%
Others	5,238	46	5,284	87	2	4	93	48	5,425	(25)	(2)	(27)	(11)	(2)	(2)	(15)	(28)	(70)	1.3%
Others	26,180	5,068	31,248	407	79	250	736	923	32,907	(206)	(30)	(236)	(26)	(10)	(41)	(77)	(370)	(683)	2.1%
Mortgages	14,589	2,249	16,838	137	38	136	311	444	17,593	(5)	(4)	(9)	(1)	(1)	(1)	(3)	(123)	(135)	0.8%
Credit cards	1,400	88	1,488	74	1	17	92	47	1,627	(23)	(8)	(31)	(7)	-	(11)	(18)	(21)	(70)	4.3%
Others	10,191	2,731	12,922	196	40	97	333	432	13,687	(178)	(18)	(196)	(18)	(9)	(29)	(56)	(226)	(478)	3.5%
Total	112,547	5,517	118,064	1,333	172	343	1,848	1,518	121,430	(274)	(76)	(350)	(49)	(27)	(58)	(134)	(697)	(1,181)	1.0%

	Wealth & Retail Banking
	31.12.23
	Gross									Credit impairment
	Stage 1			Stage 2				Stage 3		Stage 1			Stage 2				Stage 3		Coverage
	Strong $million	Satis-factory $million	Total $million	Strong $million	Satis-factory $million	Higher Risk $million	Total $million	De-faulted $million	Total $million	Strong $million	Satis-factory $million	Total $million	Strong $million	Satis-factory $million	Higher Risk $million	Total $million	De-faulted $million	Total $million	%
Hong Kong	42,161	230	42,391	480	66	40	586	164	43,141	(17)	(33)	(50)	(14)	(10)	(9)	(33)	(39)	(122)	0.3%
Mortgages	32,374	152	32,526	282	53	13	348	63	32,937	-	-	-	(1)	-	-	(1)	(1)	(2)	0.0%
Credit cards	3,278	32	3,310	46	9	13	68	8	3,386	(2)	(32)	(34)	(5)	(9)	(5)	(19)	(8)	(61)	1.8%
Others	6,509	46	6,555	152	4	14	170	93	6,818	(15)	(1)	(16)	(8)	(1)	(4)	(13)	(30)	(59)	0.9%
Singapore	26,412	64	26,476	379	41	32	452	280	27,208	(8)	(18)	(26)	(2)	(5)	(4)	(11)	(245)	(282)	1.0%
Mortgages	14,992	16	15,008	230	34	11	275	13	15,296	-	-	-	-	-	-	-	(4)	(4)	0.0%
Credit cards	1,679	21	1,700	11	5	14	30	8	1,738	-	(17)	(17)	-	(5)	(3)	(8)	(8)	(33)	1.9%
Others	9,741	27	9,768	138	2	7	147	259	10,174	(8)	(1)	(9)	(2)	-	(1)	(3)	(233)	(245)	2.4%
Korea	22,965	211	23,176	462	20	9	491	93	23,760	(40)	-	(40)	(18)	-	-	(18)	(19)	(77)	0.3%
Mortgages	16,534	164	16,698	364	18	8	390	69	17,157	-	-	-	-	-	-	-	-	-	0.0%
Credit cards	113	2	115	3	-	-	3	-	118	(4)	-	(4)	-	-	-	-	-	(4)	3.4%
Others	6,318	45	6,363	95	2	1	98	24	6,485	(36)	-	(36)	(18)	-	-	(18)	(19)	(73)	1.1%
Others	26,655	4,788	31,443	440	79	256	775	947	33,165	(169)	(29)	(198)	(31)	(7)	(41)	(79)	(457)	(734)	2.2%
Mortgages	14,681	2,297	16,978	155	48	134	337	374	17,689	(5)	(2)	(7)	(2)	(1)	(1)	(4)	(118)	(129)	0.7%
Credit cards	1,420	68	1,488	73	1	15	89	40	1,617	(26)	(9)	(35)	(7)	-	(10)	(17)	(16)	(68)	4.2%
Others	10,554	2,423	12,977	212	30	107	349	533	13,859	(138)	(18)	(156)	(22)	(6)	(30)	(58)	(323)	(537)	3.9%
Total	118,193	5,293	123,486	1,761	206	337	2,304	1,484	127,274	(234)	(80)	(314)	(65)	(22)	(54)	(141)	(760)	(1,215)	1.0%

Movement in gross exposures and credit impairment for loans and advances, debt securities, undrawn commitments and financial guarantees (reviewed)

The tables overleaf set out the movement in gross exposures and credit impairment by stage in respect of amortised cost loans to banks and customers, undrawn commitments, financial guarantees and debt securities classified at amortised cost and FVOCI. The tables are presented for the Group, debt securities and other eligible bills.

Methodology

The movement lines within the tables are an aggregation of monthly movements over the year and will therefore reflect the accumulation of multiple trades during the year. The credit impairment charge in the income statement comprises the amounts within the boxes in the table below, less recoveries of amounts previously written off. Discount unwind is reported in net interest income and related to stage 3 financial instruments only.

Page 17

The approach for determining the key line items in the tables is set out below.

• Transfers - transfers between stages are deemed to occur at the beginning of a month based on prior month closing balances.

• Net remeasurement from stage changes - the remeasurement of credit impairment provisions arising from a change in stage is reported within the stage that the assets are transferred to. For example, assets transferred into stage 2 are remeasured from a 12-month to a lifetime expected credit loss, with the effect of remeasurement reported in stage 2. For stage 3, this represents the initial remeasurement from specific provisions recognised on individual assets transferred into stage 3 in the year.

• Net changes in exposures - new business written less repayments in the year. Within stage 1, new business written will attract up to 12 months of expected credit loss charges. Repayments of non-amortising loans (primarily within CIB) will have low amounts of expected credit loss provisions attributed to them, due to the release of provisions over the term to maturity. In stages 2 and 3, the net change in exposures reflect repayments although stage 2 may include new facilities where clients are on non-purely precautionary early alert, are CG 12, or when non-investment grade debt securities are acquired.

• Changes in risk parameters - for stages 1 and 2, this reflects changes in the probability of default (PD), loss given default (LGD) and exposure at default (EAD) of assets during the year, which includes the impact of releasing provisions over the term to maturity. It also includes the effect of changes in forecasts of macroeconomic variables during the year. In stage 3, this line represents additional specific provisions recognised on exposures held within stage 3.

• Interest due but not paid - change in contractual amount of interest due in stage 3 financial instruments but not paid, being the net of accruals, repayments and write-offs, together with the corresponding change in credit impairment.

Changes to ECL models, which incorporate changes to model approaches and methodologies, are not reported as a separate line item as these have an impact over a number of lines and stages.

Movements during the year

Stage 1 gross exposures decreased by $7.8 billion to $716 billion (31 December 2023: $724 billion). CIB increased by $20.5 billion to $358 billion (31 December 2023: $337 billion) largely due to higher amounts of financial guarantees. WRB decreased by $15.6 billion to $175 billion (31 December 2023: $191 billion), largely due to the mortgage portfolio in Korea and Hong Kong, as well as off balance sheet commitments. Stage 1 debt securities decreased by $8.9 billion to $149 billion (31 December 2023: $158 billion).

Total stage 1 provisions increased by $39 million to $565 million (31 December 2023: $526 million). CIB provisions decreased by $7 million to $144 million (31 December 2023: $151 million), due to China CRE overlay releases driven by repayments. This was partly offset by increases due to portfolio movements. WRB provisions increased by $33 million to $358 million (31 December 2023: $325 million), due to delinquencies in personal loans and unsecured lending portfolio. There was also $10 million overlay charges on Hong Kong and Singapore credit cards due to an increase in industry bankruptcy trends.

Stage 2 gross exposures decreased by $3.7 billion to $19 billion (31 December 2023: $22 billion), primarily driven by a net reduction in CIB exposures from off-balance sheet instruments, and in Central and other items where a portfolio of debt securities were maturing, which were being held by Treasury and accounted for under FVOCI. WRB exposures decreased by $0.5 billion to $2 billion (31 December 2023: $2.5 billion). Debt securities remained broadly stable at $1.8 billion (31 December 2023: $1.9 billion).

Stage 2 provisions decreased by $89 million to $428 million (31 December 2023: $517 million). CIB provisions decreased by $59 million to $259 million (31 December 2023: $318 million) from China CRE overlay releases largely due to repayments, and releases due to a sovereign upgrade. This was partly offset by portfolio movements. Debt securities provisions decreased by $24 million to $10 million (31 December 2023: $34 million) mainly due to a sovereign upgrade, which was driven by an improvement in the macroeconomic environment. The decrease was also due to the maturity of a portfolio of debt securities, which were being held by Treasury and accounted for under FVOCI.

The impact of model and methodology updates in H1 2024 reduced modelled provisions by $13 million across stages 1, 2 and 3 in WRB.

Page 18

Stage 3 gross loans for CIB decreased by $0.4 billion to $5.8 billion (31 December 2023: $6.3 billion) due to repayments and write-offs, which were partly offset by new inflows. CIB provisions decreased by $58 million to $3.6 billion (31 December 2023: $3.7 billion), due to releases from repayments and write-offs, which was offset by charges from new downgrades. WRB stage 3 loans was stable at $1.5 billion (31 December 2023: $1.5 billion) but provisions decreased by $61 million to $0.7 billion (31 December 2023: $0.8 billion) due to the unsecured portfolio being classified as held for sale in Malaysia. Debt securities increased by $223 million to $387 million (31 December 2023: $164 million) due to sovereign client positions.

All segments (reviewed)

	Stage 1			Stage 2			Stage 35			Total
	Gross balance3 $million	Total credit impair-ment $million	Net $million	Gross balance3 $million	Total credit impair-ment $million	Net $million	Gross balance3 $million	Total credit impair-ment $million	Net $million	Gross balance3 $million	Total credit impair-ment $million	Net $million
As at 1 January 2023	720,112	(645)	719,467	27,479	(618)	26,861	8,841	(4,724)	4,117	756,432	(5,987)	750,445
Transfers to stage 1	19,594	(661)	18,933	(19,583)	661	(18,922)	(11)	-	(11)	-	-	-
Transfers to stage 2	(42,628)	174	(42,454)	42,793	(182)	42,611	(165)	8	(157)	-	-	-
Transfers to stage 3	(96)	6	(90)	(2,329)	326	(2,003)	2,425	(332)	2,093	-	-	-
Net change in exposures	23,717	(185)	23,532	(22,727)	22	(22,705)	(1,708)	624	(1,084)	(718)	461	(257)
Net remeasurement from stage changes	-	52	52	-	(199)	(199)	-	(163)	(163)	-	(310)	(310)
Changes in risk parameters	-	202	202	-	(32)	(32)	-	(1,100)	(1,100)	-	(930)	(930)
Write-offs	-	-	-	-	-	-	(1,027)	1,027	-	(1,027)	1,027	-
Interest due but unpaid	-	-	-	-	-	-	(83)	83	-	(83)	83	-
Discount unwind	-	-	-	-	-	-	-	180	180	-	180	180
Exchange translation differences and other movements¹	3,177	531	3,708	(3,365)	(495)	(3,860)	(128)	(102)	(230)	(316)	(66)	(382)
As at 31 December 2023²	723,876	(526)	723,350	22,268	(517)	21,751	8,144	(4,499)	3,645	754,288	(5,542)	748,746
Income statement ECL (charge)/release		69			(209)			(639)			(779)
Recoveries of amounts previously written off		-			-			271			271
Total credit impairment (charge)/release		69			(209)			(368)			(508)
As at 1 January 2024	723,876	(526)	723,350	22,268	(517)	21,751	8,144	(4,499)	3,645	754,288	(5,542)	748,746
Transfers to stage 1	8,877	(299)	8,578	(8,862)	299	(8,563)	(15)	-	(15)	-	-	-
Transfers to stage 2	(18,521)	121	(18,400)	18,617	(122)	18,495	(96)	1	(95)	-	-	-
Transfers to stage 3	(347)	16	(331)	(576)	108	(468)	923	(124)	799	-	-	-
Net change in exposures	13,748	(72)	13,676	(11,669)	27	(11,642)	(563)	165	(398)	1,516	120	1,636
Net remeasurement from stage changes	-	44	44	-	(117)	(117)	-	(145)	(145)	-	(218)	(218)
Changes in risk parameters	-	68	68	-	(25)	(25)	-	(314)	(314)	-	(271)	(271)
Write-offs	-	-	-	-	-	-	(578)	578	-	(578)	578	-
Interest due but unpaid	-	-	-	-	-	-	13	(13)	-	13	(13)	-
Discount unwind	-	-	-	-	-	-	-	69	69	-	69	69
Exchange translation differences and other movements¹	(11,587)	83	(11,504)	(1,236)	(81)	(1,317)	(23)	(35)	(58)	(12,846)	(33)	(12,879)
As at 30 June 2024²	716,046	(565)	715,481	18,542	(428)	18,114	7,805	(4,317)	3,488	742,393	(5,310)	737,083
Income statement ECL (charge)/release⁶		40			(115)			(294)			(369)
Recoveries of amounts previously written off		-			-			130			130
Total credit impairment (charge)/release4		40			(115)			(164)			(239)

1   Includes fair value adjustments and amortisation on debt securities

2   Excludes Cash and balances at central banks, Accrued income, Assets held for sale and Other assets gross balances of $109,690 million (2023: $111,478 million) and Total credit impairment of $95 million (2023: $59 million)

3   Does not include $1 million (2023: Nil) release relating to Other assets

4   Reported basis

5   Stage 3 gross includes $23 million (2023: $80 million) originated credit-impaired debt securities with impairment of Nil (2023: $14 million)

6   The gross balance includes the notional amount of off balance sheet instruments

Page 19

Of which - movement of debt securities, additional tier one and other eligible bills (reviewed)

Amortised cost and FVOCI	Stage 1			Stage 2			Stage 32			Total
	Gross balance $million	Total credit impair-ment $million	Net $million	Gross balance $million	Total credit impair-ment $million	Net $million	Gross balance $million	Total credit impair-ment $million	Net $million	Gross balance $million	Total credit impair-ment $million	Net3 $million
As at 1 January 2023	166,103	(25)	166,078	5,455	(90)	5,365	144	(106)	38	171,702	(221)	171,481
Transfers to stage 1	371	(65)	306	(371)	65	(306)	-	-	-	-	-	-
Transfers to stage 2	(884)	14	(870)	884	(14)	870	-	-	-	-	-	-
Transfers to stage 3	-	-	-	(16)	-	(16)	16	-	16	-	-	-
Net change in exposures	(11,583)	(28)	(11,611)	(1,899)	(44)	(1,943)	7	-	7	(13,475)	(72)	(13,547)
Net remeasurement from stage changes	-	7	7	-	(18)	(18)	-	-	-	-	(11)	(11)
Changes in risk parameters	-	32	32	-	105	105	-	(4)	(4)	-	133	133
Write-offs	-	-	-	-	-	-	-	-	-	-	-	-
Interest due but unpaid	-	-	-	-	-	-	-	-	-	-	-	-
Exchange translation differences and other movements1	4,307	39	4,346	(2,193)	(38)	(2,231)	(3)	49	46	2,111	50	2,161
As at 31 December 2023	158,314	(26)	158,288	1,860	(34)	1,826	164	(61)	103	160,338	(121)	160,217
Income statement ECL (charge)/release		11			43			(4)			50
Recoveries of amounts previously written off		-			-			-			-
Total credit impairment (charge)/release		11			43			(4)			50
As at 1 January 2024	158,314	(26)	158,288	1,860	(34)	1,826	164	(61)	103	160,338	(121)	160,217
Transfers to stage 1	125	-	125	(125)	-	(125)	-	-	-	-	-	-
Transfers to stage 2	(555)	42	(513)	555	(42)	513	-	-	-	-	-	-
Transfers to stage 3	(131)	-	(131)	131	-	131	-	-	-	-	-	-
Net change in exposures	(5,162)	(4)	(5,166)	2	(9)	(7)	272	22	294	(4,888)	9	(4,879)
Net remeasurement from stage changes	-	-	-	-	2	2	-	-	-	-	2	2
Changes in risk parameters	-	4	4	-	26	26	-	-	-	-	30	30
Write-offs	-	-	-	-	-	-	(51)	51	-	(51)	51	-
Interest due but unpaid	-	-	-	-	-	-	-	-	-	-	-	-
Exchange translation differences and other movements1	(3,169)	(39)	(3,208)	(636)	47	(589)	2	(28)	(26)	(3,803)	(20)	(3,823)
As at 30 June 2024	149,422	(23)	149,399	1,787	(10)	1,777	387	(16)	371	151,596	(49)	151,547
Income statement ECL (charge)/release		-			19			22			41
Recoveries of amounts previously written off		-			-			-			-
Total credit impairment (charge)/release		-			19			22			41

1   Includes fair value adjustments and amortisation on debt securities

2   Stage 3 includes gross of $23 million (31 December 2023: $80 million) and ECL Nil (31 December 2023: $14 million) originated credit-impaired debt securities

3   FVOCI instruments are not presented net of ECL. While the presentation is on a net basis for the table, the total net on-balance sheet amount to $151,580 million (31 December 2023: $160,263 million). Refer to the Analysis of financial instrument by stage table

Page 20

Corporate & Investment Banking (reviewed)

Amortised cost and FVOCI	Stage 1			Stage 2			Stage 3			Total
	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million
As at 1 January 2023	315,437	(194)	315,243	20,148	(411)	19,737	6,994	(3,822)	3,172	342,579	(4,427)	338,152
Transfers to stage 1	14,948	(347)	14,601	(14,948)	347	(14,601)	-	-	-	-	-	-
Transfers to stage 2	(34,133)	80	(34,053)	34,175	(88)	34,087	(42)	8	(34)	-	-	-
Transfers to stage 3	(17)	-	(17)	(1,270)	141	(1,129)	1,287	(141)	1,146	-	-	-
Net change in exposures	41,314	(73)	41,241	(20,084)	89	(19,995)	(1,335)	623	(712)	19,895	639	20,534
Net remeasurement from stage changes	-	15	15	-	(45)	(45)	-	(82)	(82)	-	(112)	(112)
Changes in risk parameters	-	60	60	-	(68)	(68)	-	(668)	(668)	-	(676)	(676)
Write-offs	-	-	-	-	-	-	(340)	340	-	(340)	340	-
Interest due but unpaid	-	-	-	-	-	-	(120)	120	-	(120)	120	-
Discount unwind	-	-	-	-	-	-	-	155	155	-	155	155
Exchange translation differences and other movements	(360)	308	(52)	(1,148)	(283)	(1,431)	(188)	(184)	(372)	(1,696)	(159)	(1,855)
As at 31 December 2023	337,189	(151)	337,038	16,873	(318)	16,555	6,256	(3,651)	2,605	360,318	(4,120)	356,198
Income statement ECL (charge)/release2		2			(24)			(127)			(149)
Recoveries of amounts previously written off		-			-			31			31
Total credit impairment (charge)/release		2			(24)			(96)			(118)
As at 1 January 2024	337,189	(151)	337,038	16,873	(318)	16,555	6,256	(3,651)	2,605	360,318	(4,120)	356,198
Transfers to stage 1	5,730	(144)	5,586	(5,730)	144	(5,586)	-	-	-	-	-	-
Transfers to stage 2	(14,220)	41	(14,179)	14,245	(42)	14,203	(25)	1	(24)	-	-	-
Transfers to stage 3	(118)	13	(105)	(147)	(3)	(150)	265	(10)	255	-	-	-
Net change in exposures	32,957	(23)	32,934	(10,137)	39	(10,098)	(479)	127	(352)	22,341	143	22,484
Net remeasurement from stage changes	-	12	12	(1)	(32)	(33)	-	(83)	(83)	(1)	(103)	(104)
Changes in risk parameters	-	38	38	-	3	3	-	(69)	(69)	-	(28)	(28)
Write-offs	-	-	-	-	-	-	(107)	107	-	(107)	107	-
Interest due but unpaid	-	-	-	-	-	-	16	(16)	-	16	(16)	-
Discount unwind	-	-	-	-	-	-	-	54	54	-	54	54
Exchange translation differences and other movements	(3,878)	70	(3,808)	(538)	(50)	(588)	(102)	(53)	(155)	(4,518)	(33)	(4,551)
As at 30 June 2024	357,660	(144)	357,516	14,565	(259)	14,306	5,824	(3,593)	2,231	378,049	(3,996)	374,053
Income statement ECL (charge)/release²		27			10			(25)			12
Recoveries of amounts previously written off		-			-			5			5
Total credit impairment (charge)/release		27			10			(20)			17

1   The gross balance includes the notional amount of off balance sheet instruments

2   Does not include release relating to Other assets

Page 21

Wealth & Retail Banking (reviewed)

Amortised cost and FVOCI	Stage 1			Stage 2			Stage 3			Total
	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million
As at 1 January 2023	193,239	(413)	192,826	1,821	(118)	1,703	1,454	(776)	678	196,514	(1,307)	195,207
Transfers to stage 1	4,265	(246)	4,019	(4,254)	246	(4,008)	(11)	-	(11)	-	-	-
Transfers to stage 2	(7,544)	73	(7,471)	7,667	(73)	7,594	(123)	-	(123)	-	-	-
Transfers to stage 3	(64)	1	(63)	(1,049)	187	(862)	1,113	(188)	925	-	-	-
Net change in exposures	1,965	(78)	1,887	(1,713)	14	(1,699)	(395)	-	(395)	(143)	(64)	(207)
Net remeasurement from stage changes	-	31	31	-	(137)	(137)	-	(38)	(38)	-	(144)	(144)
Changes in risk parameters	-	110	110	-	(69)	(69)	-	(426)	(426)	-	(385)	(385)
Write-offs	-	-	-	-	-	-	(649)	649	-	(649)	649	-
Interest due but unpaid	-	-	-	-	-	-	37	(37)	-	37	(37)	-
Discount unwind	-	-	-	-	-	-	-	24	24	-	24	24
Exchange translation differences and other movements	(862)	197	(665)	-	(190)	(190)	59	33	92	(803)	40	(763)
As at 31 December 2023	190,999	(325)	190,674	2,472	(140)	2,332	1,485	(759)	726	194,956	(1,224)	193,732
Income statement ECL (charge)/release		63			(192)			(464)			(593)
Recoveries of amounts previously written off		-			-			239			239
Total credit impairment (charge)/release		63			(192)			(225)			(354)
As at 1 January 2024	190,999	(325)	190,674	2,472	(140)	2,332	1,485	(759)	726	194,956	(1,224)	193,732
Transfers to stage 1	2,963	(146)	2,817	(2,948)	146	(2,802)	(15)	-	(15)	-	-	-
Transfers to stage 2	(3,684)	36	(3,648)	3,755	(36)	3,719	(71)	-	(71)	-	-	-
Transfers to stage 3	(57)	-	(57)	(568)	112	(456)	625	(112)	513	-	-	-
Net change in exposures	(11,173)	(27)	(11,200)	(668)	(3)	(671)	(196)	-	(196)	(12,037)	(30)	(12,067)
Net remeasurement from stage changes	-	16	16	-	(82)	(82)	-	(26)	(26)	-	(92)	(92)
Changes in risk parameters	-	15	15	-	(54)	(54)	-	(245)	(245)	-	(284)	(284)
Write-offs	-	-	-	-	-	-	(382)	382	-	(382)	382	-
Interest due but unpaid	-	-	-	-	-	-	(3)	3	-	(3)	3	-
Discount unwind	-	-	-	-	-	-	-	15	15	-	15	15
Exchange translation differences and other movements	(3,604)	73	(3,531)	(38)	(81)	(119)	79	44	123	(3,563)	36	(3,527)
As at 30 June 2024	175,444	(358)	175,086	2,005	(138)	1,867	1,522	(698)	824	178,971	(1,194)	177,777
Income statement ECL (charge)/release		4			(139)			(271)			(406)
Recoveries of amounts previously written off		-			-			124			124
Total credit impairment (charge)/release		4			(139)			(147)			(282)

1   The gross balance includes the notional amount of off-balance sheet instruments

Page 22

Wealth & Retail Banking - Secured (reviewed)

Amortised cost and FVOCI	Stage 1			Stage 2			Stage 3			Total
	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million
As at 1 January 2023	135,362	(60)	135,302	1,413	(17)	1,396	1,028	(552)	476	137,803	(629)	137,174
Transfers to stage 1	3,311	(20)	3,291	(3,302)	20	(3,282)	(9)	-	(9)	-	-	-
Transfers to stage 2	(5,340)	11	(5,329)	5,436	(9)	5,427	(96)	(2)	(98)	-	-	-
Transfers to stage 3	(28)	1	(27)	(463)	1	(462)	491	(2)	489	-	-	-
Net change in exposures	(3,138)	(16)	(3,154)	(1,250)	3	(1,247)	(216)	-	(216)	(4,604)	(13)	(4,617)
Net remeasurement from stage changes	-	4	4	-	(16)	(16)	-	(3)	(3)	-	(15)	(15)
Changes in risk parameters	-	22	22	-	24	24	-	(110)	(110)	-	(64)	(64)
Write-offs	-	-	-	-	-	-	(109)	109	-	(109)	109	-
Interest due but unpaid	-	-	-	-	-	-	(3)	3	-	(3)	3	-
Discount unwind	-	-	-	-	-	-	-	12	12	-	12	12
Exchange translation differences and other movements	(369)	25	(344)	(7)	(22)	(29)	(24)	20	(4)	(400)	23	(377)
As at 31 December 2023	129,798	(33)	129,765	1,827	(16)	1,811	1,062	(525)	537	132,687	(574)	132,113
Income statement ECL (charge)/release		10			11			(113)			(92)
Recoveries of amounts previously written off		-			-			68			68
Total credit impairment (charge)/release		10			11			(45)			(24)
As at 1 January 2024	129,798	(33)	129,765	1,827	(16)	1,811	1,062	(525)	537	132,687	(574)	132,113
Transfers to stage 1	2,353	(13)	2,340	(2,342)	13	(2,329)	(11)	-	(11)	-	-	-
Transfers to stage 2	(2,542)	3	(2,539)	2,591	(3)	2,588	(49)	-	(49)	-	-	-
Transfers to stage 3	(16)	-	(16)	(234)	2	(232)	250	(2)	248	-	-	-
Net change in exposures	(6,534)	(4)	(6,538)	(431)	2	(429)	(113)	-	(113)	(7,078)	(2)	(7,080)
Net remeasurement from stage changes	-	4	4	-	(10)	(10)	-	(1)	(1)	-	(7)	(7)
Changes in risk parameters	-	(9)	(9)	-	17	17	-	(62)	(62)	-	(54)	(54)
Write-offs	-	-	-	-	-	-	(63)	63	-	(63)	63	-
Interest due but unpaid	-	-	-	-	-	-	23	(23)	-	23	(23)	-
Discount unwind	-	-	-	-	-	-	-	8	8	-	8	8
Exchange translation differences and other movements	(2,768)	13	(2,755)	(26)	(17)	(43)	37	24	61	(2,757)	20	(2,737)
As at 30 June 2024	120,291	(39)	120,252	1,385	(12)	1,373	1,136	(518)	618	122,812	(569)	122,243
Income statement ECL (charge)/release		(9)			9			(63)			(63)
Recoveries of amounts previously written off		-			-			43			43
Total credit impairment (charge)/release		(9)			9			(20)			(20)

1   The gross balance includes the notional amount of off balance sheet instruments

Page 23

Wealth & Retail Banking - Unsecured (reviewed)

Amortised cost and FVOCI	Stage 1			Stage 2			Stage 3			Total
	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million	Gross balance1 $million	Total credit impair-ment $million	Net $million
As at 1 January 2023	57,877	(353)	57,524	408	(101)	307	426	(224)	202	58,711	(678)	58,033
Transfers to stage 1	954	(226)	728	(952)	226	(726)	(2)	-	(2)	-	-	-
Transfers to stage 2	(2,204)	62	(2,142)	2,231	(64)	2,167	(27)	2	(25)	-	-	-
Transfers to stage 3	(36)	-	(36)	(586)	186	(400)	622	(186)	436	-	-	-
Net change in exposures	5,103	(62)	5,041	(463)	11	(452)	(179)	-	(179)	4,461	(51)	4,410
Net remeasurement from stage changes	-	27	27	-	(121)	(121)	-	(35)	(35)	-	(129)	(129)
Changes in risk parameters	-	88	88	-	(93)	(93)	-	(316)	(316)	-	(321)	(321)
Write-offs	-	-	-	-	-	-	(540)	540	-	(540)	540	-
Interest due but unpaid	-	-	-	-	-	-	40	(40)	-	40	(40)	-
Discount unwind	-	-	-	-	-	-	-	12	12	-	12	12
Exchange translation differences and other movements	(493)	172	(321)	7	(168)	(161)	83	13	96	(403)	17	(386)
As at 31 December 2023	61,201	(292)	60,909	645	(124)	521	423	(234)	189	62,269	(650)	61,619
Income statement ECL (charge)/release		53			(203)			(351)			(501)
Recoveries of amounts previously written off		-			-			171			171
Total credit impairment (charge)/release		53			(203)			(180)			(330)
As at 1 January 2024	61,201	(292)	60,909	645	(124)	521	423	(234)	189	62,269	(650)	61,619
Transfers to stage 1	610	(133)	477	(606)	133	(473)	(4)	-	(4)	-	-	-
Transfers to stage 2	(1,142)	33	(1,109)	1,164	(33)	1,131	(22)	-	(22)	-	-	-
Transfers to stage 3	(41)	-	(41)	(334)	110	(224)	375	(110)	265	-	-	-
Net change in exposures	(4,639)	(23)	(4,662)	(237)	(5)	(242)	(83)	-	(83)	(4,959)	(28)	(4,987)
Net remeasurement from stage changes	-	12	12	-	(72)	(72)	-	(25)	(25)	-	(85)	(85)
Changes in risk parameters	-	24	24	-	(71)	(71)	-	(183)	(183)	-	(230)	(230)
Write-offs	-	-	-	-	-	-	(319)	319	-	(319)	319	-
Interest due but unpaid	-	-	-	-	-	-	(26)	26	-	(26)	26	-
Discount unwind	-	-	-	-	-	-	-	7	7	-	7	7
Exchange translation differences and other movements	(836)	60	(776)	(12)	(64)	(76)	42	20	62	(806)	16	(790)
As at 30 June 2024	55,153	(319)	54,834	620	(126)	494	386	(180)	206	56,159	(625)	55,534
Income statement ECL (charge)/release		13			(148)			(208)			(343)
Recoveries of amounts previously written off		-			-			81			81
Total credit impairment (charge)/release		13			(148)			(127)			(262)

1   The gross balance includes the notional amount of off balance sheet instruments

Page 24

Analysis of stage 2 balances

The table below analyses total stage 2 gross on-and off-balance sheet exposures and associated expected credit provisions by the key SICR driver that caused the exposures to be classified as stage 2 as at 30 June 2024 and 31 December 2023 for each segment.

Where multiple drivers apply, the exposure is allocated based on the table order. For example, a loan may have breached the PD thresholds and could also be on non-purely precautionary early alert; in this instance, the exposure is reported under 'Increase in PD'.

Further details can be found in the 'Summary of Credit Risk performance' section.

	30.06.24
	Corporate & Investment Banking			Wealth & Retail Banking			Ventures			Central & other items1			Total
	Gross $million	ECL $million	Cove-rage %	Gross $million	ECL $million	Cove-rage %	Gross $million	ECL $million	Cove-rage %	Gross $million	ECL $million	Cove-rage %	Gross $million	ECL $million	Cove-rage %
Increase in PD	7,885	115	1.5%	1,626	125	7.7%	51	25	49.0%	452	4	0.9%	10,014	269	2.7%
Non-purely precautionary early alert	4,019	35	0.9%	30	-	0.0%	-	-	0.0%	-	-	0.0%	4,049	35	0.9%
Higher risk (CG12)	674	22	3.3%	17	-	0.0%	-	-	0.0%	1,427	3	0.2%	2,118	25	1.2%
Sub-investment grade	-	-	0.0%	-	-	0.0%	-	-	0.0%	-	-	0.0%	-	-	0.0%
Top up/Sell down (Private Banking)	-	-	0.0%	39	-	0.0%	-	-	0.0%	-	-	0.0%	39	-	0.0%
Others	1,987	1	0.1%	147	4	2.7%	-	-	0.0%	426	-	0.0%	2,560	5	0.2%
30 days past due	-	-	0.0%	146	9	6.2%	5	-	0.0%	-	-	0.0%	151	9	6.0%
Management overlay	-	86	0.0%	-	-	0.0%	-	-	0.0%	-	-	0.0%	-	86	0.0%
Total stage 2	14,565	259	1.8%	2,005	138	6.9%	56	25	44.6%	2,305	7	0.3%	18,931	429	2.3%

	31.12.23
	Corporate & Investment Banking			Wealth & Retail Banking			Ventures			Central & other items1			Total
	Gross $million	ECL $million	Cove-rage %	Gross $million	ECL $million	Cove-rage %	Gross $million	ECL $million	Cove-rage %	Gross $million	ECL $million	Cove-rage %	Gross $million	ECL $million	Cove-rage %
Increase in PD	8,262	75	0.9%	1,962	109	5.6%	96	23	24.0%	599	13	2.2%	10,919	220	2.0%
Non-purely precautionary early alert	5,136	26	0.5%	37	-	0.0%	-	-	0.0%	-	-	0.0%	5,173	26	0.5%
Higher risk (CG12)	1,008	56	5.6%	26	1	3.8%	-	-	0.0%	2,020	17	0.8%	3,054	74	2.4%
Sub-investment grade	-	-	0.0%	-	-	0.0%	-	-	0.0%	-	-	0.0%	-	-	0.0%
Top up/Sell down (Private Banking)	-	-	0.0%	148	2	1.4%	-	-	0.0%	-	-	0.0%	148	2	1.4%
Others	2,467	37	1.5%	151	16	10.6%	-	-	0.0%	489	-	0.0%	3,107	53	1.7%
30 days past due	-	-	0.0%	148	12	8.1%	2	-	0.0%	-	-	0.0%	150	12	8.0%
Management overlay	-	124	0.0%	-	-	0.0%	-	-	0.0%	-	17	0.0%	-	141	0.0%
Total stage 2	16,873	318	1.9%	2,472	140	5.7%	98	23	23.5%	3,108	47	1.5%	22,551	528	2.3%

1   Includes Gross and ECL for Cash and balances at central banks and Assets held for sale

Page 25

Credit impairment charge (reviewed)

The table below analyses credit impairment charges or releases of the ongoing business portfolio and restructuring business portfolio for the half year ended 30 June 2024.

Further details can be found in the 'Summary of Credit Risk performance' section.

	30.06.24			30.06.23
	Stage 1 & 2 $million	Stage 3 $million	Total $million	Stage 1 & 2 $million	Stage 3 $million	Total $million
Ongoing business portfolio
Corporate & Investment Banking	(38)	3	(35)	33	36	69
Wealth & Retail Banking	135	147	282	15	93	108
Ventures	7	36	43	12	11	23
Central & other items	(31)	(10)	(41)	(27)	(1)	(28)
Credit impairment charge/(release)	73	176	249	33	139	172
Restructuring business portfolio
Others	2	(11)	(9)	(2)	(9)	(11)
Credit impairment charge/(release)	2	(11)	(9)	(2)	(9)	(11)
Total credit impairment charge/ (release)	75	165	240	31	130	161

Problem credit management and provisioning

Forborne and other modified loans by client segment (reviewed)

A forborne loan arises when a concession has been made to the contractual terms of a loan in response to a customer's financial difficulties.

Net forborne loans decreased by $139 million to $866 million (31 December 2023: $1,005 million), largely on the non-performing forborne loans stock. The net non-performing forborne loans decreased by $136 million to $831 million (31 December 2023: $967 million) largely due to write-offs and repayments.

Amortised cost	30.06.24				31.12.23
	Corporate & Investment Banking $million	Wealth & Retail Banking $million	Ventures $million	Total $million	Corporate & Investment Banking $million	Wealth & Retail Banking $million	Ventures $million	Total $million
All loans with forbearance measures	2,139	299	-	2,438	2,340	314	-	2,654
Credit impairment (stage 1 and 2)	-	(2)	-	(2)	-	(2)	-	(2)
Credit impairment (stage 3)	(1,450)	(120)	-	(1,570)	(1,529)	(118)	-	(1,647)
Net carrying value	689	177	-	866	811	194	-	1,005
Included within the above table
Gross performing forborne loans	4	33	-	37	-	40	-	40
Modification of terms and conditions1	4	33	-	37	-	40	-	40
Refinancing2	-	-	-	-	-	-	-	-
Impairment provisions	-	(2)	-	(2)	-	(2)	-	(2)
Modification of terms and conditions1	-	(2)	-	(2)	-	(2)	-	(2)
Refinancing2	-	-	-	-	-	-	-	-
Net performing forborne loans	4	31	-	35	-	38	-	38
Collateral	-	22	-	22	-	31	-	31
Gross non-performing forborne loans	2,135	266	-	2,401	2,340	274	-	2,614
Modification of terms and conditions1	1,906	266	-	2,172	2,113	274	-	2,387
Refinancing2	229	-	-	229	227	-	-	227
Impairment provisions	(1,450)	(120)	-	(1,570)	(1,529)	(118)	-	(1,647)
Modification of terms and conditions1	(1,240)	(120)	-	(1,360)	(1,337)	(118)	-	(1,455)
Refinancing2	(210)	-	-	(210)	(192)	-	-	(192)
Net non-performing forborne loans	685	146	-	831	811	156	-	967
Collateral	296	49	-	345	341	49	-	390

1   Modification of terms is any contractual change apart from refinancing, as a result of credit stress of the counterparty, i.e. interest reductions, loan covenant waivers

2   Refinancing is a new contract to a borrower in credit stress, such that they are refinanced and can pay other debt contracts that they were unable to honour

Page 26

Forborne and other modified loans by country

Net forborne loans decreased by $139 million to $866 million (31 December 2023: $1,005 million), mainly on the non-performing forborne loans stock. Stage 3 forborne loans reductions in the 'Other' category, were largely in CIB and driven by UAE ($53 million) and Bahrain ($30 million).

Amortised cost	30.06.24								31.12.23
	Hong Kong $million	Korea $million	China $million	Singa-pore $million	UK $million	US $million	Other $million	Total $million	Hong Kong $million	Korea $million	China $million	Singa-pore $million	UK $million	US $million	Other $million	Total $million
Performing forborne loans	2	6	-	3	-	-	24	35	-	6	-	3	-	-	29	38
Stage 3 forborne loans	135	20	91	34	49	1	501	831	104	22	114	37	46	1	643	967
Net forborne loans	137	26	91	37	49	1	525	866	104	28	114	40	46	1	672	1,005

Credit Risk mitigation

Potential credit losses from any given account, customer or portfolio are mitigated using a range of tools such as collateral, netting arrangements, credit insurance and credit derivatives, taking into account expected volatility and guarantees.

The reliance that can be placed on these mitigants is carefully assessed in light of issues such as legal certainty and enforceability, market valuation correlation and counterparty risk of the guarantor.

The unadjusted market value of collateral across all asset types, in respect of CIB, without adjusting for over-collateralisation, increased to $343 billion (31 December 2023: $290 billion) predominantly due to an increase in reverse repos.

Collateral held on loans and advances

The table below details collateral held against exposures, separately disclosing stage 2 and stage 3 exposure and corresponding collateral.

Amortised cost	30.06.24
	Net amount outstanding			Collateral			Net exposure
	Total $million	Stage 2 financial assets $million	Credit-impaired financial assets (S3) $million	Total2 $million	Stage 2 financial assets $million	Credit-impaired financial assets (S3) $million	Total $million	Stage 2 financial assets $million	Credit-impaired financial assets (S3) $million
Corporate & Investment Banking1	175,766	8,163	1,652	32,993	2,797	638	142,773	5,366	1,014
Wealth & Retail Banking	120,249	1,714	821	85,192	810	664	35,057	904	157
Ventures	1,109	26	-	-	-	-	1,109	26	-
Central & other items	24,003	129	64	1,678	128	-	22,325	1	64
Total	321,127	10,032	2,537	119,863	3,735	1,302	201,264	6,297	1,235

Amortised cost	31.12.23
	Net amount outstanding			Collateral			Net exposure
	Total $million	Stage 2 financial assets $million	Credit-impaired financial assets (S3) $million	Total2 $million	Stage 2 financial assets $million	Credit-impaired financial assets (S3) $million	Total $million	Stage 2 financial assets $million	Credit-impaired financial assets (S3) $million
Corporate & Investment Banking1	175,382	8,175	2,046	36,458	2,972	623	138,924	5,203	1,423
Wealth & Retail Banking	126,059	2,163	724	86,827	1,136	554	39,232	1,027	170
Ventures	1,033	33	-	-	-	-	1,033	33	-
Central & other items	29,478	964	209	2,475	964	-	27,003	-	209
Total	331,952	11,335	2,979	125,760	5,072	1,177	206,192	6,263	1,802

1   Includes loans and advances to banks

2   Adjusted for over-collateralisation based on the drawn and undrawn components of exposures

Page 27

Collateral - Corporate & Investment Banking (reviewed)

Collateral taken for longer-term and sub-investment grade corporate loans was stable at 40 per cent (31 December 2023: 41 per cent).

Our underwriting standards encourage taking specific charges on assets and we consistently seek high-quality, investment-grade collateral.

84 per cent (31 December 2023: 83 per cent) of tangible collateral excluding reverse repurchase agreements and financial guarantees held comprises physical assets or is property based, with the remainder held in cash. Overall collateral decreased by $3.5 billion to $33 billion (31 December 2023: $36 billion) mainly due to a decrease in reverse repos.

Non-tangible collateral, such as guarantees and standby letters of credit, is also held against corporate exposures,
although the financial effect of this type of collateral is less significant in terms of recoveries. However, this is considered when determining the loss given default and other credit-related factors. Collateral is also held against off balance sheet exposures, including undrawn commitments and trade-related instruments.

Corporate & Investment Banking

Amortised cost	30.06.24 $million	31.12.23 $million
Maximum exposure	175,766	175,382
Property	8,634	9,339
Plant, machinery and other stock	947	933
Cash	2,782	2,985
Reverse repos	10,303	13,826
AAA	616	-
AA- to AA+	383	1,036
A- to A+	5,378	10,606
BBB- to BBB+	758	855
Lower than BBB-	35	169
Unrated	3,133	1,160
Financial guarantees and insurance	5,274	5,057
Commodities	14	5
Ships and aircraft	5,039	4,313
Total value of collateral1	32,993	36,458
Net exposure	142,773	138,924

1   Adjusted for over-collateralisation based on the drawn and undrawn components of exposures

Collateral - Wealth & Retail Banking (reviewed)

In WRB, fully secured products remain stable at 85 per cent of the total portfolio (31 December 2023: 85 per cent).

The following table presents an analysis of loans to individuals by product; split between fully secured, partially secured and unsecured.

Amortised cost	30.06.24				31.12.23
	Fully secured $million	Partially secured $million	Unsecured $million	Total $million	Fully secured $million	Partially secured $million	Unsecured $million	Total $million
Maximum exposure	101,615	522	18,112	120,249	106,914	505	18,640	126,059
Loans to individuals
Mortgages	77,535	-	-	77,535	82,943	-	-	82,943
Credit Cards & Personal Loans	423	-	16,850	17,273	375	-	17,395	17,770
Auto	224	-	-	224	312	-	-	312
Secured wealth products	21,197	-	-	21,197	20,303	-	-	20,303
Other	2,236	522	1,262	4,020	2,981	505	1,245	4,731
Total collateral1				85,192				86,827
Net exposure2				35,057				39,232
Percentage of total loans	85%	0%	15%		85%	0%	15%

1   Collateral values are adjusted where appropriate in accordance with our risk mitigation policy and for the effect of over-collateralisation

2   Amounts net of ECL

Page 28

Mortgage loan-to-value ratios by country (reviewed)

Loan-to-value (LTV) ratios measure the ratio of the current mortgage outstanding to the current fair value of the properties on which they are secured.

In a majority of mortgages, the value of property held as security significantly exceeds principal outstanding of the mortgage loans. The average LTV of the overall mortgage portfolio remains broadly stable at 47.9 per cent (31 December 2023: 47.1 per cent). The top three markets (Hong Kong, Singapore and Korea) which represents 79 per cent of the mortgage portfolio continue to have low portfolio LTVs (Hong Kong, Singapore and Korea at 56.8 per cent, 43.0 per cent and 40.6 per cent respectively).

An analysis of LTV ratios by geography for the mortgage portfolio is presented in the table below.

For the Hong Kong residential mortgage portfolio, 8.1 per cent of the portfolio was in negative equity, representing approximately 4,000 accounts that exceeded their property values by a total of $196 million. Of these, 13 accounts with a total loan balance of $9.4 million were more than 90 days past due. Under local regulations, mortgages with LTV exceeding 70 per cent (including those in negative equity) are generally required to be insured by the Mortgage Insurance Program (MIP).

Amortised cost	30.06.24
	Hong Kong % Gross	Singapore % Gross	Korea % Gross	Other % Gross	Total % Gross
Less than 50 per cent	43.3	53.5	68.2	51.7	53.8
50 per cent to 59 per cent	18.8	23.5	11.6	15.7	16.9
60 per cent to 69 per cent	10.6	14.4	10.9	16.6	12.6
70 per cent to 79 per cent	4.8	8.2	8.4	11.3	7.7
80 per cent to 89 per cent	6.3	0.3	0.7	4.1	3.3
90 per cent to 99 per cent	8.1	0.0	0.1	0.4	2.9
100 per cent and greater	8.1	0.0	0.1	0.2	2.8
Average portfolio loan-to-value	56.8	43.0	40.6	47.6	47.9
Loans to individuals - mortgages ($million)	31,821	14,531	13,724	17,458	77,534

Amortised cost	31.12.23
	Hong Kong % Gross	Singapore % Gross	Korea % Gross	Other % Gross	Total % Gross
Less than 50 per cent	44.9	50.9	69.5	51.0	54.9
50 per cent to 59 per cent	19.5	24.7	11.0	16.7	17.1
60 per cent to 69 per cent	9.7	15.2	9.7	16.3	11.9
70 per cent to 79 per cent	4.3	8.7	8.9	11.6	7.9
80 per cent to 89 per cent	7.3	0.5	0.6	3.6	3.3
90 per cent to 99 per cent	7.4	-	0.1	0.4	2.5
100 per cent and greater	7.0	-	0.1	0.4	2.4
Average portfolio loan-to-value	55.7	43.4	40.4	47.8	47.1
Loans to individuals - mortgages ($million)	32,935	15,292	17,157	17,559	82,943

Page 29

Collateral and other credit enhancements possessed or called upon (reviewed)

The Group obtains assets by taking possession of collateral or calling upon other credit enhancements (such as guarantees). Repossessed properties are sold in an orderly fashion. Where the proceeds are in excess of the outstanding loan balance the excess is returned to the borrower.

Certain equity securities acquired may be held by the Group for investment purposes and are classified as fair value through profit or loss, and the related loan written off. The carrying value of collateral possessed and held by the Group is $11.9 million (31 December 2023: $16.5 million).

	30.06.24 $million	31.12.23 $million
Property, plant and equipment	9.0	10.5
Guarantees	2.9	6.0
Total	11.9	16.5

Other Credit risk mitigation (reviewed)

Other forms of credit risk mitigation are set out below.

Credit default swaps

The Group has entered into credit default swaps for portfolio management purposes, referencing loan assets with a notional value of $3.5 billion (31 December 2023: $3.5 billion). These credit default swaps are accounted for as financial guarantees as per IFRS 9 as they will only reimburse the holder for an incurred loss on an underlying debt instrument.

The Group continues to hold the underlying assets referenced in the credit default swaps and it continues to be exposed to related Credit Risk and Foreign Exchange Rate Risk on these assets.

Credit linked notes

The Group has issued credit linked notes for portfolio management purposes, referencing loan assets with a notional value of $29.0 billion (31 December 2023: $22.5 billion). The Group continues to hold the underlying assets for which the credit linked notes provide mitigation. The credit linked notes are recognised as a financial liability at amortised cost on the balance sheet.

Derivative financial instruments

The Group enters into master netting agreements which, in the event of default, result in a single amount owed by or to the counterparty through netting the sum of the positive and negative mark-to-market values of applicable derivative transactions. Credit Risk mitigation for derivative financial instruments is set out below.

Off-balance sheet exposures

For certain types of exposures, such as letters of credit and guarantees, the Group obtains collateral such as cash depending on internal Credit Risk assessments, as well as in the case of letters of credit holding legal title to the underlying assets should a default take place.

Other portfolio analysis

This section provides analysis of Credit quality by industry and Industry analysis of loans and advances by key geography.

Page 30

Credit quality by industry

Loans and advances

This section provides an analysis of the Group's amortised cost portfolio by industry on a gross, total credit impairment and net basis.

Further details can be found in the 'Summary of Credit Risk performance' section.

Amortised cost	30.06.24
	Stage 1			Stage 2			Stage 3			Total
	Gross balance $million	Total credit impair-ment $million	Net carrying amount	Gross balance $million	Total credit impair-ment $million	Net carrying amount	Gross balance $million	Total credit impair-ment $million	Net carrying amount	Gross balance $million	Total credit impair-ment $million	Net carrying amount
Industry:
Energy	11,879	(15)	11,864	554	(19)	535	894	(570)	324	13,327	(604)	12,723
Manufacturing	19,050	(9)	19,041	712	(14)	698	500	(383)	117	20,262	(406)	19,856
Financing, insurance and non-banking	30,566	(9)	30,557	666	(5)	661	107	(103)	4	31,339	(117)	31,222
Transport, telecom and utilities	15,188	(10)	15,178	2,178	(48)	2,130	431	(152)	279	17,797	(210)	17,587
Food and household products	8,335	(6)	8,329	356	(8)	348	290	(226)	64	8,981	(240)	8,741
Commercial real estate	12,650	(45)	12,605	1,769	(73)	1,696	1,606	(1,194)	412	16,025	(1,312)	14,713
Mining and quarrying	5,622	(2)	5,620	219	(9)	210	101	(59)	42	5,942	(70)	5,872
Consumer durables	6,166	(3)	6,163	249	(18)	231	311	(277)	34	6,726	(298)	6,428
Construction	2,415	(2)	2,413	466	(3)	463	368	(325)	43	3,249	(330)	2,919
Trading companies & distributors	623	-	623	36	-	36	86	(53)	33	745	(53)	692
Government	27,566	(4)	27,562	771	(3)	768	197	(19)	178	28,534	(26)	28,508
Other	5,022	(5)	5,017	133	(6)	127	221	(88)	133	5,376	(99)	5,277
Total	145,082	(110)	144,972	8,109	(206)	7,903	5,112	(3,449)	1,663	158,303	(3,765)	154,538
Retail Products:
Mortgage	76,084	(8)	76,076	1,008	(4)	1,004	586	(132)	454	77,678	(144)	77,534
Credit Cards	7,628	(112)	7,516	240	(67)	173	74	(53)	21	7,942	(232)	7,710
Personal loans and other unsecured lending	10,488	(215)	10,273	331	(75)	256	243	(100)	143	11,062	(390)	10,672
Auto	223	-	223	1	-	1	-	-	-	224	-	224
Secured wealth products	20,888	(28)	20,860	183	(8)	175	488	(328)	160	21,559	(364)	21,195
Other	3,856	(7)	3,849	133	(2)	131	136	(93)	43	4,125	(102)	4,023
Total	119,167	(370)	118,797	1,896	(156)	1,740	1,527	(706)	821	122,590	(1,232)	121,358
Net carrying value (customers)¹	264,249	(480)	263,769	10,005	(362)	9,643	6,639	(4,155)	2,484	280,893	(4,997)	275,896
Net carrying value (Banks)¹	44,793	(4)	44,789	392	(3)	389	57	(4)	53	45,242	(11)	45,231

1   Includes reverse repurchase agreements and other similar secured lending held at amortised cost of $3,991 million (Loans to Banks) and $7,788 million
(Loans to customers)

Page 31

Amortised cost	31.12.23
	Stage 1			Stage 2			Stage 3			Total
	Gross balance $million	Total credit impair-ment $million	Net carrying amount	Gross balance $million	Total credit impair-ment $million	Net carrying amount	Gross balance $million	Total credit impair-ment $million	Net carrying amount	Gross balance $million	Total credit impair-ment $million	Net carrying amount
Industry:
Energy	9,397	(8)	9,389	672	(22)	650	949	(535)	414	11,018	(565)	10,453
Manufacturing	21,239	(8)	21,231	708	(16)	692	656	(436)	220	22,603	(460)	22,143
Financing, insurance and non-banking	31,633	(13)	31,620	571	(1)	570	80	(77)	3	32,284	(91)	32,193
Transport, telecom and utilities	14,710	(8)	14,702	1,722	(36)	1,686	481	(178)	303	16,913	(222)	16,691
Food and household products	7,668	(15)	7,653	323	(7)	316	355	(262)	93	8,346	(284)	8,062
Commercial real estate	12,261	(30)	12,231	1,848	(129)	1,719	1,712	(1,191)	521	15,821	(1,350)	14,471
Mining and quarrying	5,995	(4)	5,991	220	(10)	210	151	(84)	67	6,366	(98)	6,268
Consumer durables	5,815	(3)	5,812	300	(21)	279	329	(298)	31	6,444	(322)	6,122
Construction	2,230	(2)	2,228	502	(8)	494	358	(326)	32	3,090	(336)	2,754
Trading companies & distributors	581	-	581	57	-	57	107	(58)	49	745	(58)	687
Government	33,400	(6)	33,394	1,783	(5)	1,778	367	(33)	334	35,550	(44)	35,506
Other	4,262	(4)	4,258	161	(3)	158	187	(70)	117	4,610	(77)	4,533
Total	149,191	(101)	149,090	8,867	(258)	8,609	5,732	(3,548)	2,184	163,790	(3,907)	159,883
Retail Products:
Mortgage	81,210	(8)	81,202	1,350	(5)	1,345	519	(123)	396	83,079	(136)	82,943
Credit Cards	7,633	(104)	7,529	244	(65)	179	69	(50)	19	7,946	(219)	7,727
Personal loans and other unsecured lending	10,867	(188)	10,679	324	(77)	247	315	(165)	150	11,506	(430)	11,076
Auto	310	-	310	1	-	1	1	-	1	312	-	312
Secured wealth products	19,923	(22)	19,901	278	(10)	268	474	(340)	134	20,675	(372)	20,303
Other	4,558	(7)	4,551	161	(5)	156	118	(94)	24	4,837	(106)	4,731
Total	124,501	(329)	124,172	2,358	(162)	2,196	1,496	(772)	724	128,355	(1,263)	127,092
Net carrying value (customers)¹	273,692	(430)	273,262	11,225	(420)	10,805	7,228	(4,320)	2,908	292,145	(5,170)	286,975
Net carrying value (Banks)¹	44,384	(8)	44,376	540	(10)	530	77	(6)	71	45,001	(24)	44,977

1   Includes reverse repurchase agreements and other similar secured lending held at amortised cost of $1,738 million (Loans to Banks) and $13,996 million (Loans to customers)

Industry analysis of loans and advances by key geography

This section provides an analysis of the Group's amortised cost loan portfolio, net of provisions, by industry and geography.

The Manufacturing sector group is spread across a diverse range of industries, including automobiles and components, capital goods, pharmaceuticals, biotech and life sciences, technology hardware and equipment, chemicals, paper products and packaging, with lending spread over 3269 clients.

Page 32

Corporate & Investment Banking

Amortised cost	30.06.24							31.12.23
	Hong Kong $million	China $million	Singa-pore $million	UK $million	US $million	Other $million	Total $million	Hong Kong $million	China $million	Singa-pore $million	UK $million	US $million	Other $million	Total $million
Industry:
Energy	2,840	56	3,014	3,646	1,594	1,560	12,710	3,118	42	1,162	1,341	3,638	1,130	10,431
Manufacturing	3,299	4,353	1,302	436	2,111	8,333	19,834	3,570	4,309	1,666	694	2,921	8,982	22,142
Financing, insurance and non-banking	3,505	3,823	2,031	8,535	8,098	3,943	29,935	3,700	3,570	1,708	1,724	6,627	14,864	32,193
Transport, telecom and utilities	5,140	410	3,022	1,336	595	7,078	17,581	4,634	429	2,499	1,030	630	7,470	16,692
Food and household products	359	467	1,746	1,004	626	4,539	8,741	541	519	911	816	664	4,611	8,062
Commercial real estate	4,030	411	1,549	1,100	1,823	5,800	14,713	3,895	588	1,125	1,436	1,236	6,192	14,472
Mining and quarrying	955	691	506	1,520	195	2,005	5,872	1,028	735	427	1,729	279	2,071	6,269
Consumer durables	3,028	310	282	114	487	2,207	6,428	3,030	244	180	177	483	2,008	6,122
Construction	233	146	525	119	385	1,511	2,919	176	163	319	137	389	1,569	2,753
Trading companies and distributors	119	185	125	31	37	195	692	119	75	121	31	20	321	687
Government	1,248	-	103	145	5	4,332	5,833	1,445	1	547	236	6	3,814	6,049
Other	2,247	321	661	349	167	1,532	5,277	1,676	265	646	257	264	1,425	4,533
Net loans and advances to customers - CIB	27,003	11,173	14,866	18,335	16,123	43,035	130,535	26,932	10,940	11,311	9,608	17,157	54,457	130,405
Net loans and advances to banks	16,258	2,779	9,263	3,843	2,774	10,314	45,231	17,457	1,996	8,994	3,868	2,544	10,119	44,978

Wealth & Retail Banking

Amortised cost	30.06.24					31.12.23
	Hong Kong $million	Korea $million	Singapore $million	Other $million	Total $million	Hong Kong $million	Korea $million	Singapore $million	Other $million	Total $million
Retail Products:
Mortgages	31,821	13,724	14,531	17,458	77,534	32,935	17,157	15,292	17,559	82,943
Credit Cards	3,335	65	1,643	1,558	6,601	3,325	114	1,705	1,549	6,693
Personal Loans and other unsecured lending	1,015	2,907	255	6,495	10,672	950	3,230	220	6,676	11,076
Auto	-	-	171	53	224	-	-	240	72	312
Secured wealth products	5,199	25	10,229	5,742	21,195	5,164	33	9,388	5,718	20,303
Other	592	2,423	90	918	4,023	644	3,149	82	856	4,731
Net loans and advances to customers - WRB	41,962	19,144	26,919	32,224	120,249	43,018	23,683	26,927	32,430	126,058

Vulnerable, cyclical and high carbon sectors

Vulnerable and cyclical sectors are those that the Group considers to be most at risk from current economic stresses, including volatile energy and commodity prices, and we continue to monitor exposures to these sectors particularly carefully.

Sectors are identified and grouped as per the International Standard Industrial Classification (ISIC) system and exposure numbers have been updated to include all in-scope ISIC codes used for target setting among the high carbon sectors.

The maximum exposures shown in the table include Loans and Advances to Customers at Amortised cost, Fair Value through profit or loss, and committed facilities available as per IFRS 9 - Financial Instruments in $million.

Further details can be found in the 'Summary of Credit Risk performance' section.

Page 33

Maximum exposure

	30.06.24
	Maximum on Balance Sheet Exposure (net of credit impairment) $million	Collateral $million	Net On Balance Sheet Exposure $million	Undrawn Commitments (net of credit impairment) $million	Financial Guarantees (net of credit impairment) $million	Net Off Balance Sheet Exposure $million	Total On & Off Balance Sheet Net Exposure $million
Industry:
Automotive manufacturers1	3,120	61	3,059	3,350	290	3,640	6,699
Aviation1,2	1,751	935	816	1,964	676	2,640	3,456
Of which: High Carbon Sector	1,395	970	425	1,202	632	1,834	2,259
Commodity Traders2	8,429	324	8,105	2,213	6,539	8,752	16,857
Metals & Mining1,2	4,651	325	4,326	3,653	1,632	5,285	9,611
Of which: Steel1	2,068	216	1,852	692	376	1,068	2,920
Of which: Coal Mining1	13	5	8	50	101	151	159
Of which: Aluminium1	535	33	502	388	118	506	1,008
Shipping1	7,285	4,621	2,664	2,851	433	3,284	5,948
Construction2	3,013	351	2,662	2,577	5,910	8,487	11,149
Of which: Cement1	949	55	894	621	277	898	1,792
Commercial Real Estate2	15,127	5,964	9,163	5,042	802	5,844	15,007
Of which: High Carbon Sector	8,511	3,460	5,051	2,421	659	3,080	8,131
Hotels & Tourism2	1,950	689	1,261	1,290	360	1,650	2,911
Oil & Gas1,2	8,100	1,026	7,074	8,543	7,070	15,613	22,687
Power1	5,356	1,103	4,253	3,516	918	4,434	8,687
Total3	58,782	15,399	43,383	34,999	24,630	59,629	103,012
Of which: Vulnerable and cyclical sectors	43,021	9,614	33,407	25,282	22,989	48,271	81,678
Of which: High carbon sectors	37,332	11,550	25,782	23,634	10,874	34,508	60,290
Total Corporate & Investment Banking4	190,337	27,434	162,903	110,067	74,551	184,618	347,521
Total Group5	423,399	119,863	303,536	178,475	85,934	264,409	567,945

1   High-carbon sectors

2   Vulnerable and cyclical sectors

3   Maximum On Balance sheet exposure include FVTPL portion of $2,254 million, of which Vulnerable sector is $1,650 million and High Carbon sector is $1,186 million

4   Include On Balance sheet FVTPL amount of $59,802 million for Corporate & Investment Banking loans to customers

5   Total Group includes net loans and advances to banks and net loans and advances to customers held at amortised cost of $45,231 million and $275,896 million

       respectively and loans to banks and loans and advances to customers held at FVTPL of $42,461 million and $59,811 million respectively. Refer to credit quality table

Page 34

	31.12.23
	Maximum On Balance Sheet Exposure (net of credit impairment) Million	Collateral Million	Net On Balance Sheet Exposure Million	Undrawn Commitments (net of credit impairment) Million	Financial Guarantees (net of credit impairment) Million	Net Off Balance Sheet Exposure Million	Total On & Off Balance Sheet Net Exposure Million
Industry:
Automotive manufacturers1	3,564	65	3,499	3,791	538	4,329	7,828
Aviation1,2	1,775	974	801	1,794	668	2,462	3,263
Of which: High Carbon Sector	1,330	974	356	944	615	1,559	1,915
Commodity Traders2	7,406	303	7,103	2,591	6,281	8,872	15,975
Metals & Mining1,2,4	4,136	354	3,782	3,862	1,153	5,015	8,797
Of which: Steel1	1,596	193	1,403	601	358	959	2,362
Of which: Coal Mining1	29	9	20	51	99	150	170
Of which: Aluminium1	526	9	517	338	188	526	1,043
Shipping1	5,964	3,557	2,407	2,261	291	2,552	4,959
Construction2	2,853	448	2,405	2,753	5,927	8,680	11,085
Of which: Cement1,4	671	47	624	769	259	1,028	1,652
Commercial Real Estate2	14,533	6,363	8,170	4,658	311	4,969	13,139
Of which: High Carbon Sector	7,498	3,383	4,115	1,587	112	1,699	5,814
Hotels & Tourism2	1,680	715	965	1,339	227	1,566	2,531
Oil & Gas1,2	6,278	894	5,384	7,845	6,944	14,789	20,173
Power1	5,411	1,231	4,180	3,982	732	4,714	8,894
Total3	53,600	14,904	38,696	34,876	23,072	57,948	96,644
Of which: Vulnerable and cyclical sectors	38,661	10,051	28,610	24,842	21,511	46,353	74,963
Of which: High carbon sectors	32,867	10,362	22,505	22,169	10,136	32,305	54,810
Total Corporate & Investment Banking5	188,903	32,744	156,159	104,437	63,183	167,620	323,779
Total Group6	423,276	125,760	297,516	182,299	74,278	256,577	554,093

1   High-carbon sectors

2   Vulnerable and cyclical sectors

3   Maximum On Balance sheet exposure include FVTPL portion of $640 million, of which Vulnerable sector is $602 million and High Carbon sector is $125 million

4   Restated Metals & Mining to align the vulnerable and cyclical sector definition to that used for climate reporting. Other Metals and Mining has been removed from
high carbon sectors and Cement added to provide consistency with climate reporting and individual high carbon sectors

5   Represented to include On Balance sheet FVTPL amount of $58,498 million for Corporate & Investment Banking loans to customers

6   Represented to include On Balance sheet FVTPL amount. In 2023, total Group includes net loans and advances to banks and net loans and advances to customers

       held at amortised cost of $44,977 million and $286,975 million respectively and loans to banks and loans and advances to customers held at FVTPL of $32,813 million

       and $58,511 million respectively. Refer to credit quality table

Page 35

Loans and advances by stage

Amortised Cost	30.06.24
	Stage 1			Stage 2			Stage 3			Total
	Gross Balance $million	Total Credit Impair-ment $million	Net Carrying Amount $million	Gross Balance $million	Total Credit Impair-ment $million	Net Carrying Amount $million	Gross Balance $million	Total Credit Impair-ment $million	Net Carrying Amount $million	Gross Balance $million	Total Credit Impair-ment $million	Net Carrying Amount $million
Industry:
Aviation	1,605	(1)	1,604	77	-	77	63	(12)	51	1,745	(13)	1,732
Commodity Traders	7,838	(2)	7,836	31	(1)	30	503	(491)	12	8,372	(494)	7,878
Metals & Mining	3,889	(2)	3,887	188	(8)	180	110	(66)	44	4,187	(76)	4,111
Construction	2,415	(2)	2,413	466	(3)	463	368	(325)	43	3,249	(330)	2,919
Commercial Real Estate	12,650	(45)	12,605	1,769	(73)	1,696	1,606	(1,194)	412	16,025	(1,312)	14,713
Hotels & Tourism	1,789	(2)	1,787	35	-	35	125	(28)	97	1,949	(30)	1,919
Oil & Gas	7,211	(6)	7,205	530	(11)	519	524	(149)	375	8,265	(166)	8,099
Total	37,397	(60)	37,337	3,096	(96)	3,000	3,299	(2,265)	1,034	43,792	(2,421)	41,371
Total CIB	121,272	(110)	121,162	7,980	(206)	7,774	5,048	(3,449)	1,599	134,300	(3,765)	130,535
Total Group	309,042	(482)	308,560	10,397	(367)	10,030	6,696	(4,159)	2,537	326,135	(5,008)	321,127

Amortised Cost	31.12.23
	Stage 1			Stage 2			Stage 3			Total
	Gross Balance $million	Total Credit Impair-ment $million	Net Carrying Amount $million	Gross Balance $million	Total Credit Impair-ment $million	Net Carrying Amount $million	Gross Balance $million	Total Credit Impair-ment $million	Net Carrying Amount $million	Gross Balance $million	Total Credit Impair-ment $million	Net Carrying Amount $million
Industry:
Aviation	1,619	-	1,619	55	(1)	54	74	(15)	59	1,748	(16)	1,732
Commodity Traders	6,912	(2)	6,910	129	(1)	128	555	(504)	51	7,596	(507)	7,089
Metals & Mining	3,934	(1)	3,933	140	(8)	132	154	(88)	66	4,228	(97)	4,131
Construction	2,230	(2)	2,228	502	(8)	494	358	(326)	32	3,090	(336)	2,754
Commercial Real Estate	12,261	(30)	12,231	1,848	(129)	1,719	1,712	(1,191)	521	15,821	(1,350)	14,471
Hotels & Tourism	1,468	(2)	1,466	61	-	61	126	(25)	101	1,655	(27)	1,628
Oil & Gas	5,234	(4)	5,230	615	(15)	600	571	(147)	424	6,420	(166)	6,254
Total	33,658	(41)	33,617	3,350	(162)	3,188	3,550	(2,296)	1,254	40,558	(2,499)	38,059
Total CIB	120,886	(101)	120,785	7,902	(257)	7,645	5,508	(3,533)	1,975	134,296	(3,891)	130,405
Total Group	318,076	(438)	317,638	11,765	(430)	11,335	7,305	(4,326)	2,979	337,146	(5,194)	331,952

Loans and advances by geography (net of credit impairment)

	30.06.24							31.12.23
	Hong Kong $million	China $million	Singa-pore $million	UK $million	US $million	Other $million	Total $million	Hong Kong $million	China $million	Singa-pore $million	UK $million	US $million	Other $million	Total $million
Industry:
Aviation1,2	232	32	473	628	198	169	1,732	238	5	480	447	201	361	1,732
Commodity Traders	1,020	673	1,948	1,943	674	1,620	7,878	1,313	493	1,560	2,294	312	1,117	7,089
Metals & Mining	313	404	357	458	98	2,481	4,111	346	430	115	773	209	2,258	4,131
Construction	233	146	525	119	385	1,511	2,919	176	163	319	137	389	1,570	2,754
Commercial Real Estate	4,030	411	1,549	1,100	1,823	5,800	14,713	3,895	588	1,125	1,436	1,236	6,192	14,472
Hotel & Tourism	693	95	238	357	90	446	1,919	355	85	123	289	163	613	1,628
Oil & Gas	2,127	-	885	598	3,840	649	8,099	1,410	4	694	554	2,073	1,518	6,253
Total	8,648	1,761	5,975	5,203	7,108	12,676	41,371	7,733	1,768	4,416	5,930	4,583	13,629	38,059

Page 36

Credit quality - loans and advances

Amortised Cost Credit Grade	30.06.24
	Aviation Gross $million	Commodity Traders Gross $million	Construction Gross $million	Metals & Mining Gross $million	Commercial Real Estate Gross $million	Hotel & Tourism Gross $million	Oil & Gas Gross $million	Total Gross $million
Strong	1,430	5,171	962	3,011	8,344	1,464	4,693	25,075
Satisfactory	252	2,696	1,904	1,015	6,067	354	3,033	15,321
Higher risk	-	2	15	51	8	5	15	96
Credit impaired (stage 3)	63	503	368	110	1,606	126	524	3,300
Total Gross Balance	1,745	8,372	3,249	4,187	16,025	1,949	8,265	43,792
Strong	-	(1)	-	(1)	(43)	(1)	(1)	(47)
Satisfactory	(1)	(2)	(5)	(4)	(75)	(1)	(16)	(104)
Higher risk	-	-	-	(6)	-	-	-	(6)
Credit impaired (stage 3)	(12)	(491)	(325)	(65)	(1,194)	(28)	(149)	(2,264)
Total Credit Impairment	(13)	(494)	(330)	(76)	(1,312)	(30)	(166)	(2,421)
Strong	0.0%	0.0%	0.0%	0.0%	0.5%	0.1%	0.0%	0.2%
Satisfactory	0.4%	0.1%	0.3%	0.4%	1.2%	0.3%	0.5%	0.7%
Higher risk	0.0%	0.0%	0.0%	11.8%	0.0%	0.0%	0.0%	6.3%
Credit impaired (stage 3)	19.0%	97.6%	88.3%	59.1%	74.3%	22.2%	28.4%	68.6%
Cover Ratio	0.7%	5.9%	10.2%	1.8%	8.2%	1.5%	2.0%	5.5%

Credit Grade	31.12.23
	Aviation Gross $million	Commodity Traders Gross $million	Construction Gross $million	Metals & Mining Gross $million	Commercial Real Estate Gross $million	Hotel & Tourism Gross $million	Oil & Gas Gross $million	Total Gross $million
Strong	1,452	4,444	1,012	3,213	7,326	1,090	4,024	22,561
Satisfactory	222	2,592	1,702	788	6,751	439	1,726	14,220
Higher risk	-	5	18	73	32	-	101	229
Credit impaired (stage 3)	74	555	358	154	1,712	126	569	3,548
Total Gross Balance	1,748	7,596	3,090	4,228	15,821	1,655	6,420	40,558
Strong	-	(1)	(1)	-	(20)	(1)	(3)	(26)
Satisfactory	(1)	(2)	(6)	(1)	(139)	(1)	(12)	(162)
Higher risk	-	-	(4)	(8)	-	-	(4)	(16)
Credit impaired (stage 3)	(15)	(504)	(325)	(88)	(1,191)	(25)	(147)	(2,295)
Total Credit Impairment	(16)	(507)	(336)	(97)	(1,350)	(27)	(166)	(2,499)
Strong	0.0%	0.0%	0.1%	0.0%	0.3%	0.1%	0.1%	0.1%
Satisfactory	0.5%	0.1%	0.4%	0.1%	2.1%	0.2%	0.7%	1.1%
Higher risk	0.0%	0.0%	22.2%	11.0%	0.0%	0.0%	4.0%	7.0%
Credit impaired (stage 3)	20.3%	90.8%	90.8%	57.1%	69.6%	19.8%	25.8%	64.7%
Cover Ratio	0.9%	6.7%	10.9%	2.3%	8.5%	1.6%	2.6%	6.2%

Page 37

Maturity and expected credit loss for high-carbon sectors

Sector	30.06.24	Maturity Buckets1			Expected Credit Loss $million
	Loans and advances (Drawn funding) $million	Less than 1 year $million	More than 1 to 5 years $million	More than 5 years $million
Automotive Manufacturers	3,121	2,615	506	-	1
Aviation	1,403	181	133	1,089	8
Cement	984	586	398	-	35
Coal Mining	24	-	24	-	11
Steel	2,122	1,535	228	359	54
Aluminium	544	439	83	22	9
Oil & Gas	8,265	3,962	1,612	2,691	165
Power	5,453	1,753	1,083	2,617	97
Shipping	7,298	1,241	2,505	3,552	13
Commercial Real Estate	8,640	4,584	3,758	298	129
Total balance2,3	37,854	16,896	10,330	10,628	522

1   Maturity bucketing of gross balances

2   Other metals and mining sector excluded to align with climate reporting

3   Includes FVTPL

Sector	31.12.23	Maturity Buckets1			Expected Credit Loss $million
	Loans and advances (Drawn funding) $million	Less than 1 year $million	More than 1 to 5 years $million	More than 5 years $million
Automotive Manufacturers	3,566	3,106	460	-	2
Aviation	1,339	149	145	1,045	9
Cement	719	512	189	18	48
Coal Mining	42	9	33	-	13
Steel	1,649	1,258	185	206	53
Aluminium	537	442	63	32	11
Oil & Gas	6,444	2,980	1,576	1,888	166
Power	5,516	1,933	1,533	2,050	105
Shipping	5,971	1,051	2,568	2,352	7
Commercial Real Estate	7,664	3,722	3,935	7	166
Total balance2,3	33,447	15,162	10,687	7,598	580

1   Maturity bucketing of gross balances

2   Other metals and mining sector excluded to align with climate reporting

3   Include FVTPL

China commercial real estate

The table below represents the on and off-balance sheet items that are exposed to China CRE by credit quality.

Further details can be found in the 'Summary of Credit Risk performance' section.

Amortised cost	30.06.2024
	China $million	Hong Kong $million	Rest of Group1 $million	Total $million
Loans to customers	398	1,696	37	2,131
Off balance sheet	6	38	-	44
Total as at 30 June 2024	404	1,734	37	2,175
Loans to customers - By Credit quality
Gross
Strong	9	11	-	20
Satisfactory	214	422	37	673
Higher risk	8	-	-	8
Credit impaired (stage 3)	167	1,263	-	1,430
Total as at 30 June 2024	398	1,696	37	2,131
Loans to customers - ECL
Strong	-	-	-	-
Satisfactory	(3)	(79)	(12)	(94)
Higher risk	-	-	-	-
Credit impaired (stage 3)	(61)	(1,035)	-	(1,096)
Total as at 30 June 2024	(64)	(1,114)	(12)	(1,190)

1   Rest of Group mainly includes Singapore

Page 38

Amortised cost	31.12.2023
	China $million	Hong Kong $million	Rest of Group1 $million	Total $million
Loans to customers	584	1,821	39	2,444
Off balance sheet	42	82	-	124
Total as at 31 December 2023	626	1,903	39	2,568
Loans to customers - By Credit quality
Gross
Strong	33	-	-	33
Satisfactory	339	619	39	997
Higher risk	8	-	-	8
Credit impaired (stage 3)	204	1,202	-	1,406
Total as at 31 December 2023	584	1,821	39	2,444
Loans to customers - ECL
Strong	-	-	-	-
Satisfactory	(3)	(134)	(12)	(149)
Higher risk	-	-	-	-
Credit impaired (stage 3)	(70)	(941)	-	(1,011)
Total as at 31 December 2023	(73)	(1,075)	(12)	(1,160)

1   Rest of Group mainly includes Singapore

Debt securities and other eligible bills (reviewed)

This section provides further detail on gross debt securities and treasury bills.

The standard credit ratings used by the Group are those used by Standard & Poor's or its equivalent. Debt securities held that have a short-term rating are reported against the long-term rating of the issuer. For securities that are unrated, the Group applies an internal credit rating, as described under the credit rating and measurement section on page 321 of the 2023 Annual Report.

Total gross debt securities and other eligible bills decreased by $8.7 billion to $152 billion (31 December 2023: $160 billion) due to capital efficiency, primarily in stage 1.

Stage 1 gross balance decreased by $8.9 billion to $149 billion (31 December 2023: $158 billion) of which $5.1 billion of the decrease was from A- to A+ rating, mainly in Hong Kong.

Stage 2 gross balance remained stable at $1.8 billion (31 December 2023: $1.9 billion).

Stage 3 gross balance increased by $0.2 billion to $0.4 billion (31 December 2023: $0.2 billion) due to an increase in Sri Lanka so as to rebuild the liquidity portfolio.

Page 39

Amortised cost and FVOCI	30.06.24			31.12.23
	Gross $million	ECL $million	Net2 $million	Gross $million	ECL $million	Net2 $million
Stage 1	149,422	(23)	149,399	158,314	(26)	158,288
AAA	62,664	(9)	62,655	61,920	(5)	61,915
AA- to AA+	32,206	(2)	32,204	34,244	(2)	34,242
A- to A+	33,759	(3)	33,756	38,891	(2)	38,889
BBB- to BBB+	10,980	(4)	10,976	13,098	(7)	13,091
Lower than BBB-	2,766	(2)	2,764	1,611	(2)	1,609
Unrated	7,047	(3)	7,044	8,550	(8)	8,542
- Strong	6,107	(2)	6,105	7,415	(7)	7,408
- Satisfactory	940	(1)	939	1,135	(1)	1,134
Stage 2	1,787	(10)	1,777	1,860	(34)	1,826
AAA	11	(1)	10	98	-	98
AA- to AA+	21	-	21	22	-	22
A- to A+	344	-	344	81	-	81
BBB- to BBB+	541	(4)	537	499	(3)	496
Lower than BBB-	826	(4)	822	893	(30)	863
Unrated	44	(1)	43	267	(1)	266
- Strong	1	-	1	217	-	217
- Satisfactory	43	(1)	42	50	(1)	49
- High Risk	-	-	-	-	-	-
Stage 3	387	(16)	371	164	(61)	103
Lower than BBB-	346	(10)	336	72	(4)	68
Defaulted	41	(6)	35	92	(57)	35
Gross balance¹	151,596	(49)	151,547	160,338	(121)	160,217

1   Stage 3 gross includes $23 million (31 December 2023: $80 million) originated credit-impaired debt securities with impairment of Nil (31 December 2023: $14 million)

2   FVOCI instrument are not presented net of ECL. While the presentation is on a net basis for the table, the total net on-balance sheet amount is $151,580 million (31 December 2023: $160,263 million). Refer to the Analysis of financial instrument by stage table

IFRS 9 expected credit loss methodology (reviewed)

Refer to page 273 in the 2023 Annual Report for the 'Approach for determining expected credit losses', 'Application of lifetime' and pages 282 to 285 for 'SICR', 'Assessment of credit-impaired financial assets' and 'Governance and application of expert credit judgement in respect of expected credit losses'. There have been no changes to the Group's approach in determining SICR compared to 31 December 2023.

Composition of credit impairment provisions

The table below summarises the key components of the Group's credit impairment provision balances at 30 June 2024 and 31 December 2023.

30 June 2024	Corporate & Investment Banking $ million	Wealth & Retail Banking $ million	Ventures $ million	Central & other items4 $ million	Total $ million
Modelled ECL provisions (base forecast)	342	595	41	80	1,058
Modelled Impact of multiple economic scenarios	48	14¹	-	-	62
Total ECL provisions before management judgements	390	609	41	80	1,120
Includes: Model performance post model adjustments		(23)	-	-	(23)
Judgemental post model adjustments	-	(21)2	10	-	(11)
Judgemental management adjustments3
- China commercial real estate	86	-	-	-	86
- Other	-	13	-	-	13
Total modelled provisions	476	601	51	80	1,208
Of which:   Stage 1	144	358	20	46	568
Stage 2	259	138	22	10	429
Stage 3	73	105	9	24	211
Stage 3 non-modelled provisions	3,521	593	-	83	4,197
Total credit impairment provisions	3,997	1,194	51	163	5,405

Page 40

31 December 2023	Corporate & Investment Banking $ million	Wealth & Retail Banking $ million	Ventures $ million	Central & other items4 $ million	Total $ million
Modelled ECL provisions (base forecast)	372	553	48	98	1,071
Modelled impact of multiple economic scenarios	20	18	-	6	44
Total ECL provisions before management judgements	392	571	48	104	1,115
Includes: Model performance post model adjustments	(3)	(28)	-	-	(31)
Judgemental post model adjustments	-	4	-	-	4
Judgemental management adjustments3
- China commercial real estate	141	-	-	-	141
- Other	-	3	-	17	20
Total modelled provisions	533	578	48	121	1,280
Of which: Stage 1	151	325	15	68	559
Stage 2	318	140	21	49	528
Stage 3	64	113	12	4	193
Stage 3 non-modelled provisions	3,587	646	-	88	4,321
Total credit impairment provisions	4,120	1,224	48	209	5,601

1   Net of a judgemental post model adjustment to reduce ECL by $4 million (31 December 2023: $nil)

2   Excludes $4 million (31 December 2023: $nil) reduction in ECL which is reported within the 'Modelled impact of multiple economic scenarios'

3   $13 million (31 December 2023: $27 million) is in stage 1, $86 million (31 December 2023: $138 million) in stage 2

4   Includes ECL on cash and balances at central banks, accrued income, assets held for sale and other assets

Model performance post model adjustments (PMA)

As part of normal model monitoring and validation operational processes, where a model's performance breaches the monitoring thresholds or validation standards, an assessment is performed to determine whether a model performance post model adjustment is required to correct for the identified model issue. Model performance post model adjustments are approved by the Group Credit Model Assessment Committee and will be removed when the models are enhanced to correct for the identified model issue or the model estimates return to being within the monitoring thresholds or validation standards.

As at 30 June 2024, model performance post model adjustments have been applied for five models out of the total of 167 models. In aggregate, these post model adjustments reduce the Group's impairment provisions by $23 million (2 per cent of modelled provisions) compared with a $31 million decrease at 31 December 2023. The most significant of these relates to an adjustment to decrease ECL for Korea personal loans as the IFRS 9 PD model is sensitive to the higher range of interest rates.

In addition to these model performance post model adjustments, separate judgemental post model and management adjustments have also been applied as set out below.

	30.06.24 $ million	31.12.23 $ million
Model performance PMAs
Corporate & Investment Banking	-	(3)
Wealth & Retail Banking	(23)	(28)
Total model performance PMAs	(23)	(31)

Key assumptions and judgements in determining expected credit loss

Incorporation of forward-looking information

The evolving economic environment is a key determinant of the ability of a bank's clients to meet their obligations as they fall due. It is a fundamental principle of IFRS 9 that the provisions banks hold against potential future Credit Risk losses should depend, not just on the health of the economy today, but should also take into account potential changes to the economic environment. For example, if a bank were to anticipate a sharp slowdown in the world economy over the coming year, it should hold more provisions today to absorb the credit losses likely to occur in the near future.

To capture the effect of changes to the economic environment, the PDs and LGDs used to calculate ECL incorporate forward-looking information in the form of forecasts of the values of economic variables and asset prices that are likely to have an effect on the repayment ability of the Group's clients.

Page 41

The 'base forecast' of the economic variables and asset prices is based on management's view of the five-year outlook, supported by projections from the Group's in-house research team and outputs from a third-party model that project specific economic variables and asset prices. The research team takes consensus views into consideration, and senior management review projections for some core country variables against consensus when forming their view of the outlook. For the period beyond five years, management utilises the in-house research view and third-party model outputs, which allow for a reversion to long-term growth rates or norms. All projections are updated on a quarterly basis.

Forecast of key macroeconomic variables underlying the expected credit loss calculation and the impact on non-linearity

In the Base Forecast - management's view of the most likely outcome - the world economy is expected grow by 3.1 per cent in 2024 and 3.2 per cent in 2025 with Asia set to remain the primary engine of global growth. This compares to the average of 3.7 per cent for the 10 years prior to COVID-19 (between 2010 and 2019). Growth was over 3 per cent in both 2022 and 2023 at 3.4 per cent and 3.1 per cent, respectively.

Significant uncertainties remain around the outlook. High geopolitical tensions remain a significant near-term adverse risk, particularly if the evolving conflicts in the Middle East were to intensify and disrupt energy and financial markets. Key elections in multiple countries this year may temporarily weigh on investment activity. The US election in particular could have consequences for global trade in 2025. Major central banks are likely to start their rate-cutting cycles in the coming months, opening doors for Asian countries to ease monetary policy.

While the quarterly Base Forecasts inform the Group's strategic plan, one key requirement of IFRS 9 is that the assessment of provisions should consider multiple future economic environments. For example, the global economy may grow more quickly or more slowly than the Base Forecast, and these variations would have different implications for the provisions that the Group should hold today. As the negative impact of an economic downturn on credit losses tends to be greater than the positive impact of an economic upturn, if the Group sets provisions only on the ECL under the Base Forecast it might maintain a level of provisions that does not appropriately capture the range of potential outcomes. To address the inherent uncertainty in economic forecast, and the property of skewness (or non-linearity), IFRS 9 requires reported ECL to be a probability-weighted ECL, calculated over a range of possible outcomes.

To assess the range of possible outcomes the Group simulates a set of 50 scenarios around the Base Forecast, calculates the ECL under each of them and assigns an equal weight of 2 per cent to each scenario outcome. These scenarios are generated by a Monte Carlo simulation, which addresses the challenges of crafting many realistic alternative scenarios in the many countries in which the Group operates by means of a model, which produces these alternative scenarios while considering the degree of historical uncertainty (or volatility) observed from Q1 1990 to Q1 2024 around economic outcomes, the trends in each macroeconomic variable modelled and the correlation in the unexplained movements around these trends. This naturally means that each of the 50 scenarios do not have a specific narrative, although collectively they explore a range of hypothetical alternative outcomes for the global economy, including scenarios that turn out better than expected and scenarios that amplify anticipated stresses.

The GDP graphs below illustrate the shape of the Base Forecast for key footprint markets in relation to prior periods' actuals. The long-term growth rates are based on the pace of economic expansion expected for 2030. The tables below provide a summary of the Group's Base Forecast for these markets. The peak/trough amount show the highest and lowest points within the Base Forecast.

China's GDP growth is expected to ease to 4.8 per cent in 2024 and then to 4.5 per cent in 2025. This follows growth of 5.2 per cent in 2023. Weak consumer confidence and a persistent housing-market downturn cloud the economic outlook. The slower growth for China will also temper economic expansion of Hong Kong. Growth there is expected to be 2.6 per cent in 2024 and 2.9 per cent in 2025, down from the 3.2 per cent for 2023. The recent weakness in domestic business confidence will also slow the recovery in Hong Kong. Growth in India is also expected to slow to 7 per cent in 2024 and 6.5 per cent in 2025 from 7.6 per cent last year. Supportive one-off factors are expected to fade. Growth was recently supported by construction activity and electricity demand (amid below-normal rains), higher corporate profitability due to lower commodity prices, and a still-strong global economy.

In contrast, GDP growth for Singapore is expected to accelerate from 1.0 per cent in 2023 to just over 2.6 per cent in 2024 and to 2.9 per cent in 2025. Favourable base effects to exports and the recovery in the global electronics and semiconductor industry are expected to continue to support the economy. Korea's economic growth will also benefit from the turnaround in this key sector and the current AI 'super-cycle'. The economy is also expected to be supported by more demand for new ships on stricter environmental regulations and export-related facility investment. Korea's economic growth is expected to improve to 2.5 per cent in 2024 and 2.1 per cent in 2025 from 1.3 per cent in 2023.

Page 42

	30.06.24
	China				Hong Kong
	GDP growth (YoY%)	Unemployment %	3-month interest rates %	House prices (YoY %)	GDP growth (YoY %)	Unemployment %	3-month interest rates %	House prices (YoY %)
Base forecast1
2024	4.8	3.6	1.9	(2.9)	2.6	3.1	4.5	4.3
2025	4.5	3.5	2.0	0.0	2.9	3.2	3.7	5.5
2026	4.3	3.3	2.2	2.7	2.5	3.2	3.2	3.3
2027	4.0	3.2	2.4	3.7	2.3	3.2	2.7	2.7
2028	3.8	3.2	2.6	4.3	2.2	3.2	2.7	2.6
5-year average2	4.1	3.3	2.3	2.3	2.5	3.2	3.1	4.0
Peak	5.6	3.6	2.7	4.4	4.0	3.2	4.3	11.1
Trough	2.8	3.1	1.8	(3.9)	1.9	3.2	2.7	2.6
Monte Carlo
Low3	(0.8)	2.8	0.8	(6.0)	(4.5)	1.4	0.0	(19.7)
High4	9.3	3.8	4.5	10.1	8.6	6.1	6.5	26.8

	30.06.24
	Singapore				Korea
	GDP growth (YoY%)	Unemployment %	3-month interest rates %	House prices (YoY%)	GDP growth (YoY%)	Unemployment %	3-month interest rates %	House prices (YoY %)
Base forecast1
2024	2.6	3.1	3.8	2.7	2.5	3.3	3.6	2.9
2025	2.9	2.8	3.1	2.5	2.1	3.3	3.2	5.7
2026	2.5	2.8	2.9	2.2	2.2	3.1	3.2	3.5
2027	2.5	2.8	2.7	3.0	2.1	3.0	3.2	2.4
2028	2.7	2.8	2.6	3.7	2.0	3.0	3.2	2.1
5-year average2	2.6	2.8	2.9	2.8	2.1	3.1	3.2	3.5
Peak	3.2	3.1	3.7	3.9	3.0	3.4	3.6	8.0
Trough	2.3	2.8	2.6	0.4	1.0	2.9	3.2	2.0
Monte Carlo
Low3	(2.6)	1.9	0.9	(16.1)	(2.7)	1.2	0.5	(5.7)
High4	8.3	4.0	5.2	23.9	7.0	5.7	6.4	12.3

	30.06.24
	India				Brent Crude $ pb
	GDP growth (YoY%)	Unemployment7 %	3 month interest rates %	House prices (YoY%)
Base forecast1
2024	7.0	NA	6.3	6.6	83.2
2025	6.5	NA	6.0	6.1	82.7
2026	6.5	NA	6.0	6.4	82.6
2027	6.4	NA	6.0	6.4	83.2
2028	6.5	NA	6.0	6.3	81.3
5-year average2	6.6	NA	6.0	6.4	82.4
Peak	7.7	NA	6.5	7.5	83.4
Trough	6.3	NA	6.0	5.9	80.9
Monte Carlo
Low3	1.7	NA	1.7	(0.9)	40.1
High4	11.5	NA	9.8	11.7	140.4

Page 43

	31.12.23
	China				Hong Kong
	GDP growth (YoY%)	Unemployment %	3-month interest rates %	House prices (YoY%)⁵	GDP growth (YoY%)	Unemployment %	3-month interest rates %	House prices (YoY%)
5-year average2	4.3	4.0	2.1	4.6	2.5	3.4	3.4	2.8
Peak	5.7	4.1	2.5	7.2	3.8	3.4	5.0	4.6
Trough	3.8	3.8	1.7	1.5	1.5	3.4	2.3	(1.1)
Monte Carlo
Low3	0.6	3.3	0.8	(1.5)	(3.8)	1.4	0.3	(19.3)
High4	7.7	4.4	3.8	12.0	8.2	6.4	8.3	25.5

	31.12.23
	Singapore				Korea
	GDP growth (YoY%)	Unemployment %6	3-month interest rates %	House prices (YoY%)	GDP growth (YoY%)	Unemployment %	3-month interest rates %	House prices (YoY%)
5-year average2	2.9	2.8	2.9	2.2	2.3	3.1	3.1	3.3
Peak	3.8	2.9	4.1	3.9	2.6	3.5	3.7	5.3
Trough	1.9	2.8	2.3	(0.7)	2.0	3.0	3.1	(0.3)
Monte Carlo
Low3	(2.4)	1.7	0.6	(16.2)	(2.3)	1.4	0.7	(6.1)
High4	8.5	3.8	5.9	19.2	7.0	5.8	6.3	12.5

	31.12.23
	India				Brent crude $ pb
	GDP growth (YoY%)	Unemployment7 %	3-month interest rates %	House prices (YoY%)
5-year average2	6.2	NA	6.2	6.1	88.2
Peak	9.1	NA	6.3	6.5	93.8
Trough	4.4	NA	5.8	4.7	82.8
Monte Carlo
Low3	2.1	NA	2.7	(0.5)	46.0
High4	10.5	NA	9.9	13.8	137.8

1   Data presented are those used in the calculation of ECL. These may differ slightly to forecasts presented elsewhere in this Report as they are finalised before the period end.

2   5 year averages reported for 30.06.24 cover Q3 2024 to Q2 2029. They cover Q1 2024 to Q4 2028 for the numbers reported for the 2023 annual report.

3   Represents the 10th percentile in the range of economic scenarios used to determine non-linearity.

4   Represents the 90th percentile in the range of economic scenarios used to determine non-linearity.

5   A judgemental management adjustment is held in respect of the China commercial real estate sector as discussed.

6   Singapore unemployment rate covers the resident unemployment rate, which refers to citizens and permanent residents.

7   India unemployment is not available due to insufficient data

Impact of multiple economic scenarios

The final probability-weighted ECL reported by the Group is a simple average of the ECL for each of the 50 scenarios simulated using a Monte Carlo model. The Monte Carlo approach has the advantage that it generates many alternative scenarios that cover our global footprint.

The total amount of non-linearity, calculated as the difference between the probability-weighted ECL calculated by the Monte Carlo model and the unweighted base forecast ECL, is $62 million (31 December 2023: $44 million). The CIB and
Central and other items portfolios accounted for $48 million (31 December 2023: $26 million) of the calculated non-linearity, with the increase from 31 December 2023 driven by the Project Finance portfolio. The remaining $14 million (31 December 2023: $18 million) was attributable to WRB portfolios (net of a $4 million judgemental post model adjustment).

Page 44

The impact of multiple economic scenarios on stage 1, stage 2 and stage 3 modelled ECL is set out in the table below, together with the management overlay and other judgemental adjustments.

	Base forecast $million	Multiple economic scenarios1 $million	Management overlays and other judgemental adjustments $million	Total modelled ECL2,3 $million
Total expected credit loss at 30 June 2024	1,058	62	88	1,208
Total expected credit loss at 31 December 2023	1,071	44	165	1,280

1   Includes judgemental post model adjustment of $4 million (31 December 2023: $nil million) relating to WRB

2   Total modelled ECL comprises stage 1 and stage 2 balances of $997 million (31 December 2023: $1,105 million) and $194 million (31 December 2023: $193 million) of modelled ECL on stage 3 loans

3   Includes ECL on Assets held for sale of $17 million (31 December 2023: $34 million)

The average expected credit loss under multiple scenarios is 6 per cent (31 December 2023: 4 per cent) higher than the expected credit loss calculated using only the most likely scenario (the Base Forecast). Portfolios that are more sensitive to non-linearity include those with greater leverage and/or a longer tenor, such as Project and Shipping Finance portfolios. Other portfolios display minimal non-linearity owing to limited responsiveness to macroeconomic impacts for structural reasons, such as significant collateralisation as with the WRB mortgage portfolios.

Judgemental management adjustments

As at 30 June 2024, the Group held judgemental adjustments for ECL as set out in the table below. All of the judgemental adjustments have been determined after taking account of the model performance post model adjustments reported. They are reassessed quarterly and are reviewed and approved by the IFRS 9 Impairment Committee and will be released when no longer relevant.

30 June 2024	Corporate & Investment Banking $ million	Wealth & Retail Banking				Ventures $ million	Central & other $ million	Total $ million
		Mortgages $ million	Credit Cards $ million	Other $ million	Total $ million
Judgemental post model adjustments	-	1	(4)	(22)	(25)	10	-	(15)
Judgemental management adjustments:
- China CRE	86	-	-	-	-	-	-	86
- Other	-	1	11	1	13	-	-	13
Total judgemental adjustments	86	2	8	(22)	(12)	10	-	84
Judgemental adjustments by stage:
- Stage 1	-	1	8	(9)	-	10	-	10
- Stage 2	86	1	-	(11)	(10)	-	-	76
- Stage 3	-	-	-	(2)	(2)	-	-	(2)

31 December 2023	Corporate & Investment Banking $ million	Wealth & Retail Banking				Ventures $ million	Central & other $ million	Total $ million
		Mortgages $ million	Credit Cards $ million	Other $ million	Total $ million
Judgemental post model adjustments	-	-	1	1	2	-	-	2
Judgemental management adjustments:
- China CRE	141	-	-	-	-	-	-	141
- Other	-	1	2	2	5	-	17	22
Total judgemental adjustments	141	1	3	3	7	-	17	165
Judgemental adjustments by stage:
- Stage 1	17	1	3	6	10	-	-	27
- Stage 2	124	-	-	(3)	(3)	-	17	138
- Stage 3	-	-	-	-	-	-	-	-

Judgemental post model adjustments

Judgemental post model adjustments that decreased ECL by a net $15 million (31 December 2023: $2 million increase) have been applied to certain WRB and Ventures models. This includes a $13 million (31 December 2023: $nil) reduction in ECL in WRB due to the expected migration of a number of non-material portfolios to a simplified modelling approach and a $4 million (31 December 2023: $nil) reduction in ECL relating to non-linearity. The remaining adjustments primarily relate
to temporary factors impacting modelled outputs. These will be released when these factors normalise.

Page 45

China commercial real estate

The real estate market in China has been in a downturn since late 2021 as evidenced by continued decline in sales, and investments in the sector. Liquidity issues experienced by Chinese property developers continued into 2023 with more developers defaulting on their obligations both offshore and onshore. During 2023, authorities on the mainland have introduced a slew of policies to help revive the sector and restore buying sentiments. This has helped stabilise the market to an extent in some cities, but demand and home prices remain muted overall. Continued policy relaxations, including those related to house purchase restrictions, completion support for eligible projects from onshore financial institutions, relaxation in mortgage rates, and further support for affordable housing, are key for reversing the continued decline in sales and investments and ensuring a stable outlook for 2024.

The Group's loans and advances to China CRE clients was $2.1 billion at 30 June 2024 (31 December 2023: $2.4 billion).
Client level analysis continues to be done, with clients being placed on purely precautionary or non-purely precautionary early alert, where appropriate, for closer monitoring. Given the evolving nature of the risks in the China CRE sector, a management overlay of $86 million (31 December 2023: $141 million) has been taken by estimating the impact of further deterioration to exposures in this sector. The decrease from 31 December 2023 was primarily driven by repayments and movement of one exposure to Stage 3.

Other

Overlays of $13 million (31 December 2023: $5 million) have also been applied in WRB to capture risks from increased credit card bankruptcy industry trends in Singapore and Hong Kong and macroeconomic environment challenges caused by sovereign defaults or heightened sovereign risk, the impact of which is not fully captured in the modelled outcomes. An overlay of $17 million held in Central & Other at 31 December 2023, due to a temporary market dislocation in the Middle East, was fully released in the six months to 30 June 2024 as conditions normalised.

Stage 3 assets

Credit-impaired assets managed by Stressed Asset Group (SAG) incorporate forward-looking economic assumptions in respect of the recovery outcomes identified and are assigned individual probability weightings per IFRS 9. These assumptions are not based on a Monte Carlo simulation but are informed by the Base Forecast.

Sensitivity of expected credit loss calculation to macroeconomic variables

The ECL calculation relies on multiple variables and is inherently non-linear and portfolio-dependent, which implies that no single analysis can fully demonstrate the sensitivity of the ECL to changes in the macroeconomic variables. The Group has conducted a series of analyses with the aim of identifying the macroeconomic variables which might have the greatest impact on the overall ECL. These encompassed single variable and multi-variable exercises, using simple up/down variation and extracts from actual calculation data, as well as bespoke scenario design assessments.

The primary conclusion of these exercises is that no individual macroeconomic variable is materially influential. The Group believes this is plausible as the number of variables used in the ECL calculation is large. This does not mean that macroeconomic variables are uninfluential; rather, that the Group believes that consideration of macroeconomics should involve whole scenarios, as this aligns with the multi-variable nature of the calculation.

The Group faces downside risks in the operating environment related to the uncertainties surrounding the macroeconomic outlook. To explore this, a sensitivity analysis of ECL was undertaken to explore the effect of slower economic recoveries across the Group's footprint markets. Two downside scenarios were considered. The first scenario, Renewed Global Trade Tensions (RGTT), explores an escalating trade war between the US and China and other economies and increased geopolitical tensions in Europe. The second more severe scenario is based on the US Federal Reserve's regulatory Dodd-Frank Act Stress Test scenario (Fed DFAST) which explores a deep global downturn with weakness in developing Asia reflecting a significant slowdown in economic growth in China. Interest rates and inflation are much lower than base and there is a prolonged decline in property prices.

Page 46

	Baseline		RGTT		Fed DFAST
	Five year average	Peak/Trough	Five year average	Peak/Trough	Five year average	Peak/Trough
China GDP	4.1	5.6/2.8	3.2	4.0/0.0	3.2	6.0/(1.5)
China unemployment	3.3	3.6/3.1	3.9	4.7/3.1	4.5	5.4/3.4
China property prices	2.3	4.4/(3.9)	1.4	4.4/(4.5)	0.5	4.4/(5.7)
Hong Kong GDP	2.5	4.0/1.9	1.6	2.1/0.1	1.6	4.3/(2.4)
Hong Kong unemployment	3.2	3.2/3.2	3.6	4.2/3.2	3.8	4.5/3.3
Hong Kong property prices	4.0	11.1/2.6	3.3	8.4/0.9	2.7	7.1/(2.0)
US GDP	1.8	2.6/1.4	0.9	1.6/(1.0)	1.3	6.4/(7.7)
Singapore GDP	2.6	3.2/2.3	1.9	2.7/0.0	1.8	4.7/(1.8)
India GDP	6.6	7.7/6.3	6.3	6.6/5.7	5.8	7.5/3.3
Crude oil	82.4	83.4/80.9	79.5	83.4/73.4	61.6	80.5/30.1

Period covered from Q3 2024 to Q2 2029.

	Base (GDP, YoY%)					Fed DFAST (GDP, YoY%)					Difference from Base
	2024	2025	2026	2027	2028	2024	2025	2026	2027	2028	2024	2025	2026	2027	2028
China	3.8	5.0	4.0	3.9	3.7	(0.1)	2.0	5.4	4.6	4.0	(3.9)	(3.0)	1.4	0.6	0.2
Hong Kong	3.3	2.6	2.4	2.3	2.0	(0.6)	(0.5)	3.7	3.0	2.2	(3.9)	(3.0)	1.3	0.7	0.2
US	1.7	1.6	2.4	1.9	1.6	(4.6)	(2.5)	5.3	4.8	3.3	(6.3)	(4.1)	2.9	2.9	1.7
Singapore	2.8	2.7	2.4	2.6	2.7	(0.3)	(0.8)	4.0	3.3	2.7	(3.1)	(3.6)	1.6	0.6	0.0
India	7.3	6.5	6.4	6.4	6.5	5.2	3.8	7.0	6.4	6.3	(2.1)	(2.7)	0.6	0.0	(0.1)

Each year is from Q3 to Q2. For example, 2024 is from Q3 2024 to Q2 2025.

	Base (GDP, YoY%)					RGTT (GDP, YoY%)					Difference from Base
	2024	2025	2026	2027	2028	2024	2025	2026	2027	2028	2024	2025	2026	2027	2028
China	3.8	5.0	4.0	3.9	3.7	1.4	3.7	3.7	3.7	3.7	(2.4)	(1.3)	(0.4)	(0.2)	0.0
Hong Kong	3.3	2.6	2.4	2.3	2.0	0.9	1.5	1.7	1.9	2.0	(2.4)	(1.0)	(0.7)	(0.4)	0.0
US	1.7	1.6	2.4	1.9	1.6	(0.3)	0.7	1.0	1.3	1.6	(1.9)	(0.9)	(1.4)	(0.6)	0.0
Singapore	2.8	2.7	2.4	2.6	2.7	0.5	1.9	2.2	2.4	2.7	(2.4)	(0.8)	(0.2)	(0.2)	0.0
India	7.3	6.5	6.4	6.4	6.5	6.1	6.3	6.4	6.4	6.5	(1.2)	(0.1)	(0.1)	0.0	0.0

Each year is from Q3 to Q2. For example, 2024 is from Q3 2024 to Q2 2025.

The total modelled stage 1 and 2 ECL provisions (including both on and off-balance sheet instruments) would be approximately $122 million higher under the RGTT scenario, and $175 million higher under the Fed DFAST scenario than the baseline ECL provisions (which excluded the impact of multiple economic scenarios and management overlays which may already capture some of the risks in these scenarios). Stage 2 exposures as a proportion of stage 1 and 2 exposures would increase from 4.8 per cent in the base case to 5.1 per cent and 5.7 per cent respectively under the RGTT and Fed DFAST scenarios. This includes the impact of exposures transferring to stage 2 from stage 1 but does not consider an increase in stage 3 defaults.

Under both scenarios, the majority of the increase in ECL in CIB came from the main corporate, CRE and Project Finance portfolios. For the portfolios under the main corporate models, ECL would increase by $29 million and $84 million for the RGTT and Fed DFAST scenarios respectively and the proportion of stage 2 exposures would increase from 3.9 per cent in the base case to 4.3 per cent and 6.8 per cent respectively.

For the WRB portfolios, most of the increase in ECL came from the unsecured retail portfolios. The reduction in ECL under the Fed DFAST scenario compared to RGTT reflects the impact of interest rate cuts on the personal loan portfolios in Korea and Taiwan, where interest rates are highly correlated to defaults. Under the Fed DFAST scenario, interest rates have a peak-to-trough range of 1.5% to 0.8% for Taiwan and 2.7% to 1.1% for Korea, compared to 3.0% to 1.5% and 4.2% to 3.2% respectively
in the RGTT scenario. Under the RGTT and Fed DFAST scenarios, credit card ECL would increase by $8 million and $15 million respectively, largely in the Singapore and Hong Kong portfolios and the proportion of stage 2 credit card exposures would increase from 1.6 per cent in the base case to 1.7 per cent and 1.9 per cent for each scenario respectively, with the Singapore portfolio most impacted. Mortgages ECL would increase by under $1 million in both scenarios and the proportion of exposures would be broadly stable around 1 per cent.

There was no material change in modelled stage 3 provisions as these primarily relate to unsecured WRB exposures for which the LGD is not sensitive to changes in the macroeconomic forecasts. There is also no material change for non-modelled stage 3 exposures as these are more sensitive to client specific factors than to alternative macroeconomic scenarios.

Page 47

The actual outcome of any scenario may be materially different due to, among other factors, the effect of management actions to mitigate potential increases in risk and changes in the underlying portfolio.

	Gross as reported1 $ million	ECL as reported2 $ million	ECL Base case $ million	ECL RGTT $ million	ECL Fed DFAST $ million
Stage 1 modelled
Corporate & Investment Banking	357,660	144	139	165	215
Wealth & Retail Banking	175,444	358	351	400	354
Ventures	1,103	5	5	5	5
Central & Other items	181,839	48	47	52	57
Total stage 1 excluding management judgements	716,046	555	543	622	631
Stage 2 modelled
Corporate & Investment Banking	14,565	173	130	149	211
Wealth & Retail Banking	2,005	148	141	165	147
Ventures	48	21	21	21	21
Central & Other items	1,924	10	10	9	10
Total excluding management overlays	18,542	352	302	345	389
Total Stage 1 & 2 modelled
Corporate & Investment Banking	372,225	317	269	315	426
Wealth & Retail Banking	177,449	506	492	565	501
Ventures	1,151	26	26	26	26
Central & Other items	183,763	58	57	61	67
Total excluding management overlays	734,588	907	845	967	1,020
Stage 3 exposures excluding management overlays	7,805	4,319
Other financial assets3	109,690	95
ECL from management overlays		84
Total financial assets reported at 30 June 2024	852,083	5,405

1   Gross balances includes both on- and off- balance sheet instruments; allocation between stage 1 and 2 will differ by scenario

2   Includes ECL for both on- and off- balance sheet instruments

3   Includes cash and balances at central banks, Accrued income, Other financial assets; and Assets held for sale

Traded Risk

Traded Risk is the potential for loss resulting from activities undertaken by the Group in financial markets. Under the Enterprise Risk Management Framework, the Traded Risk Framework brings together Market Risk, Counterparty Credit Risk and Algorithmic Trading. Traded Risk Management is the core risk management function supporting market-facing businesses, predominantly Trading and Treasury.

Market Risk (reviewed)

Market Risk is the potential for fair value loss due to adverse moves in financial markets. The Group's exposure to Market Risk arises predominantly from the following sources:

• Trading book:

-  The Group provides clients with access to financial markets, facilitation of which entails the Group taking moderate Market Risk positions. All trading teams support client activity. There are no proprietary trading teams. Hence, income earned from Market Risk-related activities is primarily driven by the volume of client activity.

• Non-trading book:

-  The Treasury Markets desk is required to hold a liquid assets buffer, much of which is held in high-quality marketable debt securities.

-  The Group has capital invested and related income streams denominated in currencies other than US dollars. To the extent that these income streams are not hedged, the Group is subject to Structural Foreign Exchange Risk which is reflected in reserves.

A summary of our current policies and practices regarding Market Risk management is provided in the Principal Risks section.

Page 48

The primary categories of Market Risk for the Group are:

• Interest Rate Risk: arising from changes in yield curves and implied volatilities on interest rate options.

• Foreign Exchange Rate Risk: arising from changes in currency exchange rates and implied volatilities on foreign
exchange options.

• Commodity Risk: arising from changes in commodity prices and implied volatilities on commodity options

• Credit Spread Risk: arising from changes in the price of debt instruments and credit-linked derivatives and driven by factors other than the level of risk-free interest rates.

• Equity Risk: arising from changes in the prices of equities and implied volatilities on equity options.

Market Risk movements (reviewed)

Value at Risk (VaR) allows the Group to manage Market Risk across the trading book and most of the fair valued
non-trading books.

The average level of total trading and non-trading VaR in H1 2024 was $42.9 million, 20 per cent lower than H2 2023 ($53.4 million) and 19 per cent lower than H1 2023 ($53.1 million). The half year-end level of total trading and non-trading VaR in H1 2024 was $42.3 million, 5 per cent lower than H2 2023 ($44.5 million) and 16 per cent lower than H1 2023 ($50.2 million). The decrease in trading and non-trading average VaR was driven by a reduction in market volatility.

The average trading VaR remained relatively unchanged in H1 2024 at $21.5 million, 9 per cent lower than H2 2023 ($23.5 million) and 11 per cent higher than H1 2023 ($19.4 million).

Daily value at risk (VaR at 97.5%, one day) (reviewed)

Trading1 and non-trading2	6 months ended 30.06.24				6 months ended 31.12.23				6 months ended 30.06.23
	Average $million	High $million	Low $million	Half Year $million	Average $million	High $million	Low $million	Half Year $million	Average $million	High $million	Low $million	Half Year $million
Interest Rate Risk	35.5	43.9	26.3	34.9	45.0	54.1	29.2	30.5	34.2	47.3	23.2	46.0
Credit Spread Risk	21.9	31.3	12.8	20.2	30.0	34.1	25.0	31.7	37.5	48.0	31.9	34.9
Foreign Exchange Risk	8.9	14.5	5.2	9.1	7.9	12.2	5.3	7.4	6.1	9.7	4.2	5.1
Commodity Risk	5.6	10.0	2.9	6.4	5.2	8.6	3.7	4.3	6.4	9.7	3.7	5.3
Equity Risk	0.4	0.9	-	0.1	-	0.1	-	-	0.1	0.4	-	0.1
Diversification effect3	(29.4)	NA	NA	(28.4)	(34.7)	NA	NA	(29.4)	(31.2)	NA	NA	(41.2)
Total	42.9	53.1	37.0	42.3	53.4	65.4	44.4	44.5	53.1	65.5	44.2	50.2

Trading1	6 months ended 30.06.24				6 months ended 31.12.23				6 months ended 30.06.23
	Average $million	High $million	Low $million	Half Year $million	Average $million	High $million	Low $million	Half Year $million	Average $million	High $million	Low $million	Half Year $million
Interest Rate Risk	13.2	22.0	9.1	10.6	14.7	20.4	8.7	11.6	11.5	16.9	7.7	13.0
Credit Spread Risk	7.2	9.6	4.8	6.0	9.3	10.6	7.9	9.4	9.6	12.4	7.4	10.2
Foreign Exchange Risk	8.9	14.5	5.2	9.1	7.9	12.2	5.3	7.4	6.1	9.7	4.2	5.1
Commodity Risk	5.2	10.0	2.4	5.7	5.2	8.6	3.7	4.4	6.4	9.7	3.7	5.3
Equity Risk	-	-	-	-	-	-	-	-	-	-	-	-
Diversification effect3	(13.0)	NA	NA	(15.9)	(13.6)	NA	NA	(11.5)	(14.2)	NA	NA	(13.7)
Total	21.5	33.1	13.0	15.5	23.5	30.6	16.3	21.3	19.4	24.0	14.7	19.9

Non-trading2	6 months ended 30.06.24				6 months ended 31.12.23				6 months ended 30.06.23
	Average $million	High $million	Low $million	Half Year $million	Average $million	High $million	Low $million	Half Year $million	Average $million	High $million	Low $million	Half Year $million
Interest Rate Risk	30.8	35.5	26.4	32.4	38.0	43.6	23.7	23.9	30.4	43.1	19.7	37.7
Credit Spread Risk	17.7	24.8	10.0	17.8	24.7	28.9	21.5	24.4	31.8	40.1	26.5	28.5
Foreign Exchange Risk	-	-	-	-	-	-	-	-	-	-	-	-
Commodity Risk	1.3	1.8	0.6	1.5	0.1	0.5	-	0.5	-	-	-	-
Equity Risk	0.4	0.9	-	0.1	-	0.1	-	-	0.1	0.4	-	0.1
Diversification effect3	(16.3)	NA	NA	(11.0)	(21.6)	NA	NA	(13.2)	(15.5)	NA	NA	(22.0)
Total	33.9	44.1	29.2	40.8	41.2	46.0	32.0	35.6	46.8	53.4	41.7	44.3

1   The trading book for Market Risk is defined in the Trading Book (CRR) section of the PRA Rulebook which transposes the requirements of the Capital Requirements Regulation Part 3 Title I Chapter 3. This restricts the positions permitted in the trading book.

2   The non-trading book VaR does not include syndicated loans

3   The total VaR is non-additive across risk types due to diversification effects, which is measured as the difference between the sum of the VaR by individual risk type
or business and the combined total VaR. As the maximum and minimum occur on different days for different risk types or businesses, it is not meaningful to calculate
a portfolio diversification benefit for these measures

Page 49

Risks not in VaR

In H1 2024, the main market risks not reflected in VaR were:

• Basis risks for which the historical market price data is limited and is therefore proxied, giving rise to potential proxy basis risk that is not captured in VaR

• Potential depeg risk from currencies currently pegged or managed, where the historical one-year VaR observation period may not reflect the possibility of a change in the currency regime or a sudden depegging

• Potential understatement of VaR when abrupt increases in market volatility are not adequately captured by the VaR model

Additional capital is set aside to cover such 'risks not in VaR'.

Backtesting

In H1 2024, there were no regulatory backtesting exceptions. In the one year period to 28 June 2024, there have been two Group level backtesting exceptions:

• 1 November and 3 November: After the Nigerian government announced on 30 October that it planned to target an exchange rate of 750 Naira per dollar, the onshore spot market became more volatile on low volumes.

An enhancement to the VaR model has been approved by the PRA and once implemented is expected to increase its responsiveness to abrupt upturns in market volatility.

Average daily income earned from Market Risk-related activities1 (reviewed)

Trading: The average level of total trading daily income in H1 2024 was $14.3 million, 33.6 per cent higher than H2 2023 ($10.7million) and 7.5 per cent higher than H1 2023 ($13.3 million). The increase in 2024 is largely attributable to double-digit growth from higher flow income in Credit Trading & Commodities, offsetting with lower income in FX & Rates business.

Non-trading: The average level of non-trading daily income in H1 2024 was $2.1 million, largely attributable to a one-off FX revaluation gain in Treasury due to the devaluation of the Egyptian Pound against the US Dollar, and FX Revaluation gains across currencies in Credit Trading.

Trading	6 months ended 30.06.24 $milion	6 months ended 31.12.23 $million	6 months ended 30.06.23 $million
Interest Rate Risk	5.5	4.5	4.6
Credit Spread Risk	1.9	0.9	1.5
Foreign Exchange Risk	5.8	4.4	6.4
Commodity Risk	1.1	0.9	0.8
Equity Risk	-	-	-
Total	14.3	10.7	13.3

Non-trading	6 months ended 30.06.24 $million	6 months ended 31.12.23 $million	6 months ended 30.06.23 $million
Interest Rate Risk	1.3	(0.1)	-
Credit Spread Risk	0.8	(0.6)	(0.8)
Equity Risk	-	0.1	0.1
Total	2.1	(0.6)	(0.7)

1   Reflects total product income which is the sum of client income and own account income. Includes elements of trading income, interest income and non funded income which are generated from Market Risk-related activities. Rates, XVA and Treasury income are included under Interest Rate Risk whilst Credit Trading income is included under Credit Spread Risk

Page 50

Counterparty Credit Risk

Counterparty Credit Risk is the potential for loss in the event of the default of a derivative counterparty, after taking into account the value of eligible collaterals and risk mitigation techniques. The Group's counterparty credit exposures are included in the Credit Risk section.

Derivative financial instruments Credit Risk mitigation

The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the counterparty through netting the sum of the positive and negative mark-to-market values of applicable derivative transactions.

In addition, the Group enters into credit support annexes (CSAs) with counterparties where collateral is deemed a necessary or desirable mitigant to the exposure. Cash collateral includes collateral called under a variation margin process from counterparties if total uncollateralised mark-to-market exposure exceeds the threshold and minimum transfer amount specified in the CSA. With certain counterparties, the CSA is reciprocal and requires us to post collateral if the overall mark-to-market values of positions are in the counterparty's favour and exceed an agreed threshold.

Liquidity and Funding Risk

Liquidity and Funding Risk is the risk that the Group may not have sufficient stable or diverse sources of funding to meet its obligations as they fall due.

The Group's Liquidity and Funding Risk framework requires each country to ensure that it operates within predefined liquidity limits and remains in compliance with Group liquidity policies and practices, as well as local regulatory requirements.

The Group achieves this through a combination of setting Risk Appetite and associated limits, policy formation, risk measurement and monitoring, prudential and internal stress testing, governance and review.

The Group has maintained resilience and retained a robust liquidity position. The Group continues to focus on improving the quality and diversification of its funding mix and remains committed to supporting its clients.

Liquidity and Funding Risk metrics

The Group continually monitors key liquidity metrics, both on a country basis and consolidated across the Group.

The following liquidity and funding Board Risk Appetite metrics define the maximum amount and type of risk that the Group is willing to assume in pursuit of its strategy: liquidity coverage ratio (LCR), liquidity stress survival horizons, recovery capacity and net stable funding ratio (NSFR). In addition to the Board Risk Appetite, there are further limits that apply at Group and country level such as external wholesale borrowing (WBE) and advances-to-deposit-ratio (ADR).

Liquidity coverage ratio (LCR)

The LCR is a regulatory requirement set to ensure the Group has sufficient unencumbered high-quality liquid assets to meet its liquidity needs in a 30-calendar-day liquidity stress scenario.

The Group monitors and reports its liquidity positions under the Liquidity Coverage Ratio per PRA rulebook and has maintained its LCR above the prudential requirement.

At the reporting date, the Group LCR was 148 per cent (31 December 2023: 145 per cent), with a surplus to both Board-approved Risk Appetite and regulatory requirements.

Adequate liquidity was held across our footprint to meet all local prudential LCR requirements where applicable.

	30.06.24 $million	31.12.23 $million
Liquidity buffer	173,493	185,643
Total net cash outflows	116,884	128,111
Liquidity coverage ratio	148%	145%

Page 51

Stress coverage

The Group intends to maintain a prudent and sustainable funding and liquidity position, in all countries and currencies, such that it can withstand a severe but plausible liquidity stress.

Our approach to managing liquidity and funding is reflected in the Board-level Risk Appetite Statement which includes the following:

"The Group should have sufficient stable and diverse sources of funding to meet its contractual and contingent obligations as they fall due."

The Group's internal liquidity stress testing framework covers the following stress scenarios:

• Standard Chartered-specific - Captures the liquidity impact from an idiosyncratic event affecting Standard Chartered only with the rest of the market assumed to be operating normally.

• Market wide - Captures the liquidity impact from a market-wide crisis affecting all participants in a country, region
or globally.

• Combined - Assumes both Standard Chartered-specific and market-wide events affect the Group simultaneously and hence is the most severe scenario.

All scenarios include, but are not limited to, modelled outflows for retail and wholesale funding, off-balance sheet funding risk, cross-currency funding risk, intraday risk, franchise risk, risks associated with a deterioration of a firm's credit rating and  concentration risk from single name and industry concentration.

Stress testing results show that a positive surplus was maintained under all scenarios at 30 June 2024, and respective countries were able to survive for a period of time as defined under each scenario. The results take into account currency convertibility and portability constraints while calculating the liquidity surplus at Group level.

Standard Chartered Bank's credit ratings as at 30 June 2024 were A+ with stable outlook (Fitch), A+ with stable outlook (S&P) and A1 with stable outlook (Moody's). As of 30 June 2024, the estimated contractual outflow of a three-notch long-term ratings downgrade is $1.1 billion.

External wholesale borrowing

A risk limit is set to prevent excessive reliance on wholesale borrowing. Within the definition of wholesale borrowing, limits are applied to all branches and operating subsidiaries in the Group and as at the reporting date, the Group remained within the limit.

Advances-to-deposits ratio

This is defined as the ratio of total loans and advances to customers relative to total customer deposits, excluding approved balances held with central banks, confirmed as repayable at the point of stress. An advances-to-deposits ratio below 100 per cent demonstrates that customer deposits exceed customer loans as a result of the emphasis placed on generating a high level of stable funding from customers.

The Group's advances-to-deposits ratio has decreased by 0.8 per cent to 52.6 per cent during H1 2024, driven by an increase in customer deposits of 1 per cent and with a reduction of 3 per cent in customer loans and advances. Deposits from customers as at 30 June 2024 are $488,007 million (31 December 2023: $486,666 million).

	30.06.24 $million	31.12.23 $million
Total loans and advances to customers1,2	256,566	259,481
Total customer accounts3	488,007	486,666
Advances-to-deposits ratio	52.6%	53.3%

1   Excludes reverse repurchase agreement and other similar secured lending of $7,788 million and includes loans and advances to customers held at fair value through profit and loss of $6,877 million

2   Loans and advances to customers for the purpose of the advances-to-deposits ratio excludes $18,419 million of approved balances held with central banks, confirmed as repayable at the point of stress (31 December 2023: $20,710 million)

3   Includes customer accounts held at fair value through profit or loss of $19,850 million (31 December 2023: $17,248 million)

Page 52

Net stable funding ratio (NSFR)

The NSFR is a PRA regulatory requirement that stipulates institutions to maintain a stable funding profile in relation to an assumed duration of their assets and off-balance sheet activities over a one-year horizon. It is the ratio between the amount of available stable funding (ASF) and the amount of required stable funding (RSF). ASF factors are applied to balance sheet liabilities and capital, based on the tenor and/or their perceived stability to quantify the amount of stable funding they provide. Likewise, RSF factors are applied to assets and off-balance sheet exposures according to the amount of stable funding they require. The regulatory requirements for NSFR are to maintain a ratio of at least 100 per cent. The average ratio for the past four quarters is 136 per cent.

Liquidity pool

The liquidity value of the Group's LCR eligible liquidity pool at the reporting date was $173 billion. The figures in the table below account for haircuts, currency convertibility and portability constraints per PRA rules for transfer restrictions, and therefore are not directly comparable with the consolidated balance sheet. A liquidity pool is held to offset stress outflows as defined in the LCR per PRA rulebook.

	30.06.24 $million	31.12.23 $million
Level 1  securities
Cash and balances at central banks	74,141	81,675
Central banks, governments/public sector entities	74,632	71,768
Multilateral development banks and international organisations	15,789	16,917
Other	1,240	1,291
Total Level 1 securities	165,802	171,651
Level 2 A securities	6,165	13,268
Level 2 B securities	1,526	724
Total LCR eligible assets	173,493	185,643

Liquidity analysis of the Group's balance sheet (reviewed)

Contractual maturity of assets and liabilities

The following table presents assets and liabilities by 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 flows.

Within the tables below, cash and balances with central banks, interbank placements and investment securities that are fair valued through other comprehensive income are used by the Group principally for liquidity management purposes.

As at the reporting date, assets remain predominantly short-dated, with 60 per cent maturing in less than one year.

Page 53

	30.06.24
	One month or less $million	Between one month and three months $million	Between three months and six months $million	Between six months and nine months $million	Between nine months and one year $million	Between one year and two years $million	Between two years and five years $million	More than five years and undated $million	Total $million
Assets
Cash and balances at central banks	54,216	-	-	-	-	-	-	9,870	64,086
Derivative financial instruments	10,026	6,008	7,662	5,234	2,818	5,261	6,924	4,714	48,647
Loans and advances to banks1,2	31,438	21,293	12,292	5,050	4,579	8,414	3,424	1,202	87,692
Loans and advances to customers1,2	83,116	51,429	21,244	15,126	11,686	33,798	25,855	93,453	335,707
Investment securities1	11,746	23,660	23,513	20,820	18,813	26,188	48,845	58,270	231,855
Other assets1	22,827	30,911	1,457	335	619	129	44	11,118	67,440
Total assets	213,369	133,301	66,168	46,565	38,515	73,790	85,092	178,627	835,427
Liabilities
Deposits by banks1,3	27,480	3,237	1,938	913	465	3,794	2,647	4	40,478
Customer accounts1,4	379,475	46,011	28,154	9,360	11,613	9,805	45,223	2,621	532,262
Derivative financial instruments	8,837	8,975	7,076	5,436	3,201	5,216	6,874	4,969	50,584
Senior debt5	1,180	910	1,249	1,584	4,031	9,049	19,481	16,575	54,059
Other debt securities in issue1	1,944	5,123	8,107	4,206	2,989	907	264	415	23,955
Other liabilities	17,794	39,284	2,983	1,870	762	1,225	2,044	5,944	71,906
Subordinated liabilities and other borrowed funds	10	72	508	160	43	358	1,954	7,751	10,856
Total liabilities	436,720	103,612	50,015	23,529	23,104	30,354	78,487	38,279	784,100
Net liquidity gap	(223,351)	29,689	16,153	23,036	15,411	43,436	6,605	140,348	51,327

1   Loans and advances, investment securities, other assets, deposits by banks, customer accounts and debt securities in issue include financial instruments held at fair value through profit or loss, see Note 13 Financial instruments

2   Loans and advances include reverse repurchase agreements and other similar secured lending of $105.0 billion

3   Deposits by banks include repurchase agreements and other similar secured borrowing of $10.3 billion

4   Customer accounts include repurchase agreements and other similar secured borrowing of $44.3 billion

5   Senior debt maturity profiles are based upon contractual maturity, which may be later than call options over the debt held by the Group

Page 54

	31.12.23
	One month or less $million	Between one month and three months $million	Between three months and six months $million	Between six months and nine months $million	Between nine months and one year $million	Between one year and two years $million	Between two years and five years $million	More than five years and undated $million	Total $million
Assets
Cash and balances at central banks	63,752	-	-	-	-	-	-	6,153	69,905
Derivative financial instruments	12,269	10,632	6,910	3,611	2,921	4,650	6,038	3,403	50,434
Loans and advances to banks1,2	28,814	23,384	10,086	4,929	5,504	1,583	2,392	1,098	77,790
Loans and advances to customers1,2	86,695	55,009	25,492	15,392	14,537	25,987	26,545	95,829	345,486
Investment securities1	12,187	28,999	17,131	18,993	20,590	24,244	44,835	50,168	217,147
Other assets1	17,611	31,729	1,286	409	587	67	93	10,300	62,082
Total assets	221,328	149,753	60,905	43,334	44,139	56,531	79,903	166,951	822,844
Liabilities
Deposits by banks1,3	26,745	1,909	1,398	503	778	1,326	2,848	2	35,509
Customer accounts1,4	384,444	47,723	28,288	13,647	11,806	7,787	38,578	2,349	534,622
Derivative financial instruments	13,111	12,472	6,655	4,001	3,433	5,142	6,932	4,315	56,061
Senior debt5	130	1,111	1,537	1,389	624	11,507	20,127	14,443	50,868
Other debt securities in issue1	3,123	5,822	6,109	3,235	3,037	492	482	195	22,495
Other liabilities	14,929	26,447	1,695	544	883	1,830	1,809	12,763	60,900
Subordinated liabilities and other borrowed funds	980	68	19	172	453	312	1,936	8,096	12,036
Total liabilities	443,462	95,552	45,701	23,491	21,014	28,396	72,712	42,163	772,491
Net liquidity gap	(222,134)	54,201	15,204	19,843	23,125	28,135	7,191	124,788	50,353

1   Loans and advances, investment securities, other assets, deposits by banks, customer accounts and debt securities in issue include financial instruments held at fair value through profit or loss, see Note 13 Financial instruments

2   Loans and advances include reverse repurchase agreements and other similar secured lending of $97.6 billion

3   Deposits by banks include repurchase agreements and other similar secured borrowing of $5.6 billion

4   Customer accounts include repurchase agreements and other similar secured borrowing of $48 billion

5   Senior debt maturity profiles are based upon contractual maturity, which may be later than call options over the debt held by the Group

Page 55

Behavioural maturity of financial assets and liabilities

The cash flows presented in the previous section reflect the cash flows that will be contractually payable over the residual maturity of the instruments. However, contractual maturities do not necessarily reflect the timing of actual repayments or cash flow. In practice, certain assets and liabilities behave differently from their contractual terms, especially for short-term customer accounts, credit card balances and overdrafts, which extend to a longer period than their contractual maturity. On the other hand, mortgage balances tend to have a shorter repayment period than their contractual maturity date. Expected customer behaviour is assessed and managed on a country basis using qualitative and quantitative techniques, including analysis of observed customer behaviour over time.

Maturity of financial liabilities on an undiscounted basis (reviewed)

The following table analyses the contractual cash flows payable for the Group's financial liabilities by remaining contractual maturities on an undiscounted basis. The financial liability balances in the table below will not agree with the balances reported in the consolidated balance sheet as the table incorporates all contractual cash flows, on an undiscounted basis, relating to both principal and interest payments. Derivatives not treated as hedging derivatives are included in the 'On demand' time bucket and not by contractual maturity.

Within the 'More than five years and undated' maturity band are undated financial liabilities, the majority of which relate to subordinated debt, on which interest payments are not included as this information would not be meaningful, given the instruments are undated. Interest payments on these instruments are included within the relevant maturities up to five years.

	30.06.24
	One month or less $million	Between one month and three months $million	Between three months and six months $million	Between six months and nine months $million	Between nine months and one year $million	Between one year and two years $million	Between two years and five years $million	More than five years and undated $million	Total $million
Deposits by banks	27,493	3,257	1,974	919	480	3,794	2,647	4	40,568
Customer accounts	380,360	46,413	28,652	9,584	12,017	10,147	45,513	3,379	536,065
Derivative financial instruments	48,345	4	37	83	44	184	760	1,127	50,584
Debt securities in issue	3,403	6,062	9,706	6,210	7,478	11,444	22,754	19,967	87,024
Subordinated liabilities and other borrowed funds	15	174	558	167	48	185	2,355	16,017	19,519
Other liabilities	17,365	39,101	2,900	1,852	753	1,227	2,044	5,787	71,029
Total liabilities	476,981	95,011	43,827	18,815	20,820	26,981	76,073	46,281	804,789

	31.12.23
	One month or less $million	Between one month and three months $million	Between three months and six months $million	Between six months and nine months $million	Between nine months and one year $million	Between one year and two years $million	Between two years and five years $million	More than five years and undated $million	Total $million
Deposits by banks	26,759	1,921	1,417	513	790	1,328	2,848	4	35,580
Customer accounts	385,361	48,140	28,763	14,049	12,190	8,118	39,000	3,036	538,657
Derivative financial instruments	53,054	517	46	44	103	202	887	1,208	56,061
Debt securities in issue	3,507	6,995	8,015	5,070	4,002	13,663	23,413	16,396	81,061
Subordinated liabilities and other borrowed funds	1,043	134	46	208	570	395	2,389	14,367	19,152
Other liabilities	12,200	26,291	1,560	515	884	1,832	1,810	11,513	56,605
Total liabilities	481,924	83,998	39,847	20,399	18,539	25,538	70,347	46,524	787,116

Interest Rate Risk in the Banking Book (reviewed)

The following table provides the estimated impact to a hypothetical base case projection of the Group's earnings under the following scenarios:

• A 50 basis point parallel interest rate shock (up and down) to the current market-implied path of rates, across all
yield curves

• A 100 basis point parallel interest rate shock (up and down) to the current market-implied path of rates, across all
yield curves

These interest rate shock scenarios assume all other economic variables remain constant. The sensitivities shown represent the estimated change to a hypothetical base case projected net interest income (NII), plus the change in interest rate implied income and expense from FX swaps used to manage banking book currency positions, under the different interest rate shock scenarios.

Page 56

The base case projected NII is based on the current market-implied path of rates and forward rate expectations. The NII sensitivities below stress this base case by a further 50 or 100bps. Actual observed interest rate changes will likely differ from market expectation. Accordingly, the shocked NII sensitivity does not represent a forecast of the Group's net interest income.

The interest rate sensitivities are indicative stress tests and based on simplified scenarios, estimating the aggregate
impact of an unanticipated, instantaneous parallel shock across all yield curves over a one-year horizon, including the time taken to implement changes to pricing before becoming effective. The assessment assumes that the size and mix of the balance sheet remain constant and that there are no specific management actions in response to the change in rates. No assumptions are made in relation to the impact on credit spreads in a changing rate environment.

Significant modelling and behavioural assumptions are made regarding scenario simplification, market competition, pass-through rates, asset and liability re-pricing tenors, and price flooring. In particular, the assumption that interest rates of all currencies and maturities shift by the same amount concurrently, and that no actions are taken to mitigate the impacts arising from this are considered unlikely. Reported sensitivities will vary over time due to a number of factors including changes in balance sheet composition, market conditions, customer behaviour and risk management strategy. Therefore, while the NII sensitivities are a relevant measure of the Group's interest rate exposure, they should not be considered an income or profit forecast.

Estimated one-year impact to earnings from a parallel shift in yield curves at the beginning of the period of:	30.06.24
	USD bloc $million	HKD bloc $million	SGD bloc $million	CNY bloc $million	Other currency bloc ¹ $million	Total $million
+ 50 basis points	50	20	10	20	110	210
- 50 basis points	(100)	(30)	(20)	(40)	(140)	(330)
+ 100 basis points	100	30	20	50	200	400
- 100 basis points	(210)	(60)	(40)	(70)	(270)	(650)

Estimated one-year impact to earnings from a parallel shift in yield curves at the beginning of the period of:	31.12.23
	USD bloc $million	HKD bloc $million	SGD bloc $million	CNY bloc $million	Other currency bloc $million	Total $million
+ 50 basis points	90	10	50	30	170	350
- 50 basis points	(150)	(30)	(50)	(40)	(200)	(470)
+ 100 basis points	180	10	100	60	340	690
- 100 basis points	(280)	(40)	(100)	(80)	(390)	(890)

1   The currency blocs broken out in the table are not necessarily the most material at the reporting date as this can change year to year. The majority of the
Other currency bloc sensitivity relates to the currencies EUR, GBP, INR, KRW, MYR, TWD

As at 30 June 2024, the Group estimates the one-year impact of an instantaneous, parallel increase across all yield curves of 50 basis points to increase projected NII by $210 million. The equivalent impact from a parallel decrease of 50 basis points would result in a reduction in projected NII of $330 million. The Group estimates the one-year impact of an instantaneous, parallel increase across all yield curves of 100 basis points to increase projected NII by $400 million. The equivalent impact from a parallel decrease of 100 basis points would result in a reduction in projected NII of $650 million.

The benefit from rising interest rates is primarily from reinvesting at higher yields and from assets re-pricing faster and to a greater extent than deposits. NII sensitivity in falling rate scenarios has decreased versus 31 December 2023, due to an increase in programmatic hedging as well as actions taken in discretionary portfolios to increase asset duration. Over the course of 2024 the notional of interest rate swaps and HTC-accounted bond portfolios used to reduce NII sensitivity through the cycle increased from $47 billion to $51 billion. As at 30 June 2024, the portfolios had a weighted average maturity of 3.1 years, which reflects the behaviouralised lives of the rate-insensitive deposit and equity balances that they hedge, and a yield of 3.4 per cent.

Operational and Technology Risk

The Group defines Operational and Technology Risk as the potential for loss from inadequate or failed internal processes, technology events, human error, or from the impact of external events (including legal risks). Operational and Technology risk may occur anywhere in the Group, including third-party processes.

Page 57

Operational and Technology Risk profile

Risk management practices help the business grow safely and ensure governance and management of Operational and Technology risk through the delivery and embedding of effective frameworks and policies, together with continuous oversight and assurance. Managing Operational and Technology risk makes the Group more efficient and enables it to offer better, sustainable service to its customers. The Group's Operational and Technology Risk Type Framework (O&T RTF) enable the Group to govern, identify, measure, monitor and test, manage and report on its Operational and Technology risk. The Group continues to ensure the O&T RTF supports the business and functions in effectively managing risk and controls within Risk Appetite to meet their strategic objectives.

The Group has demonstrated progress on ensuring visibility of risks and risk management through implementation of a standardised risk taxonomy. Standardising the risk taxonomy enables improved risk aggregation and reporting and provides opportunities for simplifying the process of risk identification and assessment. A revised Process Universe along with taxonomies for causes and controls have been designed and are being implemented in 2024, with control categories supporting the streamlining and removal of duplicate controls, reducing complexity, and improving risk and control management. Macro processes will provide a client-centric view and enable clearer accountability for delivery as well as management of risks in line with business objectives.

The Group's Operational and Technology risk profile remained stable with improvements to the quality of risk understanding and identification in a fast-changing technology landscape. Operational and Technology risk is elevated in areas such as Information and Cyber Security, Data Management and Transaction Processing, which are subject to ongoing control enhancement programmes. Other key areas of focus are Change, Systems Health/Technology risk, Third Party risk, Resilience and Regulatory Compliance. Management has focused on addressing these areas, improving the sustainable operating environment, and initiated several programmes to enhance the control environment. The Group continues to monitor and manage Operational and Technology risks associated with the external environment such as geopolitical factors and the increasing risk of cyber attacks. Digitalisation and inappropriate use of Artificial Intelligence, various regulatory expectations across our footprint and the changing technology landscape remain key emerging areas to manage, allowing the Group to keep pace with new business developments, whilst ensuring that risk and control frameworks evolve accordingly. The Group continues to strengthen its risk management to understand the full spectrum of risks in the operating environment, enhance its defences and improve resilience.

Other principal risks

Losses arising from operational failures for other principal and integrated risks are reported as operational losses. Operational losses do not include operational risk-related credit impairments.

Page 58

Capital review

The Capital review provides an analysis of the Group's capital and leverage position, and requirements.

Capital summary

The Group's capital, leverage and minimum requirements for own funds and eligible liabilities (MREL) position is managed within the Board-approved risk appetite. The Group is well capitalised with low leverage and high levels of loss-absorbing capacity.

	30.06.24	31.12.23
CET1 capital	14.6%	14.1%
Tier 1 capital	17.3%	16.3%
Total capital	22.1%	21.2%
Leverage ratio	4.8%	4.7%
MREL ratio	35.4%	33.3%
Risk-weighted assets (RWA) $million	241,926	244,151

The Group's capital, leverage and MREL positions were all above current requirements and Board-approved risk appetite. For further detail see the Capital section in the Standard Chartered PLC Pillar 3 Disclosures for H1 2024. The Group's CET1 capital increased 59 basis points to 14.6 percent of RWA since FY2023. Profits, movements in FVOCI, lower regulatory deductions and RWA optimisations were partly offset by distributions (including ordinary share buybacks of $1.0 billion during the year) and FX translation reserves.

As at 30 June 2024 the Group's Pillar 2A was 3.8 percent of RWA, of which at least 2.1 per cent must be held in CET1 capital. The Group's minimum CET1 capital requirement was 10.6 per cent at H1 2024. The Korea countercyclical buffer increased to 1.0 per cent in the second quarter which impacts the Group's CET1 minimum requirement by approximately 7 basis points from December 2023.

The Group CET1 capital ratio at H1 2024 reflects the share buybacks of $1.0 billion completed during the year. The CET1 capital ratio also includes an accrual for the FY 2024 interim dividend. The Board has recommended an interim dividend for H1 2024 of $230 million or 9 cents per share representing a third of the total 2023 dividend. In addition, the Board has announced a further share buyback of $1.5 billion, the impact of this will reduce the Group's CET1 capital by around 60 basis points in the third quarter of 2024.

The Group expects to manage CET1 capital dynamically within our 13-14 per cent target range, in support of our aim of delivering future sustainable shareholder distributions.

The Group's MREL requirement as at H1 2024 was equivalent to 28.4 per cent of RWA. This is composed of a minimum requirement of 24.5 per cent of RWA and the Group's combined buffer (comprising the capital conservation buffer, the G-SII buffer and the countercyclical buffer). The Group's MREL ratio was 35.4 per cent of RWA and 9.8 per cent of leverage exposure at H1 2024.

During the period, the Group successfully raised $7.0 billion of MREL eligible securities from its holding company, Standard Chartered PLC. Issuance include $1.0 billion of Additional Tier1 and $6.0 billion of callable senior debt.

The Group is a G-SII, with a 1.0 per cent G-SII CET1 capital buffer. The Standard Chartered PLC G-SII disclosure is published at: sc.com/en/investors/financial-results.

Page 59

Capital base1 (reviewed)

	30.06.24 $million	31.12.23 $million
CET1 capital instruments and reserves
Capital instruments and the related share premium accounts	5,264	5,321
Of which: share premium accounts	3,989	3,989
Retained earnings	27,017	24,930
Accumulated other comprehensive income (and other reserves)	8,274	9,171
Non-controlling interests (amount allowed in consolidated CET1)	236	217
Independently reviewed interim and year-end profits	2,409	3,542
Foreseeable dividends	(478)	(768)
CET1 capital before regulatory adjustments	42,722	42,413
CET1 regulatory adjustments
Additional value adjustments (prudential valuation adjustments)	(678)	(730)
Intangible assets (net of related tax liability)	(6,006)	(6,128)
Deferred tax assets that rely on future profitability (excludes those arising from temporary differences)	(44)	(41)
Fair value reserves related to net losses on cash flow hedges	56	(91)
Deduction of amounts resulting from the calculation of excess expected loss	(653)	(754)
Net gains on liabilities at fair value resulting from changes in own credit risk	260	(100)
Defined-benefit pension fund assets	(110)	(95)
Fair value gains arising from the institution's own credit risk related to derivative liabilities	(90)	(116)
Exposure amounts which could qualify for risk weighting of 1250%	(39)	(44)
Other regulatory adjustments to CET1 capital	-	-
Total regulatory adjustments to CET1	(7,304)	(8,099)
CET1 capital	35,418	34,314
Additional Tier 1 capital (AT1) instruments	6,504	5,512
AT1 regulatory adjustments	(20)	(20)
Tier 1 capital	41,902	39,806
Tier 2 capital instruments	11,697	11,965
Tier 2 regulatory adjustments	(30)	(30)
Tier 2 capital	11,667	11,935
Total capital	53,569	51,741
Total risk-weighted assets2	241,926	244,151

1   Capital base is prepared on the regulatory scope of consolidation

2   Total risk-weighted assets are not in scope of EY's review

Page 60

Movement in total capital (reviewed)

	30.06.24 $million	31.12.23 $million
CET1 at 1 January/1 July	34,314	34,896
Ordinary shares issued in the period and share premium	-	-
Share buyback	(1,000)	(1,000)
Profit for the period/year	2,409	1,156
Foreseeable dividends deducted from CET1	(478)	(391)
Difference between dividends paid and foreseeable dividends	8	(376)
Movement in goodwill and other intangible assets	122	(303)
Foreign currency translation differences	(510)	164
Non-controlling interests	19	27
Movement in eligible other comprehensive income	368	54
Deferred tax assets that rely on future profitability	(3)	45
Decrease/(increase) in excess expected loss	101	33
Additional value adjustments (prudential valuation adjustment)	52	(37)
IFRS 9 transitional impact on regulatory reserves including day one	-	-
Exposure amounts which could qualify for risk weighting	5	8
Fair value gains arising from the institution's own Credit Risk related to derivative liabilities	26	(52)
Others	(15)	90
CET1 at 30 June/31 December	35,418	34,314
AT1 at 1 January/1 July	5,492	5,492
Net issuances (redemptions)	992	-
Foreign currency translation difference	-	-
Excess on AT1 grandfathered limit (ineligible)	-	-
AT1 at 30 June/31 December	6,484	5,492
Tier 2 capital at 1 January/1 July	11,935	12,281
Regulatory amortisation	822	(287)
Net issuances (redemptions)	(1,000)	(118)
Foreign currency translation difference	(91)	36
Tier 2 ineligible minority interest	(2)	22
Recognition of ineligible AT1	-	-
Others	3	1
Tier 2 capital at 30 June/31 December	11,667	11,935
Total capital at 30 June/31 December	53,569	51,741

The main movements in capital in the period were:

• CET1 capital increased by $1.1 billion as retained profits of $2.4 billion, movement in FVOCI of $0.2bn and decrease in regulatory deductions and other movements of $0.5 billion were partly offset by share buybacks of $1.0 billion, distributions paid and foreseeable of $0.5 billion and foreign currency translation impact of $0.5 billion.

• AT1 capital increased by $1.0 billion following the issuance of $1.0 billion of 7.875 per cent securities.

• Tier 2 capital decreased by $0.3 billion due to the redemption of $1.0 billion of Tier 2 during the period partly offset by the reversal of regulatory amortisation and foreign currency translation impact.

Page 61

Risk-weighted assets by business

	30.06.24
	Credit risk $million	Operational risk $million	Market risk $million	Total risk $million
Corporate & Investment Banking	105,356	19,987	23,790	149,133
Wealth & Retail Banking	42,936	9,523	-	52,459
Ventures	1,981	142	6	2,129
Central & Other items	34,731	(173)	3,647	38,205
Total risk-weighted assets	185,004	29,479	27,443	241,926

	31.12.23
	Credit risk $million	Operational risk $million	Market risk $million	Total risk $million
Corporate & Investment Banking	102,675	18,083	21,221	141,979
Wealth & Retail Banking	42,559	8,783	-	51,342
Ventures	1,885	35	3	1,923
Central & Other items	44,304	960	3,643	48,907
Total risk-weighted assets	191,423	27,861	24,867	244,151

Movement in risk-weighted assets

	Credit risk					Operational risk $million	Market risk $million	Total risk $million
	Corporate & Investment Banking $million	Wealth & Retail Banking $million	Ventures $million	Central & Other items $million	Total $million
At 31 December 2022	110,103	42,091	1,350	43,311	196,855	27,177	20,679	244,711
At 1 January 2023	110,103	42,091	1,350	43,311	196,855	27,177	20,679	244,711
Assets growth & mix	(726)	693	538	2,000	2,505	-	-	2,505
Asset quality	(157)	(125)	-	420	138	-	-	138
Risk-weighted assets efficiencies	-	-	-	-	-	-	-	-
Model Updates	800	-	-	-	800	-	700	1,500
Methodology and policy changes	-	(200)	-	-	(200)	-	-	(200)
Acquisitions and disposals	-	-	-	-	-	-	-	-
Foreign currency translation	(677)	(578)	-	(1,692)	(2,947)	-	-	(2,947)
Other, Including non-credit risk movements	-	-	-	-	-	684	2,726	3,410
At 30 June 2023	109,343	41,881	1,888	44,039	197,151	27,861	24,105	249,117
Assets growth & mix	(3,698)	35	(3)	(817)	(4,483)	-	-	(4,483)
Asset quality	(234)	515	-	2,264	2,545	-	-	2,545
Risk-weighted assets efficiencies	-	-	-	(688)	(688)	-	-	(688)
Model Updates	(1,397)	(151)	-	(151)	(1,699)	-	(200)	(1,899)
Methodology and policy changes	-	4	-	-	4	-	(800)	(796)
Acquisitions and disposals	(1,630)	-	-	-	(1,630)	-	-	(1,630)
Foreign currency translation	291	275	-	(343)	223	-	-	223
Other, Including non-credit risk movements	-	-	-	-	-	-	1,762	1,762
At 31 December 2023	102,675	42,559	1,885	44,304	191,423	27,861	24,867	244,151
Assets growth & mix	4,273	53	96	(5,051)	(629)	-	-	(629)
Asset quality	(741)	401	-	(2,334)	(2,674)	-	-	(2,674)
Risk-weighted assets efficiencies	-	-	-	-	-	-	-	-
Model Updates	462	818	-	-	1,280	-	-	1,280
Methodology and policy changes	-	-	-	-	-	-	(1,300)	(1,300)
Acquisitions and disposals	-	-	-	-	-	-	-	-
Foreign currency translation	(1,313)	(895)	-	(954)	(3,162)	-	-	(3,162)
Other, Including non-credit risk movements	-	-	-	(1,234)	(1,234)	1,618	3,876	4,260
At 30 June 2024	105,356	42,936	1,981	34,731	185,004	29,479	27,443	241,926

 

Page 62

Movements in risk-weighted assets

RWA decreased by $2.2 billion, or 0.9 per cent from 31 December 2023 to $241.9 billion. This was mainly due to a decrease in Credit Risk RWA of $6.4 billion, partially offset by increases in Market Risk RWA of $2.6 billion and Operational Risk RWA of $1.6 billion.

Corporate & Investment Banking

Credit Risk RWA increased by $2.7 billion, or 2.6 per cent from 31 December 2023 to $105.4 billion mainly due to:

• $4.3 billion increase from changes in asset growth & mix, of which:

-  $5.1 billion increase from asset balance growth

-  $0.8 billion decrease from optimisation activities

• $0.5 billion increase from industry-wide regulatory changes to align IRB model performance

• $1.3 billion decrease from foreign currency translation

• $0.7 billion decrease mainly due to an improvement in asset quality reflecting client upgrades

Wealth & Retail Banking

Credit Risk RWA increased by $0.4 billion, or 0.9 per cent from 31 December 2023 to $42.9 billion mainly due to:

• $0.8 billion increase from industry-wide regulatory changes to align IRB model performance

• $0.4 billion increase mainly due to deterioration in asset quality mainly in Asia

• $0.1 billion increase from changes in asset growth & mix

• $0.9 billion decrease from foreign currency translation

Ventures

Ventures is comprised of Mox Bank Limited, Trust Bank and SC Ventures. Credit Risk RWA increased by $0.1 billion, or
5.1 per cent from 31 December 2023 to $2.0 billion from asset balance growth, mainly from SC Ventures.

Central & Other items

Central & Other items RWA mainly relate to the Treasury Markets liquidity portfolio, equity investments and current & deferred tax assets.

Credit Risk RWA decreased by $9.6 billion, or 21.6 per cent from 31 December 2023 to $34.7 billion mainly due to:

• $5.1 billion decrease from changes in asset growth & mix primarily from optimisation activities

• $2.3 billion decrease due to improvement in asset quality mainly from sovereign upgrades in Asia

• $1.2 billion decrease due to reporting enhancements

• $1.0 billion decrease from foreign currency translation

Market Risk

Total Market Risk RWA increased by $2.6 billion, or 10 per cent from 31 December 2023 to $27.4 billion due primarily to:

• $2.5 billion increase in Standardised Approach (SA) Specific Interest Rate Risk RWA due primarily to increases in the
Trading Book government bond portfolio

• $1.1 billion increase in Internal Models Approach (IMA) stressed VaR RWA due to increased IMA positions attributable mainly to interest rate exposures, offset by a reduction of VaR RWA due to lower FX market volatility, and a reduction of addons for Risks not in VaR

• $1.3 billion decrease in the first quarter due to a reduction in the IMA RWA multiplier resulting from fewer back-testing exceptions

Operational Risk

• Operational Risk RWA increased by $1.6 billion, or 5.8 per cent from 31 December 2023 to $29.5 billion, mainly due to an increase in average income as measured over a rolling three-year time horizon for certain products.

Page 63

Leverage ratio

The Group's leverage ratio, which excludes qualifying claims on central banks, was 4.8 per cent at H1 2024, which was above the current minimum requirement of 3.8 per cent. The leverage ratio was 7 basis points higher than FY2023. Tier1 capital increased by $2.1 billion as CET1 capital increased by $1.1 billion and AT1 capital increased following the issuance of $1.0 billion of 7.875 percent securities in February 2024. Leverage exposure increased by $30.6 billion predominantly due to growth in on balance sheet assets, decrease in eligible central bank claims deduction forming part of regulatory adjustments, and decrease in derivative netting adjustments.

Leverage ratio

	30.06.24 $million	31.12.23 $million
Tier 1 capital (end point)	41,902	39,806
Derivative financial instruments	48,647	50,434
Derivative cash collateral	8,099	10,337
Securities financing transactions (SFTs)	104,981	97,581
Loans and advances and other assets	673,700	664,492
Total on-balance sheet assets	835,427	822,844
Regulatory consolidation adjustments1	(82,607)	(92,709)
Derivatives adjustments
Derivatives netting	(36,580)	(39,031)
Adjustments to cash collateral	(6,876)	(9,833)
Net written credit protection	1,316	1,359
Potential future exposure on derivatives	45,488	42,184
Total derivatives adjustments	3,348	(5,321)
Counterparty risk leverage exposure measure for SFTs	3,885	6,639
Off-balance sheet items	125,194	123,572
Regulatory deductions from Tier 1 capital	(7,474)	(7,883)
Total exposure measure excluding claims on central banks	877,773	847,142
Leverage ratio excluding claims on central banks (%)	4.8%	4.7%
Average leverage exposure measure excluding claims on central banks	870,657	853,968
Average leverage ratio excluding claims on central banks (%)	4.7%	4.6%
Countercyclical leverage ratio buffer	0.2%	0.1%
G-SII additional leverage ratio buffer	0.4%	0.4%

1   Includes adjustment for qualifying central bank claims and unsettled regular way trades

Page 64

Statement of directors' responsibilities

We confirm that to the best of our knowledge:

• The condensed consolidated interim financial statements have been prepared in accordance with UK-adopted IAS 34 Interim Financial Reporting and IAS 34 as adopted by the EU.

• The interim management report includes a fair review of the information required by:

(a)  DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the six months ended 30 June 2024 and their impact on the condensed consolidated interim financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place during the six months ended 30 June 2024 that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could have materially affected the financial position or performance of the entity during that period

By order of the Board

Diego De Giorgi

Group Chief Financial Officer

30 July 2024

Standard Chartered PLC Board of Directors

Chairman                                               Executive Directors                                             Non-Executive Directors

José Viñals                                             Bill Winters                                                           Shirish Apte
                                                                Diego De Giorgi                                                    David Conner
                                                                                                                                                Jackie Hunt
                                                                                                                                                Diane Jurgens
                                                                                                                                                Robin Lawther
                                                                                                                                                Maria Ramos
                                                                                                                                                Phil Rivett
                                                                                                                                                David Tang
                                                                                                                                                Linda Yueh

Page 65

Independent review report to Standard Chartered PLC

Conclusion

We have been engaged by Standard Chartered PLC (the 'Company' or, together with its subsidiaries, the 'Group') to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2024 which comprises the condensed consolidated interim income statement, the condensed consolidated interim statement of comprehensive income, the condensed consolidated interim balance sheet, the condensed consolidated interim statement of changes in equity, the condensed consolidated interim cash flow statement, the related notes 1 to 31, and the risk and capital disclosures marked as 'reviewed' (together the 'condensed consolidated interim financial statements'). 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.

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial statements in the half-yearly financial report for the six months ended 30 June 2024 are not prepared, in all material respects, in accordance with United Kingdom (UK) adopted International Accounting Standard 34 (IAS 34), IAS 34 as adopted by the European Union (EU), and the Disclosure Guidance and Transparency Rules (DTR) of the UK's Financial Conduct Authority (FCA).

Basis for Conclusion

We conducted our review in accordance with International Standard on Review Engagements 2410 (UK) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' (ISRE) issued by the Financial Reporting Council (FRC). 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 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.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with UK adopted international accounting standards and international financial reporting standard as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted IAS 34 and IAS 34 as adopted by the EU, and the DTR of the UK's FCA.

Conclusions Relating to Going Concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with this ISRE, however future events or conditions may cause the entity to cease to continue as a going concern.

Responsibilities of the directors

The directors are responsible for preparing the half-yearly financial report in accordance with UK adopted IAS 34 and IAS 34 as adopted by the EU, and the DTR of the UK's FCA.

In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Page 66

Use of our report

This report is made solely to the company in accordance with guidance contained in ISRE 2410 (UK) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the FRC. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Ernst & Young LLP

London

30 July 2024

Page 67

Condensed consolidated interim income statement

For the six months ended 30 June 2024

	Notes	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
Interest income		14,194	12,826
Interest expense		(11,019)	(8,842)
Net interest income	3	3,175	3,984
Fees and commission income		2,363	2,079
Fees and commission expense		(442)	(434)
Net fee and commission income	4	1,921	1,645
Net trading income	5	4,749	3,233
Other operating income	6	(54)	265
Operating income		9,791	9,127
Staff costs		(4,336)	(4,158)
Premises costs		(177)	(208)
General administrative expenses		(1,027)	(741)
Depreciation and amortisation		(516)	(561)
Operating expenses	7	(6,056)	(5,668)
Operating profit before impairment losses and taxation		3,735	3,459
Credit impairment	8	(240)	(161)
Goodwill, property, plant and equipment and other impairment	9	(147)	(77)
Profit from associates and joint ventures	19	144	102
Profit before taxation		3,492	3,323
Taxation	10	(1,123)	(938)
Profit for the period		2,369	2,385
Profit attributable to:
Non-controlling interests		(9)	(3)
Parent company shareholders		2,378	2,388
Profit for the period		2,369	2,385
Basic earnings per ordinary share	12	83.3	75.6
Diluted earnings per ordinary share	12	81.3	73.9

The notes form an integral part of these financial statements.

Page 68

Condensed consolidated interim statement of comprehensive income

For the six months ended 30 June 2024

	Notes	6 months ended 30.06.2024 $million	6 months ended 30.06.2023 $million
Profit for the period		2,369	2,385
Other comprehensive loss
Items that will not be reclassified to income statement:		(265)	(53)
Own credit losses on financial liabilities designated at fair value through profit or loss		(410)	(141)
Equity instruments at fair value through other comprehensive (loss)/income		(25)	67
Actuarial gains on retirement benefit obligations	26	31	35
Revaluation Surplus		15	-
Taxation relating to components of other comprehensive income		124	(14)
Items that may be reclassified subsequently to income statement:		(649)	(233)
Exchange differences on translation of foreign operations:
Net loss taken to equity		(1,017)	(979)
Net gains on net investment hedges		377	294
Share of other comprehensive income/(loss) from associates and joint ventures		9	(11)
Debt instruments at fair value through other comprehensive income:
Net valuation gains taken to equity		56	167
Reclassified to income statement		90	84
Net impact of expected credit losses		(19)	(41)
Cash flow hedges:
Net movements in cash flow hedge reserve		(171)	271
Taxation relating to components of other comprehensive income		26	(18)
Other comprehensive loss for the period, net of taxation		(914)	(286)
Total comprehensive income for the period		1,455	2,099
Total comprehensive income attributable to:
Non-controlling interests		(16)	(31)
Parent company shareholders		1,471	2,130
Total comprehensive income for the period		1,455	2,099

Page 69

Condensed consolidated interim balance sheet

As at 30 June 2024

	Notes	30.06.24 $million	31.12.23 $million
Assets
Cash and balances at central banks		64,086	69,905
Financial assets held at fair value through profit or loss	13	181,725	147,222
Derivative financial instruments	13,14	48,647	50,434
Loans and advances to banks	13	45,231	44,977
Loans and advances to customers	13	275,896	286,975
Investment securities	13	152,403	161,255
Other assets	18	53,016	47,594
Current tax assets		491	484
Prepayments and accrued income		3,224	3,033
Interests in associates and joint ventures	19	1,088	966
Goodwill and intangible assets	16	6,103	6,214
Property, plant and equipment	17	2,202	2,274
Deferred tax assets	10	593	702
Retirement benefit schemes in surplus	26	111	-
Assets classified as held for sale	20	611	809
Total assets		835,427	822,844
Liabilities
Deposits by banks	13	28,087	28,030
Customer accounts	13	468,157	469,418
Repurchase agreements and other similar secured borrowing	13,15	7,539	12,258
Financial liabilities held at fair value through profit or loss	13	96,882	83,096
Derivative financial instruments	13,14	50,584	56,061
Debt securities in issue	13	65,199	62,546
Other liabilities	21	47,440	39,221
Current tax liabilities		1,061	811
Accruals and deferred income		6,491	6,975
Subordinated liabilities and other borrowed funds	13,24	10,856	12,036
Deferred tax liabilities	10	558	770
Provisions for liabilities and charges		401	299
Retirement benefit schemes in deficit	26	268	183
Liabilities included in disposal groups held for sale	20	577	787
Total liabilities		784,100	772,491
Equity
Share capital and share premium account	25	6,758	6,815
Other reserves		8,274	9,171
Retained earnings		29,381	28,459
Total parent company shareholders' equity		44,413	44,445
Other equity instruments	25	6,504	5,512
Total equity excluding non-controlling interests		50,917	49,957
Non-controlling interests		410	396
Total equity		51,327	50,353
Total equity and liabilities		835,427	822,844

The notes form an integral part of these financial statements.

These financial statements were approved by the Board of directors and authorised for issue on 30 July 2024 and signed on its behalf by:

Diego De Giorgi

Group Chief Financial Officer

Page 70

Condensed consolidated interim statement of changes in equity

For the six months ended 30 June 2024

	Ordinary share capital and share premium account $million	Preference share capital and share premium account $million	Capital and merger reserves1 $million	Own credit adjustment reserve $million	Fair value through other compre-hensive income reserve - debt $million	Fair value through other compre-hensive income reserve - equity $million	Cash flow hedge reserve $million	Translation reserve $million	Retained earnings $million	Parent company share-holders' equity $million	Other equity instru-ments $million	Non-controlling interests $million	Total $million
As at 01 January 2023	5,436	1,494	17,338	(63)	(1,116)	206	(564)	(7,636)	28,067	43,162	6,504	350	50,016
Profit for the period	-	-	-	-	-	-	-	-	2,388	2,388	-	(3)	2,385
Other comprehensive (loss)/income7	-	-	-	(140)	204	50	247	(666)	47²	(258)	-	(28)	(286)
Distributions	-	-	-	-	-	-	-	-	-	-	-	(17)	(17)
Redemption of other equity instruments	-	-	-	-	-	-	-	-	-	-	(1,000)	-	(1,000)
Treasury shares net movement	-	-	-	-	-	-	-	-	23	23	-	-	23
Share option expense, net of taxation	-	-	-	-	-	-	-	-	90	90	-	-	90
Dividends on ordinary shares	-	-	-	-	-	-	-	-	(401)	(401)	-	-	(401)
Dividends on preference shares and AT1 securities	-	-	-	-	-	-	-	-	(243)	(243)	-	-	(243)
Share buyback3	(47)	-	47	-	-	-	-	-	(1,000)	(1,000)	-	-	(1,000)
Other movements	-	-	-	-	-	-	-	25⁴	17	42	8⁴	64⁵	114
As at 30 June 2023	5,389	1,494	17,385	(203)	(912)	256	(317)	(8,277)	28,988	43,803	5,512	366	49,681
Profit for the period	-	-	-	-	-	-	-	-	1,081	1,081	-	(4)	1,077
Other comprehensive income/(loss)7	-	-	-	303	222	74	408	177	(94)²	1,090	-	(3)	1,087
Distributions	-	-	-	-	-	-	-	-	-	-	-	(9)	(9)
Treasury shares net movement	-	-	-	-	-	-	-	-	(212)	(212)	-	-	(212)
Share option expense, net of taxation	-	-	-	-	-	-	-	-	83	83	-	-	83
Dividends on ordinary shares	-	-	-	-	-	-	-	-	(167)	(167)	-	-	(167)
Dividends on preference shares and AT1 securities	-	-	-	-	-	-	-	-	(209)	(209)	-	-	(209)
Share buyback3,6	(68)	-	68	-	-	-	-	-	(1,000)	(1,000)	-	-	(1,000)
Other movements	-	-	-	-	-	-	-	(13)⁴	(11)⁴	(24)	-	46⁵	22
As at 31 December 2023	5,321	1,494	17,453	100	(690)	330	91	(8,113)	28,459	44,445	5,512	396	50,353
Profit for the period	-	-	-	-	-	-	-	-	2,378	2,378	-	(9)	2,369
Other comprehensive (loss)/income7	-	-	-	(360)	137	(81)¹¹	(147)	(644)	1882,12	(907)	-	(7)	(914)
Distributions	-	-	-	-	-	-	-	-	-	-	-	(25)	(25)
Other equity instruments issued, net of expenses	-	-	-	-	-	-	-	-	-	-	992	-	992
Treasury shares net movement	-	-	-	-	-	-	-	-	29	29	-	-	29
Share option expense, net of taxation	-	-	-	-	-	-	-	-	148	148	-	-	148
Dividends on ordinary shares	-	-	-	-	-	-	-	-	(551)	(551)	-	-	(551)
Dividends on preference shares and AT1 securities	-	-	-	-	-	-	-	-	(209)	(209)	-	-	(209)
Share buyback8	(57)	-	57	-	-	-	-	-	(1,000)	(1,000)	-	-	(1,000)
Other movements	-	-	-	-	7	-	-	134⁴	(61)⁹	80	-	55¹⁰	135
As at 30 June 2024	5,264	1,494	17,510	(260)	(546)	249	(56)	(8,623)	29,381	44,413	6,504	410	51,327

1    Includes capital reserve of $5 million, capital redemption reserve of $394 million and merger reserve of $17,111 million

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

3    On 16 February 2023, the Group announced an additional buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases was $58 million (June 2023: $47 million) of which $11m were purchased following 30 June 2023 in the period to 29 September 2023 when the programme was completed. Total consideration paid was $1,000 million (June 2023: $732 million). The total number of shares purchased was 116,710,492 (June 2023: 93,894,706) representing 4.03 per cent (June 2023: 3.24 per cent) of the ordinary shares in issue. The nominal value of the shares were transferred from the share capital to the capital redemption reserve account

4    Movement related to Translation adjustment and AT1 Securities charges (June 2023). June 2024 balance includes $190 million translation adjustment loss from sale of SCB Zimbabwe Limited transferred to other operating income

5    Movements primarily related to non-controlling interest from Zodia Custody Limited ($27 million), Mox Bank Limited ($17 million) and Trust Bank Singapore Ltd ($17 million) pertaining to half year ending June 2023. Further movement in NCI from Mox Bank Limited ($31 million), Trust Bank Singapore Ltd ($17 million) and Zodia Custody Limited ($1 million)

6    On 28 July 2023, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases was $57 million, and the total consideration paid was $1,000 million and the buyback completed on 6 November 2023. The total number of shares purchased was 112,982,802, representing 3.90 per cent of the ordinary shares in issue as at the commencement of the buyback. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account

7    All the amounts are net of tax

8    On 23 February 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases was $57 million, the total consideration paid was $1,000 million, and the buyback completed on 25 June 2024. The total number of shares purchased was 113,266,516, representing 4.25 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account

9    Includes $77 million loss to  retained earnings related to Ghana hyperinflation

10  Movements primarily related to non-controlling interest from Mox Bank Limited ($8 million) and Trust Bank Singapore Ltd ($47 million)

11  Includes $147 million gain on sale of equity investment transferred to retained earnings partly offset by $76 million reversal of deferred tax liability

12  Includes $147 million gain on sale of equity investment in other comprehensive income reserve transferred to retained earnings partly offset by $13 million capital gain tax

Note 25 includes a description of each reserve.

The notes form an integral part of these financial statements.

Page 71

Condensed consolidated interim cash flow statement

For the six months ended 30 June 2024

	Notes	6 months ended 30.06.24 $million	6 months ended 30.06.23 (Restated) $million
Cash flows from operating activities:
Profit before taxation		3,492	3,323
Adjustments for non-cash items and other adjustments included within income statement	31	1,730	1,518
Change in operating assets	31	(41,582)	(8,306)
Change in operating liabilities	31	20,466	26,466
Contributions to defined benefit schemes		(19)	(19)
UK and overseas taxes paid		(793)	(633)
Net cash (used in)/from operating activities		(16,706)	22,349
Cash flows from investing activities:
Internally generated Capitalised Software	16	(474)	(513)
Disposal of Internally generated Capitalised Software	16	5	-
Purchase of property, plant and equipment	17	(76)	(205)
Disposal of property, plant and equipment	17	31	68
Disposal of held for sale property, plant and equipment	20	-	136
Acquisition of investment associates, and joint ventures, net of cash acquired	19	(4)	(23)
Disposal of investment in subsidiaries, associates and joint ventures, net of cash acquired		41	26
Purchase of investment securities		(120,307)	(140,689)
Disposal and maturity of investment securities		125,925	150,779
Net cash from investing activities		5,141	9,579
Cash flows from financing activities:
Treasury share sale		29	23
Cancellation of shares through share buyback		(1,000)	(736)
Premises and equipment lease liability principal payment		(105)	(120)
Issue of Additional Tier 1 capital, net of expenses		992	-
Redemption of Tier 1 Capital	25	-	(1,000)
Interest paid on subordinated liabilities	31	(252)	(300)
Repayment of subordinated liabilities	31	(1,000)	(2,000)
Proceeds from issue of senior debts	31	7,698	7,072
Repayment of senior debts	31	(7,191)	(2,715)
Interest paid on senior debts	31	(548)	(561)
Net cash inflow from Non-controlling interest		47	70
Distributions and dividends paid to non-controlling interests, preference shareholders and AT1 securities		(234)	(260)
Dividends paid to ordinary shareholders		(551)	(401)
Net cash used in financing activities		(2,115)	(928)
Net (decrease)/increase in cash and cash equivalents		(13,680)	31,000
Cash and cash equivalents at beginning of the period		107,635	97,595
Effect of exchange rate movements on cash and cash equivalents		(1,740)	(1,452)
Cash and cash equivalents at end of the period1,2		92,215	127,143

1  Comprises cash and balances at central banks $64,086 million (30 June 2023: $86,339 million), treasury bills and other eligible bills $3,873 million (30 June 2023: $6,063 million), loans and advances to banks $12,691 million (30 June 2023: $13,650 million), loans and advances to customers $20,611 million (30 June 2023 $27,680 million) investments $824 million (30 June 2023: $1,307 million) less restricted balances $9870 million (30 June 2023: $7,896 million)

2   Refer to note 31 for details on restatement

Interest received was $14,575 million (30.06.23: $13,068 million), interest paid was $10,948 million (30.06.23: $7,898 million).

Page 72

Contents - Notes to the financial statements

Section	Note
Basis of preparation	1	Accounting policies
Performance/return	2	Segmental information
	3	Net interest income
	4	Net fees and commission
	5	Net trading income
	6	Other operating income
	7	Operating expenses
	8	Credit impairment
	9	Goodwill, property, plant and equipment and other impairment
	10	Taxation
	11	Dividends
	12	Earnings per ordinary share
Assets and liabilities held at fair value	13	Financial instruments
	14	Derivative financial instruments
Financial instruments held at amortised cost	15	Reverse repurchase and repurchase agreements including other similar lending and borrowing
Other assets and investments	16	Goodwill and intangible assets
	17	Property, plant and equipment
	18	Other assets
	19	Investments in associates and joint ventures
	20	Assets held for sale and associated liabilities
Funding, accruals, provisions, contingent liabilities and legal proceedings	21	Other liabilities
	22	Contingent liabilities and commitments
	23	Legal and regulatory matters
Capital instruments, equity and reserves	24	Subordinated liabilities and other borrowed funds
	25	Share capital, other equity instruments and reserves
Employee benefits	26	Retirement benefit obligations
Other disclosure matters	27	Related party transactions
	28	Post balance sheet events
	29	Corporate governance
	30	Statutory accounts
	31	Cash flow statement

Page 73

Notes to the financial statements

1. Accounting policies

Statement of compliance

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

These interim financial statements have been prepared in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority (FCA) and with UK-adopted IAS 34 Interim Financial Reporting and IAS 34 as adopted by the European Union (EU). They should be read in conjunction with the 2023 Annual Report, which was prepared in accordance with UK-adopted international accounting standards and International Financial Reporting Standards (IFRS) as adopted by the EU (EU IFRS).

The following parts of the Risk review and Capital review form part of these financial statements:

a) Risk review: Disclosures marked as 'reviewed' from the start of the Credit Risk section to the end of Other principal risks in the same section.

b) Capital review: Tables marked as 'reviewed' from the start of 'CRD Capital base' to the end of 'Movement in total capital', excluding 'Total risk-weighted assets'.

There were no new accounting standards or interpretations that had a material effect on these condensed consolidated interim financial statements

Basis of preparation

The condensed consolidated financial statements have been prepared on a going concern basis and under the historical cost convention, as modified by the revaluation of cash-settled share-based payments, fair value through other comprehensive income, and financial assets and liabilities (including derivatives) at fair value through profit or loss.

The condensed consolidated financial statements are presented in United States dollars ($), being the presentation and functional currency of the Group, and all values are rounded to the nearest million dollars, except when otherwise indicated. The accounting policies that we applied for these interim condensed consolidated financial statements are consistent with those described on pages 367 to 460 of the Annual Report and Accounts 2023, as are the methods of computation.

Significant accounting estimates and judgements

In determining the carrying amounts of certain assets and liabilities, the Group makes assumptions of the effects of uncertain future events on those assets and liabilities at the balance sheet date. The Group's estimates and assumptions are based on historical experience and expectation of future events and are reviewed periodically. 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 2023.

IFRS and Hong Kong accounting requirements

As required by the Hong Kong Listing Rules, an explanation of the differences in accounting practices between UK-adopted IFRS and Hong Kong Financial Reporting Standards is required to be disclosed. There would be no significant differences had these accounts been prepared in accordance with Hong Kong Financial Reporting Standards.

Standard Chartered PLC has fully complied with the new treasury share regime introduced under the revised Hong Kong Listing Rules from 11 June 2024 onwards and will continue to comply with the new regime.

Comparatives

Certain comparatives have been restated in line with current year disclosures. Details of these changes are set out in the relevant sections and notes below:

• Condensed consolidated interim Cash flow statement

• Note 4 Net fees and commissions

• Note 31 Cash flow statement

Page 74

Going concern

These financial statements were approved by the Board of directors on 30 July 2024. The directors have made an assessment of the Group's ability to continue as a going concern. This assessment has been made having considered the current macroeconomic and geopolitical headwinds, including:

• Review of the Group Strategy and Corporate Plan

• An assessment of the actual performance to date, loan book quality, credit impairment, legal, regulatory and compliance matters, and the updated annual budget

• Consideration of stress testing performed, including the Group Recovery Plan (RP) which include the application of stressed scenarios. Under the tests and through the range of scenarios, the results of these exercises and the RP demonstrate that the Group has sufficient capital and liquidity to continue as a going concern and meet minimum regulatory capital and liquidity requirements

1. Accounting policies continued 

• Analysis of the capital, funding and liquidity position of the Group, including the capital and leverage ratios, and ICAAP which summarises the Group's capital and risk assessment processes, assesses its capital requirements and the adequacy of resources to meet them. Further, funding and liquidity was considered in the context of the risk appetite metrics, including the LCR ratio and survival horizon and wholesale borrowing (external).

• The Group's Internal Liquidity Adequacy Assessment Process (ILAAP), which considers the Group's liquidity position,
its framework and whether sufficient liquidity resources are being maintained to meet liabilities as they fall due, was
also reviewed

• The level of debt in issue, including redemptions and issuances during the year, debt falling due for repayment in the next 12 months and further planned debt issuances, including the appetite in the market for the Group's debt

• A detailed review of all principal and topical/emerging risks

Based on the analysis performed, the directors confirm they are satisfied that the Group has adequate resources to continue in business for a period of at least 12 months from 30 July 2024. For this reason, the Group continues to adopt the going concern basis of accounting for preparing the financial statements.

2. Segmental information

Basis of preparation

The analysis reflects how the client segments and geographic regions are managed internally. This is described as the Management View (on an underlying basis) and is principally the location from which a client relationship is managed, which may differ from where it is financially booked and may be shared between businesses and/or regions. In certain instances this approach is not appropriate and a Financial View is disclosed, that is, the location in which the transaction or balance was booked. Typically, the Financial View is used in areas such as the Market and Liquidity Risk reviews where actual booking location is more important for an assessment. Segmental information is therefore on a Management View unless otherwise stated.

Client segments

The Group's segmental reporting is in accordance with IFRS 8 Operating Segments and is reported consistently with the internal performance framework and as presented to the Group's Management Team.

Restructuring and other items excluded from underlying results

The Group's reported IFRS performance is adjusted for certain items to arrive at alternative performance measures. These items include profits or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent, other infrequent and/or exceptional transactions that are significant or material in the context of the Group's normal business earnings for the period and items which management and investors would ordinarily identify separately when assessing consistent performance period by period. The alternative performance measures are not within the scope of IFRS and not a substitute for IFRS measures. These adjustments are set out below.

Net loss on businesses disposed of/ held for sale $189 million include $174 million, the sale of Zimbabwe primarily from the recycling of FX translation losses and $15 million loss in relation to a sale of a portfolio of Aviation loans. The Group is also reclassifying the movements in the Debit Valuation Adjustment (DVA) into restructuring and other items.

Page 75

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

	6 months ended 30.06.24
	Underlying $million	Restructuring $million	Net loss on businesses disposed of/ held for sale¹ $million	Other items $million	DVA $million	Reported $million
Operating income	9,958	48	(189)	-	(26)	9,791
Operating expenses	(5,673)	(283)	-	(100)	-	(6,056)
Operating profit/(loss) before impairment losses and taxation	4,285	(235)	(189)	(100)	(26)	3,735
Credit impairment	(249)	9	-	-	-	(240)
Other impairment	(143)	(4)	-	-	-	(147)
Profit from associates and joint ventures	64	80	-	-	-	144
Profit/(loss) before taxation	3,957	(150)	(189)	(100)	(26)	3,492

1   Net loss on businesses disposal includes loss of $174million relating to Zimbabwe exit

.	6 months ended 30.06.23
	Underlying $million	Restructuring $million	Net gain on businesses disposed of/ held for sale $million	Other items $million	DVA $million	Reported $million
Operating income	8,951	215	-	-	(39)	9,127
Operating expenses	(5,504)	(164)	-	-	-	(5,668)
Operating profit/(loss) before impairment losses and taxation	3,447	51	-	-	(39)	3,459
Credit impairment	(172)	11	-	-	-	(161)
Other impairment	(63)	(14)	-	-	-	(77)
Profit from associates and joint ventures	94	8	-	-	-	102
Profit/(loss) before taxation	3,306	56	-	-	(39)	3,323

Underlying performance by client segment

	6 months ended 30.06.24
	Corporate & Investment Banking $million	Wealth & Retail Banking $million	Ventures $million	Central & other items $million	Total $million
Operating income	5,991	3,872	80	15	9,958
External	5,018	1,749	80	3,111	9,958
Inter-segment	973	2,123	-	(3,096)	-
Operating expenses	(2,921)	(2,156)	(230)	(366)	(5,673)
Operating profit/(loss) before impairment losses and taxation	3,070	1,716	(150)	(351)	4,285
Credit impairment	35	(282)	(43)	41	(249)
Other impairment	(104)	(27)	-	(12)	(143)
Profit from associates and joint ventures	-	-	(6)	70	64
Underlying profit/(loss) before taxation	3,001	1,407	(199)	(252)	3,957
Restructuring	(59)	(51)	(1)	(39)	(150)
DVA	(26)	-	-	-	(26)
Other items	-	(100)	-	(189)	(289)
Reported profit/(loss) before taxation	2,916	1,256	(200)	(480)	3,492
Total assets	443,442	122,846	5,280	263,859	835,427
Of which: loans and advances to customers	190,298	120,277	1,110	24,022	335,707
loans and advances to customers	130,496	120,268	1,110	24,022	275,896
loans held at fair value through profit or loss (FVTPL)1	59,802	9	-	-	59,811
Total liabilities	467,875	208,565	4,347	103,313	784,100
Of which: customer accounts1	315,767	204,154	4,046	8,295	532,262

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

Page 76

	6 months ended 30.06.23
	Corporate & Investment Banking $million	Wealth & Retail Banking $million	Ventures $million	Central & other items $million	Total $million
Operating income	5,823	3,556	89	(517)	8,951
External	4,569	2,154	89	2,139	8,951
Inter-segment	1,254	1,402	-	(2,656)	-
Operating expenses	(2,818)	(2,075)	(211)	(400)	(5,504)
Operating profit/(loss) before impairment losses and taxation	3,005	1,481	(122)	(917)	3,447
Credit impairment	(69)	(108)	(23)	28	(172)
Other impairment	(21)	-	-	(42)	(63)
Profit from associates and joint ventures	-	-	(13)	107	94
Underlying profit/(loss) before taxation	2,915	1,373	(158)	(824)	3,306
Restructuring	73	(16)	(1)	-	56
DVA	(39)	-	-	-	(39)
Reported profit/(loss) before taxation	2,949	1,357	(159)	(824)	3,323
Total assets	401,001	129,660	3,076	304,974	838,711
Of which: loans and advances to customers	174,214	127,039	947	33,623	335,823
loans and advances to customers	128,548	127,020	947	33,622	290,137
loans held at fair value through profit or loss (FVTPL)1	45,666	19	-	1	45,686
Total liabilities	490,697	190,690	2,317	105,326	789,030
Of which: customer accounts1	333,584	185,741	2,072	8,394	529,791

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

Operating income by client segment

	6 months ended 30.06.24
	Corporate & Investment Banking $million	Wealth & Retail Banking $million	Ventures $million	Central & other items $million	Total $million
Underlying versus reported:
Underlying operating income	5,991	3,872	80	15	9,958
Restructuring	28	14	-	6	48
DVA	(26)	-	-	-	(26)
Other items 1	-	-	-	(189)	(189)
Reported operating income	5,993	3,886	80	(168)	9,791
Additional segmental income:
Net interest income	1,272	2,539	45	(681)	3,175
Net fees and commission income	993	955	19	(46)	1,921
Net trading and other income1	3,728	392	16	5591	4,695
Reported operating income	5,993	3,886	80	(168)	9,791

1   Other items includes loss of $174million relating to Zimbabwe exit

	6 months ended 30.06.23
	Corporate & Investment Banking $million	Wealth & Retail Banking $million	Ventures $million	Central & other items $million	Total $million
Underlying versus reported:
Underlying operating income	5,823	3,556	89	(517)	8,951
Restructuring	187	23	-	5	215
DVA	(39)	-	-	-	(39)
Reported operating income	5,971	3,579	89	(512)	9,127
Additional segmental income:
Net interest income	2,272	2,451	31	(770)	3,984
Net fees and commission income	861	816	26	(58)	1,645
Net trading and other income	2,838	312	32	316	3,498
Reported operating income	5,971	3,579	89	(512)	9,127

Page 77

	6 months ended 30.06.24
	Hong Kong $million	Korea $million	China $million	Taiwan $million	Singapore $million	India $million	UAE $million	UK $million	US $million	Other $million	Group $million
Net interest income	350	342	201	81	277	309	187	(503)	205	1,726	3,175
Net fees and commission income	364	104	102	106	347	151	60	54	229	404	1,921
Net trading and other income	1,589	105	361	111	678	192	201	557	162	739	4,695
Operating income	2,303	551	664	298	1,302	652	448	108	596	2,869	9,791

	6 months ended 30.06.23
	Hong Kong $million	Korea $million	China $million	Taiwan $million	Singapore $million	India $million	UAE $million	UK $million	US $million	Other $million	Group $million
Net interest income	1,103	366	271	73	547	331	201	(506)	100	1,498	3,984
Net fees and commission income	322	88	93	94	274	116	37	15	213	393	1,645
Net trading and other income	777	123	228	122	441	174	181	664	138	650	3,498
Operating income	2,202	577	592	289	1,262	621	419	173	451	2,541	9,127

3. Net interest income

	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
Balances at central banks	1,360	1,211
Loans and advances to banks	1,052	958
Loans and advances to customers	8,190	7,407
Debt securities	2,716	2,344
Other eligible bills	807	809
Accrued on impaired assets (discount unwind)	69	97
Interest income	14,194	12,826
Of which: financial instruments held at fair value through other comprehensive income	1,707	1,767
Deposits by banks	441	374
Customer accounts	8,361	6,489
Debt securities in issue	1,794	1,538
Subordinated liabilities and other borrowed funds	394	415
Interest expense on IFRS 16 lease liabilities	29	26
Interest expense	11,019	8,842
Net interest income	3,175	3,984

4. Net fees and commission

	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
Fees and commissions income	2,363	2,079
Of which:
Financial instruments that are not fair valued through profit or loss	722	687
Trust and other fiduciary activities	305	265
Fees and commissions expense	(442)	(434)
Of which:
Financial instruments that are not fair valued through profit or loss	(125)	(145)
Trust and other fiduciary activities	(25)	(25)
Net fees and commission	1,921	1,645

 

Page 78

	6 months ended 30.06.24
	Corporate & Investment Banking $million	Wealth & Retail Banking $million	Ventures $million	Central & other Items $million	Total $million
Transaction Services	704	13	-	-	717
Payments and Liquidity	290	-	-	-	290
Securities & Prime Services	127	-	-	-	127
Trade & Working Capital	287	13	-	-	300
Global Banking	504	-	-	-	504
Lending & Financial Solutions	336	-	-	-	336
Capital Market & Advisory	168	-	-	-	168
Global Markets	24	-	-	-	24
Macro Trading	7	-	-	-	7
Credit Trading	17	-	-	-	17
Valuation & Other Adj	-	-	-	-	-
Wealth solutions	-	822	-	-	822
Investment products	-	456	-	-	456
Bancassurance	-	366	-	-	366
CCPL & Other Unsecured Lending	-	161	18	-	179
Deposits	-	75	-	-	75
Mortgages & Other Secured Lending	-	46	-	-	46
Treasury	-	-	-	(12)	(12)
Other Products	-	-	12	(4)	8
Fees and commission income	1,232	1,117	30	(16)	2,363
Fees and commission expense	(239)	(162)	(11)	(30)	(442)
Net fees and commission	993	955	19	(46)	1,921

	6 months ended 30.06.23¹
	Corporate & Investment Banking $million	Wealth & Retail Banking $million	Ventures $million	Central & other Items $million	Total $million
Transaction Services	722	12	-	-	734
Payments and Liquidity	278	-	-	-	278
Securities & Prime Services	148	-	-	-	148
Trade & Working Capital	296	12	-	-	308
Global Banking	331	(1)	-	-	330
Lending & Financial Solutions	243	(1)	-	-	242
Capital Market & Advisory	88	-	-	-	88
Global Markets	28	-	-	-	28
Macro Trading	(7)	-	-	-	(7)
Credit Trading	34	-	-	-	34
Valuation & Other Adj	1	-	-	-	1
Wealth solutions	-	644	-	-	644
Investment products	-	332	-	-	332
Bancassurance	-	312	-	-	312
CCPL & Other Unsecured Lending	-	192	14	-	206
Deposits	-	84	-	-	84
Mortgages & Other Secured Lending	-	30	-	-	30
Treasury	-	-	-	(6)	(6)
Other Products	-	1	24	4	29
Fees and commission income	1,081	962	38	(2)	2,079
Fees and commission expense	(220)	(146)	(12)	(56)	(434)
Net fees and commission	861	816	26	(58)	1,645

1   Products are now presented to reflect the RNS on Presentation of Financial Information issued on 2 April 2024. Prior periods have been restated and there is no change in total income

Page 79

Upfront bancassurance consideration amounts are amortised on a straight-line basis over the contractual period to which the consideration relates.  Deferred income on the balance sheet in respect of these activities is $446 million (30 June 2023: $507 million).  Following renegotiation of the contract in 2023, the life of the contract was extended for a further 3 years.  Accordingly, the income will be earned evenly over a longer period for the next 8 years (30 June 2023: 6 years).  For the six months ended 30 June 2024, $28 million of fee income was released from deferred income (30 June 2023: $42 million).

For the bancassurance contract with the annual performance bonus, based on progress so far and expectation of meeting the performance targets by year-end with a high probability, a pro-rata portion of the total performance fee, equal to $116 million of the fee has been recognised as fee income in the period.

5. Net trading income

	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
Net trading income	4,749	3,233
Significant items within net trading income include:
Gains on instruments held for trading1	3,717	2,876
Gains on financial assets mandatorily at fair value through profit or loss	2,499	1,914
(Losses)/gains on financial assets designated at fair value through profit or loss	(1)	4
Losses on financial liabilities designated at fair value through profit or loss	(1,595)	(1,642)

1   Includes $110 million gain (30.06.23: $29 million loss) from the translation of foreign currency monetary assets and liabilities

6. Other operating income

	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
Other operating income includes:
Rental income from operating lease assets	20	246
Net loss on disposal of fair value through other comprehensive income debt instruments	(90)	(85)
Net gain/(loss) on amortised cost financial assets	4	(20)
Net (loss)/gain on sale of businesses	(169)¹	28
Dividend income	4	10
Other	177²	86
Other operating income	(54)	265

1   Includes loss of $174 million from sale of subsidiary (SCB Zimbabwe Limited) of which $190 million relates to  CTA loss.  loss of $15 million on disposal of aviation business, offset by gain of $17 million on disposal of Shoal and Autumn life Pte (subsidiary)

2   Includes IAS 29 adjustment Ghana hyperinflationary impact ($106 million)

7. Operating expenses

	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
Staff costs:
Wages and salaries	3,288	3,204
Social security costs	129	123
Other pension costs	223	214
Share-based payment costs	172	112
Other staff costs	524	505
	4,336	4,158

Other staff costs include redundancy expenses of $115 million (30.06.23: $25 million). Further costs in this category include training, travel costs and other staff-related costs.

Page 80

	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
Premises and equipment expenses:	177	208
General administrative expenses:	1,027	741
Depreciation and amortisation:
Property, plant and equipment:
Premises	148	158
Equipment	39	54
Operating lease assets	-	27
Intangibles:
Software	329	322
	516	561
Total operating expenses	6,056	5,668

Operating expenses include research expenditure of $480 million (30.06.23: $472 million), which was recognised as an expense in the year.

8. Credit impairment

	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
Net credit impairment on loans and advances to banks and customers	256	225
Net credit impairment on debt securities¹	(41)	(37)
Net credit impairment relating to financial guarantees and loan commitments	24	(37)
Net credit impairment relating to other financial assets	1	10
Credit impairment charge/(release)1	240	161

1   Includes impairment release of $14 million (30.06.23: $1 million charge) on originated credit-impaired debt securities

9. Goodwill, property, plant and equipment and other impairment

	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
Impairment of property, plant and equipment (Note 17)	-	2
Impairment of other intangible assets (Note 16)	148	67
Other	(1)	8
Goodwill, property, plant and equipment and other impairment	147	77

10. Taxation

The following table provides analysis of taxation charge in the period:

	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
The charge for taxation based upon the profit for the period comprises:
Current tax:
United Kingdom corporation tax at 25 per cent (2023: 23.5 per cent):
Current tax charge on income for the period	10	2
Adjustments in respect of prior periods (including double tax relief)	2	-
Foreign tax:
Current tax charge on income for the period	993	892
Adjustments in respect of prior periods (including double tax relief)	27	(3)
	1,032	891
Deferred tax:
Origination/reversal of temporary differences	89	33
Adjustments in respect of prior periods (including double tax relief)	2	14
	91	47
Tax on profits on ordinary activities	1,123	938
Effective tax rate	32.2%	28.2%

Page 81

The tax charge for the period has been calculated by applying the effective rate of tax which is expected to apply for
the year ending 31 December 2024 using rates substantively enacted at 30 June 2024. The rate has been calculated by estimating and applying an average annual effective income tax rate to each tax jurisdiction individually.

The tax charge for the period of $1,123 million (30 June 2023: $938 million) on a profit before tax of $3,492 million (30 June 2023: $3,323 million) reflects the impact of non-deductible expenses, tax losses for which no deferred tax assets are recognised, non-creditable withholding taxes offset by countries with tax rates lower than the UK, the most significant of which includes Hong Kong and Singapore.

Foreign tax includes current tax of $131 million (30 June 2023: $98 million) on the profits assessable in Hong Kong. Deferred tax includes origination or reversal of temporary differences of $27 million (30 June 2023: $29 million) provided at a rate of 16.5 per cent (30 June 2023: 16.5 per cent) on the profits assessable in Hong Kong.

The Group falls within the Pillar Two global minimum tax rules which apply in the UK from 1 January 2024. The IAS 12 exception to recognise and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes has been applied. The current tax charge for the period ended 30 June 2024 includes $10m in respect of Pillar Two income taxes (30 June 2023: $nil).

Deferred tax comprised assets and liabilities as follows:

	30.06.24			31.12.23
	Total $million	Asset $million	Liability $million	Total $million	Asset $million	Liability $million
Deferred tax comprises:
Accelerated tax depreciation	(395)	15	(410)	(424)	3	(427)
Impairment provisions on loans and advances	282	239	43	286	282	4
Tax losses carried forward	71	53	18	97	49	48
Equity instruments at fair value through other comprehensive income assets	(49)	(7)	(42)	(144)	(1)	(143)
Debt instruments at fair value through other comprehensive income assets	15	19	(4)	27	29	(2)
Cash flow hedges	3	7	(4)	(25)	12	(37)
Own credit adjustment	6	6	-	(71)	(1)	(70)
Retirement benefit obligations	2	14	(12)	4	13	(9)
Share-based payments	39	11	28	43	9	34
Other temporary differences	61	236	(175)	139	307	(168)
	35	593	(558)	(68)	702	(770)

11. Dividends

Ordinary equity shares

	6 months ended 30.06.24		6 months ended 31.12.23		6 months ended 30.06.23
	Cents per share	$million	Cents per share	$million	Cents per share	$million
2022 final dividend declared and paid during the period	-	-			14	401
2023 interim dividend declared and paid during the year	-	-	6	167	-	-
2023 final dividend declared and paid during the period	21	551	-	-	-	-

The 2023 final dividend per share of 21 cents per ordinary share ($551 million) was paid to eligible shareholders on 17 May 2024, and is recognised in these interim accounts.

Interim dividends on ordinary equity shares are recorded in the period in which they are declared and, in respect of the final dividend, have been approved by the shareholders

2024 recommended interim ordinary share dividend

The 2024 interim dividend of 9 cents per ordinary share will be paid in pounds sterling, Hong Kong dollars or US dollars on 10 October 2024 to shareholders on the UK register of members at the close of business in the UK on 9 August 2024.

Page 82

Preference shares and Additional Tier 1 securities

Dividends on these preference shares and securities classified as equity are recorded in the period in which they are declared.

	6 months ended 30.06.24 $million	6 months ended 31.12.23 $million	6 months ended 30.06.23 $million
Non-cumulative redeemable preference shares:
7.014 per cent preference shares of $5 each	26	27	26
Floating rate preference shares of $5 each¹	27	27	23
	53	54	49
Additional Tier 1 securities: fixed rate resetting perpetual subordinated contingent convertible securities	156	155	194
	209	209	243

1. Floating rate is based on Secured Overnight Financing Rate (SOFR), average rate paid for floating preference shares is 7.24% (2023: 6.62%)

12. Earnings per ordinary share

	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
Profit for the period attributable to equity holders	2,369	2,385
Non-controlling interest	9	3
Dividend payable on preference shares and AT1 classified as equity	(209)	(243)
Profit for the period attributable to ordinary shareholders	2,169	2,145
Items normalised:
Restructuring	150	(56)
Net loss on sale of businesses (Note 6)	189	-
DVA	26	39
Other items¹	100	-
Tax on normalised items	(67)	-
Underlying profit	2,567	2,128
Basic - Weighted average number of shares (millions)	2,605	2,839
Diluted - Weighted average number of shares (millions)	2,669	2,902
Basic earnings per ordinary share (cents)	83.3	75.6
Diluted earnings per ordinary share (cents)	81.3	73.9
Underlying basic earnings per ordinary share (cents)	98.5	75.0
Underlying diluted earnings per ordinary share (cents)	96.2	73.3

1. Charge relating to Korea ELS

The calculation of basic earnings per share is based on the profit attributable to equity holders of the parent and the basic weighted average number of shares excluding treasury shares held in employees benefit trust. When calculating diluted earnings per share, the weighted average number of shares in issue is adjusted for the effects of all expected dilutive potential ordinary shares held in respect of Standard Chartered PLC totalling 59 million (30.06.23: 56 million). The total number of share options outstanding, under schemes considered to be potentially dilutive, was 5 million (30.06.23: 7 million). These options have strike prices ranging from $3.96 to $7.43 of the total number of employee share options and share awards at 30 June 2024 there were nil share options and awards which were anti dilutive.

The 234 million decrease (30.06.23: 175 million decrease) in the basic weighted average number of shares is primarily due to the impact of the share buyback programmes completed in the year.

Page 83

13. Financial instruments

Classification and measurement

Assets	Notes	Assets at fair value						Assets held at amortised cost $million	Total $million
		Trading $million	Derivatives held for hedging $million	Non-trading mandatorily at fair value through profit or loss $million	Designated at fair value through profit or loss $million	Fair value through other comprehensive income $million	Total financial assets at fair value $million
Cash and balances at central banks¹		-	-	-	-	-	-	64,086	64,086
Financial assets held at fair value through profit or loss
Loans and advances to banks2		2,188	-	5	-	-	2,193	-	2,193
Loans and advances to customers2		6,657	-	220	-	-	6,877	-	6,877
Reverse repurchase agreements and other similar secured lending	15	8,704	-	84,498	-	-	93,202	-	93,202
Debt securities, additional tier one and other eligible bills		73,991	-	123	74	-	74,188	-	74,188
Equity shares		5,046	-	218	-	-	5,264	-	5,264
Other assets	18	-	-	1	-	-	1	-	1
		96,586	-	85,065	74	-	181,725	-	181,725
Derivative financial instruments	14	46,166	2,481	-	-	-	48,647	-	48,647
Loans and advances to banks2,3		-	-	-	-	-	-	45,231	45,231
of which - reverse repurchase agreements and other similar secured lending	15	-	-	-	-	-	-	3,991	3,991
Loans and advances to customers2		-	-	-	-	-	-	275,896	275,896
of which - reverse repurchase agreements and other similar secured lending	15	-	-	-	-	-	-	7,788	7,788
Investment securities
Debt securities, additional tier one and other eligible bills		-	-	-	-	95,177	95,177	56,403	151,580
Equity shares		-	-	-	-	823	823	-	823
		-	-	-	-	96,000	96,000	56,403	152,403
Other assets	18	-	-	-	-	-	-	42,206	42,206
Assets held for sale	20	-	-	-	-	-	-	517	517
Total at 30 June 2024		142,752	2,481	85,065	74	96,000	326,372	484,339	810,711

1   Comprises cash held at central banks in restricted accounts of $9,870 million, or on demand, or placements which are contractually due to mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers

2   Further analysed in Risk review and Capital review

3   Loans and advances to banks include amounts due on demand from banks other than central banks

Page 84

Assets	Notes	Assets at fair value						Assets held at amortised cost $million	Total $million
		Trading $million	Derivatives held for hedging $million	Non-trading mandatorily at fair value through profit or loss $million	Designated at fair value through profit or loss $million	Fair value through other comprehensive income $million	Total financial assets at fair value $million
Cash and balances at central banks1		-	-	-	-	-	-	69,905	69,905
Financial assets held at fair value through profit or loss
Loans and advances to banks2		2,265	-	-	-	-	2,265	-	2,265
Loans and advances to customers2		6,930	-	282	-	-	7,212	-	7,212
Reverse repurchase agreements and other similar secured lending	15	9,997	-	71,850	-	-	81,847	-	81,847
Debt securities, additional tier one and other eligible bills		52,776	-	98	78	-	52,952	-	52,952
Equity shares		2,721	-	219	-	-	2,940	-	2,940
Other assets	18	-	-	6	-	-	6	-	6
		74,689	-	72,455	78	-	147,222	-	147,222
Derivative financial instruments	14	48,333	2,101	-	-	-	50,434	-	50,434
Loans and advances to banks2,3		-	-	-	-	-	-	44,977	44,977
of which - reverse repurchase agreements and other similar secured lending	15	-	-	-	-	-	-	1,738	1,738
Loans and advances to customers2		-	-	-	-	-	-	286,975	286,975
of which - reverse repurchase agreements and other similar secured lending	15	-	-	-	-	-	-	13,996	13,996
Investment securities
Debt securities, additional tier one and other eligible bills		-	-	-	-	103,328	103,328	56,935	160,263
Equity shares		-	-	-	-	992	992	-	992
		-	-	-	-	104,320	104,320	56,935	161,255
Other assets	18	-	-	-	-	-	-	38,140	38,140
Assets held for sale	20	-	-	-	-	-	-	701	701
Total at 31 December 2023		123,022	2,101	72,455	78	104,320	301,976	497,633	799,609

1   Comprises cash held at central banks in restricted accounts of $6,153 million, or on demand, or placements which are contractually due to mature over-night only. Other placements with central banks are reported as part of Loans and advances to customers

2   Further analysed in Risk review and Capital review

3   Loans and advances to banks include amounts due on demand from banks other than central banks

Page 85

Liabilities	Notes	Liabilities at fair value				Amortised cost $million	Total $million
		Trading $million	Derivatives held for hedging $million	Designated at fair value through profit or loss $million	Total financial liabilities at fair value $million
Deposits by banks		-	-	-	-	28,087	28,087
Customer accounts		-	-	-	-	468,157	468,157
Financial liabilities held at fair value through profit or loss
Deposits by banks		-	-	2,059	2,059	-	2,059
Customer accounts		12	-	19,838	19,850	-	19,850
Repurchase agreements and other similar secured borrowing	15	551	-	46,497	47,048	-	47,048
Debt securities in issue		-	-	12,815	12,815	-	12,815
Short positions		15,109	-	-	15,109	-	15,109
Other liabilities		-	-	1	1	-	1
		15,672	-	81,210	96,882	-	96,882
Derivative financial instruments	14	48,338	2,246	-	50,584	-	50,584
Repurchase agreements and other similar secured borrowing	15	-	-	-	-	7,539	7,539
Debt securities in issue		-	-	-	-	65,199	65,199
Other liabilities	21	-	-	-	-	46,901	46,901
Subordinated liabilities and other borrowed funds	24	-	-	-	-	10,856	10,856
Liabilities included in disposal groups held for sale	20	-	-	-	-	535	535
Total at 30 June 2024		64,010	2,246	81,210	147,466	627,274	774,740

Liabilities	Notes	Liabilities at fair value				Amortised cost $million	Total $million
		Trading $million	Derivatives held for hedging $million	Designated at fair value through profit or loss $million	Total financial liabilities at fair value $million
Deposits by banks		-	-	-	-	28,030	28,030
Customer accounts		-	-	-	-	469,418	469,418
Financial liabilities held at fair value through profit or loss
Deposits by banks		-	-	1,894	1,894	-	1,894
Customer accounts		39	-	17,209	17,248	-	17,248
Repurchase agreements and other similar secured borrowing	15	1,660	-	39,623	41,283	-	41,283
Debt securities in issue		-	-	10,817	10,817	-	10,817
Short positions		11,846	-	-	11,846	-	11,846
Other liabilities		-	-	8	8	-	8
		13,545	-	69,551	83,096	-	83,096
Derivative financial instruments	14	52,747	3,314	-	56,061	-	56,061
Repurchase agreements and other similar secured borrowing	15	-	-	-	-	12,258	12,258
Debt securities in issue		-	-	-	-	62,546	62,546
Other liabilities	21	-	-	-	-	38,663	38,663
Subordinated liabilities and other borrowed funds	24	-	-	-	-	12,036	12,036
Liabilities included in disposal groups held for sale	20	-	-	-	-	726	726
Total at 31 December 2023		66,292	3,314	69,551	139,157	623,677	762,834

Financial liabilities designated at fair value through profit or loss

	30.06.24 $million	31.12.23 $million
Carrying balance aggregate fair value	81,211	69,551
Amount contractually obliged to repay at maturity	82,278	71,240
Difference between aggregate fair value and contractually obliged to repay at maturity	(1,067)	(1,689)
Cumulative change in fair value accredited to credit risk difference	(262)	156

The net fair value loss on financial liabilities designated at fair value through profit or loss was $1,595 million for the year (31 December 2023: net loss of $2,649 million).

Further details of the Group's own credit adjustment (OCA) valuation technique is described later in this Note.

Page 86

Valuation of financial instruments

The Valuation Methodology function is responsible for independent price verification, oversight of fair value and appropriate value adjustments and escalation of valuation issues. Independent price verification is the process of determining that the valuations incorporated into the financial statements are validated independent of the business area responsible for the product. The Valuation Methodology function has oversight of the fair value adjustments to ensure the financial instruments are priced to exit. These are key controls in ensuring the material accuracy of the valuations incorporated in the financial statements. The market data used for independent price verification (IPV) may include data sourced from recent trade data involving external counterparties or third parties such as Bloomberg, Reuters, brokers and consensus pricing providers. The Valuation Methodology function performs an ongoing review of the market data sources that are used as part of the IPV and fair value processes which are formally documented on a semi-annual basis detailing the suitability of the market data used for price testing. IPV uses independently sourced data that is deemed most representative of the market the instruments trade in. To determine the quality of the market data inputs, factors such as independence, relevance, reliability, availability of multiple data sources and methodology employed by the pricing provider are taken into consideration.

The Valuation and Benchmarks Committee (VBC) is the valuation governance forum consisting of representatives from Group Market Risk, Product Control, Valuation Methodology and the business, which meets monthly to discuss and approve the independent valuations of the inventory. For Principal Finance, the Investment Committee meeting is held on a quarterly basis to review investments and valuations.

Significant accounting estimates and judgements

The Group evaluates the significance of financial instruments and material accuracy of the valuations incorporated in the financial statements as they involve a high degree of judgement and estimation uncertainty in determining the carrying values of financial assets and liabilities at the balance sheet date.

• Fair value of financial instruments is determined using valuation techniques and estimates (see below) which, to the extent possible, use market observable inputs, but in some cases use non-market observable inputs. Changes in the observability of significant valuation inputs can materially affect the fair values of financial instruments

• When establishing the exit price of a financial instrument using a valuation technique, the Group estimates valuation adjustments in determining the fair value

• In determining the valuation of financial instruments, the Group makes judgements on the amounts reserved to cater for model and valuation risks, which cover both Level 2 and Level 3 assets, and the significant valuation judgements in respect of Level 3 instruments

Where the estimated measurement of fair value is more judgemental in respect of Level 3 assets, these are valued based on models that use a significant degree of non-market-based unobservable inputs.

Valuation techniques

Refer to the fair value hierarchy explanation - Level 1, 2 and 3

• Financial instruments held at fair value

-  Debt securities - asset-backed securities: Asset-backed securities are valued based on external prices obtained from consensus pricing providers, broker quotes, recent trades, arrangers' quotes, etc. Where an observable price is available for a given security, it is classified as Level 2. In instances where third-party prices are not available or reliable, the security is classified as Level 3. The fair value of Level 3 securities is estimated using market standard cash flow models with input parameter assumptions which include prepayment speeds, default rates, discount margins derived from comparable securities with similar vintage, collateral type, and credit ratings.

-  Debt securities in issue: These debt securities relate to structured notes issued by the Group. Where independent market data is available through pricing vendors and broker sources these positions are classified as Level 2. Where such liquid external prices are not available, valuations of these debt securities are implied using input parameters such as bond spreads and credit spreads, and are classified as Level 3. These input parameters are determined with reference to the same issuer (if available) or proxies from comparable issuers or assets.

Page 87

-  Derivatives: Derivative products are classified as Level 2 if the valuation of the product is based on input parameters which are observable from independent and reliable market data sources. Derivative products are classified as Level 3 if there are significant valuation input parameters which are unobservable in the market, such as products where the performance is linked to more than one underlying variable. Examples are foreign exchange basket options, equity options based on the performance of two or more underlying indices and interest rate products with quanto payouts. In most cases these unobservable correlation parameters cannot be implied from the market, and methods such as historical analysis and comparison with historical levels or other benchmark data must be employed

-  Equity shares - private equity: The majority of private equity unlisted investments are valued based on earning multiples - Price-to-Earnings (P/E) or enterprise value to earnings before income tax, depreciation and amortisation (EV/EBITDA) ratios - of comparable listed companies. The two primary inputs for the valuation of these investments are the actual or forecast earnings of the investee companies and earning multiples for the comparable listed companies. To ensure comparability between these unquoted investments and the comparable listed companies, appropriate adjustments are also applied (for example, liquidity and size) in the valuation. In circumstances where an investment does not have direct comparables or where the multiples for the comparable companies cannot be sourced from reliable external sources, alternative valuation techniques (for example, discounted cash flow model or net asset value (NAV) or option pricing model), which use predominantly unobservable inputs or Level 3 inputs, may be applied. Even though earning multiples for the comparable listed companies can be sourced from third-party sources (for example, Bloomberg), and those inputs can be deemed Level 2 inputs, all unlisted investments (excluding those where observable inputs are available, for example, over-the-counter (OTC) prices) are classified as Level 3 on the basis that the valuation methods involve judgements ranging from determining comparable companies to discount rates where the discounted cash flow method is applied

-  Loans and advances: These primarily include loans in the Bond and Loan Syndication business which were not fully syndicated as of the balance sheet date and other financing transactions, and loans and advances including reverse repurchase agreements that do not have SPPI cashflows or are managed on a fair value basis. These loans are generally bilateral in nature and, where available, their valuation is based on observable clean sales transactions prices or market observable spreads. If observable credit spreads are not available, proxy spreads based on comparables with similar credit grade, sector and region, are used. Where observable transaction prices, credit spreads and market standard proxy methods are available, these loans are classified as Level 2. Where there are no recent transactions or comparables, these loans are classified as Level 3

-  Other debt securities: These debt securities include convertible bonds, corporate bonds, credit and structured notes. Where quoted prices are available through pricing vendors, brokers or observable trading activities from liquid markets, these are classified as Level 2 and valued using such quotes. Where there are significant valuation inputs which are unobservable in the market, due to illiquid trading or the complexity of the product, these are classified as Level 3. The valuations of these debt securities are implied using input parameters such as bond spreads and credit spreads. These input parameters are determined with reference to the same issuer (if available) or proxied from comparable issuers or assets

• Financial instruments held at amortised cost

The following sets out the Group's basis for establishing fair values of amortised cost financial instruments and their classification between Levels 1, 2 and 3. As certain categories of financial instruments are not actively traded, there is
a significant level of management judgement involved in calculating the fair values:

-  Cash and balances at central banks: The fair value of cash and balances at central banks is their carrying amounts

-  Debt securities in issue, subordinated liabilities and other borrowed funds: The aggregate fair values are calculated based on quoted market prices. For those notes where quoted market prices are not available, a discounted cash flow model is used based on a current market related yield curve appropriate for the remaining term to maturity

-  Deposits and borrowings: The estimated fair value of deposits with no stated maturity is the amount repayable on demand. The estimated fair value of fixed interest-bearing deposits and other borrowings without quoted market prices is based on discounted cash flows using the prevailing market rates for debts with a similar Credit Risk and remaining maturity

Page 88

-  Investment securities: For investment securities that do not have directly observable market values, the Group utilises a number of valuation techniques to determine fair value. Where available, securities are valued using input proxies from the same or closely related underlying (for example, bond spreads from the same or closely related issuer) or input proxies from a different underlying (for example, a similar bond but using spreads for a particular sector and rating). Certain instruments cannot be proxies as set out above, and in such cases the positions are valued using non-market observable inputs. This includes those instruments held at amortised cost and predominantly relates to asset-backed securities. The fair value for such instruments is usually proxies from internal assessments of the underlying cash flows

-  Loans and advances to banks and customers: For loans and advances to banks, the fair value of floating rate placements and overnight deposits is their carrying amounts. The estimated fair value of fixed interest-bearing deposits is based on discounted cash flows using the prevailing money market rates for debts with a similar Credit Risk and remaining maturity. The Group's loans and advances to customers' portfolio is well diversified by geography and industry. Approximately a quarter of the portfolio re-prices within one month, and approximately half re-prices within 12 months. Loans and advances are presented net of provisions for impairment. The fair value of loans and advances to customers with a residual maturity of less than one year generally approximates the carrying value. The estimated fair value of loans and advances with a residual maturity of more than one year represents the discounted amount of future cash flows expected to be received, including assumptions relating to prepayment rates and Credit Risk. Expected cash flows are discounted at current market rates to determine fair value. The Group has a wide range of individual instruments within its loans and advances portfolio and as a result providing quantification of the key assumptions used to value such instruments is impractical

-  Other assets: Other assets comprise primarily cash collateral and trades pending settlement. The carrying amount of these financial instruments is considered to be a reasonable approximation of fair value as they are either short-term in nature or re-price to current market rates frequently

Fair value adjustments

When establishing the exit price of a financial instrument using a valuation technique, the Group considers adjustments to the modelled price which market participants would make when pricing that instrument. The main valuation adjustments (described further below) in determining fair value for financial assets and financial liabilities are as follows:

	01.01.24 $million	Movement during the year $million	30.06.24 $million	01.01.23 $million	Movement during the year $million	31.12.23 $million
Bid-offer valuation adjustment	115	3	118	118	(3)	115
Credit valuation adjustment	119	5	124	171	(52)	119
Debit valuation adjustment	(129)	27	(102)	(112)	(17)	(129)
Model valuation adjustment	4	1	5	3	1	4
Funding valuation adjustment	33	(8)	25	46	(13)	33
Other fair value adjustments	25	3	28	23	2	25
Total	167	31	198	249	(82)	167
Income deferrals
Day 1 and other deferrals	109	27	136	186	(77)	109
Total	109	27	136	186	(77)	109

Note: Brackets represent an asset and credit to the income statement

• Bid-offer valuation adjustment: Generally, market parameters are marked on a mid-market basis in the revaluation systems, and a bid-offer valuation adjustment is required to quantify the expected cost of neutralising the business' positions through dealing away in the market, thereby bringing long positions to bid and short positions to offer. The methodology to calculate the bid-offer adjustment for a derivative portfolio involves netting between long and short positions and the grouping of risk by strike and tenor based on the hedging strategy where long positions are marked to bid and short positions marked to offer in the systems

Page 89

• Credit valuation adjustment (CVA): The Group accounts for CVA against the fair value of derivative products. CVA is an adjustment to the fair value of the transactions to reflect the possibility that our counterparties may default and we may not receive the full market value of the outstanding transactions. It represents an estimate of the adjustment a market participant would include when deriving a purchase price to acquire our exposures. CVA is calculated for each subsidiary, and within each entity for each counterparty to which the entity has exposure and takes account of any collateral we may hold. The Group calculates the CVA by using estimates of future positive exposure, market-implied probability of default (PD) and recovery rates. Where market-implied data is not readily available, we use market-based proxies to estimate the PD. Wrong-way risk occurs when the exposure to a counterparty is adversely correlated with the credit quality of that counterparty, and the Group has implemented a model to capture this impact for key wrong-way exposures. The Group also captures the uncertainties associated with wrong-way risk in the Group's Prudential Valuation Adjustments framework

• Debit valuation adjustment (DVA): The Group calculates DVA adjustments on its derivative liabilities to reflect changes in its own credit standing. The Group's DVA adjustments will increase if its credit standing worsens and conversely, decrease if its credit standing improves. For derivative liabilities, a DVA adjustment is determined by applying the Group's probability of default to the Group's negative expected exposure against the counterparty. The Group's probability of default and loss expected in the event of default is derived based on bond and CDS spreads associated with the Group's issuances and market standard recovery levels. The expected exposure is modelled based on the simulation of the underlying risk factors over the expected life of the deal. This simulation methodology incorporates the collateral posted by the Group and the effects of master netting agreements

• Model valuation adjustment: Valuation models may have pricing deficiencies or limitations that require a valuation adjustment. These pricing deficiencies or limitations arise due to the choice, implementation and calibration of the
pricing model

• Funding valuation adjustment (FVA): The Group makes FVA adjustments against derivative products, including
embedded derivatives. FVA reflects an estimate of the adjustment to its fair value that a market participant would make to incorporate funding costs or benefits that could arise in relation to the exposure. FVA is calculated by determining the net expected exposure at a counterparty level and then applying a funding rate to those exposures that reflect the market cost of funding. The FVA for uncollateralised (including partially collateralised) derivatives incorporates the estimated present value of the market funding cost or benefit associated with funding these transactions

• Other fair value adjustments: The Group calculates the fair value on the interest rate callable products by calibrating to a set of market prices with differing maturity, expiry and strike of the trades

• Day one and other deferrals: In certain circumstances the initial fair value is based on a valuation technique which differs to the transaction price at the time of initial recognition. However, these gains can only be recognised when the valuation technique used is based primarily on observable market data. In those cases where the initially recognised fair value is based on a valuation model that uses inputs which are not observable in the market, the difference between the transaction price and the valuation model is not recognised immediately in the income statement. The difference is amortised to the income statement until the inputs become observable, or the transaction matures or is terminated. Other deferrals primarily represent adjustments taken to reflect the specific terms and conditions of certain derivative contracts which affect the termination value at the measurement date

In addition, the Group calculates own credit adjustment (OCA) on its issued debt designated at fair value, including structured notes, in order to reflect changes in its own credit standing. Issued debt is discounted utilising the spread at which similar instruments would be issued or bought back at the measurement date as this reflects the value from the perspective of a market participant who holds the identical item as an asset. OCA measures the difference between the fair value of issued debt as of reporting date and theoretical fair values of issued debt adjusted up or down for changes in own credit spreads from inception date to the measurement date. Under IFRS 9 the change in the OCA component is reported under other comprehensive income. The Group's OCA reserve will increase if its credit standing worsens in comparison with the inception of the trade and, conversely, decrease if its credit standing improves. The Group's OCA reserve will reverse over time as its liabilities mature.

Page 90

Fair value hierarchy - financial instruments held at fair value

The fair values of quoted financial assets and liabilities in active markets are based on current prices. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. Wherever possible, fair values have been calculated using unadjusted quoted market prices in active markets for identical instruments held by the Group. Where quoted market prices are not available, or are unreliable because of poor liquidity, fair values have been determined using valuation techniques which, to the extent possible, use market observable inputs, but in some cases use non-market observable inputs. Valuation techniques used include discounted cash flow analysis and pricing models and, where appropriate, comparison with instruments that have characteristics similar to those of the instruments held by the Group.

Assets and liabilities carried at fair value or for which fair values are disclosed have been classified into three levels according to the observability of the significant inputs used to determine the fair values. Changes in the observability of significant valuation inputs during the reporting period may result in a transfer of assets and liabilities within the fair value hierarchy. The Group recognises transfers between levels of the fair value hierarchy when there is a significant change in either its principal market or the level of observability of the inputs to the valuation techniques as at the end of the reporting period.

• Level 1: Fair value measurements are those derived from unadjusted quoted prices in active markets for identical assets or liabilities

• Level 2: Fair value measurements are those with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable

• Level 3: Fair value measurements are those where inputs which could have a significant effect on the instrument's valuation are not based on observable market data

Page 91

The following tables show the classification of financial instruments held at fair value into the valuation hierarchy:

Assets	Level 1 $million	Level 2 $million	Level 3 $million	Total $million
Financial instruments held at fair value through profit or loss
Loans and advances to banks	-	2,157	36	2,193
Loans and advances to customers	-	4,942	1,935	6,877
Reverse repurchase agreements and other similar secured lending	-	90,592	2,610	93,202
Debt securities, additional tier one and other eligible bills	33,883	39,218	1,087	74,188
Of which:
Issued by central banks & governments	28,083	12,425	-	40,508
Issued by corporates other than financial institutions1	12	4,146	260	4,418
Issued by financial institutions1	5,788	22,647	827	29,262
Equity shares	4,927	148	189	5,264
Derivative financial instruments	325	48,205	117	48,647
Of which:
Foreign exchange	124	40,915	25	41,064
Interest rate	53	6,028	80	6,161
Credit	-	386	9	395
Equity and stock index options	-	180	3	183
Commodity	148	696	-	844
Investment securities
Debt securities, additional tier one and other eligible bills	51,197	43,980	-	95,177
Of which:
Issued by Central banks & Governments	41,648	19,484	-	61,132
Issued by corporates other than financial institutions¹	-	500	-	500
Issued by financial institutions¹	9,549	23,996	-	33,545
Equity shares	47	1	775	823
Other Assets	-	-	1	1
Total financial assets at 30 June 2024	90,379	229,243	6,750	326,372
Liabilities
Financial instruments held at fair value through profit or loss
Deposits by banks	-	1,660	399	2,059
Customer accounts	-	18,121	1,729	19,850
Repurchase agreements and other similar secured borrowing	-	47,048	-	47,048
Debt securities in issue	-	10,676	2,139	12,815
Short positions	5,089	10,020	-	15,109
Derivative financial instruments	352	50,023	209	50,584
Of which:
Foreign exchange	161	38,468	9	38,638
Interest rate	65	8,538	2	8,605
Credit	-	1,660	178	1,838
Equity and stock index options	-	163	20	183
Commodity	126	1,194	-	1,320
Other Liabilities	-	-	1	1
Total financial liabilities at 30 June 2024	5,441	137,548	4,477	147,466

1          Includes covered bonds of $5,062 million, securities issued by Multilateral Development Banks/International Organisations of $11,339 million and State-owned agencies and development banks of $16,878 million

The fair value of financial assets and financial liabilities classified as Level 2 in the fair value hierarchy that are subject to complex modelling techniques is $802 million and $405 million respectively.

There were no significant changes to valuation or levelling approaches during the period ended 30 June 2024.

There were no significant transfers of financial assets and liabilities measured at fair value between Level 1 and Level 2 during the period ended 30 June 2024.

Page 92

Assets	Level 1 $million	Level 2 $million	Level 3 $million	Total $million
Financial instruments held at fair value through profit or loss
Loans and advances to banks	-	2,265	-	2,265
Loans and advances to customers	-	5,252	1,960	7,212
Reverse repurchase agreements and other similar secured lending	-	79,484	2,363	81,847
Debt securities, additional tier one and other eligible bills	27,055	24,635	1,262	52,952
Of which:
Issued by central Banks & governments	23,465	6,557	-	30,022
Issued by corporates other than financial institutions1	4	4,062	346	4,412
Issued by financial institutions1	3,586	14,016	916	18,518
Equity shares	2,386	370	184	2,940
Derivative financial instruments	954	49,400	80	50,434
Of which:
Foreign exchange	129	42,414	25	42,568
Interest rate	37	6,293	6	6,336
Credit	-	438	47	485
Equity and stock index options	-	73	2	75
Commodity	788	182	-	970
Investment securities
Debt securities, additional tier one and other eligible bills	55,060	48,196	72	103,328
Of which:
Issued by Central Banks & Governments	47,225	18,983	51	66,259
Issued by corporates other than financial institutions1	820	3,236	-	4,056
Issued by financial institutions1	7,015	25,977	21	33,013
Equity shares	199	6	787	992
Other Assets	-	-	6	6
Total financial assets at 31 December 2023	85,654	209,608	6,714	301,976
Liabilities
Financial instruments held at fair value through profit or loss
Deposits by banks	-	1,560	334	1,894
Customer accounts	-	15,970	1,278	17,248
Repurchase agreements and other similar secured borrowing	-	41,283	-	41,283
Debt securities in issue	-	9,776	1,041	10,817
Short positions	7,152	4,591	103	11,846
Derivative financial instruments	749	55,116	196	56,061
Of which:
Foreign exchange	122	45,314	10	45,446
Interest rate	46	8,262	5	8,313
Credit	-	945	162	1,107
Equity and stock index options	-	147	19	166
Commodity	581	448	-	1,029
Other Liabilities	-	-	8	8
Total financial liabilities at 31 December 2023	7,901	128,296	2,960	139,157

1   Includes covered bonds of $7,509 million, securities issued by Multilateral Development Banks/International Organisations of $24,192 million, and State-owned agencies and development banks of $7,564 million

The fair value of financial assets and financial liabilities classified as Level 2 in the fair value hierarchy that are subject to complex modelling techniques is $940 million and $288 million respectively.

Page 93

Fair value hierarchy - financial instruments measured at amortised cost

The following table shows the carrying amounts and incorporates the Group's estimate of fair values of those financial assets and liabilities not presented on the Group's balance sheet at fair value. These fair values may be different from the actual amount that will be received or paid on the settlement or maturity of the financial instrument. For certain instruments, the fair value may be determined using assumptions for which no observable prices are available.

	Carrying value $million	Fair value
		Level 1 $million	Level 2 $million	Level 3 $million	Total $million
Assets
Cash and balances at central banks¹	64,086	-	64,086	-	64,086
Loans and advances to banks	45,231	-	45,176	-	45,176
of which - reverse repurchase agreements and other similar secured lending	3,991	-	3,992	-	3,992
Loans and advances to customers	275,896	-	42,180	228,595	270,775
of which - reverse repurchase agreements and other similar secured lending	7,788	-	7,665	122	7,787
Investment securities²	56,403	-	53,422	-	53,422
Other assets¹	42,206	-	42,206	-	42,206
Assets held for sale	517	3	474	40	517
At 30 June 2024	484,339	3	247,544	228,635	476,182
Liabilities
Deposits by banks	28,087	-	28,140	-	28,140
Customer accounts	468,157	-	464,336	-	464,336
Repurchase agreements and other similar secured borrowing	7,539	-	7,585	-	7,585
Debt securities in issue	65,199	32,960	31,839	-	64,799
Subordinated liabilities and other borrowed funds	10,856	10,109	335	-	10,444
Other liabilities¹	46,901	-	46,901	-	46,901
Liabilities held for sale	535	51	484	-	535
At 30 June 2024	627,274	43,120	579,620	-	622,740

1   The carrying amount of these financial instruments is considered to be a reasonable approximation of fair value as they are short-term in nature or reprice to current market rates frequently

2   Includes Government bonds and Treasury bills of $21,475 million at 30 June 2024

	Carrying value $million	Fair value
		Level 1 $million	Level 2 $million	Level 3 $million	Total $million
Assets
Cash and balances at central banks¹	69,905	-	69,905	-	69,905
Loans and advances to banks	44,977	-	44,921	-	44,921
of which - reverse repurchase agreements and other similar secured lending	1,738	-	1,738	-	1,738
Loans and advances to customers	286,975	-	53,472	226,211	279,683
of which - reverse repurchase agreements and other similar secured lending	13,996	-	13,827	169	13,996
Investment securities²	56,935	-	54,419	33	54,452
Other assets¹	38,140	-	38,140	-	38,140
Assets held for sale	701	101	541	59	701
At 31 December 2023	497,633	101	261,398	226,303	487,802
Liabilities
Deposits by banks	28,030	-	28,086	-	28,086
Customer accounts	469,418	-	460,224	-	460,224
Repurchase agreements and other similar secured borrowing	12,258	-	12,258	-	12,258
Debt securities in issue	62,546	31,255	30,859	-	62,114
Subordinated liabilities and other borrowed funds	12,036	11,119	336	-	11,455
Other liabilities¹	38,663	-	38,663	-	38,663
Liabilities held for sale	726	54	672	-	726
At 31 December 2023	623,677	42,428	571,098	-	613,526

1   The carrying amount of these financial instruments is considered to be a reasonable approximation of fair value as they are short-term in nature or reprice to current market rates frequently

2   Includes Government bonds and Treasury bills $19,422 million at 31 December 2023

Page 94

Fair value of financial instruments

Level 3 Summary and significant unobservable inputs

The following table presents the Group's primary Level 3 financial instruments which are held at fair value. The table also presents the valuation techniques used to measure the fair value of those financial instruments, the significant unobservable inputs, the range of values for those inputs and the weighted average of those inputs:

Instrument	Value as at 30 June 2024		Principal valuation technique	Significant unobservable inputs	Range1	Weighted average2
	Assets $million	Liabilities $million
Loans and advances to banks	36	-	Discounted cash flows	Price/yield	33.6% - 100%	64.7%
Loans and advances to customers	1,935	-	Discounted cash flows	Price/yield	0.1% - 100%	16.1%
Reverse repurchase agreements and other similar secured lending	2,610	-	Discounted cash flows	Repo curve	2.7% - 7.7%	6.5%
				Price/yield	1.7% - 99.2%	4.9%
Debt securities, additional tier one and other eligible securities	1,087	-	Discounted cash flows	Price/yield	3.7% - 45.0%	10.4%
				Recovery rate	0.01% - 16.8%	10.6%
Government bonds and treasury bills	-	-	Discounted cash flows	Price/yield	N/A	N/A
Equity shares (includes private equity investments)	964	-	Comparable pricing/ yield	EV/EBITDA multiples	13.0x-15.9x	14.3x
				EV/Revenue multiples	7.5x-7.5x	7.5x
				P/E multiples	13.3x- 44.6x	43.3x
				P/B multiples	0.3x-2.6x	1.7x
				P/S multiples	0.2x-1.3x	0.2x
				Liquidity discount	0.0%-29.9%	18.3%
			Discounted cash flows	Discount rates	9.5%-20.5%	11.2%
			Option pricing model	Equity value based on EV/Revenue multiples	6.3x-38.6x	24.2x
				Equity value based on EV/EBITDA multiples	2.6x-2.6x	2.6x
				Equity value based on volatility	28.5%-50.0%	28.7%
Other Assets	1	-	NAV	N/A	N/A	N/A
Derivative financial instruments of which:
Foreign exchange	25	9	Option pricing model	Foreign exchange option implied volatility	13.9% - 44.3%	33.3%
			Discounted cash flows	Interest rate curves	3.3% - 34.8%	5.6%
				Foreign exchange curves	0.4% - 32.9%	6.3%
Interest rate	80	2	Discounted cash flows	Interest rate curves	3.3% - 6.81%	5.4%
			Option pricing model	Bond option implied volatility	3.3% - 5.3%	4.6%
Credit	9	178	Discounted cash flows	Credit spreads	1.0% - 7.4%	1.2%
				Price/yield	2.0% - 11.2%	8.1%
			Option pricing model	Bond option implied volatility	3.3% - 5.3%	4.6%
Equity and stock index	3	20	Internal pricing model	Equity-Equity correlation	46.4% - 100%	82.2%
				Equity-FX correlation	(37.3)% - 55.3%	12.1%
Deposits by banks	-	399	Discounted cash flows	Credit spreads	0.05% - 3.9%	1.4%
Customer accounts	-	1,729	Discounted cash flows	Credit spreads	0.05% - 1.8%	0.9%
				Interest rate curves	2.2% - 5.3%	4.6%
				Price/yield	4.2% - 13.0%	6.8%
			Internal pricing model	Equity-Equity correlation	46.4% - 100%	82.2%
				Equity-FX correlation	(37.3)% - 55.3%	12.1%
			Option pricing model	Bond option implied volatility	3.3% - 5.3%	4.6%
Debt securities in issue	-	2,139	Discounted cash flows	Credit spreads	0.4% - 1.8%	1.4%
				Price/yield	0.2% - 18.8%	6.2%
				Interest rate curves	3.3% - 5.3%	4.6%
			Internal pricing model	Equity-Equity correlation	46.4% - 100%	82.2%
				Equity-FX correlation	(37.3)% - 55.3%	12.1%
				Bond option implied volatility	3.3% - 23.0%	4.7%
Short positions	-	-	Discounted cash flows	N/A	N/A	N/A
Other Liabilities	-	1	Comparable pricing/yield	EV/EBITDA multiples	5.5x - 6.2x	5.8x
Total	6,750	4,477

1   The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group's Level 3 financial instruments as at 30 June 2024. The ranges of values used are reflective of the underlying characteristics of these Level 3 financial instruments based on the market conditions at the balance sheet date. However, these ranges of values may not represent the uncertainty in fair value measurements of the Group's Level 3 financial instruments

2   Weighted average for non-derivative financial instruments has been calculated by weighting inputs by the relative fair value. Weighted average for derivatives has been provided by weighting inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful indicator

Page 95

Instrument	Value as at 31 December 2023		Principal valuation technique	Significant unobservable inputs	Range1	Weighted average2
	Assets $million	Liabilities $million
Loans and advances to customers	1,960	-	Discounted cash flows	Price/yield	1.7% - 100%	12.0%
				Credit spreads	0.1% - 1.0%	0.6%
Reverse repurchase agreements and other similar secured lending	2,363	-	Discounted cash flows	Repo curve	5.1% - 7.6%	6.3%
				Price/yield	(2.7)% - 10.3%	6.0%
Debt securities, additional tier one and other eligible securities	1,283	-	Discounted cash flows	Price/yield	(14.0)% - 25.8%	10.1%
				Recovery rates	0.1% - 1.0%	0.2%
			Internal pricing model	Equity-Equity correlation	44.1% - 100%	80.7%
				Equity-FX correlation	(35.9)% - 45.5%	14.2%
Government bonds and treasury bills	51	-	Discounted cash flows	Price/yield	17.7% - 21.8%	20.6%
Equity shares (includes private equity investments)	971	-	Comparable pricing/yield	EV/EBITDA multiples	13.8x - 15.6x	14.9x
				EV/Revenue multiples	9.3x - 30.9x	15.8x
				P/E multiples	10.6x - 51.8x	45.7x
				P/B multiples	0.3x - 2.7x	1.6x
				P/S multiples	0.2x - 1.6x	0.3x
				Liquidity discount	7.5% - 20.0%	15.1%
			Discounted cash flows	Discount rates	9.2% - 35.6%	17.0%
			Option pricing model	Equity value based on EV/Revenue multiples	8.4x - 42.5x	27.5x
				Equity value based on EV/EBITDA multiples	3.1x - 3.1x	3.1x
				Equity value based on volatility	21.0% - 65.0%	30.1%
Other Assets	6	-	NAV	N/A	N/A	N/A
Derivative financial instruments of which:
Foreign exchange	25	10	Option pricing model	Foreign exchange option implied volatility	0.5% - 51%	31.8%
			Discounted cash flows	Interest rate curves	3.6% - 5.8%	3.8%
				Foreign exchange curves	0.6% - 64.2%	12.8%
Interest rate	6	5	Discounted cash flows	Interest rate curves	3.6% - 8.6%	5.0%
Credit	47	162	Discounted cash flows	Credit spreads	1.0% - 1.0%	1.0%
				Price/yield	1.7% - 16.3%	8.6%
Equity and stock index	2	19	Internal pricing model	Equity-Equity correlation	44.1% - 100%	80.7%
				Equity-FX correlation	(35.9)% - 45.5%	14.2%
Deposits by banks	-	334	Discounted cash flows	Credit spreads	0.1% - 3.4%	1.9%
Customer accounts	-	1,278	Discounted cash flows	Credit spreads	1.0% - 2.0%	1.2%
				Interest rate curves	2.9% - 8.6%	6.1%
				Price/yield	4.8% - 15.2%	9.9%
			Internal pricing model	Equity-Equity correlation	44.1% - 100%	80.7%
				Equity-FX correlation	(35.9)% - 45.5%	14.2%
Debt securities in issue	-	1,041	Discounted cash flows	Credit spreads	0.3% - 1.6%	1.1%
				Price/yield	6.6% - 20.9%	17.9%
				Interest rate curves	2.9% - 5.3%	4.4%
			Internal pricing model	Equity-Equity correlation	44.1% - 100%	80.7%
				Equity-FX correlation	(35.9)% - 45.5%	14.2%
				Bond option implied volatility	2.9% - 5.3%	4.4%
Short position	-	103	Discounted cash flows	Price/yield	7.1% - 7.1%	7.1%
Other Liabilities	-	8	Comparable pricing/yield	EV/EBITDA multiples	5.8x - 11.2x	8.5x
Total	6,714	2,960

1   The ranges of values shown in the above table represent the highest and lowest levels used in the valuation of the Group's Level 3 financial instruments as at 31 December 2023. The ranges of values used are reflective of the underlying characteristics of these Level 3 financial instruments based on the market conditions at
the balance sheet date. However, these ranges of values may not represent the uncertainty in fair value measurements of the Group's Level 3 financial instruments

2   Weighted average for non-derivative financial instruments has been calculated by weighting inputs by the relative fair value. Weighted average for derivatives has been provided by weighting inputs by the risk relevant to that variable. N/A has been entered for the cases where weighted average is not a meaningful indicator

Page 96

The following section describes the significant unobservable inputs identified in the valuation technique table:

• Comparable price/yield is a valuation methodology in which the price of a comparable instrument is used to estimate the fair value where there are no direct observable prices. Yield is the interest rate that is used to discount the future cash flows in a discounted cash flow model. Valuation using comparable instruments can be done by calculating an implied yield (or spread over a liquid benchmark) from the price of a comparable instrument, then adjusting that yield (or spread) to derive a value for the instrument. The adjustment should account for relevant differences in the financial instruments such as maturity and/or credit quality. Alternatively, a price-to-price basis can be assumed between the comparable instrument and the instrument being valued in order to establish the value of the instrument (for example, deriving a fair value for a junior unsecured bond from the price of a senior secured bond). An increase in price, in isolation, would result in a favourable movement in the fair value of the asset. An increase in yield, in isolation, would result in an unfavourable movement in the fair value of the asset

• Correlation is the measure of how movement in one variable influences the movement in another variable. An equity correlation is the correlation between two equity instruments while an interest rate correlation refers to the correlation between two swap rates

• Credit spread represents the additional yield that a market participant would demand for taking exposure to the Credit Risk of an instrument

• Discount rate refers to the rate of return used to convert expected cash flows into present value

• Equity-FX correlation is the correlation between equity instrument and foreign exchange instrument

• EV/EBITDA multiple is the ratio of Enterprise Value (EV) to Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA). EV is the aggregate market capitalisation and debt minus the cash and cash equivalents. An increase in EV/EBITDA multiple will result in a favourable movement in the fair value of the unlisted firm

• EV/Revenue multiple is the ratio of Enterprise Value (EV) to Revenue. An increase in EV/Revenue multiple will result in a favourable movement in the fair value of the unlisted firm

• Foreign exchange curves is the term structure for forward rates and swap rates between currency pairs over a specified period

• Net asset value (NAV) is the value of an entity's assets after deducting any liabilities

• Interest rate curves is the term structure of interest rates and measures of future interest rates at a particular point in time

• Liquidity discounts in the valuation of unlisted investments are primarily applied to the valuation of unlisted firms' investments to reflect the fact that these stocks are not actively traded. An increase in liquidity discount will result in an unfavourable movement in the fair value of the unlisted firm

• Price-Earnings (P/E) multiple is the ratio of the market value of the equity to the net income after tax. An increase in P/E multiple will result in a favourable movement in the fair value of the unlisted firm

• Price-Book (P/B) multiple is the ratio of the market value of equity to the book value of equity. An increase in P/B multiple will result in a favourable movement in the fair value of the unlisted firm

• Price-Sales (P/S) multiple is the ratio of the market value of equity to sales. An increase in P/S multiple will result in a favourable movement in the fair value of the unlisted firm

• Recovery rates is the expectation of the rate of return resulting from the liquidation of a particular loan. As the probability of default increases for a given instrument, the valuation of that instrument will increasingly reflect its expected recovery level assuming default. An increase in the recovery rate, in isolation, would result in a favourable movement in the fair value of the loan

• Repo curve is the term structure of repo rates on repos and reverse repos at a particular point in time

• Volatility represents an estimate of how much a particular instrument, parameter or index will change in value over time. Generally, the higher the volatility, the more expensive the option will be

Page 97

Level 3 movement tables - financial assets

The table below analyses movements in Level 3 financial assets carried at fair value.

Assets	6 months ended 30.06.24
	Held at fair value through profit or loss						Derivative financial instruments $million	Investment securities		Total $million
	Loans and advances to banks $million	Loans and advances to customers $million	Reverse repurchase agreements and other similar secured lending $million	Debt securities, additional tier one and other eligible bills $million	Equity shares $million	Other Assets $million		Debt securities, additional tier one and other eligible bills $million	Equity shares $million
At 01 January 2024	-	1,960	2,363	1,262	184	6	80	72	787	6,714
Total (losses)/gains recognised in income statement	-	(18)	(85)	25	(1)	(1)	(36)	-	-	(116)
Net trading income	-	(18)	(85)	(6)	2	-	(36)	-	-	(143)
Other operating income	-	-	-	31	(3)	(1)	-	-	-	27
Total losses recognised in other comprehensive income (OCI)	-	-	-	-	-	-	-	(13)	(31)	(44)
Fair value through OCI reserve	-	-	-	-	-	-	-	-	(18)	(18)
Exchange difference	-	-	-	-	-	-	-	(13)	(13)	(26)
Purchases	18	2,538	2,725	468	3	-	166	13	37	5,968
Sales	(2)	(2,631)	(2,199)	(668)	(3)	(4)	(114)	-	(18)	(5,639)
Settlements	(7)	(14)	(329)	-	-	-	(15)	-	-	(365)
Transfers out1	(13)	(155)	(5)	-	-	-	(2)	(72)	(1)	(248)
Transfers in2	40	255	140	-	6	-	38	-	1	480
At 30 June 2024	36	1,935	2,610	1,087	189	1	117	-	775	6,750
Total unrealised gains/(losses) recognised in the income statement, within net trading income, relating to change in fair value of assets held at 30 June 2024	-	1	1	11	12	-	(10)	-	-	15

1   Transfers out include loans and advances, reverse repurchase agreements, derivative financial instruments, debt securities, additional tier one and other eligible bills and equity shares where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2

2   Transfers in primarily relate to loans and advances, reverse repurchase agreements, equity shares and derivative financial instruments where the valuation parameters became unobservable during the period

Page 98

Assets	6 months ended 30.06.23
	Held at fair value through profit or loss						Derivative financial instruments $million	Investment securities		Total $million
	Loans and advances to banks $million	Loans and advances to customers $million	Reverse repurchase agreements and other similar secured lending $million	Debt securities, additional tier one and other eligible bills $million	Equity shares $million	Other Assets $million		Debt securities, additional tier one and other eligible bills $million	Equity shares $million
At 01 January 2023	21	1,805	1,998	1,153	182	7	44	-	655	5,865
Total (losses)/gains recognised in income statement	-	(62)	(12)	(217)	1	-	13	-	-	(277)
Net trading income	-	(62)	(12)	(217)	-	-	13	-	-	(278)
Other operating income	-	-	-	-	1	-	-	-	-	1
Total gains recognised in other comprehensive income (OCI)	-	-	-	-	-	-	-	1	69	70
Fair value through OCI reserve	-	-	-	-	-	-	-	-	77	77
Exchange difference	-	-	-	-	-	-	-	1	(8)	(7)
Purchases	-	313	3,020	565	1	-	124	5	4	4,032
Sales	-	(481)	(3,156)	(282)	(9)	-	(56)	(10)	-	(3,994)
Settlements	-	(221)	(335)	(310)	-	-	(9)	-	-	(875)
Transfers out1	(21)	(206)	-	(6)	-	-	(3)	(4)	(39)	(279)
Transfers in2	-	75	-	-	-	-	-	59	1	135
At 30 June 2023	-	1,223	1,515	903	175	7	113	51	690	4,677
Total unrealised (losses)/gains recognised in the income statement, within net trading income, relating to change in fair value of assets held at 30 June 2023	-	(10)	-	14	(1)	-	(10)	-	-	(7)

1   Transfers out include loans and advances, debt securities, additional tier one and other eligible bills, derivative financial instruments and equity shares where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2

2   Transfers in primarily relate to loans and advances, debt securities, additional tier one and other eligible bills, and equity shares where the valuation parameters became unobservable during the period

Page 99

Assets	6 months ended 31.12.23
	Held at fair value through profit or loss						Derivative financial instruments $million	Investment securities		Total $million
	Loans and advances to banks $million	Loans and advances to customers $million	Reverse repurchase agreements and other similar secured lending $million	Debt securities, additional tier one and other eligible bills $million	Equity shares $million	Other Assets $million		Debt securities, additional tier one and other eligible bills $million	Equity shares $million
At 01 July 2023	-	1,223	1,515	903	175	7	113	51	690	4,677
Total gains/(losses) recognised in income statement	-	27	(95)	(75)	3	(1)	(1)	-	-	(142)
Net trading income	-	27	(95)	(87)	5	-	(1)	-	-	(151)
Other operating income	-	-	-	12	(2)	(1)	-	-	-	9
Total (losses)/gains recognised in other comprehensive income (OCI)	-	-	-	-	-	-	-	(2)	32	30
Fair value through OCI reserve	-	-	-	-	-	-	-	-	31	31
Exchange difference	-	-	-	-	-	-	-	(2)	1	(1)
Purchases	22	1,471	2,882	517	7	-	65	16	57	5,037
Sales	(22)	(652)	(786)	(236)	(1)	-	(59)	(13)	(5)	(1,774)
Settlements	-	(221)	(1,153)	5	-	-	(16)	-	-	(1,385)
Transfers out1	-	(19)	-	-	-	-	(24)	(12)	7	(48)
Transfers in2	-	131	-	148	-	-	2	32	6	319
At 31 December 2023	-	1,960	2,363	1,262	184	6	80	72	787	6,714
Total unrealised gains/(losses) recognised in the income statement, within net trading income, relating to change in fair value of assets held at 31 December 2023	-	7	3	(15)	5	-	(2)	-	-	(2)

1   Transfers out include loans and advances, debt securities, additional tier one and other eligible bills, derivative financial instruments and equity shares where the valuation parameters became observable during the period and were transferred to Level 1 and Level 2

2   Transfers in primarily relate to loans and advances, debt securities, additional tier one and other eligible bills, , derivative financial instruments and equity shares where the valuation parameters became unobservable during the period

Page 100

Level 3 movement tables - financial liabilities

Liabilities	6 months ended 30.06.24
	Deposits by banks $million	Customer accounts $million	Debt securities in issue $million	Derivative financial instruments $million	Short positions $million	Other liabilities $million	Total $million
At 01 January 2024	334	1,278	1,041	196	103	8	2,960
Total losses/(gains) recognised in income statement - net trading income	37	(4)	16	(12)	-	(7)	30
Issues	218	1,427	2,334	240	-	-	4,219
Settlements	(190)	(990)	(1,127)	(217)	-	-	(2,524)
Transfers out1	-	(20)	(162)	(7)	(103)	-	(292)
Transfers in2	-	38	37	9	-	-	84
At 30 June 2024	399	1,729	2,139	209	-	1	4,477
Total unrealised losses/(gains) recognised in the income statement, within net trading income, relating to change in fair value of liabilities held at 30 June 2024	24	3	5	(4)	-	-	28

1   Transfers out primarily relate to bank deposits, debt securities in issue, short positions and derivative financial instruments where the valuation parameters became observable during the period and were transferred to Level 2 financial liabilities

2   Transfers in primarily relate to derivative financial instruments, customer accounts and debt securities in issue where the valuation parameters became unobservable during the period

Liabilities	6 months ended 30.06.23
	Deposits by banks $million	Customer accounts $million	Debt securities in issue $million	Derivative financial instruments $million	Short positions $million	Other liabilities $million	Total $million
At 01 January 2023	288	972	451	121	40	6	1,878
Total (gains)/losses recognised in income statement - net trading income	(9)	16	(5)	3	-	2	7
Issues	271	868	654	225	-	-	2,018
Settlements	(298)	(989)	(558)	(165)	(40)	-	(2,050)
Transfers out1	-	(5)	(21)	(13)	-	-	(39)
Transfers in2	-	18	-	2	-	-	20
At 30 June 2023	252	880	521	173	-	8	1,834
Total unrealised (gains)/losses recognised in the income statement, within net trading income, relating to change in fair value of liabilities held at 30 June 2023	-	(6)	3	(12)	-	-	(15)

1   Transfers out primarily relate to customer accounts, debt securities in issue and derivative financial instruments where the valuation parameters became observable during the period and were transferred to Level 2 financial liabilities

2   Transfers in primarily relate to customer accounts and derivative financial instruments where the valuation parameters became unobservable during the period

Liabilities	6 months ended 31.12.23
	Deposits by banks $million	Customer Accounts $million	Debt securities in issue $million	Derivative financial instruments $million	Short positions $million	Other Liabilities $million	Total $million
At 01 July 2023	252	880	521	173	-	8	1,834
Total losses/(gains) recognised in income statement - net trading income	16	(22)	44	(55)	3	1	(13)
Issues	357	921	835	222	100	-	2,435
Settlements	(287)	(502)	(660)	(147)	-	-	(1,596)
Transfers out1	(4)	(4)	(64)	2	-	(1)	(71)
Transfers in2	-	5	365	1	-	-	371
At 31 December 2023	334	1,278	1,041	196	103	8	2,960
Total unrealised (gains)/losses recognised in the income statement, within net trading income, relating to change in fair value of liabilities held at 31 December 2023	-	(15)	3	(35)	-	-	(47)

1   Transfers out primarily relate to bank deposits, customer accounts, debt securities in issue, derivative financial instruments and other liabilities where the valuation parameters became observable during the period and were transferred to Level 2 financial liabilities

2   Transfers in primarily relate to customer accounts, debt securities in issue and derivative financial instruments  where the valuation parameters became unobservable during the period

Page 101

Sensitivities in respect of the fair values of Level 3 assets and liabilities

Sensitivity analysis is performed on products with significant unobservable inputs. The Group applies a 10 per cent increase or decrease on the values of these unobservable inputs, to generate a range of reasonably possible alternative valuations. The percentage shift is determined by statistical analysis performed on a set of reference prices based on the composition of the Group's Level 3 inventory at the measurement date. Favourable and unfavourable changes (which show the balance adjusted for input change) are determined on the basis of changes in the value of the instrument as a result of varying the levels of the unobservable parameters. The Level 3 sensitivity analysis assumes a one-way market move and does not consider offsets for hedges.

	Fair value through profit or loss			Fair value through other comprehensive income
	Net exposure $million	Favourable changes $million	Unfavourable changes $million	Net exposure $million	Favourable changes $million	Unfavourable changes $million
Financial instruments held at fair value
Loans and advances	1,971	2,008	1,915	-	-	-
Reverse repurchase agreements and other similar secured lending	2,610	2,663	2,557	-	-	-
Debt securities, additional tier one and other eligible bills	1,087	1,138	1,035	-	-	-
Equity shares	189	208	170	775	874	708
Other Assets	1	1	1	-	-	-
Derivative financial instruments	(92)	(72)	(113)	-	-	-
Customer accounts	(1,729)	(1,606)	(1,852)	-	-	-
Deposits by banks	(399)	(399)	(399)	-	-	-
Short positions	-	-	-	-	-	-
Debt securities in issue	(2,139)	(2,082)	(2,196)	-	-	-
Other Liabilities	(1)	(1)	(1)	-	-	-
At 30 June 2024	1,498	1,858	1,117	775	874	708
Financial instruments held at fair value
Loans and advances	1,960	1,985	1,918	-	-	-
Reverse repurchase agreements and other similar secured lending	2,363	2,390	2,336	-	-	-
Debt securities, additional tier one and other eligible bills	1,262	1,309	1,193	72	78	66
Equity shares	184	202	166	787	866	708
Other Assets	6	7	5	-	-	-
Derivative financial instruments	(116)	(75)	(157)	-	-	-
Customer accounts	(1,278)	(1,191)	(1,365)	-	-	-
Deposits by banks	(334)	(334)	(334)	-	-	-
Short positions	(103)	(101)	(105)	-	-	-
Debt securities in issue	(1,041)	(966)	(1,115)	-	-	-
Other Liabilities	(8)	(7)	(9)	-	-	-
At 31 December 2023	2,895	3,219	2,533	859	944	774

The reasonably possible alternatives could have increased or decreased the fair values of financial instruments held at fair value through profit or loss and those classified as fair value through other comprehensive income by the amounts disclosed below.

Financial instruments	Fair value changes	30.06.24 $million	31.12.23 $million
Fair value through profit or loss	Possible increase	360	324
	Possible decrease	(381)	(362)
Fair value through other comprehensive income	Possible increase	99	85
	Possible decrease	(67)	(85)

 

Page 102

14. Derivative financial instruments

The tables below analyse the notional principal amounts and the positive and negative fair values of derivative financial instruments. Notional principal amounts are the amounts of principal underlying the contract at the reporting date.

Derivatives	30.06.24			31.12.23
	Notional principal amounts $million	Assets $million	Liabilities $million	Notional principal amounts $million	Assets $million	Liabilities $million
Foreign exchange derivative contracts:
Forward foreign exchange contracts	4,438,922	28,145	25,301	3,628,067	30,897	32,601
Currency swaps and options	1,286,136	12,919	13,337	1,145,702	11,671	12,845
	5,725,058	41,064	38,638	4,773,769	42,568	45,446
Interest rate derivative contracts:
Swaps	5,445,462	21,371	23,368	4,841,616	53,735	55,241
Forward rate agreements and options	319,883	2,216	2,650	313,253	2,057	2,520
	5,765,345	23,587	26,018	5,154,869	55,792	57,761
Exchange traded futures and options	512,905	55	68	325,051	39	47
Credit derivative contracts	264,892	395	1,838	281,130	485	1,107
Equity and stock index options	11,889	183	183	8,671	75	166
Commodity derivative contracts	174,007	844	1,320	117,436	970	1,029
Gross total derivatives	12,454,096	66,128	68,065	10,660,926	99,929	105,556
Offset¹	-	(17,481)	(17,481)	-	(49,495)	(49,495)
Net total derivatives	12,454,096	48,647	50,584	10,660,926	50,434	56,061

1   In 2024, the Group migrated contracts from Collateralized to Market (CTM) to Settled to Market (STM) for house cleared contracts with London Clearing House

The Group limits exposure to credit losses in the event of default by entering into master netting agreements with certain market counterparties. As required by IAS 32, exposures are only presented net in these accounts where they are subject to legal right of offset and intended to be settled net in the ordinary course of business.

The Group applies balance sheet offsetting only in the instance where we are able to demonstrate legal enforceability of the right to offset (e.g. via legal opinion) and the ability and intention to settle on a net basis (e.g. via operational practice).

The Group may enter into economic hedges that do not qualify for IAS 39 hedge accounting treatment, including derivatives such as interest rate swaps, interest rate futures and cross currency swaps to manage interest rate and currency risks of the Group. These derivatives are measured at fair value, with fair value changes recognised in net trading income: refer to Market Risk.

Derivatives held for hedging

The Group enters into derivative contracts for the purpose of hedging interest rate, currency and structural foreign exchange risks inherent in assets, liabilities and forecast transactions. The table below summarises the notional principal amounts and carrying values of derivatives designated in hedge accounting relationships at the reporting date.

Included in the table above are derivatives held for hedging purposes as follows:

	30.06.24			31.12.23
	Notional principal amounts $million	Assets $million	Liabilities $million	Notional principal amounts $million	Assets $million	Liabilities $million
Derivatives designated as fair value hedges:
Interest rate swaps	68,043	890	1,997	69,347	1,264	2,397
Currency swaps	580	9	7	115	10	6
	68,623	899	2,004	69,462	1,274	2,403
Derivatives designated as cash flow hedges:
Interest rate swaps	33,962	66	212	41,834	184	537
Forward foreign exchange contracts	6,315	666	-	12,071	420	183
Currency swaps	13,365	591	22	14,321	191	150
	53,642	1,323	234	68,226	795	870
Derivatives designated as net investment hedges:
Forward foreign exchange contracts	15,061	259	8	15,436	32	41
Total derivatives held for hedging	137,326	2,481	2,246	153,124	2,101	3,314

Page 103

15. Reverse repurchase and repurchase agreements including other similar lending and borrowing

Reverse repurchase agreements and other similar secured lending

	30.06.24 $million	31.12.23 $million
Banks	44,259	32,286
Customers	60,722	65,295
	104,981	97,581
Of which:
Fair value through profit or loss	93,202	81,847
Banks	40,268	30,548
Customers	52,934	51,299
Held at amortised cost	11,779	15,734
Banks	3,991	1,738
Customers	7,788	13,996

Under 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:

	30.06.24 $million	31.12.23 $million
Securities and collateral received (at fair value)	108,948	101,935
Securities and collateral which can be repledged or sold (at fair value)	107,853	101,845
Amounts repledged/transferred to others for financing activities, to satisfy liabilities under sale and repurchase agreements (at fair value)	36,509	34,154

Repurchase agreements and other similar secured borrowing

	30.06.24 $million	31.12.23 $million
Banks	10,332	5,585
Customers	44,255	47,956
	54,587	53,541
Of which:
Fair value through profit or loss	47,048	41,283
Banks	9,430	4,658
Customers	37,618	36,625
Held at amortised cost	7,539	12,258
Banks	902	927
Customers	6,637	11,331

The tables below set out the financial assets provided as collateral for repurchase and other secured borrowing transactions:

Collateral pledged against repurchase agreements	30.06.24
	Fair value through profit or loss $million	Fair value through other comprehensive income $million	Amortised cost $million	Off-balance sheet $million	Total $million
On-balance sheet
Debt securities and other eligible bills	3,822	3,216	12,179	-	19,217
Off-balance sheet
Repledged collateral received	-	-	-	36,509	36,509
At 30 June 2024	3,822	3,216	12,179	36,509	55,726

Page 104

Collateral pledged against repurchase agreements	31.12.23
	Fair value through profit or loss $million	Fair value through other comprehensive income $million	Amortised cost $million	Off-balance sheet $million	Total $million
On-balance sheet
Debt securities and other eligible bills	4,993	8,157	10,181	-	23,331
Off-balance sheet
Repledged collateral received	-	-	-	34,154	34,154
At 31 December 2023	4,993	8,157	10,181	34,154	57,485

16. Goodwill and intangible assets

	30.06.24				31.12.23
	Goodwill $million	Acquired intangibles $million	Computer software $million	Total $million	Goodwill $million	Acquired intangibles $million	Computer software $million	Total $million
Cost
At 1 January	2,429	278	6,168	8,875	2,471	295	5,178	7,944
Exchange translation differences	(35)	(4)	(95)	(134)	(24)	(12)	21	(15)
Additions	-	1	473	474	-	-	1,124	1,124
Disposals	-	-	(5)	(5)	-	-	-	-
Impairment	-	-	(149)²	(149)	-	-	(151)	(151)
Amounts written off	-	(9)	(15)	(24)	(18)¹	(5)¹	(4)	(27)
At 30 June/31 December	2,394	266	6,377	9,037	2,429	278	6,168	8,875
Provision for amortisation
At 1 January	-	265	2,396	2,661	-	276	1,799	2,075
Exchange translation differences	-	(5)	(35)	(40)	-	(12)	11	(1)
Amortisation	-	-	329	329	-	1	625	626
Impairment charge	-	-	(1)²	(1)	-	-	(39)	(39)
Amounts written off	-	-	(15)	(15)	-	-	-	-
At 30 June/31 December	-	260	2,674	2,934	-	265	2,396	2,661
Net book value	2,394	6	3,703	6,103	2,429	13	3,772	6,214

1   Includes disposal of goodwill and other intangibles relating to aviation finance leasing business. These were classified as held for sale during 2023 and sold during the year

2   Includes $148 million impairment relating to software capitalised in previous years

At 30 June 2024, accumulated goodwill impairment losses incurred from 1 January 2005 amounted to $3,331 million (31 December 2023: $3,331 million), of which nil was recognised in 2024 (31 December 2023: nil).

The Group assessed the goodwill assigned to each of the Group's CGUs and determined that there are no indicators of impairment; therefore, estimates of the recoverable amounts for the CGUs were not calculated at 30 June 2024.

Page 105

17. Property, plant and equipment

	30.06.24
	Premises $million	Equipment $million	Operating lease assets $million	Leased premises assets $million	Leased equipment assets $million	Total $million
Cost or valuation
At 1 January	1,741	810	-	1,864	18	4,433
Exchange translation differences	(37)	(25)	-	(24)	(1)	(87)
Additions1	31	45	-	96	-	172
Disposals and fully depreciated assets written off2	(24)	(15)	-	(8)	(1)	(48)
Transfers to assets held for sale	(2)	3	-	-	-	1
As at 30 June	1,709	818	-	1,928	16	4,471
Depreciation
Accumulated at 1 January	692	535	-	914	18	2,159
Exchange translation differences	(19)	(6)	-	(18)	(7)	(50)
Charge for the year	39	37	-	109	2	187
Impairment charge	(4)	-	-	4	-	-
Attributable to assets sold, transferred or written off2	(7)	(15)	-	(7)	-	(29)
Transfers to assets held for sale	(1)	3	-	-	-	2
Accumulated at 30 June	700	554	-	1,002	13	2,269
Net book amount at 30 June	1,009	264	-	926	3	2,202

1   Refer to the cash flow statement under cash flows from investing activities section for the purchase of property, plant and equipment during the year of $76 million

2   Disposals for property, plant and equipment during the year of $31 million in the cash flow statement would include the gains and losses incurred as part of other operating income (Note 6) on disposal of assets during the year and the net book value disposed.

	31.12.23
	Premises $million	Equipment $million	Operating lease assets $million	Leased premises assets $million	Leased equipment assets $million	Total $million
Cost or valuation
At 1 January	1,773	840	4,420	1,652	29	8,714
Exchange translation differences	(27)	(22)	-	(5)	(3)	(57)
Additions	45	114	-	286	1	446
Disposals and fully depreciated assets written off	(68)	(122)	(4,420)¹	(69)	(9)	(4,688)
Transfers to assets held for sale	18	-	-	-	-	18
As at 31 December	1,741	810	-	1,864	18	4,433
Depreciation
Accumulated at 1 January	678	575	1,185	730	24	3,192
Exchange translation differences	(21)	(17)	1	(25)	(1)	(63)
Charge for the year	77	99	27	238	4	445
Impairment charge	3	-	-	9	-	12
Attributable to assets sold, transferred or written off	(47)	(122)	(1,213)¹	(38)	(9)	(1,429)
Transfers to assets held for sale	2	-	-	-	-	2
Accumulated at 31 December	692	535	-	914	18	2,159
Net book amount at 31 December	1,049	275	-	950	-	2,274

1. Includes disposal of assets from aviation finance leasing business and sale of vessels.

Page 106

18. Other assets

Other assets include:

	30.06.24 $million	31.12.23 $million
Financial assets held at amortized cost (Note 13):
Hong Kong SAR Government certificates of indebtedness (Note 21)¹	6,529	6,568
Cash collateral2	8,099	10,337
Acceptances and endorsements	5,781	5,326
Unsettled trades and other financial assets	21,797	15,909
	42,206	38,140
Non-financial assets:
Commodities and emissions certificates3	10,498	8,889
Other assets	312	565
	53,016	47,594

1   The Hong Kong SAR Government certificates of indebtedness are subordinated to the claims of other parties in respect of bank notes issued

2   Cash collateral are margins placed to collateralize net derivative mark-to-market (MTM) positions

3   Physically held commodities and emission certificates are inventory that is carried at fair value less costs to sell, $5.7 billion (31 December 2023: $5.1 billion) are classified as Level 1 and $4.7 billion are classified as Level 2 (31 December 2023: $3.7 billion). For commodities, the fair value is derived from observable spot or short-term futures prices from relevant exchanges.

19. Investments in associates and joint ventures

Share of profit from investment in associates and joint ventures comprises:

	6 months ended 30.06.24 $million	6 months ended 30.06.23 $million
Loss from Investment in Joint Ventures	(3)	(7)
Profit from Investment in Associates	147	109
Total	144	102

Interests in associates and joint ventures	30.06.24 $million	31.12.23 $million
As at 1 January	966	1,631
Exchange translation difference	(17)	16
Additions1	14	64
Share of profits	144	141
Dividend received2	(30)	(11)
Impairment	-	(872)
Share of FVOCI and Other reserves	9	(7)
Other movements	2	4
As at 30 June/31 December	1,088	966

1   Includes non-cash consideration of $6.4 million (disposal of Autumn Life) from Vault 22 Solutions Holdings Ltd and  $3.6 million (convertible notes) from Verified Impacts Holdings Pte Ltd

2   Include capital distribution from Ascenta IV

The Group's principal associate are:

Associate	Nature of activities	Main areas of operation	Group interest in ordinary share capital %
China Bohai Bank	Banking	China	16.26
CurrencyFair Limited Exchange Ireland	Banking	Ireland	43.42

The Group's ownership percentage in China Bohai Bank is 16.26%.

Although the Group's investment in China Bohai Bank is less than 20 per cent, it is considered to be an associate because of the significant influence the Group is able to exercise over its management and financial and operating policies. This influence is exercised through Board representation and the provision of technical expertise to Bohai. The Group applies the equity method of accounting for investments in associates.

Page 107

Bohai publishes their results after the Group. As it is impracticable for Bohai to prepare financial statements sooner, the Group recognises its share of Bohai's earnings on a three-month lag basis. Therefore, the Group recognised its share of Bohai's profits and movements in other comprehensive from 1 October 2023 through 31 March 2024 (six months of earnings) in the Group's consolidated statement of income and consolidated statement of comprehensive income for the period ended 30 June 2024, respectively.

There have been no material events after 31 March 2024 which would require adjustments in respect of the share of Bohai's profits and movements in OCI recognised by the Group for the period ended on 30 June 2024.

If the Group did not have significant influence over Bohai, the investment would be measured at fair value rather than the current carrying value, which is based on the application of the equity method as described in the accounting policy note.

Impairment testing

On 30 June 2024, the listed equity value of Bohai is below the carrying amount of the Group's investment in associate. As a result, the Group assessed the carrying value of its investment in Bohai for impairment and concluded that no impairment was required for the period ended 30 June 2024 ($nil for the period ended 30 June 2023; $1,458million of accumulated impairment as at 31 December 2023). The carrying value of the Group's investment in Bohai of $766 million (2023: $700 million) represents the higher of the value in use and fair value less costs to dispose. The financial forecasts used in the VIU calculation reflect Group management's best estimate of Bohai's future earnings, in line with current economic conditions and latest Bohai's reported results.

Bohai	30.06.24 $million	31.12.23 $million
VIU	766	700
Carrying amount1	766	700
Market capitalisation2	351	418

1   The Group's 16.26% share in the net assets less other equity instruments which the Group does not hold

2   Number of shares held by the Group multiplied by the quoted share price at period end

Basis of recoverable amount

The impairment test was performed by comparing the recoverable amount of Bohai, determined as the higher of VIU and fair value less costs to dispose, with its carrying amount.

The value in use ('VIU') is calculated using a dividend discount model ('DDM'), which estimates the distributable future cashflows to the equity holders, after adjusting for regulatory capital requirements, for a 5-year period, after which a
terminal value ('TV') is calculated based on the 'Gordon Growth' model. The key assumptions in the VIU are as follows:

• Short to medium term projections are based on Group management's best estimates of future profits available to ordinary shareholders and have been determined with reference to the latest published financial results and historical performance of Bohai;

• The projections use available information and include normalised performance over the forecast period, inclusive of: (i) asset growth assumptions based on the long-term GDP growth rate for Mainland China; (ii) ECL assumptions using Bohai's historical reported ECL, based on the proportion of ECL from loans and advances to customers and financial investments measured at amortised cost and FVOCI. This was further adjusted for banking industry challenges and property market uncertainties; (iii) Net Interest Margin (NIM) increases from 2025 with reference to third party market interest rate forecasts in China; (iv) Non-interest income estimated according to the latest available performance of Bohai and contribution of the constituent parts; and (v) Statutory tax rate of 25% was applied to the taxable profit of Bohai, after consideration of taxable and non-taxable elements, consistent with historical reported results;

• The discount rate applied to these cash flows was estimated with reference to transaction and broker data in the local Chinese market, cross checked to the capital asset pricing model (CAPM), which includes a long-term risk-free rate, beta and company risk premium assumptions for Bohai;

• A long-term GDP growth rate for Mainland China is used to extrapolate the expected short to medium term earnings to perpetuity to derive a terminal value; and

Page 108

• Capital maintenance ratio consists of a capital haircut taken to estimate Bohai's target regulatory capital requirements over the forecast period. This haircut considers movements in risk weighted assets (RWA) projected based on the historical proportion of RWA to total assets and the total capital required (Core CET 1 and Minimum Core CET 1 ratios), including required retained earnings over time to meet the target capital ratios. RWA projection is adjusted to reflect management's best estimates for the impact of implementing Basel 3.1, effective 1 January 2024 in China.

The VIU model was refined during 2024 to include a more granular forecasting assumptions for each period. While it is impracticable for the Group to estimate the impact on future periods, the key changes to the 2024 model are summarised as follows:

• A statutory tax rate of 25% was applied to the taxable profit of Bohai, after consideration of taxable and non-taxable elements, consistent with  historical reported results. In previous model, the calculation of the tax expenses was based on the reported effective tax rate as per published financial statements of Bohai;

• Non-interest income was calculated by applying the historical average return on the respective components of the non-interest income, grown at long-term GDP rate for Mainland China, over the forecasted period. In the previous model, the non-interest income was projected based on the latest actual results reported by Bohai and grown according to long-term GDP rate.

The key assumptions used in the VIU calculation:

	30.06.24 per cent	31.12.23 per cent
Pre-tax discount rate¹	12.59	13.68
Long term GDP growth rate	3.60	4.00
Total assets growth rate	3.60	4.00
RWA as percentage of total assets	64.28-65.85	63.87-67.06
Net interest margin	1.14-1.41	1.21-1.48
Net fee income growth rate	3.60	4.00
Expected credit losses as a percentage of customer loans	0.78-1.22	0.80-1.24
Expected credit losses as a percentage of financial investments measured at amortised cost and FVOCI	0.35	0.35-0.67
Tax expense²	13.00-16.00	N/A
Capital maintenance ratio3	8.34	8.28

1   Post-tax Discount rate of 11.0% was used in 2024 and 2023 models. The difference in pre-tax discount rates relates to changes in effective tax rate

2   The  30 June 2024 percentages represent the average of non-taxable income and non-deductible expenses, consistent with historical reported results. A statutory tax rate of 25% was applied to the taxable profit of Bohai, after consideration of taxable and non-taxable elements. For the 31 December 2023 VIU, the calculation of the tax expenses was based on the reported effective tax rate as per published financial statements of Bohai

3   Core CET 1 ratio reported by Bohai

The table below discloses sensitivities to the key assumptions of Bohai, according to management's judgement of reasonably possible changes. Changes were applied to every cash flow year on an individual basis. The percentage change to the assumptions reflects the level at which management assess the reasonableness of the assumptions used and their impact
on the Value in Use.

Sensitivities	key assumption change
	basis points	Increase Headroom/ (Impairment) $ million	Decrease Headroom/ (Impairment) $ million
Discount Rate	100	(115)	160
Long term GDP growth rate1	100	125	(89)
Total assets growth rate	100	30	(22)
RWA as percentage of total assets	100	(35)	42
Net interest margin	10	405	(398)
Net fee income	100	70	(61)
Expected credit losses as a percentage of customer loans	10	(228)	235
Expected credit losses as a percentage of financial investments measured at amortised cost and FVOCI	10	(114)	121
Tax expense²	300	45	(36)
Capital maintenance ratio	50	(179)	187

1   Changes in long term GDP growth rate applied only to the calculation of the terminal value

2   Changes in tax expense applied only to both average percentages of non-taxable income and non-deductible expenses

Page 109

The following table sets out the summarised financial statements of China Bohai Bank prior to the Group's share of the associate's profit being applied:

	31.03.24 $million	31.03.23 $million
Total assets	243,892	237,604
Total liabilities	227,393	221,897
Operating income1	1,862	1,942
Net profit1	441	638
Other comprehensive income1	49	(68)

1   This represents six months of earnings (1 October to 31 March)

20. Assets held for sale and associated liabilities

Assets held for sale

The financial assets reported below are classified under Level 1 $3 million (31 December 2023: $101 million), Level 2 $474 million (31 December 2023: $541 million) and Level 3 $40 million (31 December 2023: $59 million).

Assets held for sale	30.06.24 $million	31.12.23 $million
Financial assets held at amortised cost	517	701
Cash and balances at central banks	159	246
Loans and advances to banks	3	24
Loans and advances to customers	194	251
Debt securities held at amortised cost	161	180
Property, plant and equipment	61	59
Vessels	43	43
Others	18	16
Others	33	49
	611	809

Liabilities held for sale

The financial liabilities reported below are classified under Level 1 $51 million (31 December 2023: $54 million) and Level 2 $484 million (31 December 2023: $672 million).

Liabilities held for sale	30.06.24 $million	31.12.23 $million
Financial liabilities held at amortised cost	535	726
Deposits by banks	-	3
Customer accounts	535	723
Other liabilities	30	51
Provisions for liabilities and charges	12	10
	577	787

Page 110

21. Other liabilities

	30.06.24 $million	31.12.23 $million
Financial liabilities held at amortised cost (Note 13)
Notes in circulation1	6,529	6,568
Acceptances and endorsements	5,784	5,386
Cash collateral2	11,285	8,440
Property leases	1,028	1,054
Equipment leases	9	4
Unsettled trades and other financial liabilities	22,266	17,211
	46,901	38,663
Non-financial liabilities
Cash-settled share-based payments	94	102
Other liabilities	445	456
	47,440	39,221

1   Hong Kong currency notes in circulation of $6,529 million (31 December 2023: $6,568 million) that are secured by the Government of Hong Kong SAR certificates of indebtedness of the same amount included in other assets (Note 18)

2. Cash collateral are margins received against collateralize net derivative mark-to-market (MTM) positions

22. Contingent liabilities and commitments

The table below shows the contract or underlying principal 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.

	30.06.24 $million	31.12.23 $million
Financial guarantees and other contingent liabilities
Financial guarantees, trade credits and irrevocable letters of credit	86,094	74,414
	86,094	74,414
Commitments
Undrawn formal standby facilities, credit lines and other commitments to lend
One year and over	75,382	78,356
Less than one year	29,950	33,092
Unconditionally cancellable	73,236	70,942
	178,568	182,390
Capital Commitments
Contracted capital expenditure approved by the directors but not provided for in these accounts	2	217

As set out in Note 23, the Group has contingent liabilities in respect of certain legal and regulatory matters.

Page 111

 

23. Legal and regulatory matters

The Group receives legal claims against it in a number of jurisdictions and is subject to regulatory and enforcement investigations and proceedings from time to time. Apart from the matters described below, the Group currently considers none of the ongoing claims, investigations or proceedings to be individually material. However, in light of the uncertainties involved in such matters there can be no assurance that the outcome of a particular matter or matters currently not considered to be material may not ultimately be material to the Group's results in a particular reporting period depending on, among other things, the amount of the loss resulting from the matter(s) and the results otherwise reported for such period.

Since 2014, the Group has been named as a defendant in a series of lawsuits that have been filed in the United States District Courts for the Southern and Eastern Districts of New York against a number of banks on behalf of plaintiffs who are, or are relatives of, victims of attacks in Iraq, Afghanistan and Israel. The plaintiffs in each of these lawsuits have alleged that the defendant banks aided and abetted the unlawful conduct of parties with connections to terrorist organisations in breach of the United States Anti-Terrorism Act. None of these lawsuits specify the amount of damages claimed. The Group continues to defend these lawsuits.

In January 2020, a shareholder derivative complaint was filed by the City of Philadelphia in New York State Court against 45 current and former directors and senior officers of the Group. It is alleged that the individuals breached their duties to the Group and caused a waste of corporate assets by permitting the conduct that gave rise to the costs and losses to the Group related to legacy conduct and control issues. In March 2021, an amended complaint was served in which Standard Chartered Bank and seven individuals were removed from the case. Standard Chartered PLC and Standard Chartered Holdings Limited remained as named "nominal defendants" in the complaint. In May 2021, Standard Chartered PLC filed a motion to dismiss the complaint. In February 2022, the New York State Court ruled in favour of Standard Chartered PLC's motion to dismiss the complaint. The plaintiffs are pursuing an appeal against the February 2022 ruling. A hearing date for the plaintiffs' appeal is awaited.

Since October 2020, four lawsuits have been filed in the English High Court against Standard Chartered PLC on behalf of more than 200 shareholders in relation to alleged untrue and/or misleading statements and/or omissions in information published by Standard Chartered PLC in its rights issue prospectuses of 2008, 2010 and 2015 and/or public statements regarding the Group's historic sanctions, money laundering and financial crime compliance issues. These lawsuits have been brought under sections 90 and 90A of the Financial Services and Markets Act 2000. These lawsuits are at an early procedural stage and trial is due to start in late 2026. The claimants have alleged that their losses are in the region of £1.56 billion (excluding any pre-judgment interest that may be awarded). In addition to having denied any and all liability, Standard Chartered PLC will contest claimants' alleged losses.

Bernard Madoff's 2008 confession to running a Ponzi scheme through Bernard L. Madoff Investment Securities LLC (BMIS) gave rise to a number of lawsuits against the Group. BMIS and the Fairfield funds (which invested in BMIS) are in bankruptcy and liquidation, respectively. Between 2010 and 2012, five lawsuits were brought against the Group by the BMIS bankruptcy trustee and the Fairfield funds' liquidators, in each case seeking to recover funds paid to the Group's clients pursuant to redemption requests made prior to BMIS' bankruptcy filing. The total amount sought in these cases exceeds USD 300 million, excluding any pre-judgment interest that may be awarded. The four lawsuits commenced by the Fairfield funds' liquidators have been dismissed and the appeals of those dismissals by the funds' liquidators are ongoing.

As has been reported in the press, a number of Korean banks, including Standard Chartered Bank Korea, have sold equity-linked securities ("ELS") to customers, the redemption values of which are determined by the performance of various stock indices. Standard Chartered Bank Korea sold relevant ELS to its customers with a notional value of approximately USD900m. Due to the performance of the Hang Seng China Enterprise Index, it is anticipated that several thousand Standard Chartered Bank Korea customers may redeem their ELS at a loss. The value of Standard Chartered Bank Korea customers' anticipated losses is subject to fluctuation as the ELS mature on various dates through 2026. Standard Chartered Bank Korea may be faced with claims by customers and its regulator, the Financial Supervisory Service, to cover part or all of those anticipated losses and also may face regulatory penalties. A provision is recorded on the balance sheet in respect of this matter.

With the exception of the Korea ELS matter described above, the Group has concluded that the threshold for recording provisions pursuant to IAS 37 Provisions, Contingent Liabilities and Contingent Assets is not met with respect to the above matters; however, the outcomes of these matters are inherently uncertain and difficult to predict.

Page 112

24. Subordinated liabilities and other borrowed funds

	30.06.24					31.12.23
	USD $million	EUR $million	GBP $million	NPR $million	Total $million	USD $million	EUR $million	GBP $million	NPR $million	Total $million
Fixed rate subordinated debt	7,431	2,546	861	18	10,856	8,524	2,602	892	18	12,036

Redemptions and repurchases during the period 2024

Standard Chartered PLC exercised its right to redeem USD 1 billion 5.2 per cent subordinated notes 2024.

Redemptions and repurchases during the year 2023

Standard Chartered PLC exercised its right to redeem USD 2 billion 3.95 per cent subordinated notes 2023. Further to that outstanding balances of floating rate undated subordinate notes were redeemed during the year.

Issuance during the period 2024

There was no issuance during the period.

Issuance during the year 2023

Standard Chartered Bank Nepal Limited issued NPR 2.4 billion 10.3 per cent fixed rate dated subordinated notes due 2028.

25. Share capital, other equity instruments and reserves

	Number of ordinary shares millions	Ordinary share capital1 $million	Ordinary Share premium $million	Preference Share premium2 $million	Total share capital and share premium $million	Other equity instruments $million
At 1 January 2023	2,895	1,447	3,989	1,494	6,930	6,504
Cancellation of shares including share buyback	(94)	(47)	-	-	(47)
Additional Tier 1 equity redemption	-	-	-	-	-	(992)
At 30 June 2023	2,801	1,400	3,989	1,494	6,883	5,512
Cancellation of shares including share buyback	(136)	(68)	-	-	(68)	-
At 31 December 2023	2,665	1,332	3,989	1,494	6,815	5,512
Cancellation of shares including share buyback	(113)	(57)	-	-	(57)
Additional Tier 1 equity issuance	-	-	-	-	-	992
At 30 June 2024	2,552	1,275	3,989	1,494	6,758	6,504

1   Issued and fully paid ordinary shares of 50 cents each

2   Includes preference share capital of $75,000

Share buyback

On 23 February 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. Nominal value of share purchases was $57 million, the total consideration paid was $1,000 million, and the buyback completed on 25 June 2024. The total number of shares purchased was 113,266,516, representing 4.25 per cent of the ordinary shares in issue. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account. The shares were purchased by Standard Chartered PLC on various exchanges not including the Hong Kong Stock Exchange, by private arrangement.

	Number of ordinary shares	Highest price Paid £	Lowest price paid £	Average price paid per share £	Aggregate price paid £	Aggregate price paid $
February 2024	6,418,285	6.6920	6.3700	6.5039	41,743,905	52,831,654
March 2024	45,113,015	7.0000	6.4400	6.6765	301,197,187	383,771,653
April 2024	24,716,649	7.1300	6.3800	6.7727	167,398,467	209,475,694
May 2024	19,525,751	7.9540	6.9080	7.6883	150,119,738	189,885,098
June 2024	17,492,816	7.8840	7.1220	7.3676	128,879,487	164,035,854

Ordinary share capital

In accordance with the Companies Act 2006 the Company does not have authorised share capital. The nominal value of each ordinary share is 50 cents.

During the period nil shares were issued under employee share plans.

Page 113

 

Preference share capital

At 30 June 2024, the Company has 15,000 $5 non-cumulative redeemable preference shares in issue, with a premium of $99,995 making a paid up amount per preference share of $100,000. The preference shares are redeemable at the option of the Company and are classified in equity.

The available profits of the Company are distributed to the holders of the issued preference shares in priority to payments made to holders of the ordinary shares and in priority to, or pari passu with, any payments to the holders of any other class of shares in issue. On a winding up, the assets of the Company are applied to the holders of the preference shares in priority to any payment to the ordinary shareholders and in priority to, or pari passu with, the holders of any other shares in issue, for an amount equal to any dividends payable (on approval of the Board) and the nominal value of the shares together with any premium as determined by the Board. The redeemable preference shares are redeemable at the paid up amount (which includes premium) at the option of the Company in accordance with the terms of the shares. The holders of the preference shares are not entitled to attend or vote at any general meeting except where any relevant dividend due is not paid in full or where a resolution is proposed varying the rights of the preference shares.

Other equity instruments

The table provides details of outstanding Fixed Rate Resetting Perpetual Subordinated Contingent Convertible AT1 securities issued by Standard Chartered PLC. The net proceeds from the issue of the Securities will be used for the general business purposes of the Group and to strengthen further the regulatory capital base of the Group.

Issuance date	Nominal value	Proceeds net of issue costs	Interest rate1	Coupon payment dates2	First reset dates3	Conversion price per ordinary share4
3 July 2019	SGD 750 million	USD 552 million	5.375%	3 April, 3 October each year	3 October 2024	SGD 10.909
26 June 2020	USD 1,000 million	USD 992 million	6%	26 January, 26 July each year	26 January 2026	USD 5.331
14 January 2021	USD 1,250 million	USD 1,239 million	4.75%	14 January, 14 July each year	14 July 2031	USD 6.353
19 August 2021	USD 1,500 million	USD 1,489 million	4.30%	19 February, 19 August each year	19 August 2028	USD 6.382
15 August 2022	USD 1,250 million	USD 1,239 million	7.75%	15 February, 15 August each year	15 February 2028	USD 7.333
8 March 2024	USD 1,000 million	USD 992 million	7.875%	8 March, 8 September each year	8 September 2030	USD 8.216

1   Interest rates for the period from (and including) the issue date to (but excluding) the first reset date

2   Interest payable semi-annually in arrears

3   Securities are resettable each date falling five years, or an integral multiple of five years, after the first reset date

4   Conversion price set at the time of pricing with reference to closing share price and any applicable discount

The AT1 issuances above are primarily purchased by institutional investors.

The principal terms of the AT1 securities are described below:

• The securities are perpetual and redeemable, at the option of Standard Chartered PLC in whole but not in part, on the first interest reset date and each date falling five years after the first reset date

• The securities are also redeemable for certain regulatory or tax reasons on any date at 100 per cent of their principal amount together with any accrued but unpaid interest up to (but excluding) the date fixed for redemption. Any redemption is subject to Standard Chartered PLC giving notice to the relevant regulator and the regulator granting permission to redeem

• Interest payments on these securities will be accounted for as a dividend.

• Interest on the securities is due and payable only at the sole and absolute discretion of Standard Chartered PLC, subject to certain additional restrictions set out in the terms and conditions. Accordingly, Standard Chartered PLC may at any time elect to cancel any interest payment (or part thereof) which would otherwise be payable on any interest payment date.

• The securities convert into ordinary shares of Standard Chartered PLC, at a pre-determined price detailed in the table above, should the fully loaded Common Equity Tier 1 ratio of the Group fall below 7.0 per cent. Approximately 859 million ordinary shares would be required to satisfy the conversion of all the securities mentioned above

The securities rank behind the claims against Standard Chartered PLC of (a) unsubordinated creditors, (b) which are expressed to be subordinated to the claims of unsubordinated creditors of Standard Chartered PLC but not further or otherwise; or (c) which are, or are expressed to be, junior to the claims of other creditors of Standard Chartered PLC, whether subordinated or unsubordinated, other than claims which rank, or are expressed to rank, pari passu with, or junior to, the claims of holders of the AT1 securities in a winding-up occurring prior to the conversion trigger. The net proceeds from the issue of the Securities will be used for the general business purposes of the Group and to strengthen further the regulatory capital base of the Group.

Page 114

 

Reserves

The constituents of the reserves are summarised as follows:

• The capital reserve represents the exchange difference on redenomination of share capital and share premium from sterling to US dollars in 2001. The capital redemption reserve represents the nominal value of preference shares redeemed

• The amounts in the "Capital and Merger Reserve" represents the premium arising on shares issued using a cash box financing structure, which required the Company to create a merger reserve under section 612 of the Companies Act
2006. Shares were issued using this structure in 2005 and 2006 to assist in the funding of Korea ($1.9 billion) and Taiwan ($1.2 billion) acquisitions, in 2008, 2010 and 2015 for the shares issued by way of a rights issue, primarily for capital maintenance requirements and for the shares issued in 2009 by way of an accelerated book build, the proceeds of which were used in the ordinary course of business of the Group. The funding raised by the 2008, 2010 and 2015 rights issues and 2009 share issue was fully retained within the Company. Of the 2015 funding, $1.5 billion was used to subscribe to additional equity in Standard Chartered Bank, a wholly owned subsidiary of the Company. Apart from the Korea, Taiwan and Standard Chartered Bank funding, the merger reserve is considered realised and distributable.

• Own credit adjustment reserve represents the cumulative gains and losses on financial liabilities designated at fair value through profit or loss relating to own credit. Gains and losses on financial liabilities designated at fair value through profit or loss relating to own credit in the year have been taken through other comprehensive income into this reserve. On derecognition of applicable instruments the balance of any OCA will not be recycled to the income statement, but will be transferred within equity to retained earnings

• Fair value through other comprehensive income (FVOCI) debt reserve represents the unrealised fair value gains and
losses in respect of financial assets classified as FVOCI, net of expected credit losses and taxation. Gains and losses
are deferred in this reserve and are reclassified to the income statement when the underlying asset is sold, matures or becomes impaired.

• FVOCI equity reserve represents unrealised fair value gains and losses in respect of financial assets classified as FVOCI, net of taxation. Gains and losses are recorded in this reserve and never recycled to the income statement

• Cash flow hedge reserve represents the effective portion of the gains and losses on derivatives that meet the criteria for these types of hedges. Gains and losses are deferred in this reserve and are reclassified to the income statement when the underlying hedged item affects profit and loss or when a forecast transaction is no longer expected to occur

• Translation reserve represents the cumulative foreign exchange gains and losses on translation of the net investment of the Group in foreign operations. Since 1 January 2004, gains and losses are deferred to this reserve and are reclassified to the income statement when the underlying foreign operation is disposed. Gains and losses arising from derivatives used as hedges of net investments are netted against the foreign exchange gains and losses on translation of the net investment of the foreign operations

• Retained earnings represents profits and other comprehensive income earned by the Group and Company in the current and prior periods, together with the after tax increase relating to equity-settled share options, less dividend distributions, own shares held (treasury shares) and share buybacks

A substantial part of the Group's reserves is held in overseas subsidiary undertakings and branches, principally to support local operations or to comply with local regulations. The maintenance of local regulatory capital ratios could potentially restrict the amount of reserves which can be remitted. In addition, if these overseas reserves were to be remitted, further unprovided taxation liabilities might arise.

As at 30 June 2024, the distributable reserves of Standard Chartered PLC (the Company) were $15.1 billion (31 December 2023: $14.7 billion). Distributable reserves of SC PLC were $15.1 billion, which are calculated from the Merger reserve and Retained Earnings with consideration for restricted items in line with sections 830 and 831 of the Companies Act 2006.

Page 115

 

Own shares

The 2004 Employee Benefit Trust (2004 Trust) is used in conjunction with the Group's employee share schemes and other employee share-based payments (such as upfront shares and salary shares). Computershare Trustees (Jersey) Limited is the trustee of the 2004 Trust. Group companies fund the 2004 Trust from time to time to enable the trustee to acquire ordinary shares in Standard Chartered PLC to satisfy these arrangements.

Details of the shares purchased and held by the 2004 Trust are set out below.

	2004 Trust
	30.06.24	31.12.23	30.06.23
Shares purchased during the period	40,707	29,069,539	-
Market price of shares purchased ($million)	0.35	237	-
Shares held at the end of the period	1,863,677	28,095,542	3,541,529
Maximum number of shares held during the period	28,085,688	28,893,930	27,525,624

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.

Dividend waivers

The trustees of the 2004 Trust, which holds ordinary shares in Standard Chartered PLC in connection with the operation of its employee share plans, waive any dividend on the balance of ordinary shares that have not been allocated to employees, except for 0.01p per share.

26. Retirement benefit obligations

Retirement benefit obligations comprise:

	30.06.24 $million	31.12.23 $million	30.06.23 $million
Defined benefit plans obligation	(138)	(166)	(110)
Defined contribution plans obligation	(19)	(17)	(16)
Net obligation	(157)¹	(183)	(126)

1   Includes $268 million retirement benefit schemes in deficit partly offset by $111 million retirement benefit schemes in surplus

Retirement benefit charge comprises:

	6 months ended 30.06.24	6 months ended 31.12.23	6 months ended 30.06.23
The pension cost for defined benefit plans was:
Current service cost¹	24	27	23
Past service cost and curtailments	-	-	9
Gain on settlements	-	2	-
Interest income on pension plan assets	(49)	(49)	(51)
Interest on pension plan liabilities	51	51	54
Total charge to profit before deduction of tax	26	31	35
Losses/(returns) on plan assets excluding interest income²	32	(82)	12
Losses/(gains) on liabilities	(63)	164	(47)
Total losses/(gains) recognised directly in statement of comprehensive income before tax	(31)	82	(35)
Deferred taxation	6	(15)	4
Total losses/(gains) after tax	(25)	67	(31)

1   Includes administrative expenses paid out of plan assets of $1 million

2   The actual return on assets was a gain of $17 million

The Group operates over 60 defined benefit plans across its geographies, many of which are closed to new entrants who now join defined contribution arrangements. The aim of all these plans is, as part of the Group's commitment to financial wellbeing for employees, to give employees the opportunity to save appropriately for retirement in a way that is consistent with local regulations, taxation requirements and market conditions. The defined benefit plans expose the Group to currency risk, interest rate risk, investment risk and actuarial risks such as longevity risk.

Page 116

Material holdings of government and corporate bonds partially hedge movements in the liabilities resulting from interest rate and inflation changes. Setting aside movements from other drivers such as currency fluctuation, the increases in discount rates in most geographies over 2024 have led to lower liabilities. These have been partly offset by decreases in the value of bonds while H1 2024 has seen strong performance of growth assets such as equities and property, leading to a fall in the pension deficit reported. These movements are shown as actuarial gains and losses in the tables above.

The disclosures required under IAS 19 have been calculated by independent qualified actuaries based on the most recent full actuarial valuations updated, where necessary, to 30 June 2024.

27. Related party transactions

Directors and officers

As at 30 June 2024, Standard Chartered Bank had in place a charge over $67 million (31 December 2023: $68 million) of cash assets in favour of the independent trustee of its employer financed retirement benefit scheme.

There were no changes in the related party transactions described in the Annual Report 2023 that could have or have had a material effect on the financial position or performance of the Group in the period ended 30 June 2024. All related party transactions that have taken place in the period were similar in nature to those disclosed in Annual Report 2023.

Associate and joint ventures

The following transactions with related parties are on an arm's length basis:

	30.06.24 $million	31.12.23 $million
Assets
Financial Assets held at FVTPL	-	14
Derivative assets	9	12
Total assets	9	26
Liabilities
Deposits	547	959
Other Liabilities	-	2
Total liabilities	547	961
Loan commitments and other guarantees¹	14	113

1   The maximum loan commitments and other guarantees during the period were $14 million (31 December 2023: $113 million)

28. Post balance sheet events

A share buyback for up to a maximum consideration of $1 .5billion has been declared by the directors after 30 June 2024. This will reduce the number of ordinary shares in issue by cancelling the repurchased shares

The Board has recommended an interim ordinary dividend for the half year 2024 of 9 cents a share or $230 million

29. Corporate governance

The directors confirm that, throughout the period, the Company has complied with the code provisions set out in the Corporate Governance Code contained in Appendix C1 of the Hong Kong Listing Rules. The directors also confirm that the announcement of these results has been reviewed by the Company's Audit Committee. The Company confirms that it has adopted a code of conduct regarding securities transactions by directors on terms no less exacting than the required standard set out in Appendix C3 of the Hong Kong Listing Rules and that, having made specific enquiry of all directors, the directors of the Company have complied with the required standards of the adopted code of conduct throughout the period. Details of the Group's corporate governance arrangements are set out in the Directors' Report within the 2023 Annual Report.

As previously announced, the following changes to the composition of the Board have taken place since 31 December 2023. On 2 January 2024, Andy Halford retired from the Board and Diego De Giorgi was appointed as an Executive Director and Group Chief Financial Officer with effect from 3 January 2024. On 29 February 2024, Gay Huey Evans retired from the Board and as a member of the Board Risk Committee. Diane Jurgens was appointed to the Board as an Independent Non-Executive Director (INED) on 1 March 2024 and became a member of the Culture and Sustainability Committee. On 9 May 2024, Carlson Tong retired from the Board and as member of the Audit and Board Risk Committees. Biographies for each of the directors and a list of the committees' membership can be found at www.sc.com/ourpeople.

Page 117

In compliance with Rule 13.51B(1) of the Hong Kong Listing Rules, the Company confirms that Maria Ramos, INED, retired from AngloGold Ashanti PLC as Chair of the board on 28 May 2024.

30. Statutory accounts

The information in this Half Year Report 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 30 July 2024. The statutory accounts for the year ended 31 December 2023 have been audited and delivered to the Registrar of Companies in England and Wales. 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 sections 498(2) and 498(3) of the Companies Act 2006.

31. Cash flow statement

Adjustment for non-cash items and other adjustments included within income statement

	30.06.24 $million	30.06.23 $million
Amortisation of discounts and premiums of investment securities	249	(219)
Interest expense on subordinated liabilities	394	415
Interest expense on senior debt securities in issue	1,291	959
Other non-cash items	(91)	(168)
Pension costs for defined benefit schemes	27	35
Share-based payment costs	172	112
Impairment losses on loans and advances and other credit risk provisions	240	161
Other impairment	147	77
Gain on disposal of property, plant and equipment	(13)	(32)
Loss on disposal of FVOCI and AMCST financial assets	86	105
Depreciation and amortisation	516	561
Fair value changes taken to income statement	(1,034)	(357)
Foreign Currency revaluation	(110)	(29)
Profit from associates and joint ventures	(144)	(102)
Total	1,730	1,518

 

Change in operating assets

	30.06.24 $million	30.06.23 (Restated) $million
Net decrease in derivative financial instruments	1,370	2,893
Net increase in debt securities, treasury bills and equity shares held at fair value through profit or loss1	(25,183)	(11,254)
Net (increase)/decrease in loans and advances to banks and customers1	(9,614)	7,043
Net increase in prepayments and accrued income	(227)	(205)
Net increase in other assets	(7,928)	(6,783)
Total	(41,582)	(8,306)

1   Increase in debt securities, treasury bills and equity shares held at fair value through profit or loss for 30.06.2023 has been restated by $28 million and the increase in loans and advances to banks and customers for 30.06.2023 has been restated by $(6,273) million

Change in operating liabilities

	30.06.24 $million	30.06.23 $million
Net decrease in derivative financial instruments	(5,059)	(6,511)
Net increase in deposits from banks, customer accounts, debt securities in issue, Hong Kong notes in circulation and short positions	17,512	23,238
(Decrease)/increase in accruals and deferred income	(380)	437
Net increase in other liabilities	8,393	9,302
Total	20,466	26,466

Page 118

Changes in financing activities - subordinated & senior debts

	30.06.24 $million	30.06.23 $million
Subordinated debt (including accrued interest):
Opening balance	12,216	13,929
Interest paid	(252)	(300)
Repayment	(1,000)	(2,000)
Foreign exchange movements	(91)	109
Fair value changes	(92)	38
Accrued Interest and Others	244	282
Closing balance	11,025	12,058
Senior debt (including accrued interest):
Opening balance	41,350	32,288
Proceeds from the issue	7,698	7,072
Interest paid	(548)	(561)
Repayment	(7,191)	(2,715)
Foreign exchange movements	(292)	(158)
Fair value changes	(92)	(98)
Accrued Interest and Others	1,612	390
Closing balance	42,537	36,218

Cash and cash equivalents

The Group's cash and cash equivalents balance for 30 June 2023 has been restated to increase the balance by $2,631 million as balances with central banks that met the cash and cash equivalents definition were originally included in loans and advances to customers ($27,680 million) but not included in cash and cash equivalents and there were balances included in cash and cash equivalents related to loans and advances to banks ($19,781 million), treasury bills and other eligible bills ($3,919 million) as well as Investments ($1,349 million) that did not meet the cash and cash equivalents definition. On the 30 June 2023 cash flow statement for Group, the change in operating assets has also been restated by $(6,245) million as a result of these changes.

Page 119

Other supplementary information

Supplementary financial information

Insured and uninsured deposits

SCB operates and provides services to customers across many countries and insured deposit is determined on the basis of limits enacted within local regulations

	30.06.24		31.12.23
	Bank deposits $million	Customer accounts $million	Bank deposits $million	Customer accounts $million
Insured deposits	23	67,611	10	66,753
Current accounts	9	15,237	9	15,767
Savings deposits	-	27,472	-	27,376
Time deposits	14	24,799	1	23,517
Other deposits	-	103	-	93
Uninsured deposits	40,455	464,651	35,500	467,868
Current accounts	21,613	147,169	20,969	150,559
Savings deposits	-	88,097	-	91,425
Time deposits	7,775	184,152	8,295	176,977
Other deposits	11,067	45,233	6,236	48,907
Total	40,478	532,262	35,510	534,621

UK and non-UK deposits

The following table summarises the split of Bank and Customer deposits into UK and Non-UK deposits for respective account lines based on the domicile or residence of the clients.

	30.06.24		31.12.23
	Bank deposits $million	Customer accounts $million	Bank deposits $million	Customer accounts $million
UK deposits	4,688	20,655	2,918	29,318
Current accounts	1,156	8,619	925	7,062
Savings deposits	-	193	-	330
Time deposits	427	6,533	310	5,412
Other deposits	3,105	5,310	1,683	16,514
Non-UK deposits	35,790	511,607	32,592	505,303
Current accounts	20,466	153,787	20,053	159,264
Savings deposits	-	115,376	-	118,471
Time deposits	7,362	202,418	7,986	195,082
Other deposits	7,962	40,026	4,553	32,486
Total	40,478	532,262	35,510	534,621

Contractual maturity of Loans, Investment securities and Deposits

	30.06.2024
	Loans and advances to banks $million	Loans and advances to customers $million	Investment securities - Treasury and other eligible Bills $million	Investment securities - Debt securities $million	Investment securities - Equity shares $million	Bank deposits $million	Customer accounts $million
One year or less	74,652	182,601	40,572	57,980	-	34,033	474,613
Between one and five years	11,838	59,653	36	74,997	-	6,441	55,028
Between five and ten years	891	19,825	-	23,215	-	4	806
Between ten years and fifteen years	70	13,178	-	7,514	-	-	1,287
More than fifteen years and undated	241	60,450	-	21,453	6,088	-	528
Total	87,692	335,707	40,608	185,159	6,088	40,478	532,262
Total Amortised cost and FVOCI exposures	45,231	275,896
Of which: Fixed interest rate exposures	37,835	155,260
Of which: Floating interest rate exposures	7,396	120,636

Page 120

	31.12.2023
	Loans and advances to banks $million	Loans and advances to customers $million	Investment securities - Treasury and other eligible Bills $million	Investment securities - Debt securities $million	Investment securities - Equity shares $million	Bank deposits $million	Customer accounts $million
One year or less	72,717	197,125	38,877	59,023	-	31,333	485,909
Between one and five years	3,975	52,532	4	69,075	-	4,174	46,364
Between five and ten years	837	19,184	1	18,804	-	2	567
Between ten years and fifteen years	35	14,084	-	9,276	-	-	1,341
More than fifteen years and undated	226	62,561	-	18,155	3,932	-	441
Total	77,790	345,486	38,882	174,333	3,932	35,509	534,622
Total Amortised cost and FVOCI exposures	44,977	286,975
Of which: Fixed interest rate exposures	38,505	168,697
Of which: Floating interest rate exposures	6,472	118,278

Maturity and yield of Debt securities, additional tier one and other eligible bills held at amortised

	One year or less		Between one and five years		Between five and ten years		More than ten years		Total
	$million	Yield %	$million	Yield %	$million	Yield %	$million	Yield %	$million	Yield %
Central and other government agencies
- US	2,441	1.75	9,519	1.67	5,950	1.77	4,430	3.87	22,340	2.14
- UK	286	1.62	673	1.91	55	1.25	-	-	1,014	1.79
- Other	4,244	2.69	10,575	2.71	1,954	3.33	24	7.39	16,797	2.78
Other debt securities	1,534	6.06	2,320	5.94	3,791	5.05	8,607	5.12	16,252	5.31
As at 30 June 2024	8,505	2.99	23,087	2.58	11,750	3.08	13,061	4.70	56,403	3.23

	One year or less		Between one and five years		Between five and ten years		More than ten years		Total
	$million	Yield %	$million	Yield %	$million	Yield %	$million	Yield %	$million	Yield %
Central and other government agencies
- US	1,861	1.39	9,171	1.61	5,799	1.67	4,524	3.89	21,355	2.09
- UK	39	2.75	85	1.06	101	0.67	-	-	225	1.18
- Other	5,045	2.72	9,560	2.80	2,289	3.12	81	4.74	16,975	2.84
Other debt securities	2,487	6.45	2,658	5.37	2,262	5.44	10,973	5.13	18,380	5.38
As at 31 December 2023	9,432	3.44	21,474	2.61	10,451	2.79	15,578	4.77	56,935	3.37

The maturity distributions are presented in the above table on the basis of contractual maturity dates. The weighted average yield for each range of maturities is calculated by dividing the annualised interest income for the year by the book amount of debt securities at that date.

Average balance sheets and yields

Average balance sheets and yields

For the purposes of calculating net interest margin the following adjustments are made:

• Statutory net interest income is adjusted to remove interest expense on amortised cost liabilities used to provide funding to the Global Markets business

• Financial instruments measured at fair value through profit or loss are classified as non-interest earning

• Premiums on financial guarantees purchased to manage interest earning assets are treated as interest expense In the Group's view this results in a net interest margin that is more reflective of banking book performance.

Page 121

The following tables set out the average balances and yields for the Group's assets and liabilities for the periods ended 30 June 2024 31 December 2023 and 30 June 2023 under the revised definition of net interest margin. For the purpose of these tables, average balances have been determined on the basis of daily balances, except for certain categories, for which balances have been determined less frequently. The Group does not believe that the information presented in these tables would be significantly different had such balances been determined on a daily basis.

Average assets

	6 months ended 30.06.24
	Average non-interest earning balance $million	Average interest earning balance $million	Interest income $million	Gross yield interest earning balance %	Gross yield total balance %
Cash and balances at central banks	10,244	59,865	1,360	4.57	3.90
Gross loans and advances to banks	39,425	41,801	1,052	5.06	2.60
Gross loans and advances to customers	56,445	285,940	8,259	5.81	4.85
Impairment provisions against loans and advances to banks and customers	-	(5,501)	-	-	-
Investment securities - Treasury and Other Eligible Bills	13,364	28,990	807	5.60	3.83
Investment securities - Debt Securities	53,058	132,693	2,716	4.12	2.94
Investment securities - Equity Shares	4,545	-	-	-	-
Property, plant and equipment and intangible assets	6,263	-	-	-	-
Prepayments, accrued income and other assets	120,866	-	-	-	-
Investment associates and joint ventures	1,052	-	-	-	-
Total average assets	305,262	543,788	14,194	5.25	3.36

	6 months ended 31.12.23
	Average non-interest earning balance $million	Average interest earning balance $million	Interest income $million	Gross yield interest earning balance %	Gross yield total balance %
Cash and balances at central banks	10,138	72,136	1,622	4.46	3.96
Gross loans and advances to banks	36,110	45,606	1,136	4.94	2.80
Gross loans and advances to customers	53,180	297,757	8,194	5.46	4.70
Impairment provisions against loans and advances to banks and customers	-	(5,793)	-	-	-
Investment securities - Treasury and Other Eligible Bills	9,041	28,621	787	5.45	4.20
Investment securities - Debt Securities	33,551	130,622	2,661	4.04	3.26
Investment securities - Equity Shares	3,151	-	-	-	-
Property, plant and equipment and intangible assets	6,142	-	-	-	-
Prepayments, accrued income and other assets	129,624	-	-	-	-
Investment associates and joint ventures	1,466	-	-	-	-
Total average assets	282,403	568,949	14,400	5.02	3.40

	6 months ended 30.06.23
	Average non-interest earning balance $million	Average interest earning balance $million	Interest income $million	Gross yield interest earning balance %	Gross yield total balance %
Cash and balances at central banks	10,799	63,057	1,211	3.87	3.31
Gross loans and advances to banks	33,352	42,692	958	4.53	2.54
Gross loans and advances to customers	57,325	305,444	7,504	4.95	4.17
Impairment provisions against loans and advances to banks and customers	-	(5,996)	-	-	-
Investment securities - Treasury and Other Eligible Bills	6,851	35,488	809	4.60	3.85
Investment securities - Debt Securities	26,211	135,464	2,344	3.49	2.92
Investment securities - Equity Shares	3,230	-	-	-	-
Property, plant and equipment and intangible assets	9,278	-	-	-	-
Prepayments, accrued income and other assets	125,751	-	-	-	-
Investment associates and joint ventures	1,781	-	-	-	-
Total average assets	274,578	576,149	12,826	4.49	3.04

Page 122

Average liabilities

	6 months ended 30.06.24
	Average non-interest bearing balance $million	Average interest bearing balance $million	Interest expense $million	Rate paid interest bearing balance %	Rate paid total balance %
Deposits by banks	15,374	21,300	441	4.16	2.42
Customer accounts:	-	-	-
Current accounts	39,666	128,079	2,245	3.52	2.69
Savings deposits	-	113,627	1,204	2.13	2.13
Time deposits	19,131	186,811	4,642	5.00	4.53
Other deposits	36,403	11,734	299	5.12	1.25
Debt securities in issue	11,642	64,678	1,794	5.58	4.73
Accruals, deferred income and other liabilities	138,564	-	-	-	-
Subordinated liabilities and other borrowed funds	-	11,379	394	6.96	6.96
Non-controlling interests	389	-	-	-	-
Shareholders' funds	50,272	-	-	-	-
	311,442	537,608	11,019	4.12	1.30
Adjustment for trading book funding cost and others			(1,816)
Total average liabilities and shareholders' funds	311,442	537,608	9,203	3.44	1.08

	6 months ended 31.12.23
	Average non-interest bearing balance $million	Average interest bearing balance $million	Interest expense $million	Rate paid interest bearing balance %	Rate paid total balance %
Deposits by banks	14,075	22,975	420	3.63	2.25
Customer accounts:
Current accounts	39,993	123,011	2,044	3.30	2.49
Savings deposits	-	111,593	1,087	1.93	1.93
Time deposits	16,188	185,482	4,276	4.57	4.21
Other deposits	39,148	10,018	424	8.40	1.71
Debt securities in issue	13,945	64,968	1,829	5.58	4.60
Accruals, deferred income and other liabilities	135,882	12,612	-	-	-
Subordinated liabilities and other borrowed funds	-	12,447	535	8.53	8.53
Non-controlling interests	370	-	-	-	-
Shareholders' funds	48,644	-	-	-	-
	308,246	543,106	10,615	3.88	2.47
Adjustment for trading book funding cost and others			(992)
Total average liabilities and shareholders' funds	308,246	543,106	9,623	3.51	2.24

Page 123

	6 months ended 30.06.23
	Average non-interest bearing balance $million	Average interest bearing balance $million	Interest expense $million	Rate paid interest bearing balance %	Rate paid total balance %
Deposits by banks	14,395	25,176	374	3.00	1.91
Customer accounts:
Current accounts	43,861	130,405	1,705	2.64	1.97
Savings deposits	-	112,506	892	1.60	1.60
Time deposits	14,489	187,106	3,830	4.13	3.83
Other deposits	49,348	2,978	62	4.20	0.24
Debt securities in issue	10,546	66,201	1,538	4.68	4.04
Accruals, deferred income and other liabilities	130,519	1,029	26	5.10	0.04
Subordinated liabilities and other borrowed funds	-	12,148	415	6.89	6.89
Non-controlling interests	320	-	-	-	-
Shareholders' funds	49,700	-	-	-	-
	313,178	537,549	8,842	3.32	1.04
Adjustment for trading book funding cost and others	-	-	(786)	-	-
Total average liabilities and shareholders' funds	313,178	537,549	8,056	3.02	0.95

Net interest margin

	6 months ended 30.06.24 $million	6 months ended 31.12.23 $million	6 months ended 30.06.23 $million
Interest income (reported)	14,194	14,400	12,826
Average interest earning assets	543,788	568,949	576,149
Gross yield (%)	5.25	5.02	4.49
Interest expense (reported)	11,019	10,615	8,842
Adjustment for trading book funding cost and others	(1,816)	(992)	(786)
Interest expense adjusted for trading book funding cost and others	9,203	9,623	8,056
Average interest-bearing liabilities	537,608	543,106	537,549
Rate paid (%)	3.44	3.51	3.02
Net yield (%)	1.81	1.51	1.47
Net interest income adjusted for trading book funding cost and others	4,991	4,777	4,770
Net interest margin (%)	1.85	1.67	1.67

Page 124

Additional items

A. Our Fair Pay Charter

Our Fair Pay Charter, introduced in 2018, sets out the principles we use to make remuneration decisions across the Group that are fair, transparent and competitive to support us in embedding a performance-oriented, inclusive and innovative culture and in delivering a differentiated employee experience. In 2023, we reviewed and refined our Fair Pay Charter to a set of four principles set out in the Group's Diversity, Equality and Inclusion Impact Report 2023. This report, available on our Group website, explains each principle and summarises how we are implementing them across the Group.

B. Group share plans

Discretionary share plans

The 2021 Standard Chartered Share Plan (the '2021 Plan') was approved by shareholders in May 2021 and is the Group's main share plan, replacing the 2011 Standard Chartered Share Plan (the '2011 Plan') for new awards from June 2021. It is used to deliver various types of share awards to employees and former employees of the Group, including directors and former executive directors:

• Long-term incentive plan (LTIP) awards are granted with vesting subject to performance measures that have previously included: relative total shareholder return (TSR); Return on Tangible Equity (RoTE) (with a Common Equity Tier 1 (CET1) underpin); and strategic and sustainability measures. Each measure is assessed independently over a three-year period. LTIP awards have an individual conduct gateway requirement that results in the award lapsing if not met.

• Deferred shares are used to deliver:

-  the deferred portion of variable remuneration. These awards vest in instalments on anniversaries of the award date specified at the time of grant. This enables the Group to meet regulatory requirements relating to deferral levels, and is in line with market practice.

-  replacement buy-out awards to new joiners who forfeit awards on leaving their previous employers. These vest in the quarter following the date when the award would have vested at the previous employer. This enables the Group to meet regulatory requirements relating to buy-outs, and is in line with market practice.

Under the 2021 Plan and 2011 Plan, no grant price is payable to receive an award. The remaining life of the 2021 Plan during which new awards can be made is seven years. The 2011 Plan has expired and no further awards can be granted under this plan.

All-employee share plans

The Standard Chartered 2023 Sharesave Plan was approved by shareholders in May 2023, replacing the Standard Chartered 2013 Sharesave Plan. Under the 2023 Sharesave Plan, employees may open a savings contract. Within a maturity period of six months after the third anniversary, employees may purchase ordinary shares in the Company at a discount of up to 20 per cent on the share price at the date of invitation. There are no performance measures attached to options granted under the 2023 Sharesave Plan and no grant price is payable to receive an option.

In some countries in which the Group operates, it is not possible to deliver shares under the 2023 Sharesave Plan, typically due to securities laws and regulatory restrictions. In these countries, where possible, the Group offers an equivalent cash-based plan to its employees.

Valuation of share awards

Details of the valuation models used in determining the fair values of share awards granted under the Group's share plans are detailed in the Group's 2023 Annual Report.

Page 125

Reconciliation of share award movements for the year to 30 June 2024

	Discretonary1		Sharesave⁴	Weighted average Sharesave exercise price (£)
	LTIP	Deferred shares
Outstanding on 1 January 2024	10,947,382	47,068,204	16,902,217	4.49
Granted2, 3	2,320,481	25,075,381	-	-
Lapsed	(1,730,292)	(471,265)	(613,810)	4.68
Vested/exercised	(901,531)	(18,131,269)	(2,441,150)	3.16
Outstanding on 30 June 2024⁵	10,636,040	53,541,051	13,847,257	4.72
Total number of securities available for issue under the plan	10,636,040	53,541,051	13,847,257	4.72
Percentage of the issued shares this represents as of 30 June 2024⁶	0.42	2.10	0.54
Exercisable as of 30 June 2024	-	361,802	91,880	4.65
Range of exercise prices (£)	-	-	3.14 - 5.88	-
Intrinsic value of vested but not exercised options ($ million)	0.00	3.27	0.29	-
Weighted average contractual remaining life (years)	7.89	8.64	2.11	-
Weighted average share price for awards exercised during the period (£)	6.57	6.57	6.76	-

1.  Employees do not contribute towards the cost of these awards, which are covered under the rules of the 2011 Standard Chartered Share Plan for grants prior to May 2021, and under the rules of the 2021 Standard Chartered Share Plan for grants from June 2021

2.  2,315,422 (LTIP) granted on 12 March 2024; 5,059 (LTIP) granted as a notional dividend on 1 March 2024; 24,381,791 (deferred shares) granted on 11 March 2024; 229,896 (deferred shares) granted as a notional dividend on 1 March 2024; 463,694 (deferred shares) granted on 17 June 2024

3.  No discretionary awards (LTIP or deferred/buy-out awards) have been granted in the form of options since June 2015. For historic awards granted as options and exercised in the period to 30 June 2024, the exercise price of deferred shares options was nil

4.  All Sharesave awards are in the form of options. The exercise price of Sharesave options exercised was £5.88 for options granted in 2023, £4.23 for options granted in 2022, £3.67 for options granted in 2021 and £3.14 for options granted in 2020

5.  No options or awards were cancelled in the period

6.  The number of shares granted during this period, under all Standard Chartered PLC share plans, as a percentage of the average number of shares in issue during the period is 1.04 per cent

C. Group Chairman and independent non-executive directors' interests in ordinary shares as at 30 June 2024¹^,²

	Shares beneficially held as of 31 December 2023	Shares beneficially held as of 30 June 2024
Chairman
J Viñals	45,000	45,000
Independent non-executive directors
S M Apte	2,000	2,000
D P Conner	10,000	10,000
G Huey Evans, CBE3	2,615	-
J Hunt	2,000	2,000
D E Jurgens4	-	8,888
R A Lawther, CBE	2,000	2,000
M Ramos	2,000	2,000
P G Rivett	2,128	2,128
D Tang	2,000	2,000
C Tong5	2,000	-
L Y Yueh	2,000	2,000

1.  Independent non-executive directors are required to hold shares with a nominal value of $1,000. All the directors have met this requirement

2.  The beneficial interests of directors and their related parties 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. None of the directors used ordinary shares as collateral for any loans. No director had either i) an interest in the Company's preference shares or loan stocks of any subsidiary or associated undertaking of the Group or ii) any corporate interests in the Company's ordinary shares. All figures as of 30 June 2024

3.  Gay Huey Evans, CBE, retired from the Board on 29 February 2024

4.  Diane Jurgens was appointed to the Board on 1 March 2024

5.  Carlson Tong retired from the Board on 9 May 2024

Page 126

D. Executive directors' interests in ordinary shares as at 30 June 2024

Scheme interests awarded, exercised and lapsed during the period

Employees, including executive directors, are not permitted to engage in any personal investment strategies with regards to their Company shares, including hedging against the share price of Company shares. The main features of the outstanding shares and awards are summarised below:

Award1	Performance measures	Performance outcome	Accrues notional dividends?2
2017-19	33% RoE 33% TSR 33% Strategic	38%	Yes
2018-20		26%	No
2019-21	33% RoTE 33% TSR 33% Strategic	23%
2020-22		36.8%
2021-23	30% RoTE 30% TSR 15% Sustainability 25% Strategic	57%
2022-24		To be assessed at the end of 2024
2023-25		To be assessed at the end of 2025
2024-26	30% RoTE 30% TSR 25% ESG 15% Other strategic	To be assessed at the end of 2026

1.  Awards are delivered in five equal tranches

2.  2017-19 LTIP award may receive dividend equivalent shares based on dividends declared between grant and vest. From 1 January 2017 remuneration regulations for European banks prohibited the award of dividend equivalent shares. Therefore, the number of shares awarded in respect of the LTIP awards granted after this date took into account the lack of dividend equivalents (calculated by reference to market consensus dividend yield) such that the overall value of the award was maintained

The following table shows the changes in share interests.

	Date of grant	Changes in interests from 1 January to 30 June 2024
		Share award price (£)	As at 1 January	Awarded1	Dividends awarded2	Vested/ exercised3,4	Lapsed	As at 30 June	Performance period end	Vesting date
Bill Winters5
2017-19 LTIP	13 Mar 2017	7.450	45,049	-	6,127	51,176	-	-	13 Mar 2020	13 Mar 2024
2018-20 LTIP	9 Mar 2018	7.782	28,178	-	-	28,178	-	-	9 Mar 2021	9 Mar 2024
			28,179	-	-	-	-	28,179		9 Mar 2025
2019-21 LTIP	11 Mar 2019	6.105	30,604	-	-	30,604	-	-	11 Mar 2022	11 Mar 2024
			30,604	-	-	-	-	30,604		11 Mar 2025
			30,605	-	-	-	-	30,605		11 Mar 2026
2020-22 LTIP	9 Mar 2020	5.196	59,282	-	-	59,282	-	-	9 Mar 2023	9 Mar 2024
			59,282	-	-	-	-	59,282		9 Mar 2025
			59,282	-	-	-	-	59,282		9 Mar 2026
			59,282	-	-	-	-	59,282		9 Mar 2027
2021-23 LTIP	15 Mar 2021	4.901	150,621	-	-	85,853	64,768	-	15 Mar 2024	15 Mar 2024
			150,621	-	-	-	64,768	85,853		15 Mar 2025
			150,621	-	-	-	64,768	85,853		15 Mar 2026
			150,621	-	-	-	64,768	85,853		15 Mar 2027
			150,621	-	-	-	64,768	85,853		15 Mar 2028
2022-24 LTIP	14 Mar 2022	4.876	151,386	-	-	-	-	151,386	14 Mar 2025	14 Mar 2025
			151,386	-	-	-	-	151,386		14 Mar 2026
			151,386	-	-	-	-	151,386		14 Mar 2027
			151,386	-	-	-	-	151,386		14 Mar 2028
			151,388	-	-	-	-	151,388		14 Mar 2029
2023-25 LTIP	13 Mar 2023	7.398	101,209	-	-	-	-	101,209	13 Mar 2026	13 Mar 2026
			101,209	-	-	-	-	101,209		13 Mar 2027
			101,209	-	-	-	-	101,209		13 Mar 2028
			101,209	-	-	-	-	101,209		13 Mar 2029
			101,209	-	-	-	-	101,209		13 Mar 2030
2024-26 LTIP	12 Mar 2024	6.600	-	123,275	-	-	-	123,275	12 Mar 2027	12 Mar 2027
			-	123,275	-	-	-	123,275		12 Mar 2028
			-	123,275	-	-	-	123,275		12 Mar 2029
			-	123,275	-	-	-	123,275		12 Mar 2030
			-	123,278	-	-	-	123,278		12 Mar 2031

Page 127

	Date of grant	Changes in interests from 1 January to 30 June 2024
		Share award price (£)	As at 1 January	Awarded1	Dividends awarded2	Vested/ exercised3,4	Lapsed	As at 30 June	Performance period end	Vesting date
Andy Halford5
2017-19 LTIP	13 Mar 2017	7.450	27,890	-	3,796	31,686	-	-	13 Mar 2020	13 Mar 2024
2018-20 LTIP	9 Mar 2018	7.782	17,448	-	-	17,448	-	-	9 Mar 2021	9 Mar 2024
			17,448	-	-	-	-	17,448		9 Mar 2025
2019-21 LTIP	11 Mar 2019	6.105	19,571	-	-	19,571	-	-	11 Mar 2022	11 Mar 2024
			19,571	-	-	-	-	19,571		11 Mar 2025
			19,572	-	-	-	-	19,572		11 Mar 2026
2020-22 LTIP	9 Mar 2020	5.196	36,791	-	-	36,791	-	-	9 Mar 2023	9 Mar 2024
			36,791	-	-	-	-	36,791		9 Mar 2025
			36,791	-	-	-	-	36,791		9 Mar 2026
			36,791	-	-	-	-	36,791		9 Mar 2027
2021-23 LTIP	15 Mar 2021	4.901	96,283	-	-	54,881	41,402	-	15 Mar 2024	15 Mar 2024
			96,283	-	-	-	41,402	54,881		15 Mar 2025
			96,283	-	-	-	41,402	54,881		15 Mar 2026
			96,283	-	-	-	41,402	54,881		15 Mar 2027
			96,283	-	-	-	41,402	54,881		15 Mar 2028
2022-24 LTIP	14 Mar 2022	4.876	96,772	-	-	-	-	96,772	14 Mar 2025	14 Mar 2025
			96,772	-	-	-	-	96,772		14 Mar 2026
			96,772	-	-	-	-	96,772		14 Mar 2027
			96,772	-	-	-	-	96,772		14 Mar 2028
			96,773	-	-	-	-	96,773		14 Mar 2029
2023-25 LTIP	13 Mar 2023	7.398	64,700	-	-	-	-	64,700	13 Mar 2026	13 Mar 2026
			64,700	-	-	-	-	64,700		13 Mar 2027
			64,700	-	-	-	-	64,700		13 Mar 2028
			64,700	-	-	-	-	64,700		13 Mar 2029
			64,702	-	-	-	-	64,702		13 Mar 2030
2023 Deferred Shares6	11 Mar 2024	6.558	-	10,315	-	-	-	10,315	N/A	11 Mar 2027
			-	10,315	-	-	-	10,315		11 Mar 2028
			-	10,315	-	-	-	10,315		11 Mar 2029
			-	10,315	-	-	-	10,315		11 Mar 2030
			-	10,319	-	-	-	10,319		11 Mar 2031
2022 Sharesave7,8		4.230	2,127	-	-	-	-	2,127	N/A	1 Feb 2026
Diego De Giorgi5
2024-26 LTIP	12 Mar 2024	6.600	-	80,812	-	-	-	80,812	12 Mar 2027	12 Mar 2027
			-	80,812	-	-	-	80,812		12 Mar 2028
			-	80,812	-	-	-	80,812		12 Mar 2029
			-	80,812	-	-	-	80,812		12 Mar 2030
			-	80,814	-	-	-	80,814		12 Mar 2031

1.  For the 2024-26 LTIP awards granted to Bill and Diego on 12 March 2024, the values granted were: Bill: £3.3 million; Diego: £2.2 million. The number of shares awarded in respect of the LTIP took into account the lack of dividend equivalents (calculated by reference to market consensus dividend yield) such that the overall value of the award was maintained. Performance measures apply to 2024-26 LTIP awards. The closing price on the day before grant was £6.600.

2.  Dividend equivalent shares may be awarded on vesting for awards granted prior to 1 January 2018. On 31 March 2020, Standard Chartered announced that in response to the request from the PRA and as a consequence of the unprecedented challenges facing the world due to the COVID-19 pandemic, the Board decided to withdraw the recommendation to pay a final dividend for 2019. Dividend equivalent shares allocated to the 2017-19 awards vesting in 2024 did not include any shares relating to the cancelled dividend.

3.  Shares (before tax) were delivered to Bill and Andy from the vesting element of LTIP awards. The closing share price on the day before the shares were delivered were as follows:

•  13 March 2024: Shares in respect of the 2017-19 LTIP. Previous day closing share price: £6.698

•  11 March 2024: Shares in respect of the 2018-20 LTIP, 2019-21 LTIP and 2020-22 LTIP. Previous day closing share price: £6.558

•  19 March 2024: Shares in respect of the 2021-23 LTIP. Previous day closing share price: £6.502

4.  The weighted average closing price for awards exercised during the period were: Bill: £6.567; Andy: £6.566

5.  The unvested LTIP awards held by Bill, Andy and Diego are conditional rights. They do not have to pay towards these awards. Under these awards, shares are delivered on vesting or as soon as practicable thereafter.

6.  As detailed in our 2023 Annual Report and Accounts, due to Andy Halford's upcoming retirement he did not receive an LTIP award in 2024 and therefore, to meet regulatory deferral requirements in respect of 2023, part of his annual incentive was delivered in deferred shares.

7.  Andy chose to participate in the 2022 Sharesave invitation. This unvested option was granted on 28 November 2022 under the 2013 Plan - to exercise this option, Andy has to pay an exercise price of £4.23 per share, which has been discounted by 20 per cent.

8.  The vesting date relates to the end of the savings contract and the start of the six-month exercise window.

As at 30 June 2024, none of the directors had registered an interest or short position in the shares, underlying shares or debentures of the Company or any of its associated corporations that was required to be recorded pursuant to section 352 of the Securities and Futures Ordinance, or as otherwise notified to the Company and The Stock Exchange of Hong Kong Limited pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers.

Page 128

Shareholdings and share interests

The following table summarises the executive directors' shareholdings and share interests.

	Shares held beneficially1,2,3	Unvested share awards not subject to performance measures (net of tax)4,5	Total shares counting towards shareholding requirement	Shareholding requirement	Salary3	Value of shares counting towards shareholding requirement as a percentage of salary1	Unvested share awards subject to performance measures (before tax)
Bill Winters	2,911,070	323,640	3,234,710	250% salary	£2,517,000	920%	1,879,355
Andy Halford	981,249	232,172	1,213,421	200% salary	£1,609,000	540%	807,363
Diego De Giorgi	70,445	-	70,445	200% salary	£1,650,000	31%	404,062

1.  All figures are as of 30 June 2024 unless stated otherwise. The closing share price on 30 June 2024 was £7.16. No director had either: (i) an interest in Standard Chartered PLC's preference shares or loan stocks of any subsidiary or associated undertaking of the Group; or (ii) any corporate interested in Standard Chartered PLC's ordinary shares

2.  The beneficial interests of directors and connected persons in the ordinary shares of the Company are set out above. The executive directors do not have any non-beneficial interest in the Company's shares. Neither of the executive directors used ordinary shares as collateral for any loans

3.  The salary and shares held beneficially include shares awarded to deliver the executive directors' salary shares

4.  57 per cent of the 2021-23 LTIP award is no longer subject to performance measures due to achievement against RoTE and strategic measures

5.  As Bill , Andy and Diego are UK taxpayers: zero per cent tax is assumed to apply to Sharesave (as Sharesave is a UK tax qualified share plan) and 47 per cent tax is assumed to apply to other unvested share awards (marginal combined PAYE rate of income tax at 45 per cent and employee National Insurance contributions at
2 per cent) - rates may change

E. Share price information

The middle market price of an ordinary share at the close of business on 30 June 2024 was 716.0 pence. The share price range during the first half of 2024 was 573.9 pence to 785.9 pence (based on the closing middle market prices).

F. 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 Part XV of the SFO (other than Divisions 5, 11 and 12 thereof) 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 Stock Exchange of Hong Kong Limited any disclosure of interests made in the UK.

G. Code for Financial Reporting Disclosures

The UK Finance Code for Financial Reporting Disclosure sets out five disclosure principles together with supporting guidance. The principles are that UK banks will: provide high-quality, meaningful and decision-useful disclosures; review and enhance their financial instrument disclosures for key areas of interest; keep under review and commit to ongoing re-evaluation and enhancement of financial instrument disclosures for key areas of interest, acknowledging the importance of good practice recommendations and similar guidance issued from time to time by relevant regulators and standard-setters and assessing the applicability and relevance of such guidance to disclosures; seek to enhance the comparability of financial statement disclosures across the UK banking sector; and clearly differentiate in their annual reports between information that is audited and information that is unaudited.

The Group's interim financial statements for the six months ended 30 June 2024 have been prepared in accordance with the code's principles.

H. Employees

The details regarding our remuneration policies, bonus schemes and training schemes have not materially changed from our 2023 Annual Report and Accounts and we will be updating on these in our 2024 Annual Report.

I. Employee headcount

The following table summarises the number of employees within the Group:

	Business1	Support services2	Total3,4
At 30 June 2024	29,811	53,635	83,446
At 31 December 2023	29,929	55,078	85,007

1. Business is defined as employees directly under the remit of the businesses

2. Support services include employees who support businesses' operations or investments where costs are fully recharged to the businesses. Decrease in support services in H1 2024 is mainly due to decrease in technology and operations support resources, as tighter hiring controls are in place and we continue to review our workforce composition and skills.

3. Excludes 811 employees (headcount) from Digital Ventures entities (TasConnect, Zodia Markets, Zodia Custody, Appro, Audax, Solv India, Solv Kenya, Solv Ghana, Solv Malaysia, Letsbloom, MyZoi and TAWIFresh)

4. Includes employees operating in discontinued/restructured businesses

Page 129

Shareholder information

Dividend and interest payment dates

Ordinary shares	2024 interim dividend (cash only)
Results and dividend announced	30 July 2024
Ex-dividend date	8 (UK) 7 (HK) August 2024
Record date	9 August 2024
Last date to amend currency election instructions for cash dividend*	16 September 2024
Dividend payment date	10 October 2024

*   in either US dollars, sterling or Hong Kong dollars

	2024 final dividend (provisional only)
Results and dividend announcement date	21 February 2025

Preference shares	Second half-yearly dividend
7 3/8 per cent non-cumulative irredeemable preference shares of £1 each	1 October 2024
8 ¼ per cent non-cumulative irredeemable preference shares of £1 each	1 October 2024
6.409 per cent non-cumulative preference shares of $5 each	30 July 2024 and 30 October 2024
7.014 per cent non-cumulative preference shares of $5 each	30 July 2024

Previous dividend payments (unadjusted for the impact of the 2015/2010/2008 Rights Issues)

Dividend and financial year	Payment date	Dividend per ordinary share	Cost of one new ordinary share under share dividend scheme
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
Interim 2009	8 October 2009	21.23c/13.25177p/HK$1.645304	£13.876/$22.799
Final 2009	13 May 2010	44.80c/29.54233p/HK$3.478306	£17.351/$26.252
Interim 2010	5 October 2010	23.35c/14.71618p/HK$1.811274/INR0.9841241	£17.394/$27.190
Final 2010	11 May 2011	46.65c/28.272513p/HK$3.623404/INR1.99751701	£15.994/$25.649
Interim 2011	7 October 2011	24.75c/15.81958125p/HK$1.928909813/INR1.137971251	£14.127/$23.140
Final 2011	15 May 2012	51.25c/31.63032125p/HK$3.9776083375/INR2.66670151	£15.723/$24.634
Interim 2012	11 October 2012	27.23c/16.799630190p/HK$2.111362463/INR1.3498039501	£13.417/$21.041
Final 2012	14 May 2013	56.77c/36.5649893p/HK$4.4048756997/INR2.9762835751	£17.40/$26.28792
Interim 2013	17 October 2013	28.80c/17.8880256p/HK$2.233204992/INR1.68131	£15.362/$24.07379
Final 2013	14 May 2014	57.20c/33.9211444p/HK$4.43464736/INR3.3546261	£11.949/$19.815
Interim 2014	20 October 2014	28.80c/17.891107200p/HK$2.2340016000/INR1.6718425601	£12.151/$20.207
Final 2014	14 May 2015	57.20c/37.16485p/HK$4.43329/INR3.5140591	£9.797/$14.374
Interim 2015	19 October 2015	14.40c/9.3979152p/HK$1.115985456/INR0.861393721	£8.5226/$13.34383
Final 2015	No dividend declared	N/A	N/A
Interim 2016	No dividend declared	N/A	N/A
Final 2016	No dividend declared	N/A	N/A
Interim 2017	No dividend declared	N/A	N/A
Final 2017	17 May 2018	11.00c/7.88046p/HK$0.86293/INR0.6536433401	£7.7600/$10.83451
Interim 2018	22 October 2018	6.00c/4.59747p/HK$0.46978/INR0.36961751	£6.7104/$8.51952
Final 2018	16 May 2019	15.00c/11.569905p/HK$1.176260/INR0.9576916501	N/A
Interim 2019	21 October 2019	7.00c/5.676776p/HK$0.548723/INR0.4250286001	N/A
Final 2019	Dividend withdrawn	N/A	N/A
Interim 2020	No dividend declared	N/A	N/A
Final 2020	25 February 2021	9.00c/6.472413p/HK$0.698501	N/A
Interim 2021	22 October 2021	3.00c/2.204877p/HK$0.233592	N/A
Final 2021	12 May 2022	9.00c/6.894144p/HK$0.705772	N/A
Interim 2022	14 October 2022	4.00c/3.675912p/HK$0.313887	N/A
Final 2022	11 May 2023	14.00c/11.249168p/HK$1.09803	N/A
Interim 2023	13 October 2023	6.00c/4.910412p/HK$0.469085	N/A
Final 2023	17 May 2024	21.00c/16.773519p/HK$1.641434	N/A

1   The INR dividend was per Indian Depository Receipt. In March 2020, the Group announced the termination of the IDR programme. The IDR programme was formally delisted from the BSE Limited (formerly the Bombay Stock Exchange) and National Stock Exchange of India Limited with effect from 22 July 2020

Further details regarding dividends can be found on our website at www.sc.com/shareholders

Page 130

ShareCare

ShareCare is available to shareholders on the Company's UK register who have a UK address and bank account. It allows you to hold your Standard Chartered PLC 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 receive any dividend paid 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 www.sc.com/shareholders or contact the shareholder helpline on 0370 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. There is no implication for capital gains tax (no gain or loss) when you donate shares to charity, and UK taxpayers may be able to claim income tax relief on the value of their donation. Further information can be obtained from the Company's registrars or from ShareGift on 020 7930 3737 or from www.sharegift.org.

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 or 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 UK register, please contact our registrar at www.investorcentre.co.uk and click on the 'ASK A QUESTION' link at the bottom of the page. Alternatively, please contact Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ or call the shareholder helpline number on 0370 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, 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong. You can check your shareholding at: www.computershare.com/hk/investors.

Chinese translation

If you would like a Chinese version of this Half Year Report, please contact: Computershare Hong Kong Investor Services Limited at 17M 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17M樓。

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.

Electronic communications

If you hold your shares on the UK register and in future you would like to receive the Half Year Report electronically rather than by post, please register online at: www.investorcentre.co.uk. Then click on 'register now' and follow the instructions. You will need to have your shareholder or ShareCare reference number to hand. You can find this on your share certificate or ShareCare statement. Once you have registered and confirmed your email communication preference, you will receive future notifications via email enabling you to submit your proxy vote online. In addition, as a member of Investor Centre, you will be able to manage your shareholding online and change your bank mandate or address information.

Page 131

Important notices

Forward-looking statements

This document may contain 'forward-looking statements' that are based upon current expectations or beliefs, as well as statements formulated with assumptions about future events. These forward-looking statements can be identified by the fact they do not relate only to historical or current facts.  Forward-looking statements often use words such as 'may', 'could', 'will', 'expect', 'intend', 'estimate', 'anticipate', 'believe', 'plan', 'seek', 'aim', 'continue' or other words of similar meaning.

By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Group's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. Readers should not place reliance on, and are cautioned about relying on, any forward-looking statements.

There are several factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements. The factors that could cause actual results to differ materially from those described in the forward-looking statements include (but are not limited to): changes in global, political, economic, business, competitive; market forces or conditions, or in future exchange and interest rates; changes in environmental, geopolitical, social or physical risks; legislative, regulatory and policy developments; the development of standards and interpretations; the ability of the Group, together with governments and other stakeholders, to measure, manage, and mitigate the impacts of climate change and broader sustainability-related issues effectively; risks arising out of health crises and pandemics; risks of cyberattacks, data, information or security breaches or technology failures involving the Group; changes in tax rates, future business combinations or dispositions; and other factors specific to the Group, including those identified in the financial statements of the Group. Any forward-looking statements contained in this document are based on past or current trends and/or activities of the Group and should not be taken as a representation that such trends or activities will continue in the future.

No statement In this document is intended to be, nor should be interpreted as, a profit forecast or to imply that the earnings of the Group for the current year or future years will necessarily match or exceed the historical or published earnings of the Group. Each forward-looking statement speaks only as of the date of the particular statement. Except as required by any applicable laws or regulations, the Group expressly disclaims any obligation to revise or update any forward-looking statement contained within this document, regardless of whether those statements are affected as a result of new information, future events or otherwise.

Please refer to the Annual Report, this document, and the financial statements of the Group for a discussion of certain of the risks and factors that could adversely impact the Group's actual results, and its plans and objectives, to differ materially from those expressed or implied in any forward-looking statements.

Financial instruments

Nothing in this document shall constitute, in any jurisdiction, an offer or solicitation to sell or purchase any securities or other financial instruments, nor shall it constitute a recommendation or advice in respect of any securities or other financial instruments or any other matter.

Caution regarding climate and environment-related information

Some of the climate and environment-related information in this document is subject to certain limitations, and therefore the reader should treat the information provided, as well as conclusions, projections and assumptions drawn from such information, with caution. The information may be limited due to a number of factors, which include (but are not limited to): a lack of reliable data; a lack of standardisation of data; and future uncertainty. The information includes externally sourced data that may not have been verified. Furthermore, some of the data, models and methodologies used to create the information are subject to adjustment that is beyond our control, and the information is subject to change without notice. This disclaimer does not apply to the Group's condensed consolidated interim financial statements and notes as set out in Note 1 - Statement of compliance.

Page 132

Glossary

Absolute financed emissions

A measurement of our attributed share of our clients greenhouse gas emissions.

AT1 or Additional Tier 1 capital

Additional Tier 1 capital consists of instruments other than Common Equity Tier 1 that meet the Capital Requirements Regulation (as it forms part of UK domestic law) criteria for inclusion in Tier 1 capital.

Additional value adjustment

See Prudent valuation adjustment.

Advanced Internal Rating Based (AIRB) approach

The AIRB approach under the Basel framework is used to calculate credit risk capital based on the Group's own estimates of prudential parameters.

Alternative performance measures

A financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework.

ASEAN

Association of South East Asian Nations (ASEAN) which includes the Group's operations in Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.

AUM or Assets under management

Total market value of assets such as deposits, securities and funds held by the Group on behalf of the clients.

Basel II

The capital adequacy framework issued by the Basel Committee on Banking Supervision (BCBS) in June 2006 in the form of the International Convergence of Capital Measurement and Capital Standards.

Basel III

The global regulatory standards on bank capital adequacy and liquidity, originally issued in December 2010 and updated in June 2011. In December 2017, the BCBS published a document setting out the finalisation of the Basel III framework. The latest requirements issued in December 2017 will be implemented from 2022.

BCBS or Basel Committee on Banking Supervision

A forum on banking supervisory matters which develops global supervisory standards for the banking industry. Its members are officials from 45 central banks or prudential supervisors from 27 countries and territories.

Basic earnings per share (EPS)

Represents earnings divided by the basic weighted average number of shares.

Basis point (bps)

One hundredth of a per cent (0.01 per cent); 100 basis points is 1 per cent.

CRD or Capital Requirements Directive

A capital adequacy legislative package adopted by the PRA. CRD comprises the Capital Requirements Directive and the UK onshored Capital Requirements Regulation (CRR). The package implements the Basel III framework together with transitional arrangements for some of its requirements. CRD IV came into force on 1 January 2014. The EU CRR II and CRD V amending
the existing package came into force in June 2019 with most changes starting to apply from 28 June 2021. Only those parts of the EU CRR II that applied on or before 31 December 2020, when the UK was a member of the EU, have been implemented. The PRA recently finalised the UK's version of the CRR II for implementation on 1 January 2022.

Page 133

Capital-lite income

Income derived from products with low RWA consumption or products which are non-funding in nature.

Capital resources

Sum of Tier 1 and Tier 2 capital after regulatory adjustments.

CGU or Cash-generating unit

The smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

Cash shortfall

The difference between the cash flows that are due in accordance with the contractual terms of the instrument and the cash flows that the Group expects to receive over the contractual life of the instrument.

Clawback

An amount an individual is required to pay back to the Group, which has to be returned to the Group under certain circumstances.

Commercial real estate

Includes office buildings, industrial property, medical centres, hotels, malls, retail stores, shopping centres, farm land, multi-family housing buildings, warehouses, garages, and industrial properties. Commercial real estate loans are those backed by
a package of commercial real estate assets.

CET1 or Common Equity Tier 1 capital

Common Equity Tier 1 capital consists of the common shares issued by the Group and related share premium, retained earnings, accumulated other comprehensive income and other disclosed reserves, eligible non-controlling interests and regulatory adjustments required in the calculation of Common Equity Tier 1.

CET1 ratio

A measure of the Group's CET1 capital as a percentage of risk-weighted assets.

Contractual maturity

Contractual maturity refers to the final payment date of a loan or other financial instrument, at which point all the remaining outstanding principal and interest is due to be paid.

Countercyclical capital buffer

The countercyclical capital buffer (CCyB) is part of a set of macroprudential instruments, designed to help counter procyclicality in the financial system. CCyB as defined in the Basel III standard provides for an additional capital requirement of up to 2.5 per cent of risk-weighted assets in a given jurisdiction. The Bank of England's Financial Policy Committee has the power to set the CCyB rate for the United Kingdom. Each bank must calculate its 'institution-specific' CCyB rate, defined as the weighted average of the CCyB rates in effect across the jurisdictions in which it has credit exposures. The institution-specific CCyB rate is then applied to a bank's total risk-weighted assets.

Counterparty credit risk

The risk that a counterparty defaults before satisfying its obligations under a derivative, a securities financing transaction (SFT) or a similar contract.

CCF or Credit conversion factor

An estimate of the amount the Group expects a customer to have drawn further on a facility limit at the point of default.
This is either prescribed by CRR or modelled by the bank.

Page 134

CDS or Credit default swaps

A credit derivative is an arrangement whereby the credit risk of an asset (the reference asset) is transferred from the buyer to the seller of protection. A credit default swap is a contract where the protection seller receives premium or interest-related payments in return for contracting to make payments to the protection buyer upon a defined credit event. Credit events normally include bankruptcy, payment default on a reference asset or assets, or downgrades by a rating agency.

Credit institutions

An institution whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account.

Credit risk mitigation

Credit risk mitigation is a process to mitigate potential credit losses from any given account, customer or portfolio by using a range of tools such as collateral, netting agreements, credit insurance, credit derivatives and guarantees.

CVA or Credit valuation adjustments

An adjustment to the fair value of derivative contracts that reflects the possibility that the counterparty may default such that the Group would not receive the full market value of the contracts.

Customer accounts

Money deposited by all individuals and companies which are not credit institutions including securities sold under
repurchase agreement (see repo/reverse repo). Such funds are recorded as liabilities in the Group's balance sheet under customer accounts.

Days past due

One or more days that interest and/or principal payments are overdue based on the contractual terms.

DVA or Debit valuation adjustment

An adjustment to the fair value of derivative contracts that reflects the possibility that the Group may default and not pay the full market value of contracts.

Debt securities

Debt securities are assets on the Group's balance sheet and represent certificates of indebtedness of credit institutions, public bodies or other undertakings excluding those issued by central banks.

Debt securities in issue

Debt securities in issue are transferable certificates of indebtedness of the Group to the bearer of the certificate. These are liabilities of the Group and include certificates of deposits.

Deferred tax asset

Income taxes recoverable in future periods in respect of deductible temporary differences between the accounting and tax base of an asset or liability that will result in tax deductible amounts in future periods, the carry-forward of tax losses or the carry-forward of unused tax credits.

Deferred tax liability

Income taxes payable in future periods in respect of taxable temporary differences between the accounting and tax base of an asset or liability that will result in taxable amounts in future periods.

Default

Financial assets in default represent those that are at least 90 days past due in respect of principal or interest and/or where the assets are otherwise considered to be unlikely to pay, including those that are credit-impaired.

Defined benefit obligation

The present value of expected future payments required to settle the obligations of a defined benefit scheme resulting from employee service.

Page 135

Defined benefit scheme

Pension or other post-retirement benefit scheme other than a defined contribution scheme.

Defined contribution scheme

A pension or other post-retirement benefit scheme where the employer's obligation is limited to its contributions to the fund.

Delinquency

A debt or other financial obligation is considered to be in a state of delinquency when payments are overdue. Loans and advances are considered to be delinquent when consecutive payments are missed. Also known as arrears.

Deposits by banks

Deposits by banks comprise amounts owed to other domestic or foreign credit institutions by the Group including securities sold under repo.

Diluted earnings per share (EPS)

Represents earnings divided by the weighted average number of shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

Dividend per share

Represents the entitlement of each shareholder in the share of the profits of the Company. Calculated in the lowest unit of currency in which the shares are quoted.

Early alert, purely and non-purely precautionary

A borrower's account which exhibits risks or potential weaknesses of a material nature requiring closer monitoring, supervision, or attention by management. Weaknesses in such a borrower's account, if left uncorrected, could result in deterioration of repayment prospects and the likelihood of being downgraded to credit grade 12 or worse. When an account is on early alert, it is classified as either purely precautionary or non-purely precautionary. A purely precautionary account is one that exhibits early alert characteristics, but these do not present any imminent credit concern. If the symptoms present an imminent credit concern, an account will be considered for classification as non-purely precautionary.

Effective tax rate

The tax on profit/ (losses) on ordinary activities as a percentage of profit/ (loss) on ordinary activities before taxation.

Encumbered assets

On-balance sheet assets pledged or used as collateral in respect of certain of the Group's liabilities.

EU or European Union

The European Union (EU) is a political and economic union of 27 member states that are located primarily in Europe.

Eurozone

Represents the 19 EU countries that have adopted the euro as their common currency.

ECL or Expected credit loss

Represents the present value of expected cash shortfalls over the residual term of a financial asset, undrawn commitment or financial guarantee.

Expected loss

The Group measure of anticipated loss for exposures captured under an internal ratings-based credit risk approach for capital adequacy calculations. It is measured as the Group-modelled view of anticipated loss based on probability of default, loss given default and exposure at default, with a one-year time horizon.

Exposures

Credit exposures represent the amount lent to a customer, together with any undrawn commitments.

Page 136

EAD or Exposure at default

The estimation of the extent to which the Group may be exposed to a customer or counterparty in the event of, and at the time of, that counterparty's default. At default, the customer may not have drawn the loan fully or may already have repaid some of the principal, so that exposure is typically less than the approved loan limit.

ECAI or External Credit Assessment Institution

External credit ratings are used to assign risk-weights under the standardised approach for sovereigns, corporates and institutions. The external ratings are from credit rating agencies that are registered or certified in accordance with the credit rating agencies regulation or from a central bank issuing credit ratings which is exempt from the application of this regulation.

ESG

Environmental, Social and Governance.

FCA or Financial Conduct Authority

The Financial Conduct Authority regulates the conduct of financial firms and, for certain firms, prudential standards in the UK. It has a strategic objective to ensure that the relevant markets function well.

Forbearance

Forbearance takes place when a concession is made to the contractual terms of a loan in response to an obligor's financial difficulties. The Group classifies such modified loans as either 'Forborne - not impaired loans' or 'Loans subject to forbearance - impaired'. Once a loan is categorised as either of these, it will remain in one of these two categories until the loan matures or satisfies the 'curing' conditions described in Note 8 to the financial statements.

Forborne - not impaired loans

Loans where the contractual terms have been modified due to financial difficulties of the borrower, but the loan is not considered to be impaired. See 'Forbearance'.

Funded/unfunded exposures

Exposures where the notional amount of the transaction is funded or unfunded. Represents exposures where a commitment to provide future funding is made but funds have been released/ not released.

FVA or Funding valuation adjustments

FVA reflects an adjustment to fair value in respect of derivative contracts that reflects the funding costs that the market participant would incorporate when determining an exit price.

G-SIBs or Global Systemically Important Banks

Global banking financial institutions whose size, complexity and systemic interconnectedness mean that their distress or failure would cause significant disruption to the wider financial system and economic activity. The list of G-SIBs is assessed under a framework established by the FSB and the BCBS. In the UK, the G-SIB framework is implemented via the CRD and G-SIBs are referred to as Global Systemically Important Institutions (G-SIIs).

 G-SIB buffer

A CET1 capital buffer which results from designation as a G-SIB. The G-SIB buffer is between 1 per cent and 3.5 per cent,  depending on the allocation to one of five buckets based on the annual scoring. In the UK, the G-SIB buffer is implemented via the CRD as Global Systemically Important Institutions (G-SII) buffer requirement.

Green and Sustainable Product Framework

Sets out underlying eligible qualifying themes and activities that may be considered ESG .This has been developed with the support of external experts, has been informed by industry and supervisory principles and standards such as the Green Bond Principles and EU Taxonomy for sustainable activities.

 

Page 137

Hong Kong regional hub

Standard Chartered Bank (Hong Kong) Limited and its subsidiaries including the primary operating entities in China, Korea and Taiwan. Standard Chartered PLC is the ultimate parent company of Standard Chartered Bank (Hong Kong) Limited.

Interest rate risk

The risk of an adverse impact on the Group's income statement due to changes in interest rates.

IRB or internal ratings-based approach

Risk-weighting methodology in accordance with the Basel Capital Accord where capital requirements are based on a firm's own estimates of prudential parameters.

Internal model approach

The approach used to calculate market risk capital and RWA with an internal market risk model approved by the PRA under the terms of CRD/CRR.

IAS or International Accounting Standard

A standard that forms part of the International Financial Reporting Standards framework.

IASB or International Accounting Standards Board

An independent standard-setting body responsible for the development and publication of IFRS, and approving interpretations of IFRS standards that are recommended by the IFRS Interpretations Committee (IFRIC).

IFRS or International Financial Reporting Standards

A set of international accounting standards developed and issued by the International Accounting Standards Board, consisting of principles-based guidance contained within IFRSs and IASs. All companies that have issued publicly traded securities in the EU are required to prepare annual and interim reports under IFRS and IAS standards that have been endorsed by the EU.

IFRIC

The IFRS Interpretations Committee supports the IASB in providing authoritative guidance on the accounting treatment of issues not specifically dealt with by existing IFRSs and IASs.

Investment grade

A debt security, treasury bill or similar instrument with a credit rating measured by external agencies of AAA to BBB.

Leverage ratio

A ratio introduced under CRD IV that compares Tier 1 capital to total exposures, including certain exposures held off-balance sheet as adjusted by stipulated credit conversion factors. Intended to be a simple, non-risk-based backstop measure.

Liquidation portfolio

A portfolio of assets which is beyond our current risk appetite metrics and is held for liquidation.

LCR or Liquidity coverage ratio

The ratio of the stock of high-quality liquid assets to expected net cash outflows over the following 30 days. High-quality liquid assets should be unencumbered, liquid in markets during a time of stress and, ideally, be central bank eligible.

Loan exposure

Loans and advances to customers reported on the balance sheet held at amortised cost or FVOCI, non-cancellable credit commitments and cancellable credit commitments for credit cards and overdraft facilities.

Page 138

Loans and advances to customers

This represents lending made under bilateral agreements with customers entered into in the normal course of business and is based on the legal form of the instrument.

Loans and advances to banks

Amounts loaned to credit institutions including securities bought under Reverse repo.

LTV or loan-to-value ratio

A calculation which expresses the amount of a first mortgage lien as a percentage of the total appraised value of real property. The loan-to-value ratio is used in determining the appropriate level of risk for the loan and therefore the correct price of the loan to the borrower.

Loans past due

Loans on which payments have been due for up to a maximum of 90 days including those on which partial payments are being made.

Loans subject to forbearance - impaired

Loans where the terms have been renegotiated on terms not consistent with current market levels due to financial difficulties of the borrower. Loans in this category are necessarily impaired. See 'Forbearance'.

Loss rate

Uses an adjusted gross charge-off rate, developed using monthly write-off and recoveries over the preceding 12 months and total outstanding balances.

LGD or Loss given default

The percentage of an exposure that a lender expects to lose in the event of obligor default.

Low returning clients

See 'Perennial sub-optimal clients'.

Malus

An arrangement that permits the Group to prevent vesting of all or part of the amount of an unvested variable remuneration award, due to a specific crystallised risk, behaviour, conduct or adverse performance outcome.

Master netting agreement

An agreement between two counterparties that have multiple derivative contracts with each other that provides for the net settlement of all contracts through a single payment, in a single currency, in the event of default on, or termination of, any one contract.

Mezzanine capital

Financing that combines debt and equity characteristics. For example, a loan that also confers some profit participation to the lender.

MREL or minimum requirement for own funds and eligible liabilities

A requirement under the Bank Recovery and Resolution Directive for EU resolution authorities to set a minimum requirement for own funds and eligible liabilities for banks, implementing the FSB's Total Loss Absorbing Capacity (TLAC) standard. MREL is intended to ensure that there is sufficient equity and specific types of liabilities to facilitate an orderly resolution that minimises any impact on financial stability and ensures the continuity of critical functions and avoids exposing taxpayers to loss.

Net asset value (NAV) per share

Ratio of net assets (total assets less total liabilities) to the number of ordinary shares outstanding at the end of a reporting period.

Page 139

Net nominal

The aggregate of loans and advances to customers/loans and advances to banks after impairment provisions, restricted balances with central banks, derivatives (net of master netting agreements), investment debt and equity securities, and letters of credit and guarantees.

Net zero

The commitment to reaching net zero carbon emissions from our operations by 2025 and from our financing by 2050.

NII or Net interest income

The difference between interest received on assets and interest paid on liabilities.

NSFR or Net stable funding ratio

The ratio of available stable funding to required stable funding over a one-year time horizon, assuming a stressed scenario. It is a longer-term liquidity measure designed to restrain the amount of wholesale borrowing and encourage stable funding over a one-year time horizon.

NPLs or non-performing loans

An NPL is any loan that is more than 90 days past due or is otherwise individually impaired. This excludes Retail loans renegotiated at or after 90 days past due, but on which there has been no default in interest or principal payments for more than 180 days since renegotiation, and against which no loss of principal is expected.

Non-linearity

Non-linearity of expected credit loss occurs when the average of expected credit loss for a portfolio is higher than the base case (median) due to the fact that bad economic environment could have a larger impact on ECL calculation than good economic environment.

Normalised items

See 'Underlying/Normalised'.

Operating expenses

Staff and premises costs, general and administrative expenses, depreciation and amortisation. Underlying operating expenses exclude expenses as described in 'Underlying earnings'. A reconciliation between underlying and statutory earnings is contained in Note 2 to the financial statements.

Operating income or operating profit

Net interest, net fee and net trading income, as well as other operating income. Underlying operating income represents the income line items above, on an underlying basis. See 'Underlying earnings'.

OTC or Over-the-counter derivatives

A bilateral transaction (e.g. derivatives) that is not exchange traded and that is valued using valuation models.

OCA or Own credit adjustment

An adjustment to the Group's issued debt designated at fair value through profit or loss that reflects the possibility that the Group may default and not pay the full market value of the contracts.

Perennial sub-optimal clients

Clients that have returned below 3% return on risk-weighted assets for the last three years

Physical risks

The risk of increased extreme weather events including flood, drought and sea level rise.

Pillar 1

The first pillar of the three pillars of the Basel framework which provides the approach to calculation of the minimum
capital requirements for credit, market and operational risk. Minimum capital requirements are 8 per cent of the Group's risk-weighted assets.

Page 140

Pillar 2

The second pillar of the three pillars of the Basel framework which requires banks to undertake a comprehensive assessment of their risks and to determine the appropriate amounts of capital to be held against these risks where other suitable mitigants are not available.

Pillar 3

The third pillar of the three pillars of the Basel framework which aims to provide a consistent and comprehensive disclosure framework that enhances comparability between banks and further promotes improvements in risk practices.

Priority Banking

Priority Banking customers are individuals who have met certain criteria for deposits, AUM, mortgage loans or monthly payroll. Criteria varies by country.

Private equity investments

Equity securities in operating companies generally not quoted on a public exchange. Investment in private equity often involves the investment of capital in private companies. Capital for private equity investment is raised by retail or institutional investors and used to fund investment strategies such as leveraged buyouts, venture capital, growth capital, distressed investments and mezzanine capital.

PD or Probability of default

PD is an internal estimate for each borrower grade of the likelihood that an obligor will default on an obligation over a given time horizon.

Probability weighted

Obtained by considering the values the metric can assume, weighted by the probability of each value occurring.

Profit (loss) attributable to ordinary shareholders

Profit (loss) for the year after non-controlling interests and dividends declared in respect of preference shares classified as equity.

PVA or Prudent valuation adjustment

An adjustment to CET1 capital to reflect the difference between fair value and prudent value positions, where the application of prudence results in a lower absolute carrying value than recognised in the financial statements.

PRA or Prudential Regulation Authority

The Prudential Regulation Authority is the statutory body responsible for the prudential supervision of banks, building societies, credit unions, insurers and a small number of significant investment firms in the UK. The PRA is a part of the Bank of England.

Revenue-based carbon intensity

A measurement of the quantity of greenhouse gases emitted by our clients per USD of their revenue.

Regulatory consolidation

The regulatory consolidation of Standard Chartered PLC differs from the statutory consolidation in that it includes Ascenta IV, Olea Global group, Partior Pte. Ltd., SBI Zodia Custody Co. Ltd, Seychelles International Mercantile Banking Corporation Limited., and all of the legal entities in the CurrencyFair group on a proportionate consolidation basis. These entities are considered associates for statutory accounting purposes.

Page 141

The regulatory consolidation further excludes the following entities, which are consolidated for statutory accounting purposes; Audax Financial Technology Pte. Ltd, Furaha Finserve Uganda Limited, Huma.Eco Pte. Ltd., Inveco Pte. Ltd., Karstenza B.V, Letsbloom Pte. Ltd, Letsbloom India Private Limited, Pegasus Dealmaking Pte. Ltd., SCV Research and Development Pte. Ltd., SCV Research and Development Pvt. Ltd., Solv Sdn. Bhd., Solv Vietnam Company Limited, Solvezy Technology Kenya Ltd, Standard Chartered Assurance Limited, Standard Chartered Isle of Man Limited, Standard Chartered Botswana Education Trust, Standard Chartered Bancassurance Intermediary Limited, Standard Chartered Bank Insurance Agency (Proprietary) Limited, Standard Chartered Research and Technology India Private Limited, Standard Chartered Trading (Shanghai) Limited, TASConnect (Hong Kong) Private Limited, Tawi Fresh Kenya Limited.

Repo/reverse repo

A repurchase agreement or repo is a short-term funding agreement, which allows a borrower to sell a financial asset, such as asset-backed securities or government bonds as collateral for cash. As part of the agreement the borrower agrees to repurchase the security at some later date, usually less than 30 days, repaying the proceeds of the loan. For the party on the other end of the transaction (buying the security and agreeing to sell in the future), it is a reverse repurchase agreement or reverse repo.

Residential mortgage

A loan to purchase a residential property which is then used as collateral to guarantee repayment of the loan. The borrower gives the lender a lien against the property, and the lender can foreclose on the property if the borrower does not repay the loan per the agreed terms. Also known as a home loan.

RoRWA or Return on risk-weighted assets

Profit before tax for year as a percentage of RWA. Profit may be statutory or underlying and is specified where used.
See 'RWA' and 'Underlying earnings'.

RWA or Risk-weighted assets

A measure of a bank's assets adjusted for their associated risks, expressed as a percentage of an exposure value in accordance with the applicable standardised or IRB approach provisions.

Risks-not-in-VaR (RNIV)

A framework for identifying and quantifying marginal types of market risk that are not captured in the Value at Risk (VaR) measure for any reason, such as being a far-tail risk or the necessary historical market data not being available.

Roll rate

Uses a matrix that gives average loan migration rate from delinquency states from period to period. A matrix multiplication
is then performed to generate the final PDs by delinquency bucket over different time horizons.

Scope 1 emissions

Arise from the consumption of energy from direct sources during the use of property occupied by the Group. On-site combustion of fuels such as diesel, liquefied petroleum gas and natural gas is recorded using meters or, where metering is not available, collated from fuel vendor invoices. Emissions from the combustion of fuel in Group-operated transportation devices, as well as fugitive emissions, are excluded as being immaterial.

Scope 2 emissions

Arise from the consumption of indirect sources of energy during the use of property occupied by the Group. Energy generated off-site in the form of purchased electricity, heat, steam or cooling is collected as kilowatt hours consumed using meters or, where metering is not available, collated from vendor invoices. For leased properties we include all indirect and direct sources of energy consumed by building services (amongst other activities) within the space occupied by the Group. This can include base building services under landlord control but over which we typically hold a reasonable degree of influence. All data centre facilities with conditioning systems and hardware remaining under the operational control of the Group are included in the reporting. This does not include energy used at outsourced data centre facilities which are captured under Scope 3.

Page 142

Scope 3 emissions

Occur as a consequence of the Group's activities but arising from sources not controlled by the Group. Business air travel data is collected as person kilometres travelled by seating class by employees of the Group. Data are drawn from country operations that have processes in place to gather accurate employee air travel data from travel management companies. Flights are categorised as short, medium or long haul trips. Emissions from other potential Scope 3 sources such as electricity transmission and distribution line losses are not currently accounted for on the basis that they cannot be calculated with an acceptable level of reliability or consistency. The Group does however capture Scope 3 emissions from outsourced data centres managed by third parties.

Secured (fully and partially)

A secured loan is a loan in which the borrower pledges an asset as collateral for a loan which, in the event that the borrower defaults, the Group is able to take possession of. All secured loans are considered fully secured if the fair value of the collateral is equal to or greater than the loan at the time of origination. All other secured loans are considered to be partly secured.

Securitisation

Securitisation is a process by which credit exposures are aggregated into a pool, which is used to back new securities.
Under traditional securitisation transactions, assets are sold to a structured entity which then issues new securities to investors at different levels of seniority (credit tranching). This allows the credit quality of the assets to be separated from the credit rating of the originating institution and transfers risk to external investors in a way that meets their risk appetite. Under synthetic securitisation transactions, the transfer of risk is achieved by the use of credit derivatives or guarantees, and the exposures being securitised remain exposures of the originating institution.

Senior debt

Debt that takes priority over other unsecured or otherwise more 'junior' debt owed by the issuer. Senior debt has greater seniority in the issuer's capital structure than subordinated debt. In the event the issuer goes bankrupt, senior debt theoretically must be repaid before other creditors receive any payment.

SICR or Significant increase in credit risk

Assessed by comparing the risk of default of an exposure at the reporting date to the risk of default at origination (after considering the passage of time).

Solo

The solo regulatory group as defined in the Prudential Regulation Authority waiver letter dated 10 August 2020 differs from Standard Chartered Bank Company in that it includes the full consolidation of nine subsidiaries, namely Standard Chartered Holdings (International) B.V., Standard Chartered MB Holdings B.V., Standard Chartered UK Holdings Limited, Standard Chartered Grindlays PTY Limited, SCMB Overseas Limited, Standard Chartered Capital Management (Jersey) LLC, Cerulean Investments L.P., SC Ventures Innovation Investment L.P. and SC Ventures G.P. Limited.

Sovereign exposures

Exposures to central governments and central government departments, central banks and entities owned or guaranteed by the aforementioned. Sovereign exposures, as defined by the European Banking Authority, include only exposures to central governments.

 Stage 1

Assets have not experienced a significant increase in credit risk since origination and impairment recognised on the basis of 12 months expected credit losses.

Stage 2

Assets have experienced a significant increase in credit risk since origination and impairment is recognised on the basis of lifetime expected credit losses.

Stage 3

Assets that are in default and considered credit-impaired (non-performing loans).

Page 143

Standardised approach

In relation to credit risk, a method for calculating credit risk capital requirements using External Credit Assessment
Institutions (ECAI) ratings and supervisory risk weights. In relation to operational risk, a method of calculating the
operational capital requirement by the application of a supervisory defined percentage charge to the gross income
of eight specified business lines.

Structured note

An investment tool which pays a return linked to the value or level of a specified asset or index and sometimes offers capital protection if the value declines. Structured notes can be linked to equities, interest rates, funds, commodities and foreign currency.

Subordinated liabilities

Liabilities which, in the event of insolvency or liquidation of the issuer, are subordinated to the claims of depositors and other creditors of the issuer.

Sustainability Aspirations

A series of targets and metrics by which we aim to promote social and economic development, and deliver sustainable outcomes in the areas in which we can make the most material contribution to the delivery of the UN Sustainable Development Goals.

Sustainable Finance assets

Assets from clients whose activities are aligned with the Green and Sustainable Product Framework and/or from transactions for which the use of proceeds will be utilised directly to contribute towards eligible themes and activities set out within the Green and Sustainable Product Framework.

Sustainable Finance revenue

Revenue from clients whose activities are aligned with the Green and Sustainable Product Framework and/or from transactions for which proceeds will be utilised directly to contribute towards eligible themes and activities set out within the Green and Sustainable Product Framework and/or from approved 'labelled' transactions such as any transaction referred to as "green", "social", "sustainable", "SDG (sustainable development goal) aligned", "ESG", "transition", "COVID-19 facility" or "COVID-19 response" which have been approved by the Sustainable Finance Governance Committee.

Tier 1 capital

The sum of Common Equity Tier 1 capital and Additional Tier 1 capital.

Tier 1 capital ratio

Tier 1 capital as a percentage of risk-weighted assets.

Tier 2 capital

Tier 2 capital comprises qualifying subordinated liabilities and related share premium accounts.

TLAC or Total loss absorbing capacity

An international standard for TLAC issued by the FSB, which requires G-SIBs to have sufficient loss-absorbing and recapitalisation capacity available in resolution, to minimise impacts on financial stability, maintain the continuity of
critical functions and avoid exposing public funds to loss.

Transition risks

The risk of changes to market dynamics or sectoral economics due to governments' response to climate change.

UK bank levy

A levy that applies to certain UK banks and the UK operations of foreign banks. The levy is payable each year based on a percentage of the chargeable equities and liabilities on the Group's UK tax resident entities' balance sheets. Key exclusions from chargeable equities and liabilities include Tier 1 capital, insured or guaranteed retail deposits, repos secured on certain sovereign debt and liabilities subject to netting.

Page 144

Unbiased

Not overly optimistic or pessimistic, represents information that is not slanted, weighted, emphasised, de-emphasised or otherwise manipulated to increase the probability that the financial information will be received favourably or unfavourably by users.

Unlikely to pay

Indications of unlikeliness to pay shall include placing the credit obligation on non-accrued status; the recognition of a specific credit adjustment resulting from a significant perceived decline in credit quality subsequent to the Group taking on the exposure; selling the credit obligation at a material credit-related economic loss; the Group consenting to a distressed restructuring of the credit obligation where this is likely to result in a diminished financial obligation caused by the material forgiveness, or postponement, of principal, interest or, where relevant fees; filing for the obligor's bankruptcy or a similar order in respect of an obligor's credit obligation to the Group; the obligor has sought or has been placed in bankruptcy or similar protection where this would avoid or delay repayment of a credit obligation to the Group.

VaR or Value at Risk

A quantitative measure of market risk estimating the potential loss that will not be exceeded in a set time period at a set statistical confidence level.

ViU or Value-in-Use

The present value of the future expected cash flows expected to be derived from an asset or CGU.

Write-downs

After an advance has been identified as impaired and is subject to an impairment provision, the stage may be reached whereby it is concluded that there is no realistic prospect of further recovery. Write-downs will occur when, and to the extent that, the whole or part of a debt is considered irrecoverable.

XVA

The term used to incorporate credit, debit and funding valuation adjustments to the fair value of derivative financial instruments. See 'CVA', 'DVA' and 'FVA'.

Page 145

CONTACT INFORMATION

Global headquarters
Standard Chartered Group
1 Basinghall Avenue
London, EC2V 5DD
United Kingdom

telephone: [phone]
facsimile: [phone]

Shareholder enquiries
ShareCare information

website: sc.com/shareholders
helpline: [phone]

ShareGift information
website: ShareGift.org
helpline: [phone]

Registrar information

UK

Computershare Investor Services PLC

The Pavilions
Bridgwater Road
Bristol, BS99 6ZZ
helpline: [phone]

Hong Kong

Computershare Hong Kong Investor Services Limited

17M Floor, Hopewell Centre
183 Queen's Road East
Wan Chai
Hong Kong

website: computershare.com/hk/investors

Chinese translation

Computershare Hong Kong Investor Services Limited

17M Floor, Hopewell Centre
183 Queen's Road East
Wan Chai
Hong Kong

Register for electronic communications
website: investorcentre.co.uk

For further information, please contact:

Manus Costello, Global Head of Investor Relations
[phone]

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

Page 146

 

END