Standard Chartered PLC
Q3'24 Results
30 October 2024
Registered in England under company No. 966425
Registered Office: 1 Basinghall Avenue, London, EC2V 5DD, UK
Table of contents
Performance highlights |
1 |
Statement of results |
3 |
Group Chief Financial Officer's review |
4 |
Supplementary financial information |
12 |
Underlying versus reported results reconciliations |
22 |
Risk review |
25 |
Capital review |
28 |
Financial statements |
32 |
Other supplementary financial information |
37 |
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. |
Standard Chartered PLC - Results for the third quarter ended 30 September 2024
All figures are presented on an underlying basis and comparisons are made to 2023 on a reported currency basis, unless otherwise stated. A reconciliation of restructuring and other items excluded from underlying results is set out on page 22.
"We have delivered a strong performance in the third quarter with profit before tax up 41%, driven by a record quarter in Wealth Solutions and strong growth in our Global Markets business.
We are doubling investment in our consistently fast-growing and high-returning wealth management business, and we will continue to reshape our mass retail business to focus on developing our pipeline of future affluent and international banking clients. In our CIB business, we are taking actions to focus on larger global clients who rely on our unique cross-border capabilities.
These actions will further simplify our business and help us to generate higher quality growth and improve our RoTE over the medium term. We are increasing both our 2026 RoTE target from 12% to approaching 13%, and our shareholder distribution target from at least $5bn to at least $8bn from 2024 to 2026."
• Operating income up 11% to $4.9bn, up 12% at constant currency (ccy)
- Net interest income (NII) up 9% at ccy to $2.6bn, partly due to the short-term hedge roll-off; Non NII up 15% at ccy to $2.3bn
- Wealth Solutions up 32% at ccy, with broad-based growth across products and supported by continued strong momentum in leading indicators of net new sales and affluent new to bank clients
- Global Markets up 16% at ccy, with strong performance in flow income and episodic income
• Operating expenses up 3% to $2.9bn, up 2% at ccy driven by inflation and business growth, partly offset by efficiency saves
• Credit impairment charge of $178m includes $177m from Wealth & Retail Banking (WRB) which was up quarter-on-quarter primarily due to a $21m overlay relating to Korea eCommerce platform, and a $10m net recovery in Corporate & Investment Banking (CIB)
- High risk assets of $8.3bn broadly flat quarter-on-quarter
- Loan-loss rate (LLR) of 21bps, down 16bps on prior year and up 9bps on prior quarter
• Underlying profit before tax of $1.8bn, up 41% at ccy; reported profit before tax of $1.7bn, up 180% at ccy
• Balance sheet remains strong, liquid and well diversified
- Loans and advances to customers of $287bn, up $11bn or 4% since 30.6.24; down $1bn on an underlying basis with continued growth in CIB offset by mortgage headwinds in WRB
- Customer deposits of $478bn, up $10bn or 2% since 30.6.24; growth in WRB Term Deposits
• Risk-weighted assets (RWA) of $249bn, up $7bn or 3% since 30.6.24; market risk up $3bn and $3bn from FX and others
• The Group remains strongly capitalised:
- Common equity tier 1 ratio 14.2% (30.6.24: 14.6%), above 13-14% target range, post the 62bps full impact of the $1.5 billion share buyback announced in July 2024
• Tangible net asset value per share of $15.09, up 65 cents since 30.6.24
• Return on Tangible Equity (RoTE) of 10.8%, up 4%pts
Page 01
• Double investment in wealth management for affluent clients:
- We are already a leading wealth manager across Asia, Africa and the Middle East, with a distinctive, fast-growing and high-returning international affluent franchise. We have decided to step up our planned investment into this business to accelerate income growth and returns
- In WRB, we will invest around $1.5bn over five years in relationship managers and investment advisers, wealth solutions, and enhanced advisory, cross-border and digital capabilities. This represents a doubling of investment relative to our prior plans
- The incremental investment will be funded by reshaping our mass retail business to focus on building a strong pipeline of future affluent and international banking clients
- The impact of this reshaping will vary across our network. We will continue to review single-product lending relationships and portfolios which no longer meet our strategic objectives, in order to prioritise higher growth and higher-returning assets
- We are exploring the opportunity to sell all or part of a small number of businesses where the strategic rationale is not sufficiently compelling, enabling us to focus our resources on the cross-border needs of our CIB and affluent WRB clients
- We expect these actions to take effect over the next 18-24 months
- We are confident that our increased investment and greater concentration will help us to outperform the market in terms of asset gathering and income growth over the medium term, enabling us to sustain double-digit income growth in Wealth Solutions
• Sharpen focus on cross-border needs of corporate and investment banking clients:
- In CIB, we will continue to sharpen our focus on serving the cross-border needs of our larger global corporate and financial institution clients who require transaction and securities services, financing, risk management and sector advisory expertise across Asia, Africa and the Middle East
- This will include concentrating our efforts on serving the complex needs of fewer client groups where we have the most distinctive offering, and we will reduce the number of clients whose needs do not play directly to our strengths
- We are targeting to increase income from financial institution clients to around 60 per cent of CIB over the medium-term, and to increase the percentage of cross-border (network) income to around 70 per cent
• Our leading sustainability business will continue to be an integral part of our client offering across both CIB and WRB, and for the Group as a whole
We are upgrading our 2024 income guidance while all other 2024 points of guidance remain unchanged:
• Operating income to increase towards 10% in 2024 at ccy, excluding the two notable items
We are also revising our 2025 and 2026 guidance as follows, while all other guidance remains unchanged:
• Operating income to increase 5-7% CAGR in 2023-2026 at ccy; 2025 growth expected to be below the 5-7% range at ccy
• Positive income-to-cost jaws in each year at ccy, excluding the two notable items
• Basel 3.1 day-1 impact now expected to be close to neutral
• Plan to return at least $8bn to shareholders cumulative 2024-2026, increased from previous guidance for at least $5bn
• RoTE increasing steadily from 10%, approaching 13% in 2026 and to progress thereafter
Page 02
Statement of results
|
3 months ended 30.09.24 |
3 months ended 30.09.23 |
Change1 |
Underlying performance |
|
|
|
Operating income |
4,904 |
4,403 |
11 |
Operating expenses (including UK bank levy) |
(2,840) |
(2,770) |
(3) |
Credit impairment |
(178) |
(294) |
39 |
Other impairment |
(92) |
(26) |
nm |
Profit from associates and joint ventures |
13 |
3 |
nm |
Profit before taxation |
1,807 |
1,316 |
37 |
Profit attributable to ordinary shareholders² |
1,005 |
644 |
56 |
Return on ordinary shareholders' tangible equity (%) |
10.8 |
7.0 |
380bps |
Cost to income ratio (excluding bank levy) (%) |
58.2 |
62.9 |
470bps |
Reported performance7 |
|
|
|
Operating income |
4,950 |
4,523 |
9 |
Operating expenses |
(2,971) |
(2,870) |
(4) |
Credit impairment |
(178) |
(292) |
39 |
Goodwill & other impairment |
(88) |
(734) |
88 |
Profit from associates and joint ventures |
9 |
6 |
50 |
Profit before taxation |
1,722 |
633 |
172 |
Taxation |
(575) |
(494) |
(16) |
Profit for the period |
1,147 |
139 |
nm |
Profit attributable to parent company shareholders |
1,150 |
145 |
nm |
Profit/(loss) attributable to ordinary shareholders2 |
931 |
(35) |
nm |
Return on ordinary shareholders' tangible equity (%) |
10.0 |
(0.4) |
1,040bps |
Cost to income ratio (including bank levy) (%) |
60.0 |
63.5 |
350bps |
Net interest margin (%) (adjusted)6 |
1.95 |
1.63 |
32bps |
|
30.09.24 |
30.09.23 |
Change1 |
Balance sheet and capital |
|
|
|
Total assets |
872,173 |
825,833 |
6 |
Total equity |
52,736 |
48,356 |
9 |
Average tangible equity attributable to ordinary shareholders² |
37,151 |
35,693 |
4 |
Loans and advances to customers |
287,257 |
281,009 |
2 |
Customer accounts |
478,140 |
453,157 |
6 |
Risk weighted assets |
248,924 |
241,506 |
3 |
Total capital |
53,658 |
51,112 |
5 |
Total capital (%) |
21.6 |
21.2 |
40bps |
Common Equity Tier 1 |
35,425 |
33,569 |
6 |
Common Equity Tier 1 ratio (%) |
14.2 |
13.9 |
30bps |
Advances-to-deposits ratio (%)3 |
52.7 |
54.5 |
(1.8) |
Liquidity coverage ratio (%) |
143 |
156 |
(13) |
Leverage ratio (%) |
4.7 |
4.7 |
0bps |
|
3 months ended 30.09.24 |
3 months ended 30.09.23 |
Change8 |
Information per ordinary share |
|
|
|
Earnings per share - underlying4 |
39.8 |
23.2 |
16.6 |
- reported4 |
36.8 |
(1.3) |
38.1 |
Net asset value per share5 |
1,762 |
1,504 |
258 |
Tangible net asset value per share5 |
1,509 |
1,283 |
226 |
Number of ordinary shares at period end (millions) |
2,484 |
2,725 |
(9) |
1 Variance is better/(worse) other than assets, liabilities and risk-weighted assets. Change is percentage points difference between two points rather than percentage change for total capital ratio (%), common equity tier 1 ratio (%), net interest margin (%), advances-to-deposits ratio (%), liquidity coverage ratio (%), leverage ratio (%), cost-to-income ratio (%) and return on ordinary shareholders' tangible equity (%)
2 Profit/(loss) attributable to ordinary shareholders is after the deduction of dividends payable to the holders of non-cumulative redeemable preference shares and Additional Tier 1 securities classified as equity
3 When calculating this ratio, total loans and advances to customers excludes reverse repurchase agreements and other similar secured lending, excludes approved balances held with central banks, confirmed as repayable at the point of stress and includes loans and advances to customers held at fair value through profit and loss. Total customer accounts include customer accounts held at fair value through profit or loss
4 Represents the underlying or reported earnings divided by the basic weighted average number of shares. Results represent three months ended the reporting period
5 Calculated on period end net asset value, tangible net asset value and number of shares
6 Net interest margin is calculated as adjusted net interest income divided by average interest-earning assets, annualised
7 Reported performance/results within this interim financial report means amounts reported under UK-adopted IAS and EU IFRS. In prior periods Reported performance/ results were described as Statutory performance/results
8 Change is cents difference between the two periods for earnings per share, net asset value per share and tangible net asset value per share. Number of ordinary shares at period end is percentage difference between the two periods
Page 03
Group Chief Financial Officer's review
The Group delivered a strong performance in the third quarter of 2024
|
Q3'24 |
Q3'23 |
Change |
Constant currency change¹ |
Q2'24 |
Change |
Constant currency change¹ |
YTD'24 |
YTD'23 |
Change |
Constant currency change¹ |
Underlying net interest income |
2,606 |
2,388 |
9 |
9 |
2,560 |
2 |
1 |
7,585 |
7,165 |
6 |
7 |
Underlying non NII |
2,298 |
2,015 |
14 |
15 |
2,246 |
2 |
1 |
7,277 |
6,189 |
18 |
19 |
Underlying operating income |
4,904 |
4,403 |
11 |
12 |
4,806 |
2 |
1 |
14,862 |
13,354 |
11 |
13 |
Other operating expenses |
(2,852) |
(2,770) |
(3) |
(2) |
(2,887) |
1 |
3 |
(8,525) |
(8,271) |
(3) |
(4) |
UK bank levy |
12 |
- |
nm |
nm |
- |
nm |
nm |
12 |
(3) |
nm |
nm |
Underlying operating expenses |
(2,840) |
(2,770) |
(3) |
(2) |
(2,887) |
2 |
3 |
(8,513) |
(8,274) |
(3) |
(4) |
Underlying operating profit before impairment and taxation |
2,064 |
1,633 |
26 |
28 |
1,919 |
8 |
8 |
6,349 |
5,080 |
25 |
26 |
Credit impairment |
(178) |
(294) |
39 |
42 |
(73) |
(144) |
(133) |
(427) |
(466) |
8 |
8 |
Other impairment |
(92) |
(26) |
nm |
nm |
(83) |
(11) |
(6) |
(235) |
(89) |
(164) |
(150) |
Profit from associates and |
13 |
3 |
nm |
nm |
65 |
(80) |
(80) |
77 |
97 |
(21) |
(21) |
Underlying profit before taxation |
1,807 |
1,316 |
37 |
41 |
1,828 |
(1) |
- |
5,764 |
4,622 |
25 |
26 |
Restructuring |
(91) |
(7) |
nm |
nm |
(95) |
4 |
6 |
(241) |
49 |
nm |
nm |
Goodwill & other impairment4 |
- |
(697) |
100 |
100 |
- |
nm |
nm |
- |
(697) |
100 |
100 |
DVA |
5 |
21 |
(76) |
(76) |
22 |
(77) |
(77) |
(21) |
(18) |
(17) |
(17) |
Other items3 |
1 |
- |
nm |
nm |
(177) |
101 |
101 |
(288) |
- |
nm |
nm |
Reported profit before taxation |
1,722 |
633 |
172 |
180 |
1,578 |
9 |
10 |
5,214 |
3,956 |
32 |
34 |
Taxation |
(575) |
(494) |
(16) |
(18) |
(604) |
5 |
6 |
(1,698) |
(1,432) |
(19) |
(22) |
Profit for the period |
1,147 |
139 |
nm |
nm |
974 |
18 |
20 |
3,516 |
2,524 |
39 |
40 |
Net interest margin (%)2 |
1.95 |
1.63 |
32 |
|
1.93 |
2 |
|
1.88 |
1.66 |
22 |
|
Underlying return on tangible |
10.8 |
7.0 |
380 |
|
12.9 |
(210) |
|
12.9 |
10.4 |
250 |
|
Underlying earnings per share (cents) |
39.8 |
23.2 |
72 |
|
45.5 |
(13) |
|
138.5 |
98.4 |
41 |
|
1. Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2. Change is the basis points (bps) difference between the two periods rather than the percentage change
3. Other items include $100 million charge relating to Korea equity linked securities (ELS) portfolio, loss of $174 million primarily relating to recycling of FX translation losses from reserves into P&L on the sale of Zimbabwe and $15 million loss on the Aviation business disposal
4 Goodwill and other impairment include nil (Q3'23: $697 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
Page 04
Group Chief Financial Officer's review continued
|
Q3'24 |
Q3'23 |
Change |
Constant currency change¹ |
Q2'24 |
Change |
Constant currency change¹ |
YTD'24 |
YTD'23 |
Change |
Constant currency change¹ |
Net interest income |
1,482 |
1,925 |
(23) |
(23) |
1,603 |
(8) |
(8) |
4,657 |
5,909 |
(21) |
(20) |
Non NII |
3,468 |
2,598 |
33 |
33 |
3,058 |
13 |
12 |
10,084 |
7,741 |
30 |
32 |
Reported operating income |
4,950 |
4,523 |
9 |
9 |
4,661 |
6 |
5 |
14,741 |
13,650 |
8 |
9 |
Reported operating expenses |
(2,971) |
(2,870) |
(4) |
(3) |
(3,059) |
3 |
5 |
(9,027) |
(8,538) |
(6) |
(7) |
Reported operating profit before impairment and taxation |
1,979 |
1,653 |
20 |
21 |
1,602 |
24 |
24 |
5,714 |
5,112 |
12 |
13 |
Credit impairment |
(178) |
(292) |
39 |
42 |
(75) |
(137) |
(127) |
(418) |
(453) |
8 |
7 |
Goodwill & other impairment |
(88) |
(734) |
88 |
88 |
(87) |
(1) |
1 |
(235) |
(811) |
71 |
71 |
Profit from associates and |
9 |
6 |
50 |
50 |
138 |
(93) |
(93) |
153 |
108 |
42 |
42 |
Reported profit before taxation |
1,722 |
633 |
172 |
180 |
1,578 |
9 |
10 |
5,214 |
3,956 |
32 |
34 |
Taxation |
(575) |
(494) |
(16) |
(18) |
(604) |
5 |
6 |
(1,698) |
(1,432) |
(19) |
(22) |
Profit for the period |
1,147 |
139 |
nm |
nm |
974 |
18 |
20 |
3,516 |
2,524 |
39 |
40 |
Reported return on tangible |
10.0 |
(0.4) |
1,040 |
|
10.4 |
(40) |
|
11.3 |
7.8 |
350 |
|
Reported earnings per share (cents) |
36.8 |
(1.3) |
nm |
|
36.7 |
- |
|
120.2 |
74.9 |
60 |
|
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Change is the basis points (bps) difference between the two periods rather than the percentage change
All commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2023 on a constant currency basis, unless otherwise stated.
The Group delivered a strong performance in the third quarter of 2024 with underlying operating income of $4.9 billion, the best third quarter since 2015, and up 12 per cent. Underlying net interest income (NII) was up 9 per cent at constant currency as the Group benefitted from the roll-off of short-term hedges and improved mix from Treasury activities. Underlying non net interest income (Non NII) increased 15 per cent driven by a record quarter in Wealth Solutions and strong performance in Global Markets with double digit growth in both flow and episodic income. Operating expenses grew 2 per cent resulting in positive income-to-cost jaws of 9 per cent. The credit impairment charge of $178 million was equivalent to an annualised loan-loss rate of 21 basis points. This resulted in an underlying profit before tax of $1.8 billion, up 41 per cent.
The Group remains well capitalised and highly liquid with a diverse and stable deposit base. The liquidity coverage ratio of 143 per cent reflects disciplined asset and liability management. The common equity tier 1 (CET1) ratio of 14.2 per cent is above the top of the Group's target range post the 62 basis points full impact of the $1.5 billion share buyback announced in July 2024.
• Underlying operating income of $4.9 billion was up 12 per cent driven by a record performance in Wealth Solutions, double-digit growth in Global Markets from product expansion and increased client demand, and the roll-off of short-term hedges within Treasury
• Underlying NII increased 9 per cent, benefitting from the roll-off of short-term hedges of $123 million and improved mix from Treasury activities, partly offset by an accounting asymmetry resulting from Treasury management of FX positions and elevated deposit passthrough rates in Corporate & Investment Banking (CIB)
• Underlying non NII increased 15 per cent. This was driven by a record performance in Wealth Solutions with broad-based growth across products and markets, and a strong performance in Global Markets with double-digit growth in both flow and episodic income. Excluding two notable items of $12 million relating to a hyperinflationary accounting adjustment in Ghana and revaluation of FX positions in Egypt, underlying non NII increased 14 per cent
• Underlying operating expenses increased 2 per cent. This growth reflected the impact of inflation and the Group's continued investment into business growth initiatives including Wealth and Retail Banking (WRB) relationship managers and CIB capabilities partly offset by efficiency saves. The Group generated 9 per cent positive income-to-cost jaws in the quarter
• Credit impairment was a charge of $178 million. The $177 million charge in WRB was higher than normalised levels primarily due to a $21 million overlay relating to Korea eCommerce platforms. CIB benefitted from further recoveries, partly offset by $34 million overlay for clients who have exposures to the Hong Kong commercial real estate sector. There was a $16 million charge in Ventures, mainly from Mox, albeit delinquency rates have improved
Page 05
Group Chief Financial Officer's review continued
• Other impairment charges of $92 million include a charge of $68 million related to the write-off of software assets with no impact on capital ratios
• Profit from associates and joint ventures increased $10 million to $13 million, reflecting change in profits at China Bohai Bank (Bohai)
• Restructuring, DVA and Other items charges totalled $85 million. Restructuring of $91 million reflects the impact of actions to transform the organisation to improve productivity, partly offset by gains on the remaining Principal Finance portfolio. Movements in Debit Valuation Adjustment (DVA) were a positive $5 million
• Taxation was $0.6 billion on a reported basis with an underlying year-to-date effective tax rate of 30.8 per cent, broadly flat on the prior year reflecting deferred tax not recognised for UK losses, US tax adjustments and a change in the geographic mix of profits. The full year 2024 underlying effective tax rate (ETR) is expected to be around this level and the statutory tax rate is expected to be a few percentage points higher than the underlying ETR for this year, and trend downwards in future years
• Underlying return on tangible equity (RoTE) increased by 380 basis points to 10.8 per cent reflecting the increase in profits
|
Q3'24 |
Q3'23 |
Change |
Constant currency change¹ |
Q2'24 |
Change |
Constant currency change¹ |
YTD'24 |
YTD'23 |
Change |
Constant currency change¹ |
Transaction Services |
1,585 |
1,667 |
(5) |
(5) |
1,605 |
(1) |
(2) |
4,805 |
4,859 |
(1) |
- |
Payments and Liquidity |
1,112 |
1,196 |
(7) |
(7) |
1,139 |
(2) |
(3) |
3,412 |
3,438 |
(1) |
(1) |
Securities & Prime Services |
156 |
138 |
13 |
15 |
153 |
2 |
2 |
450 |
410 |
10 |
11 |
Trade & Working Capital |
317 |
333 |
(5) |
(6) |
313 |
1 |
- |
943 |
1,011 |
(7) |
(5) |
Global Banking |
475 |
447 |
6 |
7 |
488 |
(3) |
(3) |
1,435 |
1,305 |
10 |
12 |
Lending & Financial Solutions |
407 |
393 |
4 |
4 |
422 |
(4) |
(4) |
1,243 |
1,142 |
9 |
10 |
Capital Markets & Advisory |
68 |
54 |
26 |
29 |
66 |
3 |
2 |
192 |
163 |
18 |
19 |
Global Markets |
840 |
716 |
17 |
16 |
796 |
6 |
6 |
2,677 |
2,515 |
6 |
8 |
Macro Trading |
683 |
595 |
15 |
13 |
631 |
8 |
8 |
2,198 |
2,157 |
2 |
3 |
Credit Trading |
174 |
122 |
43 |
43 |
165 |
5 |
7 |
506 |
359 |
41 |
45 |
Valuation & Other Adj |
(17) |
(1) |
nm |
nm |
- |
nm |
nm |
(27) |
(1) |
nm |
nm |
Wealth Solutions |
694 |
526 |
32 |
32 |
618 |
12 |
12 |
1,928 |
1,532 |
26 |
28 |
Investment Products |
507 |
364 |
39 |
40 |
444 |
14 |
13 |
1,375 |
1,059 |
30 |
32 |
Bancassurance |
187 |
162 |
15 |
16 |
174 |
7 |
7 |
553 |
473 |
17 |
18 |
CCPL & Other Unsecured Lending |
312 |
297 |
5 |
6 |
298 |
5 |
4 |
897 |
873 |
3 |
5 |
Deposits |
946 |
953 |
(1) |
(1) |
908 |
4 |
3 |
2,762 |
2,637 |
5 |
5 |
Mortgages & Other Secured Lending |
100 |
69 |
45 |
47 |
124 |
(19) |
(21) |
327 |
343 |
(5) |
(2) |
Treasury |
(2) |
(274) |
99 |
101 |
(30) |
93 |
130 |
11 |
(667) |
102 |
102 |
Other |
(46) |
2 |
nm |
nm |
(1) |
nm |
nm |
20 |
(43) |
147 |
159 |
Total underlying operating income |
4,904 |
4,403 |
11 |
12 |
4,806 |
2 |
1 |
14,862 |
13,354 |
11 |
13 |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
The operating income by product commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2023 on a constant currency basis, unless otherwise stated.
Transaction Services income decreased 5 per cent as the impact of margin compression more than offset volume growth across Payments and Liquidity, and Trade & Working Capital. Securities & Prime Services income was up 15 per cent mainly driven by higher custody, funds and prime brokerage fees and higher margins.
Global Banking income increased 7 per cent as Lending & Financial Solutions grew 4 per cent mostly from strong pipeline execution which led to higher origination volumes. Capital Markets & Advisory income was up 29 per cent.
Global Markets income increased 16 per cent with double-digit growth in both flow and episodic income. Episodic growth was mainly driven by higher Rates income. Flow grew mostly from increased FX volumes and Credit Trading.
Wealth Solutions income was up 32 per cent with broad-based growth across all products supported by new and innovative product launches, increased investment in Affluent Relationship Managers and continued strong new to bank onboarding levels. Wealth net new sales of $5 billion in the quarter were up 13 per cent year-on-year.
CCPL & Other Unsecured Lending income was up 6 per cent with volume growth in both Personal Loans and Credit Cards.
Page 06
Group Chief Financial Officer's review continued
Deposits income decreased 1 per cent as the impact of higher Time Deposit volumes was more than offset by lower margins. Passthrough rates remained largely stable.
Mortgages & Other Secured Lending income was up 47 per cent or $31 million primarily from higher margins as the cost of funding reduced, particularly with lower HIBOR rates, albeit partly offset by lower mortgage volumes.
Treasury income increased by $272 million to a loss of $2 million benefitting from the roll-off of the short-term hedge and repricing of structural hedges, partly offset by a $2 million loss on revaluation of FX positions in Egypt.
Other products loss of $46 million includes higher funding costs of non-financial assets partly offset by $14 million relating to a hyperinflationary accounting adjustment in Ghana.
|
Q3'24 |
Q3'23 |
Change |
Constant currency change¹ |
Q2'24 |
Change |
Constant currency change¹ |
YTD'24 |
YTD'23 |
Change |
Constant currency change¹ |
Corporate & Investment Banking |
1,365 |
1,255 |
9 |
9 |
1,362 |
- |
- |
4,366 |
4,170 |
5 |
6 |
Wealth & Retail Banking |
742 |
669 |
11 |
11 |
678 |
9 |
10 |
2,149 |
2,042 |
5 |
6 |
Ventures |
(99) |
(117) |
15 |
15 |
(87) |
(14) |
(13) |
(298) |
(275) |
(8) |
(8) |
Central & other items |
(201) |
(491) |
59 |
65 |
(125) |
(61) |
(56) |
(453) |
(1,315) |
66 |
66 |
Underlying profit before taxation |
1,807 |
1,316 |
37 |
41 |
1,828 |
(1) |
- |
5,764 |
4,622 |
25 |
26 |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
The client segment commentary that follows is on an underlying basis and comparisons are made to the equivalent period in 2023 on a constant currency basis, unless otherwise stated.
Corporate & Investment Banking (CIB) profit increased 9 per cent. Income grew 2 per cent with Global Markets up 16 per cent from double-digit growth in both flow and episodic income, and Global Banking up 7 per cent from higher origination volumes and pipeline execution. This was partly offset by Transaction Services which was down 5 per cent due to margin compression from higher passthrough rates. Expenses were 6 per cent higher, while credit impairment was a net release of $10 million. Other impairment of $57 million primarily related to the write-off of software assets.
Wealth & Retail Banking (WRB) profit increased 11 per cent. Income increased 11 per cent, with Wealth Solutions up 32 per cent from broad-based growth across products, partly offset by lower Deposits income due to lower margins. Expenses increased 4 per cent while credit impairment was $62 million higher, but broadly in-line with recent run-rates excluding a $21 million overlay relating to Korea eCommerce platforms and removal of a $13 million post model adjustment relating to Singapore credit cards.
Ventures loss decreased by $18 million to $99 million. Income increased by $8 million to $43 million with Digital Banks income of $39 million up 44 per cent. Expenses increased by $10 million whilst there was an impairment charge of $16 million primarily from Mox, albeit delinquency rates have improved.
Central & other items (C&O) recorded a loss of $201 million, which was 65 per cent lower than the prior year. Treasury income was up $281 million from the prior year largely driven by benefits from the roll-off of the short-term hedge and repricing of structural hedges, and a $2 million loss on revaluation of FX positions in Egypt. Other products income was down $52 million to a loss of $65 million driven by higher funding costs of non-financial assets coupled with non-repeat of FX gains made in the prior year, partly offset by $14 million relating to a hyperinflationary accounting adjustment in Ghana. Expenses, which include UK Bank levy, central corporate costs and recharges, decreased by $71 million while there was a credit impairment release of $5 million mostly from sovereign-related portfolio movements. Associate income increased by $18 million reflecting change in profits at Bohai.
|
Q3'24 |
Q3'23 |
Change¹ |
Q2'24 |
Change¹ |
YTD'24 |
YTD'23 |
Change¹ |
Adjusted net interest income2 |
2,606 |
2,380 |
10 |
2,562 |
2 |
7,597 |
7,151 |
6 |
Average interest-earning assets |
532,459 |
579,713 |
(8) |
533,869 |
- |
539,984 |
577,351 |
(6) |
Average interest-bearing liabilities |
540,691 |
548,297 |
(1) |
538,054 |
- |
538,643 |
541,171 |
- |
|
|
|
|
|
|
|
|
|
Gross yield (%)3 |
5.22 |
5.06 |
16 |
5.32 |
(10) |
5.24 |
4.68 |
56 |
Rate paid (%)3 |
3.22 |
3.63 |
(41) |
3.36 |
(14) |
3.37 |
3.23 |
14 |
Net yield (%)3 |
2.00 |
1.43 |
57 |
1.96 |
4 |
1.87 |
1.45 |
42 |
Net interest margin (%)3,4 |
1.95 |
1.63 |
32 |
1.93 |
2 |
1.88 |
1.66 |
22 |
1 Variance is better/(worse) other than assets and liabilities which is increase/(decrease)
2 Adjusted net interest income is reported net interest income less funding costs for the trading book, financial guarantee fees and others on interest-earning assets
3 Change is the basis points (bps) difference between the two periods rather than the percentage change
4 Adjusted net interest income divided by average interest-earning assets, annualised
Page 07
Adjusted net interest income was up 10 per cent driven by an increase in the net interest margin which averaged 195 basis points in the quarter, increasing 32 basis points year-on-year and 2 basis points compared to the prior quarter. The benefit from the roll-off of the short-term hedges and improved yield on structural hedges was partly offset by lower asset volumes and an accounting asymmetry resulting from Treasury management of FX positions.
• Average interest-earning assets were down by $1.4 billion in the quarter primarily due to a reduction in underlying loans and advances to customers driven by a decline in mortgages. Gross yields decreased 10 basis points compared to the prior quarter due to the impact of lower interest rate on customer loan pricing and Treasury portfolio yields partly offset by the benefit from roll-off of the short-term hedges
• Average interest-bearing liabilities were up by $2.6 billion on the prior quarter mostly from growth in WRB deposits. The rate paid on liabilities decreased 14 basis points compared with the average in the prior quarter reflecting an increase in the trading book funding cost adjustment partly offset by increase in Treasury accounting asymmetry
|
Q3'24 |
Q3'23 |
Change1 |
Q2'24 |
Change1 |
YTD'24 |
YTD'23 |
Change1 |
Total credit impairment charge/(release) |
178 |
294 |
(39) |
73 |
144 |
427 |
466 |
(8) |
Of which stage 1 and 22 |
126 |
101 |
25 |
12 |
nm |
199 |
134 |
49 |
Of which stage 32 |
52 |
193 |
(73) |
61 |
(15) |
228 |
332 |
(31) |
1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods
2 Refer to Credit Impairment charge table in Risk review section (page 27) for reconciliation from underlying to reported credit impairment
|
30.09.24 |
30.06.24 |
Change1 |
31.12.23 |
Change1 |
30.09.23 |
Change1 |
Gross loans and advances to customers2 |
292,394 |
280,893 |
4 |
292,145 |
- |
286,531 |
2 |
Of which stage 1 |
275,490 |
264,249 |
4 |
273,692 |
1 |
266,590 |
3 |
Of which stage 2 |
10,369 |
10,005 |
4 |
11,225 |
(8) |
12,431 |
(17) |
Of which stage 3 |
6,535 |
6,639 |
(2) |
7,228 |
(10) |
7,510 |
(13) |
|
|
|
|
|
|
|
|
Expected credit loss provisions |
(5,137) |
(4,997) |
3 |
(5,170) |
(1) |
(5,522) |
(7) |
Of which stage 1 |
(496) |
(480) |
3 |
(430) |
15 |
(458) |
8 |
Of which stage 2 |
(390) |
(362) |
8 |
(420) |
(7) |
(440) |
(11) |
Of which stage 3 |
(4,251) |
(4,155) |
2 |
(4,320) |
(2) |
(4,624) |
(8) |
|
|
|
|
|
|
|
|
Net loans and advances to customers |
287,257 |
275,896 |
4 |
286,975 |
- |
281,009 |
2 |
Of which stage 1 |
274,994 |
263,769 |
4 |
273,262 |
1 |
266,132 |
3 |
Of which stage 2 |
9,979 |
9,643 |
3 |
10,805 |
(8) |
11,991 |
(17) |
Of which stage 3 |
2,284 |
2,484 |
(8) |
2,908 |
(21) |
2,886 |
(21) |
|
|
|
|
|
|
|
|
Cover ratio of stage 3 before/after collateral (%)3 |
65 / 81 |
63 / 82 |
2 / (1) |
60 / 76 |
5 / 5 |
62 / 79 |
3 / 2 |
Credit grade 12 accounts ($million) |
943 |
964 |
(2) |
2,155 |
(56) |
1,132 |
(17) |
Early alerts ($million) |
5,100 |
5,044 |
1 |
5,512 |
(7) |
5,403 |
(6) |
Investment grade corporate exposures (%)3 |
74 |
74 |
- |
73 |
1 |
74 |
- |
1. Variance is increase/(decrease) comparing current reporting period to prior reporting periods
2. Includes reverse repurchase agreements and other similar secured lending held at amortised cost of $8,955 million at 30 September 2024, $7,788 million at 30 June 2024, $13,996 million at 31 December 2023 and $10,267 million at 30 September 2023
3. Change is the percentage points difference between the two periods rather than the percentage change
Page 08
Group Chief Financial Officer's review continued
Asset quality remained resilient in the third quarter, with an improvement in a number of underlying credit metrics.
The Group continues to actively manage the credit portfolio while remaining alert to changes in the external environment, including increased geopolitical tensions, which has led to idiosyncratic stress in a select number of geographies and industry sectors.
The credit impairment charge of $178 million in the quarter was down $116 million year-on-year, representing an annualised loan loss rate of 21 basis points. The $177 million charge in WRB was higher than normalised levels primarily due to a $21 million overlay relating to Korea eCommerce platforms. There was a $16 million charge in Ventures, down $14 million year-on-year as delinquency rates have improved in Mox. CIB was a net release of $10 million benefitting from further recoveries, partly offset by $34 million overlay for clients who have exposures to the Hong Kong commercial real estate (CRE) sector and a $24 million overlay for economic uncertainty in Bangladesh. Also included is a China CRE sector charge of $6 million as additional stage 3 provisions were offset by $15 million in management overlay releases primarily as a result of repayments. The management overlay now totals $71 million, and the Group has provided $1.2 billion in total in relation to the China CRE sector.
Gross stage 3 loans and advances to customers of $6.5 billion were 2 per cent lower compared with 30 June 2024 as repayments, client upgrades, reduction in exposures and write-offs more than offset new inflows. Credit-impaired loans represent 2.2 per cent of gross loans and advances, broadly flat on the prior quarter.
The stage 3 cover ratio of 65 per cent increased 2 percentage points compared with the position at 30 June 2024 due to the decrease in gross stage 3 loans. The cover ratio post collateral of 81 per cent was broadly stable.
Credit grade 12 balances of $0.9 billion and Early alert accounts of $5.1 billion remained broadly stable quarter-on-quarter.
The proportion of investment grade corporate exposures was flat at 74 per cent quarter-on-quarter.
|
Q3'24 |
Q3'23 |
Q2'24 |
|||||||||
Restructuring |
Goodwill & other Impairment |
DVA |
Other items |
Restructuring |
Goodwill & other Impairment1 |
DVA |
Other items |
Restructuring |
Goodwill & other Impairment |
DVA |
Other items |
|
Operating income |
40 |
- |
5 |
1 |
99 |
- |
21 |
- |
10 |
- |
22 |
(177) |
Operating expenses |
(131) |
- |
- |
- |
(100) |
- |
- |
- |
(172) |
- |
- |
- |
Credit impairment |
- |
- |
- |
- |
2 |
- |
- |
- |
(2) |
- |
- |
- |
Other impairment |
4 |
- |
- |
- |
(11) |
(697) |
- |
- |
(4) |
- |
- |
- |
Profit from associates and joint ventures |
(4) |
- |
- |
- |
3 |
- |
- |
- |
73 |
- |
- |
- |
Profit/(loss) before taxation |
(91) |
- |
5 |
1 |
(7) |
(697) |
21 |
- |
(95) |
- |
22 |
(177) |
1 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai).
The Group's reported performance is adjusted for profits or losses of a capital nature, amounts consequent to investment transactions driven by strategic intent, other infrequent and/or exceptional transactions that are significant or material in the context of the Group's normal business earnings for the period and items which management and investors would ordinarily identify separately when assessing underlying performance period-by period.
Restructuring charges of $91 million reflect the impact of actions to transform the organisation to improve productivity, primarily additional redundancy charges and technology related costs partly offset by profits on the remaining Principal Finance portfolio.
Movements in DVA were positive $5 million, driven by the widening of the Group's asset swap spreads.
Page 09
Group Chief Financial Officer's review continued
|
30.09.24 |
30.06.24 |
Change¹ |
31.12.23 |
Change¹ |
30.09.23 |
Change |
Assets |
|
|
|
|
|
|
|
Loans and advances to banks |
47,512 |
45,231 |
5 |
44,977 |
6 |
46,111 |
3 |
Loans and advances to customers |
287,257 |
275,896 |
4 |
286,975 |
- |
281,009 |
2 |
Other assets |
537,404 |
514,300 |
4 |
490,892 |
9 |
498,713 |
8 |
Total assets |
872,173 |
835,427 |
4 |
822,844 |
6 |
825,833 |
6 |
Liabilities |
|
|
|
|
|
|
|
Deposits by banks |
32,172 |
28,087 |
15 |
28,030 |
15 |
29,744 |
8 |
Customer accounts |
478,140 |
468,157 |
2 |
469,418 |
2 |
453,157 |
6 |
Other liabilities |
309,125 |
287,856 |
7 |
275,043 |
12 |
294,576 |
5 |
Total liabilities |
819,437 |
784,100 |
5 |
772,491 |
6 |
777,477 |
5 |
Equity |
52,736 |
51,327 |
3 |
50,353 |
5 |
48,356 |
9 |
Total equity and liabilities |
872,173 |
835,427 |
4 |
822,844 |
6 |
825,833 |
6 |
|
|
|
|
|
|
|
|
Advances-to-deposits ratio (%)² |
52.7% |
52.6% |
|
53.3% |
|
54.5% |
|
Liquidity coverage ratio (%) |
143% |
148% |
|
145% |
|
156% |
|
1 Variance is increase/(decrease)comparing current reporting period to prior reporting periods
2 The Group excludes $20,534 million held with central banks (30.06.24: $18,419 million, 31.12.23: $20,710 million, 30.09.23: $21,241 million) that has been confirmed as repayable at the point of stress. Advances exclude reverse repurchase agreement and other similar secured lending of $8,955 million (30.06.24: $7,788 million, 31.12.23: $13,996 million, 30.09.23: $10,267 million) and include loans and advances to customers held at fair value through profit or loss of $6,093 million (30.06.24: $6,877 million, 31.12.23: $7,212 million, 30.09.23: $5,935 million). Deposits include customer accounts held at fair value through profit or loss of $22,344 million (30.06.24: $19,850 million, 31.12.23: $17,248 million, 30.09.23: $15,930 million)
The Group's balance sheet remains strong, liquid and well diversified:
• Loans and advances (L&A) to customers increased by $11 billion or 4 per cent from 30 June 2024 to $287 billion. This was driven by a $3 billion increase from Treasury and securities-based lending and a $8 billion increase from currency translation. Excluding these items L&A were down a net $1 billion on an underlying basis, from an increase in Trade which was more than offset by a decline in mortgages. Year-to-date L&A were up 2 per cent on an underlying basis mostly from an increase in CIB partly offset by a decline in mortgages
• Customer accounts of $478 billion increased by $10 billion or 2 per cent from 30 June 2024 and were up 1 per cent on an underlying basis excluding the impact of currency translation. This was primarily driven by an increase in WRB Time Deposits from affluent clients
• Other assets increased by $23 billion or 4 per cent from 30 June 2024 with increases in financial assets held at fair value through profit or loss, primarily in relation to the trading book, derivatives and unsettled trade balances partly offset by a decrease in investment securities. Other liabilities increased 7 per cent with an increase in derivative liabilities, repurchase agreements, unsettled trade liabilities partly offset by a decrease in financial liabilities held at fair value through profit or loss
The advances-to-deposits ratio was broadly flat at 52.7 per cent since 30 June 2024. The point-in-time liquidity coverage ratio decreased 5 percentage points in the quarter to 143 per cent and remains well above the minimum regulatory requirement.
|
30.09.24 |
30.06.24 |
Change¹ |
31.12.23 |
Change¹ |
30.09.23 |
Change¹ |
By risk type |
|
|
|
|
|
|
|
Credit risk |
188,844 |
185,004 |
2 |
191,423 |
(1) |
188,294 |
0 |
Operational risk |
29,479 |
29,479 |
- |
27,861 |
6 |
27,861 |
6 |
Market risk |
30,601 |
27,443 |
12 |
24,867 |
23 |
25,351 |
21 |
Total RWAs |
248,924 |
241,926 |
3 |
244,151 |
2 |
241,506 |
3 |
1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods
Total risk-weighted assets (RWAs) of $248.9 billion increased $7.0 billion or 3 per cent since 30 June 2024.
• Credit Risk RWA increased by $3.8 billion to $188.8 billion mostly driven by a $3.4 billion increase from currency translation
• Operational Risk RWA were flat in quarter
• Market Risk RWA increased $3.2 billion to $30.6 billion as RWA were deployed to help clients capture market opportunities
Page 10
Group Chief Financial Officer's review continued
|
30.09.24 |
30.06.24 |
Change¹ |
31.12.23 |
Change¹ |
30.09.23 |
Change¹ |
CET1 capital |
35,425 |
35,418 |
0.0 |
34,314 |
3.2 |
33,569 |
5.5 |
Additional Tier 1 capital (AT1) |
6,507 |
6,484 |
0.4 |
5,492 |
18.5 |
5,492 |
18.5 |
Tier 1 capital |
41,932 |
41,902 |
0.1 |
39,806 |
5.3 |
39,061 |
7.4 |
Tier 2 capital |
11,726 |
11,667 |
0.5 |
11,935 |
(1.8) |
12,051 |
(2.7) |
Total capital |
53,658 |
53,569 |
0.2 |
51,741 |
3.7 |
51,112 |
5.0 |
CET1 capital ratio(%)² |
14.2 |
14.6 |
(0.4) |
14.1 |
0.1 |
13.9 |
0.3 |
Total capital ratio(%)² |
21.6 |
22.1 |
(0.5) |
21.2 |
0.4 |
21.2 |
0.4 |
Leverage ratio (%)² |
4.7 |
4.8 |
(0.1) |
4.7 |
- |
4.7 |
- |
1 Variance is increase/(decrease) comparing current reporting period to prior reporting periods
2 Change is percentage points difference between the two periods rather than percentage change
The Group's CET1 ratio of 14.2 per cent was 41 basis points lower than as at 30 June 2024 and remains 3.7 percentage points above the Group's latest regulatory minimum of 10.6 per cent. Underlying profit accretion was partly offset by shareholder distributions.
There was 48 basis points of CET1 accretion from underlying profits, and a further 19 basis points uplift primarily from fair value gains on other comprehensive income, FX and regulatory capital adjustments. This was partly offset by 21 basis points from an increase in RWAs.
The Group is part way through the $1.5 billion share buyback programme which it announced on 30 July 2024, and by 30 September 2024 had spent $603 million purchasing 61 million ordinary shares, reducing the share count by approximately 2 per cent. Even though the share buyback was still ongoing on 30 September 2024, the entire $1.5 billion is deducted from CET1 in the period, reducing the CET1 ratio by 62 basis points. Including the $1 billion buyback that was announced on 23 February 2024 and completed on 25 June 2024 , the Group has purchased 174 million shares during the year to 30 September, reducing the share count by approximately 7 per cent.
The Group is accruing a foreseeable dividend in respect of the final 2024 ordinary share dividend in the third quarter. This is not an indication of the Group's final 2024 ordinary share dividend, which will be proposed by the Board at the presentation of the 2024 full year results. The increase in the foreseeable dividend for ordinary dividend and AT1 coupons reduced the CET1 ratio by 25 basis points.
The Group's UK leverage ratio of 4.7 per cent decreased 11 basis points from 30 June 2024 and remains significantly above its minimum requirement of 3.8 per cent.
We are upgrading our 2024 income guidance while all other 2024 points of guidance remain unchanged:
• Operating income to increase towards 10 per cent in 2024 at constant currency, excluding the two notable items
We are also revising our 2025 and 2026 guidance as follows, while all other guidance remains unchanged:
• Operating income to increase 5-7 per cent CAGR in 2023-2026 at constant currency; 2025 growth expected to be below the 5-7 per cent range at constant currency
• Positive income-to-cost jaws in each year at constant currency, excluding the two notables
• Basel 3.1 day-1 impact now expected to be close to neutral
• Plan to return at least $8 billion to shareholders cumulative 2024-2026, increased from previous guidance for at least $5 billion
• RoTE increasing steadily from 10 per cent, approaching 13 per cent in 2026 and to progress thereafter
Group Chief Financial Officer
30 October 2024
Page 11
Supplementary financial information
Underlying performance by client segment
|
Q3'24 |
||||
Corporate & Investment Banking |
Wealth & |
Ventures |
Central & |
Total |
|
Operating income |
2,887 |
2,040 |
43 |
(66) |
4,904 |
External |
2,546 |
858 |
43 |
1,457 |
4,904 |
Inter-segment |
341 |
1,182 |
- |
(1,523) |
- |
Operating expenses |
(1,475) |
(1,108) |
(119) |
(138) |
(2,840) |
Operating profit/(loss) before impairment losses and taxation |
1,412 |
932 |
(76) |
(204) |
2,064 |
Credit impairment |
10 |
(177) |
(16) |
5 |
(178) |
Other impairment |
(57) |
(13) |
(2) |
(20) |
(92) |
Profit from associates and joint ventures |
- |
- |
(5) |
18 |
13 |
Underlying profit/(loss) before taxation |
1,365 |
742 |
(99) |
(201) |
1,807 |
Restructuring |
(36) |
(41) |
1 |
(15) |
(91) |
DVA |
5 |
- |
- |
- |
5 |
Other Items |
- |
- |
- |
1 |
1 |
Reported profit/(loss) before taxation |
1,334 |
701 |
(98) |
(215) |
1,722 |
Total assets |
479,357 |
125,964 |
6,045 |
260,807 |
872,173 |
Of which: loans and advances to customers1 |
190,034 |
122,657 |
1,230 |
26,100 |
340,021 |
loans and advances to customers |
137,278 |
122,649 |
1,230 |
26,100 |
287,257 |
loans held at fair value through profit or loss |
52,756 |
8 |
- |
- |
52,764 |
Total liabilities |
488,355 |
218,857 |
4,972 |
107,253 |
819,437 |
Of which: customer accounts1 |
315,270 |
214,402 |
4,702 |
5,647 |
540,021 |
Risk-weighted assets |
153,278 |
53,822 |
2,195 |
39,629 |
248,924 |
Income return on risk-weighted assets (%) |
7.6 |
15.3 |
7.9 |
(0.7) |
7.9 |
Underlying return on tangible equity (%) |
18.5 |
28.9 |
nm |
(27.7) |
10.8 |
Cost to income ratio (excluding bank levy) (%) |
51.1 |
54.3 |
nm |
nm |
58.2 |
|
Q3'23 |
||||
Corporate & Investment Banking |
Wealth & |
Ventures |
Central & |
Total |
|
Operating income |
2,814 |
1,849 |
35 |
(295) |
4,403 |
External |
2,084 |
1,003 |
35 |
1,281 |
4,403 |
Inter-segment |
730 |
846 |
- |
(1,576) |
- |
Operating expenses |
(1,387) |
(1,065) |
(109) |
(209) |
(2,770) |
Operating profit/(loss) before impairment losses and taxation |
1,427 |
784 |
(74) |
(504) |
1,633 |
Credit impairment |
(159) |
(115) |
(30) |
10 |
(294) |
Other impairment |
(13) |
- |
(9) |
(4) |
(26) |
Profit from associates and joint ventures |
- |
- |
(4) |
7 |
3 |
Underlying profit/(loss) before taxation |
1,255 |
669 |
(117) |
(491) |
1,316 |
Restructuring |
11 |
(17) |
- |
(1) |
(7) |
Goodwill & other impairment |
- |
- |
- |
(697) |
(697) |
DVA |
21 |
- |
- |
- |
21 |
Reported profit/(loss) before taxation |
1,287 |
652 |
(117) |
(1,189) |
633 |
Total assets |
395,938 |
126,714 |
3,398 |
299,783 |
825,833 |
Of which: loans and advances to customers1 |
177,542 |
124,178 |
1,014 |
26,686 |
329,420 |
loans and advances to customers |
129,147 |
124,162 |
1,014 |
26,686 |
281,009 |
loans held at fair value through profit or loss |
48,395 |
16 |
- |
- |
48,411 |
Total liabilities |
471,272 |
190,925 |
2,581 |
112,699 |
777,477 |
Of which: customer accounts1 |
319,785 |
186,131 |
2,316 |
7,590 |
515,822 |
Risk-weighted assets |
143,386 |
50,365 |
1,786 |
45,969 |
241,506 |
Income return on risk-weighted assets (%) |
7.8 |
14.5 |
8.3 |
(2.4) |
7.1 |
Underlying return on tangible equity (%) |
17.9 |
27.2 |
nm |
(38.5) |
7.0 |
Cost to income ratio (excluding bank levy) (%) |
49.3 |
57.6 |
nm |
nm |
62.9 |
1 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
Page 12
|
Q3'24 |
Q3'23 |
Change2 |
Constant currency change1,2 |
Q2'24 |
Change2 |
Constant currency change1,2 |
YTD'24 |
YTD'23 |
Change2 |
Constant currency change1,2 |
Operating income |
2,887 |
2,814 |
3 |
2 |
2,876 |
- |
- |
8,878 |
8,637 |
3 |
4 |
Transaction Services |
1,572 |
1,654 |
(5) |
(5) |
1,593 |
(1) |
(2) |
4,768 |
4,823 |
(1) |
- |
Payments and Liquidity |
1,112 |
1,196 |
(7) |
(7) |
1,139 |
(2) |
(3) |
3,412 |
3,438 |
(1) |
(1) |
Securities & Prime Services |
156 |
138 |
13 |
15 |
153 |
2 |
2 |
450 |
410 |
10 |
11 |
Trade & Working Capital |
304 |
320 |
(5) |
(6) |
301 |
1 |
- |
906 |
975 |
(7) |
(5) |
Global Banking |
475 |
447 |
6 |
7 |
488 |
(3) |
(3) |
1,435 |
1,305 |
10 |
12 |
Lending & Financial Solutions |
407 |
393 |
4 |
4 |
422 |
(4) |
(4) |
1,243 |
1,142 |
9 |
10 |
Capital Market & Advisory |
68 |
54 |
26 |
29 |
66 |
3 |
2 |
192 |
163 |
18 |
19 |
Global Markets |
840 |
716 |
17 |
16 |
796 |
6 |
6 |
2,677 |
2,515 |
6 |
8 |
Macro Trading |
683 |
595 |
15 |
13 |
631 |
8 |
8 |
2,198 |
2,157 |
2 |
3 |
Credit Trading |
174 |
122 |
43 |
43 |
165 |
5 |
7 |
506 |
359 |
41 |
45 |
Valuation & Other Adj |
(17) |
(1) |
nm |
nm |
- |
nm |
nm |
(27) |
(1) |
nm |
nm |
Deposits |
1 |
- |
nm |
nm |
- |
nm |
nm |
1 |
1 |
- |
- |
Other |
(1) |
(3) |
67 |
50 |
(1) |
- |
- |
(3) |
(7) |
57 |
57 |
Operating expenses |
(1,475) |
(1,387) |
(6) |
(6) |
(1,498) |
2 |
2 |
(4,396) |
(4,205) |
(5) |
(6) |
Operating profit before impairment losses and taxation |
1,412 |
1,427 |
(1) |
(1) |
1,378 |
2 |
3 |
4,482 |
4,432 |
1 |
2 |
Credit impairment |
10 |
(159) |
106 |
107 |
35 |
(71) |
(66) |
45 |
(228) |
120 |
119 |
Other impairment |
(57) |
(13) |
nm |
nm |
(51) |
(12) |
(12) |
(161) |
(34) |
nm |
nm |
Underlying profit before taxation |
1,365 |
1,255 |
9 |
9 |
1,362 |
- |
- |
4,366 |
4,170 |
5 |
6 |
Restructuring |
(36) |
11 |
nm |
nm |
(48) |
25 |
10 |
(95) |
84 |
nm |
nm |
DVA |
5 |
21 |
(76) |
(76) |
22 |
(77) |
(77) |
(21) |
(18) |
(17) |
(17) |
Reported profit before taxation |
1,334 |
1,287 |
4 |
2 |
1,336 |
- |
- |
4,250 |
4,236 |
- |
1 |
Total assets |
479,357 |
395,938 |
21 |
20 |
443,442 |
8 |
7 |
479,357 |
395,938 |
21 |
20 |
Of which: loans and advances |
190,034 |
177,542 |
7 |
6 |
190,298 |
- |
(2) |
190,034 |
177,542 |
7 |
6 |
Total liabilities |
488,355 |
471,272 |
4 |
3 |
467,875 |
4 |
3 |
488,355 |
471,272 |
4 |
3 |
Of which: customer accounts3 |
315,270 |
319,785 |
(1) |
(2) |
315,767 |
- |
(1) |
315,270 |
319,785 |
(1) |
(2) |
Risk-weighted assets |
153,278 |
143,386 |
7 |
nm |
149,133 |
3 |
nm |
153,278 |
143,386 |
7 |
nm |
Income return on risk-weighted |
7.6 |
7.8 |
(20)bps |
nm |
7.7 |
(10)bps |
nm |
7.9 |
7.9 |
- |
nm |
Underlying return on tangible |
18.5 |
17.9 |
60bps |
nm |
18.9 |
(40)bps |
nm |
20.1 |
19.8 |
30bps |
nm |
Cost to income ratio (%)5 |
51.1 |
49.3 |
(1.8) |
(1.9) |
52.1 |
1.0 |
1.2 |
49.5 |
48.5 |
(1.0) |
(0.8) |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse), except for risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the basis points (bps) difference between the two periods rather than the percentage change
5 Change is the percentage points difference between the two periods rather than the percentage change
Page 13
Supplementary financial information continued
• Underlying profit before tax of $1,365 million was up 9 per cent at constant currency (ccy) driven by higher income and lower credit impairment, partly offset by higher operating expenses
• Underlying operating income of $2,887 million was up 2 per cent at ccy primarily driven by strong performance in Global Markets and Global Banking. Global Markets was up 16 per cent from double-digit growth in both flow and episodic income, and Global Banking was up 7 per cent from higher origination volumes and pipeline execution. Transaction services was down 5 per cent, driven by lower margins across Payments & Liquidity and Trade & Working Capital products. Securities & Prime Services income was up 15 per cent mainly driven by higher custody, funds and prime brokerage fees and higher margins
• Underlying operating expenses increased 6 per cent at ccy reflecting inflation and investment in business growth initiatives
• Credit impairment was a net release of $10 million due to benign level of impairment driven by releases partly offset by $34 million overlay for clients who have exposures to the Hong Kong commercial real estate sector, and a $24 million overlay for economic uncertainty in Bangladesh. Other impairment charge primarily related to the write-off of software assets
• Risk-weighted assets (RWA) of $153 billion were up $4 billion since 30 June 2024. This was mostly driven by $1.7 billion from currency translation and $3 billion market risk RWA
Page 14
Supplementary financial information continued
|
Q3'24 |
Q3'23 |
Change2 |
Constant currency change1,2 |
Q2'24 |
Change2 |
Constant currency change1,2 |
YTD'24 |
YTD'23 |
Change2 |
Constant currency change1,2 |
Operating income |
2,040 |
1,849 |
10 |
11 |
1,955 |
4 |
4 |
5,912 |
5,405 |
9 |
10 |
Transaction Services |
13 |
13 |
- |
8 |
12 |
8 |
8 |
37 |
36 |
3 |
6 |
Trade & Working Capital |
13 |
13 |
- |
8 |
12 |
8 |
8 |
37 |
36 |
3 |
6 |
Wealth Solutions |
693 |
526 |
32 |
32 |
618 |
12 |
12 |
1,927 |
1,532 |
26 |
27 |
Investment Products |
506 |
364 |
39 |
40 |
444 |
14 |
13 |
1,374 |
1,059 |
30 |
32 |
Bancassurance |
187 |
162 |
15 |
16 |
174 |
7 |
7 |
553 |
473 |
17 |
18 |
CCPL & Other Unsecured Lending |
281 |
270 |
4 |
5 |
270 |
4 |
3 |
811 |
809 |
- |
2 |
Deposits |
950 |
967 |
(2) |
(2) |
917 |
4 |
3 |
2,784 |
2,670 |
4 |
5 |
Mortgages & Other Secured Lending |
100 |
69 |
45 |
47 |
124 |
(19) |
(21) |
327 |
343 |
(5) |
(2) |
Other |
3 |
4 |
(25) |
25 |
14 |
(79) |
(64) |
26 |
15 |
73 |
80 |
Operating expenses |
(1,108) |
(1,065) |
(4) |
(4) |
(1,109) |
- |
1 |
(3,264) |
(3,140) |
(4) |
(5) |
Operating profit before impairment losses and taxation |
932 |
784 |
19 |
19 |
846 |
10 |
10 |
2,648 |
2,265 |
17 |
17 |
Credit impairment |
(177) |
(115) |
(54) |
(54) |
(146) |
(21) |
(20) |
(459) |
(223) |
(106) |
(109) |
Other impairment |
(13) |
- |
nm |
nm |
(22) |
41 |
50 |
(40) |
- |
nm |
nm |
Underlying profit before taxation |
742 |
669 |
11 |
11 |
678 |
9 |
10 |
2,149 |
2,042 |
5 |
6 |
Restructuring |
(41) |
(17) |
(141) |
(139) |
(32) |
(28) |
(39) |
(92) |
(33) |
(179) |
(157) |
Other items³ |
- |
- |
nm |
nm |
- |
nm |
nm |
(100) |
- |
nm |
nm |
Reported profit before taxation |
701 |
652 |
8 |
8 |
646 |
9 |
9 |
1,957 |
2,009 |
(3) |
(2) |
Total assets |
125,964 |
126,714 |
(1) |
(4) |
122,846 |
3 |
(1) |
125,964 |
126,714 |
(1) |
(4) |
Of which: loans and advances |
122,657 |
124,178 |
(1) |
(4) |
120,277 |
2 |
(1) |
122,657 |
124,178 |
(1) |
(4) |
Total liabilities |
218,857 |
190,925 |
15 |
12 |
208,565 |
5 |
3 |
218,857 |
190,925 |
15 |
12 |
Of which: customer accounts |
214,402 |
186,131 |
15 |
13 |
204,154 |
5 |
3 |
214,402 |
186,131 |
15 |
13 |
Risk-weighted assets |
53,822 |
50,365 |
7 |
nm |
52,459 |
3 |
nm |
53,822 |
50,365 |
7 |
nm |
Income return on risk-weighted |
15.3 |
14.5 |
80bps |
nm |
14.9 |
40bps |
nm |
15.0 |
14.2 |
80bps |
nm |
Underlying return on tangible |
28.9 |
27.2 |
170bps |
nm |
26.8 |
210bps |
nm |
28.2 |
27.8 |
40bps |
nm |
Cost to income ratio (%)5 |
54.3 |
57.6 |
3.3 |
3.2 |
56.7 |
2.4 |
2.6 |
55.2 |
58.1 |
2.9 |
2.6 |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse), except for risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Other items include $100m charge relating to Korea ELS
4 Change is the basis points (bps) difference between the two periods rather than the percentage change
5 Change is the percentage points difference between the two periods rather than the percentage change
Page 15
• Underlying profit before tax of $742 million was up 11 per cent at constant currency (ccy) mainly driven by higher income partly offset by higher operating expenses and credit impairment
• Underlying operating income of $2,040 million was up 11 per cent at ccy, driven primarily by Wealth Solutions, up 32 per cent. Growth in Wealth Solutions was broad-based across markets and products, driven by continued momentum in Affluent new-to-bank onboarding and net new money. Mortgage income increased by 47 per cent benefiting from lower funding costs as HIBOR reduced. CCPL & Other Unsecured Lending income also increased by 5 per cent due to higher volumes driven by Partnership led growth. Deposits income dropped by 2 per cent as the impact of higher Time Deposit volumes was more than offset by lower margins. Passthrough rates remained largely stable
• Underlying operating expenses increased 4 per cent at ccy, mainly from inflation and investment in business growth initiatives including strategic hiring of Affluent relationship managers
• Credit impairment charge of $177 million up $54 million, mainly from normal flows coupled with an overlay of $21 million related to Korea eCommerce platforms
Page 16
|
Q3'24 |
Q3'23 |
Change2 |
Constant currency change1,2 |
Q2'24 |
Change2 |
Constant currency change1,2 |
YTD'24 |
YTD'23 |
Change2 |
Constant currency change1,2 |
Operating income |
43 |
35 |
23 |
17 |
48 |
(10) |
(14) |
123 |
124 |
(1) |
(2) |
Of which: SCV |
4 |
8 |
(50) |
(67) |
15 |
(73) |
(82) |
22 |
62 |
(65) |
(66) |
Of which: Digital Banks5 |
39 |
27 |
44 |
44 |
33 |
18 |
22 |
101 |
62 |
63 |
63 |
Wealth Solutions |
1 |
- |
nm |
nm |
- |
nm |
nm |
1 |
- |
nm |
nm |
CCPL & Other Unsecured Lending |
31 |
27 |
15 |
14 |
28 |
11 |
14 |
86 |
64 |
34 |
34 |
Deposits |
(5) |
(14) |
64 |
64 |
(9) |
44 |
44 |
(23) |
(34) |
32 |
32 |
Treasury |
(1) |
8 |
(113) |
(111) |
2 |
(150) |
nm |
2 |
20 |
(90) |
(91) |
Other |
17 |
14 |
21 |
23 |
27 |
(37) |
(45) |
57 |
74 |
(23) |
(22) |
Operating expenses |
(119) |
(109) |
(9) |
(8) |
(117) |
(2) |
- |
(349) |
(320) |
(9) |
(9) |
Operating Loss before impairment losses and taxation |
(76) |
(74) |
(3) |
(4) |
(69) |
(10) |
(10) |
(226) |
(196) |
(15) |
(16) |
Credit impairment |
(16) |
(30) |
47 |
50 |
(15) |
(7) |
- |
(59) |
(53) |
(11) |
(9) |
Other impairment |
(2) |
(9) |
78 |
75 |
- |
nm |
nm |
(2) |
(9) |
78 |
78 |
Profit from associates and |
(5) |
(4) |
(25) |
(25) |
(3) |
(67) |
(67) |
(11) |
(17) |
35 |
35 |
Underlying loss before taxation |
(99) |
(117) |
15 |
15 |
(87) |
(14) |
(13) |
(298) |
(275) |
(8) |
(8) |
Restructuring |
1 |
- |
nm |
nm |
(1) |
nm |
nm |
- |
(1) |
100 |
100 |
Reported loss before taxation |
(98) |
(117) |
16 |
15 |
(88) |
(11) |
(13) |
(298) |
(276) |
(8) |
(8) |
Total assets |
6,045 |
3,398 |
78 |
79 |
5,280 |
14 |
15 |
6,045 |
3,398 |
78 |
79 |
Of which: loans and advances |
1,230 |
1,014 |
21 |
19 |
1,110 |
11 |
8 |
1,230 |
1,014 |
21 |
19 |
Total liabilities |
4,972 |
2,581 |
93 |
87 |
4,347 |
14 |
11 |
4,972 |
2,581 |
93 |
87 |
Of which: customer accounts |
4,702 |
2,316 |
103 |
96 |
4,046 |
16 |
12 |
4,702 |
2,316 |
103 |
96 |
Risk-weighted assets |
2,195 |
1,786 |
23 |
nm |
2,129 |
3 |
nm |
2,195 |
1,786 |
23 |
nm |
Income return on risk-weighted |
7.9 |
8.3 |
(40)bps |
nm |
9.1 |
(120)bps |
nm |
8.1 |
11.2 |
(310)bps |
nm |
Underlying return on tangible |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
Cost to income ratio (%)4 |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse), except for risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Change is the basis points (bps) difference between the two periods rather than the percentage change
4 Change is the percentage points difference between the two periods rather than the percentage change
5 Digital Banks income includes Mox and Trust bank
• Underlying loss before tax decreased by $18 million to $99 million reflecting Group's ongoing commitment to investing in transformational digital initiatives. Income increased by 17 per cent at ccy to $43 million mostly from Digital Banks' which was up 44 per cent. This was due to strong growth in customer numbers and volumes in both Digital Banks, Mox and Trust
• Operating expenses increased by 8 per cent due to inflation and investment in business growth initiatives
• Credit impairment decreased from $30 million to $16 million primarily from charges in Mox albeit delinquency rates have improved
Page 17
|
Q3'24 |
Q3'23 |
Change2 |
Constant currency change1,2 |
Q2'24 |
Change2 |
Constant currency change1,2 |
YTD'24 |
YTD'23 |
Change2 |
Constant currency change1,2 |
Operating income |
(66) |
(295) |
78 |
80 |
(73) |
10 |
(24) |
(51) |
(812) |
94 |
94 |
Treasury |
(1) |
(282) |
100 |
101 |
(32) |
97 |
136 |
9 |
(687) |
101 |
101 |
Other |
(65) |
(13) |
nm |
(154) |
(41) |
(59) |
(69) |
(60) |
(125) |
52 |
50 |
Operating expenses |
(138) |
(209) |
34 |
43 |
(163) |
15 |
31 |
(504) |
(609) |
17 |
17 |
Operating (loss)/profit before impairment losses and taxation |
(204) |
(504) |
60 |
65 |
(236) |
14 |
19 |
(555) |
(1,421) |
61 |
61 |
Credit impairment |
5 |
10 |
(50) |
(50) |
53 |
(91) |
(92) |
46 |
38 |
21 |
16 |
Other impairment |
(20) |
(4) |
nm |
nm |
(10) |
(100) |
(90) |
(32) |
(46) |
30 |
33 |
Profit from associates and |
18 |
7 |
157 |
157 |
68 |
(74) |
(74) |
88 |
114 |
(23) |
(23) |
Underlying (loss)/profit |
(201) |
(491) |
59 |
65 |
(125) |
(61) |
(56) |
(453) |
(1,315) |
66 |
66 |
Restructuring |
(15) |
(1) |
nm |
- |
(14) |
(7) |
87 |
(54) |
(1) |
nm |
nm |
Goodwill & other impairment6 |
- |
(697) |
100 |
100 |
- |
nm |
nm |
- |
(697) |
100 |
100 |
Other items |
1 |
- |
nm |
nm |
(177) |
101 |
101 |
(188) |
- |
nm |
nm |
Reported (loss)/profit before taxation |
(215) |
(1,189) |
82 |
85 |
(316) |
32 |
42 |
(695) |
(2,013) |
65 |
66 |
Total assets |
260,807 |
299,783 |
(13) |
(15) |
263,859 |
(1) |
(3) |
260,807 |
299,783 |
(13) |
(15) |
Of which: loans and advances |
26,100 |
26,686 |
(2) |
(7) |
24,022 |
9 |
4 |
26,100 |
26,686 |
(2) |
(7) |
Total liabilities |
107,253 |
112,699 |
(5) |
(5) |
103,313 |
4 |
3 |
107,253 |
112,699 |
(5) |
(5) |
Of which: customer accounts3 |
5,647 |
7,590 |
(26) |
(26) |
8,295 |
(32) |
(32) |
5,647 |
7,590 |
(26) |
(26) |
Risk-weighted assets |
39,629 |
45,969 |
(14) |
nm |
38,205 |
4 |
nm |
39,629 |
45,969 |
(14) |
nm |
Income return on risk-weighted |
(0.7) |
(2.4) |
170bps |
nm |
(0.7) |
- |
nm |
(0.2) |
(2.2) |
200bps |
nm |
Underlying return on tangible |
(27.7) |
(38.5) |
1,080bps |
nm |
(17.1) |
(1,060)bps |
nm |
(20.6) |
(29.8) |
920bps |
nm |
Cost to income ratio (%) |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
nm |
1 Comparisons presented on the basis of the current period's transactional currency rate, ensuring like-for-like currency rates between the two periods
2 Variance is better/(worse), except for risk-weighted assets, assets and liabilities which is increase/(decrease)
3 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
4 Change is the basis points (bps) difference between the two periods rather than the percentage change
5 Change is the percentage points difference between the two periods rather than the percentage change
6 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
• Underlying Q3'24 loss before tax of $201 million improved by 65 per cent compared to prior period loss, due to a lower operating loss, lower operating expenses and an increase in income from Associates, partly offset by a write-off of software assets
• Underlying operating loss reduced by $229 million to $66 million year-on-year. Treasury income increased by $281 million mainly from the roll-off of short-term hedges and upward repricing of structural hedges. Other income decreased by $52 million due to higher funding costs of non-financial assets coupled with non-repeat of FX gains made in Q3'23
Page 18
|
Q3'24 |
||||||||||
Hong Kong |
Korea |
China |
Taiwan |
Singapore |
India |
UAE |
UK |
US |
Other |
Group |
|
Operating income |
1,257 |
225 |
354 |
151 |
678 |
348 |
201 |
66 |
348 |
1,276 |
4,904 |
Operating expenses |
(515) |
(173) |
(216) |
(85) |
(332) |
(217) |
(104) |
(209) |
(178) |
(811) |
(2,840) |
Operating profit/(loss) before impairment losses and taxation |
742 |
52 |
138 |
66 |
346 |
131 |
97 |
(143) |
170 |
465 |
2,064 |
Credit impairment |
(81) |
(29) |
(37) |
(9) |
(9) |
(14) |
18 |
4 |
2 |
(23) |
(178) |
Other impairment |
(40) |
- |
(12) |
(4) |
(22) |
(23) |
(17) |
(9) |
(14) |
49 |
(92) |
Profit from associates and |
- |
- |
15 |
- |
- |
- |
- |
(1) |
- |
(1) |
13 |
Underlying profit/(loss) |
621 |
23 |
104 |
53 |
315 |
94 |
98 |
(149) |
158 |
490 |
1,807 |
Total assets employed |
216,815 |
50,389 |
46,544 |
22,881 |
114,511 |
37,112 |
20,971 |
164,735 |
75,528 |
122,687 |
872,173 |
Of which: loans and advances |
87,200 |
28,152 |
15,467 |
11,991 |
65,474 |
14,184 |
7,521 |
29,173 |
27,901 |
52,958 |
340,021 |
Total liabilities employed |
200,908 |
41,725 |
38,111 |
19,771 |
114,754 |
28,108 |
17,346 |
119,851 |
61,927 |
176,936 |
819,437 |
Of which: customer accounts1 |
161,553 |
32,063 |
28,228 |
17,722 |
89,424 |
20,006 |
14,557 |
82,013 |
30,586 |
63,869 |
540,021 |
|
Q3'23 |
||||||||||
Hong Kong |
Korea |
China |
Taiwan |
Singapore |
India |
UAE |
UK |
US |
Other |
Group |
|
Operating income |
1,067 |
275 |
291 |
144 |
635 |
309 |
191 |
19 |
211 |
1,261 |
4,403 |
Operating expenses |
(475) |
(181) |
(222) |
(82) |
(295) |
(242) |
(99) |
(226) |
(160) |
(788) |
(2,770) |
Operating profit/(loss) before impairment losses and taxation |
592 |
94 |
69 |
62 |
340 |
67 |
92 |
(207) |
51 |
473 |
1,633 |
Credit impairment |
(203) |
(21) |
(45) |
(1) |
(24) |
(9) |
12 |
13 |
2 |
(18) |
(294) |
Other impairment |
(1) |
- |
(1) |
(1) |
(2) |
(1) |
- |
(4) |
7 |
(23) |
(26) |
Profit from associates and |
- |
- |
9 |
- |
- |
- |
- |
- |
- |
(6) |
3 |
Underlying profit/(loss) |
388 |
73 |
32 |
60 |
314 |
57 |
104 |
(198) |
60 |
426 |
1,316 |
Total assets employed |
180,633 |
58,751 |
43,936 |
22,147 |
97,981 |
34,788 |
20,835 |
160,936 |
90,525 |
115,301 |
825,833 |
Of which: loans and advances |
85,199 |
32,395 |
16,590 |
11,003 |
60,754 |
14,686 |
7,692 |
25,722 |
27,546 |
47,833 |
329,420 |
Total liabilities employed |
173,346 |
49,874 |
36,085 |
20,349 |
106,455 |
27,014 |
18,711 |
102,747 |
82,705 |
160,191 |
777,477 |
Of which: customer accounts1 |
144,629 |
37,368 |
29,342 |
17,890 |
78,878 |
19,399 |
14,064 |
70,088 |
46,170 |
57,994 |
515,822 |
|
Q2'24 |
||||||||||
Hong Kong |
Korea |
China |
Taiwan |
Singapore |
India |
UAE |
UK |
US |
Other |
Group |
|
Operating income |
1,158 |
260 |
342 |
140 |
632 |
320 |
211 |
53 |
341 |
1,349 |
4,806 |
Operating expenses |
(518) |
(176) |
(228) |
(84) |
(320) |
(220) |
(111) |
(247) |
(176) |
(807) |
(2,887) |
Operating profit/(loss) before impairment losses and taxation |
640 |
84 |
114 |
56 |
312 |
100 |
100 |
(194) |
165 |
542 |
1,919 |
Credit impairment |
(54) |
(13) |
(42) |
(9) |
(24) |
4 |
1 |
8 |
(2) |
58 |
(73) |
Other impairment |
- |
(1) |
- |
- |
- |
- |
- |
20 |
4 |
(106) |
(83) |
Profit from associates and |
- |
- |
70 |
- |
- |
- |
- |
(2) |
- |
(3) |
65 |
Underlying profit/(loss) |
586 |
70 |
142 |
47 |
288 |
104 |
101 |
(168) |
167 |
491 |
1,828 |
Total assets employed |
202,878 |
51,017 |
45,451 |
21,180 |
105,312 |
36,752 |
27,218 |
155,831 |
75,001 |
114,787 |
835,427 |
Of which: loans and advances |
84,272 |
26,970 |
16,798 |
11,002 |
60,791 |
15,479 |
8,934 |
32,609 |
25,405 |
53,447 |
335,707 |
Total liabilities employed |
191,631 |
42,224 |
36,588 |
19,000 |
110,318 |
28,004 |
20,411 |
106,861 |
66,564 |
162,499 |
784,100 |
Of which: customer accounts1 |
160,948 |
32,323 |
27,081 |
16,983 |
86,049 |
20,661 |
14,935 |
79,545 |
33,920 |
59,817 |
532,262 |
1 Loans and advances to customers includes FVTPL and customer accounts includes FVTPL and repurchase agreements
Page 19
|
Q3'24 |
Q2'24 |
Q1'24 |
Q4'23 |
Q3'23 |
Q2'23 |
Q1'23 |
Q4'22 |
Transaction Services |
1,585 |
1,605 |
1,615 |
1,659 |
1,667 |
1,620 |
1,572 |
1,416 |
Payments and Liquidity |
1,112 |
1,139 |
1,161 |
1,207 |
1,196 |
1,148 |
1,094 |
962 |
Securities & Prime Services |
156 |
153 |
141 |
140 |
138 |
131 |
141 |
126 |
Trade & Working Capital |
317 |
313 |
313 |
312 |
333 |
341 |
337 |
328 |
Global Banking |
475 |
488 |
472 |
400 |
447 |
447 |
411 |
400 |
Lending & Financial Solutions |
407 |
422 |
414 |
358 |
393 |
396 |
353 |
366 |
Capital Market & Advisory |
68 |
66 |
58 |
42 |
54 |
51 |
58 |
34 |
Global Markets |
840 |
796 |
1,041 |
534 |
716 |
877 |
922 |
662 |
Macro Trading |
683 |
631 |
884 |
463 |
595 |
776 |
786 |
536 |
Credit Trading |
174 |
165 |
167 |
92 |
122 |
116 |
121 |
123 |
Valuation & Other Adj |
(17) |
- |
(10) |
(21) |
(1) |
(15) |
15 |
3 |
Wealth Solutions |
694 |
618 |
616 |
412 |
526 |
495 |
511 |
358 |
Investment Products |
507 |
444 |
424 |
298 |
364 |
343 |
352 |
266 |
Bancassurance |
187 |
174 |
192 |
114 |
162 |
152 |
159 |
92 |
CCPL & Other Unsecured Lending |
312 |
298 |
287 |
288 |
297 |
286 |
290 |
294 |
Deposits |
946 |
908 |
908 |
933 |
953 |
881 |
803 |
833 |
Mortgages & Other Secured Lending |
100 |
124 |
103 |
57 |
69 |
113 |
161 |
55 |
Treasury |
(2) |
(30) |
43 |
(235) |
(274) |
(160) |
(233) |
(173) |
Other |
(46) |
(1) |
67 |
(24) |
2 |
(4) |
(41) |
(80) |
Total underlying operating income |
4,904 |
4,806 |
5,152 |
4,024 |
4,403 |
4,555 |
4,396 |
3,765 |
|
Q3'24 |
Q3'23 |
Change |
Q2'24 |
Change |
YTD'24 |
YTD'23 |
Change |
Profit for the period attributable to equity holders |
1,147 |
139 |
nm |
974 |
18 |
3,516 |
2,524 |
39 |
Non-controlling interest |
3 |
6 |
(50) |
1 |
200 |
12 |
9 |
33 |
Dividend payable on preference shares and AT1 classified as equity |
(219) |
(180) |
(22) |
(29) |
nm |
(428) |
(423) |
(1) |
Profit/(loss) for the period attributable to ordinary shareholders |
931 |
(35) |
nm |
946 |
(2) |
3,100 |
2,110 |
47 |
|
|
|
|
|
|
|
|
|
Items normalised: |
|
|
|
|
|
|
|
|
Restructuring |
91 |
7 |
nm |
95 |
(4) |
241 |
(49) |
nm |
Goodwill and other impairment3 |
- |
697 |
nm |
- |
nm |
- |
697 |
nm |
DVA |
(5) |
(21) |
76 |
(22) |
77 |
21 |
18 |
17 |
Net (gains)/losses on sale of businesses |
(1) |
- |
nm |
177 |
nm |
188 |
- |
nm |
Other items1 |
- |
- |
nm |
- |
nm |
100 |
- |
nm |
Tax on normalised items |
(11) |
(4) |
(175) |
(22) |
50 |
(78) |
(4) |
nm |
Underlying profit |
1,005 |
644 |
56 |
1,174 |
(14) |
3,572 |
2,772 |
29 |
|
|
|
|
|
|
|
|
|
Basic - Weighted average number of shares (millions) |
2,527 |
2,772 |
(9) |
2,578 |
(2) |
2,579 |
2,816 |
nm |
Diluted - Weighted average number of shares (millions) |
2,595 |
2,837 |
(9) |
2,645 |
(2) |
2,644 |
2,880 |
nm |
|
|
|
|
|
|
|
|
|
Basic earnings per ordinary share (cents)² |
36.8 |
(1.3) |
38.1 |
36.7 |
0.1 |
120.2 |
74.9 |
45.3 |
Diluted earnings per ordinary share (cents)² |
35.9 |
(1.2) |
37.1 |
35.8 |
0.1 |
117.2 |
73.3 |
43.9 |
Underlying basic earnings per ordinary share (cents)² |
39.8 |
23.2 |
16.6 |
45.5 |
(5.7) |
138.5 |
98.4 |
40.1 |
Underlying diluted earnings per ordinary share (cents)² |
38.7 |
22.7 |
16.0 |
44.4 |
(5.7) |
135.1 |
96.3 |
38.8 |
1 Other items include $100m provision relating to Korea ELS
2 Change is the percentage points difference between the two periods rather than the percentage change
3 Goodwill and other impairment include nil (Q3'23: $697 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
Page 20
|
Q3'24 |
Q3'23 |
Change |
Q2'24 |
Change |
YTD'24 |
YTD'23 |
Change |
Average parent company Shareholders' Equity |
44,836 |
43,135 |
4 |
44,171 |
2 |
44,417 |
43,580 |
2 |
Less Preference share premium |
(1,494) |
(1,494) |
- |
(1,494) |
- |
(1,494) |
(1,494) |
- |
Less Average intangible assets |
(6,191) |
(5,948) |
(4) |
(6,128) |
(1) |
(6,187) |
(5,907) |
(5) |
Average Ordinary Shareholders' Tangible Equity |
37,151 |
35,693 |
4 |
36,549 |
2 |
36,736 |
36,179 |
2 |
|
|
|
|
|
|
|
|
|
Profit for the period attributable to |
1,147 |
139 |
nm |
974 |
18 |
3,516 |
2,524 |
39 |
Non-controlling interests |
3 |
6 |
(50) |
1 |
200 |
12 |
9 |
33 |
Dividend payable on preference shares and AT1 classified as equity |
(219) |
(180) |
(22) |
(29) |
nm |
(428) |
(423) |
(1) |
Profit/(loss) for the period attributable to ordinary shareholders |
931 |
(35) |
nm |
946 |
(2) |
3,100 |
2,110 |
47 |
|
|
|
|
|
|
|
|
|
Items normalised: |
|
|
|
|
|
|
|
|
Restructuring |
91 |
7 |
nm |
95 |
(4) |
241 |
(49) |
nm |
Goodwill and other impairment2 |
- |
697 |
nm |
- |
nm |
- |
697 |
nm |
Net (gains) / losses on sale of businesses |
(1) |
- |
nm |
177 |
nm |
188 |
- |
nm |
Ventures FVOCI unrealised gains/(losses) net |
3 |
(11) |
nm |
(3) |
nm |
(12) |
32 |
nm |
DVA |
(5) |
(21) |
76 |
(22) |
77 |
21 |
18 |
17 |
Other items1 |
- |
- |
nm |
- |
nm |
100 |
- |
nm |
Tax on normalised items |
(11) |
(4) |
(175) |
(22) |
50 |
(78) |
(4) |
nm |
Underlying profit for the period attributable to ordinary shareholders |
1,008 |
633 |
59 |
1,171 |
(14) |
3,560 |
2,804 |
27 |
|
|
|
|
|
|
|
|
|
Underlying return on tangible equity |
10.8% |
7.0% |
380bps |
12.9% |
(210)bps |
12.9% |
10.4% |
250bps |
Reported return on tangible equity |
10.0% |
(0.4)% |
1,040bps |
10.4% |
(40)bps |
11.3% |
7.8% |
350bps |
1 Other items include $100m provision relating to Korea ELS
2 Goodwill and other impairment include nil (Q3'23: $697 million) impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai)
Net Tangible Asset Value per Share
|
30.09.24 |
30.09.23 |
Change |
30.06.24 |
Change |
31.12.23 |
Change |
Parent company shareholders' equity |
45,259 |
42,466 |
7 |
44,413 |
2 |
44,445 |
2 |
Less Preference share premium |
(1,494) |
(1,494) |
- |
(1,494) |
- |
(1,494) |
- |
Less Intangible assets |
(6,279) |
(5,997) |
(5) |
(6,103) |
(3) |
(6,214) |
(1) |
Net shareholders tangible equity |
37,486 |
34,975 |
7 |
36,816 |
2 |
36,737 |
2 |
|
|
|
|
|
|
|
|
Ordinary shares in issue, excluding own shares (millions) |
2,484 |
2,725 |
(9) |
2,550 |
(3) |
2,637 |
(6) |
Net tangible asset value per share (cents)1 |
1,509 |
1,283 |
226 |
1,444 |
65 |
1,393 |
116 |
1 Change is cents difference between the two periods rather than the percentage change
Page 21
Underlying versus reported results reconciliations
Reconciliations between underlying and reported results are set out in the tables below:
|
Q3'24 |
||||
Corporate & Investment Banking |
Wealth & |
Ventures |
Central & |
Total |
|
Underlying operating income |
2,887 |
2,040 |
43 |
(66) |
4,904 |
Restructuring |
37 |
6 |
- |
(3) |
40 |
DVA |
5 |
- |
- |
- |
5 |
Other items |
- |
- |
- |
1 |
1 |
Reported operating income |
2,929 |
2,046 |
43 |
(68) |
4,950 |
|
Q3'23 |
||||
Corporate & Investment Banking |
Wealth & |
Ventures |
Central & |
Total |
|
Underlying operating income |
2,814 |
1,849 |
35 |
(295) |
4,403 |
Restructuring |
77 |
10 |
- |
12 |
99 |
DVA |
21 |
- |
- |
- |
21 |
Reported operating income |
2,912 |
1,859 |
35 |
(283) |
4,523 |
Net interest income and Other income
|
Q3'24 |
Q3'23 |
||||||
Underlying |
Restructuring |
Adjustment for Trading book funding cost and Others |
Reported |
Underlying |
Restructuring |
Adjustment for Trading book funding cost and Others |
Reported |
|
Net interest income |
2,606 |
- |
(1,124) |
1,482 |
2,388 |
(8) |
(455) |
1,925 |
Non NII |
2,298 |
46 |
1,124 |
3,468 |
2,015 |
128 |
455 |
2,598 |
Total income |
4,904 |
46 |
- |
4,950 |
4,403 |
120 |
- |
4,523 |
Profit before taxation (PBT)
|
Q3'24 |
||||||
Underlying |
Restructuring |
Net gain on businesses disposed/ held for sale |
Goodwill & other impairment |
Other items |
DVA |
Reported |
|
Operating income |
4,904 |
40 |
1 |
- |
- |
5 |
4,950 |
Operating expenses |
(2,840) |
(131) |
- |
- |
- |
- |
(2,971) |
Operating profit/(loss) before impairment losses |
2,064 |
(91) |
1 |
- |
- |
5 |
1,979 |
Credit impairment |
(178) |
- |
- |
- |
- |
- |
(178) |
Other impairment |
(92) |
4 |
- |
- |
- |
- |
(88) |
Profit from associates and joint ventures |
13 |
(4) |
- |
- |
- |
- |
9 |
Profit/(loss) before taxation |
1,807 |
(91) |
1 |
- |
- |
5 |
1,722 |
Page 22
Underlying versus reported results reconciliations continued
|
Q3'23 |
||||||
Underlying |
Restructuring |
Net gain on businesses disposed/ held for sale |
Goodwill & other impairment¹ |
Other items |
DVA |
Reported |
|
Operating income |
4,403 |
99 |
- |
- |
- |
21 |
4,523 |
Operating expenses |
(2,770) |
(100) |
- |
- |
- |
- |
(2,870) |
Operating profit/(loss) before impairment losses |
1,633 |
(1) |
- |
- |
- |
21 |
1,653 |
Credit impairment |
(294) |
2 |
- |
- |
- |
- |
(292) |
Other impairment |
(26) |
(11) |
- |
(697) |
- |
- |
(734) |
Profit from associates and joint ventures |
3 |
3 |
- |
- |
- |
- |
6 |
Profit/(loss) before taxation |
1,316 |
(7) |
- |
(697) |
- |
21 |
633 |
1 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai).
Profit before taxation (PBT) by client segment
|
Q3'24 |
||||
Corporate & Investment Banking |
Wealth & |
Ventures |
Central & |
Total |
|
Operating income |
2,887 |
2,040 |
43 |
(66) |
4,904 |
External |
2,546 |
858 |
43 |
1,457 |
4,904 |
Inter-segment |
341 |
1,182 |
- |
(1,523) |
- |
Operating expenses |
(1,475) |
(1,108) |
(119) |
(138) |
(2,840) |
Operating profit/(loss) before impairment losses and taxation |
1,412 |
932 |
(76) |
(204) |
2,064 |
Credit impairment |
10 |
(177) |
(16) |
5 |
(178) |
Other impairment |
(57) |
(13) |
(2) |
(20) |
(92) |
Profit from associates and joint ventures |
- |
- |
(5) |
18 |
13 |
Underlying profit/(loss) before taxation |
1,365 |
742 |
(99) |
(201) |
1,807 |
Restructuring |
(36) |
(41) |
1 |
(15) |
(91) |
DVA |
5 |
- |
- |
- |
5 |
Other items |
- |
- |
- |
1 |
1 |
Reported profit/(loss) before taxation |
1,334 |
701 |
(98) |
(215) |
1,722 |
|
Q3'23 |
||||
Corporate & Investment Banking |
Wealth & |
Ventures |
Central & |
Total |
|
Operating income |
2,814 |
1,849 |
35 |
(295) |
4,403 |
External |
2,084 |
1,003 |
35 |
1,281 |
4,403 |
Inter-segment |
730 |
846 |
- |
(1,576) |
- |
Operating expenses |
(1,387) |
(1,065) |
(109) |
(209) |
(2,770) |
Operating profit/(loss) before impairment losses and taxation |
1,427 |
784 |
(74) |
(504) |
1,633 |
Credit impairment |
(159) |
(115) |
(30) |
10 |
(294) |
Other impairment |
(13) |
- |
(9) |
(4) |
(26) |
Profit from associates and joint ventures |
- |
- |
(4) |
7 |
3 |
Underlying profit/(loss) before taxation |
1,255 |
669 |
(117) |
(491) |
1,316 |
Restructuring |
11 |
(17) |
- |
(1) |
(7) |
Goodwill & other impairment¹ |
- |
- |
- |
(697) |
(697) |
DVA |
21 |
- |
- |
- |
21 |
Reported profit/(loss) before taxation |
1,287 |
652 |
(117) |
(1,189) |
633 |
1 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai).
Page 23
|
Q3'24 |
||||||
Underlying |
Restructuring |
DVA |
Net loss on sale of business |
Goodwill |
Tax on normalised items |
Reported |
|
Profit for the year attributable to ordinary shareholders |
1,005 |
(91) |
5 |
1 |
- |
11 |
931 |
Basic - Weighted average number of shares (millions) |
2,527 |
|
|
|
|
|
2,527 |
Basic earnings per ordinary share (cents) |
39.8 |
|
|
|
|
|
36.8 |
|
Q3'23 |
||||||
Underlying |
Restructuring |
DVA |
Net gain on sale of business |
Goodwill |
Tax on normalised items |
Reported |
|
Profit for the year attributable to ordinary shareholders |
644 |
(7) |
21 |
- |
(697) |
4 |
(35) |
Basic - Weighted average number of shares (millions) |
2,772 |
|
|
|
|
|
2,772 |
Basic earnings per ordinary share (cents) |
23.2 |
|
|
|
|
|
(1.3) |
1 Goodwill and other impairment include $697 million impairment charge relating to the Group's investment in its associate China Bohai Bank (Bohai).
Page 24
Risk review
Credit quality by client segment
Amortised cost |
30.09.24 |
|||||||
Banks |
Customers |
Undrawn commitments |
Financial Guarantees |
|||||
Corporate & Investment Banking |
Wealth & Retail Banking |
Ventures |
Central & other items |
Customer Total |
||||
Stage 1 |
46,848 |
127,001 |
120,300 |
1,226 |
26,963 |
275,490 |
178,181 |
85,923 |
- Strong |
34,336 |
86,852 |
114,735 |
1,211 |
26,464 |
229,262 |
162,700 |
56,132 |
- Satisfactory |
12,512 |
40,149 |
5,565 |
15 |
499 |
46,228 |
15,481 |
29,791 |
Stage 2 |
610 |
8,251 |
1,992 |
47 |
79 |
10,369 |
4,438 |
1,587 |
- Strong |
280 |
1,073 |
1,431 |
31 |
- |
2,535 |
996 |
339 |
- Satisfactory |
201 |
6,443 |
194 |
6 |
- |
6,643 |
3,137 |
1,078 |
- Higher risk |
129 |
735 |
367 |
10 |
79 |
1,191 |
305 |
170 |
Of which (stage 2): |
|
|
|
|
|
|
|
|
- Less than 30 days past due |
- |
262 |
194 |
6 |
- |
462 |
- |
- |
- More than 30 days past due |
3 |
105 |
367 |
10 |
- |
482 |
- |
- |
Stage 3, credit-impaired financial assets |
64 |
4,891 |
1,603 |
10 |
31 |
6,535 |
6 |
651 |
Gross balance¹ |
47,522 |
140,143 |
123,895 |
1,283 |
27,073 |
292,394 |
182,625 |
88,161 |
Stage 1 |
(7) |
(94) |
(379) |
(23) |
- |
(496) |
(50) |
(16) |
- Strong |
(5) |
(29) |
(297) |
(22) |
- |
(348) |
(31) |
(5) |
- Satisfactory |
(2) |
(65) |
(82) |
(1) |
- |
(148) |
(19) |
(11) |
Stage 2 |
(1) |
(229) |
(141) |
(20) |
- |
(390) |
(47) |
(8) |
- Strong |
- |
(70) |
(64) |
(15) |
- |
(149) |
(6) |
- |
- Satisfactory |
(1) |
(112) |
(31) |
(3) |
- |
(146) |
(29) |
(3) |
- Higher risk |
- |
(47) |
(46) |
(2) |
- |
(95) |
(12) |
(5) |
Of which (stage 2): |
|
|
|
|
|
|
|
|
- Less than 30 days past due |
- |
(4) |
(31) |
(3) |
- |
(38) |
- |
- |
- More than 30 days past due |
- |
(1) |
(46) |
(2) |
- |
(49) |
- |
- |
Stage 3, credit-impaired financial assets |
(2) |
(3,491) |
(751) |
(9) |
- |
(4,251) |
- |
(122) |
Total credit impairment |
(10) |
(3,814) |
(1,271) |
(52) |
- |
(5,137) |
(97) |
(146) |
Net carrying value |
47,512 |
136,329 |
122,624 |
1,231 |
27,073 |
287,257 |
|
|
Stage 1 |
0.0% |
0.1% |
0.3% |
1.9% |
0.0% |
0.2% |
0.0% |
0.0% |
- Strong |
0.0% |
0.0% |
0.3% |
1.8% |
0.0% |
0.2% |
0.0% |
0.0% |
- Satisfactory |
0.0% |
0.2% |
1.5% |
6.7% |
0.0% |
0.3% |
0.1% |
0.0% |
Stage 2 |
0.2% |
2.8% |
7.1% |
42.6% |
0.0% |
3.8% |
1.1% |
0.5% |
- Strong |
0.0% |
6.5% |
4.5% |
48.4% |
0.0% |
5.9% |
0.6% |
0.0% |
- Satisfactory |
0.5% |
1.7% |
16.0% |
50.0% |
0.0% |
2.2% |
0.9% |
0.3% |
- Higher risk |
0.0% |
6.4% |
12.5% |
20.0% |
0.0% |
8.0% |
3.9% |
2.9% |
Of which (stage 2): |
|
|
|
|
|
|
|
|
- Less than 30 days past due |
0.0% |
1.5% |
16.0% |
50.0% |
0.0% |
8.2% |
0.0% |
0.0% |
- More than 30 days past due |
0.0% |
1.0% |
12.5% |
20.0% |
0.0% |
10.2% |
0.0% |
0.0% |
Stage 3, credit-impaired financial assets (S3) |
3.1% |
71.4% |
46.8% |
90.0% |
0.0% |
65.0% |
0.0% |
18.7% |
- Stage 3 Collateral |
- |
445 |
625 |
- |
- |
1,070 |
- |
35 |
- Stage 3 Cover ratio (after collateral) |
3.1% |
80.5% |
85.8% |
90.0% |
0.0% |
81.4% |
0.0% |
24.1% |
Cover ratio |
0.0% |
2.7% |
1.0% |
4.1% |
0.0% |
1.8% |
0.1% |
0.2% |
Fair value through profit or loss |
|
|
|
|
|
|
|
|
Performing |
44,281 |
52,736 |
8 |
- |
- |
52,744 |
- |
- |
- Strong |
39,065 |
34,299 |
6 |
- |
- |
34,305 |
- |
- |
- Satisfactory |
5,198 |
18,360 |
2 |
- |
- |
18,362 |
- |
- |
- Higher risk |
18 |
77 |
- |
- |
- |
77 |
- |
- |
Defaulted (CG13-14) |
- |
20 |
- |
- |
- |
20 |
- |
- |
Gross balance (FVTPL)2 |
44,281 |
52,756 |
8 |
- |
- |
52,764 |
- |
- |
Net carrying value (incl FVTPL) |
91,793 |
189,085 |
122,632 |
1,231 |
27,073 |
340,021 |
- |
- |
1 Loans and advances includes reverse repurchase agreements and other similar secured lending of $8,955 million under Customers and of $3,538 million under Banks, held at amortised cost
2 Loans and advances includes reverse repurchase agreements and other similar secured lending of $46,671 million under Customers and of $41,392 million under Banks, held at fair value through profit or loss
Page 25
Risk review continued
Amortised cost |
30.06.24 |
|||||||
Banks |
Customers |
Undrawn commitments |
Financial Guarantees |
|||||
Corporate & Investment Banking |
Wealth & Retail Banking |
Ventures |
Central & other items |
Customer Total |
||||
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 26
|
9 months ended 30.09.24 |
9 months ended 30.09.23 |
||||
Stage 1 & 2 |
Stage 3 |
Total |
Stage 1 & 2 |
Stage 3 |
Total |
|
Ongoing business portfolio |
|
|
|
|
|
|
Corporate & Investment Banking |
(3) |
(42) |
(45) |
66 |
162 |
228 |
Wealth & Retail Banking |
230 |
229 |
459 |
75 |
148 |
223 |
Ventures |
9 |
50 |
59 |
28 |
25 |
53 |
Central & Other items |
(37) |
(9) |
(46) |
(35) |
(3) |
(38) |
Credit impairment charge / (release) |
199 |
228 |
427 |
134 |
332 |
466 |
Restructuring business portfolio |
|
|
|
|
|
|
Others |
2 |
(11) |
(9) |
(1) |
(12) |
(13) |
Credit impairment charge / (release) |
2 |
(11) |
(9) |
(1) |
(12) |
(13) |
Total credit impairment charge / (release) |
201 |
217 |
418 |
133 |
320 |
453 |
Page 27
Capital review
Capital ratios
|
30.09.24 |
30.06.24 |
Change2 |
31.12.23 |
Change2 |
CET1 |
14.2% |
14.6% |
(0.4) |
14.1% |
0.1 |
Tier 1 capital |
16.8% |
17.3% |
(0.5) |
16.3% |
0.5 |
Total capital |
21.6% |
22.1% |
(0.5) |
21.2% |
0.4 |
Capital base1
|
30.09.24 |
30.06.24 |
Change3 |
31.12.23 |
Change3 |
CET1 instruments and reserves |
|
|
|
|
|
Capital instruments and the related share premium accounts |
5,234 |
5,264 |
(1) |
5,321 |
(2) |
Of which: share premium accounts |
3,989 |
3,989 |
- |
3,989 |
- |
Retained earnings |
25,081 |
27,017 |
(7) |
24,930 |
1 |
Accumulated other comprehensive income (and other reserves) |
9,954 |
8,274 |
20 |
9,171 |
9 |
Non-controlling interests (amount allowed in consolidated CET1) |
219 |
236 |
(7) |
217 |
1 |
Independently reviewed interim and year-end profits |
3,569 |
2,409 |
48 |
3,542 |
1 |
Foreseeable dividends |
(629) |
(478) |
32 |
(768) |
(18) |
CET1 capital before regulatory adjustments |
43,428 |
42,722 |
2 |
42,413 |
2 |
CET1 regulatory adjustments |
|
|
|
|
|
Additional value adjustments (prudential valuation adjustments) |
(635) |
(678) |
(6) |
(730) |
(13) |
Intangible assets (net of related tax liability) |
(6,179) |
(6,006) |
3 |
(6,128) |
1 |
Deferred tax assets that rely on future profitability (excludes those arising from temporary differences) |
(23) |
(44) |
(48) |
(41) |
(44) |
Fair value reserves related to net losses on cash flow hedges |
(416) |
56 |
(843) |
(91) |
357 |
Deduction of amounts resulting from the calculation of excess expected loss |
(711) |
(653) |
9 |
(754) |
(6) |
Net gains on liabilities at fair value resulting from changes in own credit risk |
205 |
260 |
(21) |
(100) |
(305) |
Defined-benefit pension fund assets |
(114) |
(110) |
4 |
(95) |
20 |
Fair value gains arising from the institution's own credit risk related to derivative liabilities |
(100) |
(90) |
11 |
(116) |
(14) |
Exposure amounts which could qualify for risk weighting of 1,250% |
(30) |
(39) |
(23) |
(44) |
(32) |
Other regulatory adjustments to CET1 capital |
- |
- |
- |
- |
- |
Total regulatory adjustments to CET1 |
(8,003) |
(7,304) |
10 |
(8,099) |
(1) |
CET1 capital |
35,425 |
35,418 |
- |
34,314 |
3 |
Additional Tier 1 capital (AT1) instruments |
6,527 |
6,504 |
- |
5,512 |
18 |
AT1 regulatory adjustments |
(20) |
(20) |
- |
(20) |
- |
Tier 1 capital |
41,932 |
41,902 |
- |
39,806 |
5 |
|
|
|
|
|
|
Tier 2 capital instruments |
11,756 |
11,697 |
1 |
11,965 |
(2) |
Tier 2 regulatory adjustments |
(30) |
(30) |
- |
(30) |
- |
Tier 2 capital |
11,726 |
11,667 |
1 |
11,935 |
(2) |
Total capital |
53,658 |
53,569 |
- |
51,741 |
4 |
Total risk-weighted assets (unaudited) |
248,924 |
241,926 |
3 |
244,151 |
2 |
1 Capital base is prepared on the regulatory scope of consolidation
2 Change is the percentage point difference between two periods, rather than percentage change
3 Variance is increase/(decrease) comparing current reporting period to prior periods
Page 28
|
9 months ended 30.09.24 |
12 months ended 31.12.23 |
CET1 at 1 January |
34,314 |
34,157 |
Ordinary shares issued in the period and share premium |
- |
- |
Share buy-back |
(2,500) |
(2,000) |
Profit for the period |
3,569 |
3,542 |
Foreseeable dividends deducted from CET1 |
(629) |
(768) |
Difference between dividends paid and foreseeable dividends |
(440) |
(372) |
Movement in goodwill and other intangible assets |
(50) |
(326) |
Foreign currency translation differences |
329 |
(477) |
Non-controlling interests |
1 |
28 |
Movement in eligible other comprehensive income |
662 |
464 |
Deferred tax assets that rely on future profitability |
18 |
35 |
Decrease/(increase) in excess expected loss |
43 |
(70) |
Additional value adjustments (prudential valuation adjustment) |
95 |
124 |
IFRS 9 transitional impact on regulatory reserves including day one |
1 |
(106) |
Exposure amounts which could qualify for risk weighting |
14 |
59 |
Fair value gains arising from the institution's own Credit Risk related to derivative liabilities |
16 |
(26) |
Others |
(18) |
50 |
CET1 at 30 September/31 December |
35,425 |
34,314 |
|
|
|
AT1 at 1 January |
5,492 |
6,484 |
Net issuances (redemptions) |
1,015 |
(1,000) |
Foreign currency translation difference |
- |
8 |
AT1 at 30 September/31 December |
6,507 |
5,492 |
|
|
|
Tier 2 capital at 1 January |
11,935 |
12,510 |
Regulatory amortisation |
710 |
1,416 |
Net issuances (redemptions) |
(1,000) |
(2,160) |
Foreign currency translation difference |
75 |
146 |
Tier 2 ineligible minority interest |
2 |
19 |
Other |
4 |
4 |
Tier 2 capital at 30 September/31 December |
11,726 |
11,935 |
Total capital at 30 September/31 December |
53,658 |
51,741 |
Page 29
Capital review continued
Risk-weighted assets by business
|
30.09.24 |
|||
Credit risk |
Operational risk |
Market risk |
Total risk |
|
Corporate & Investment Banking |
106,460 |
19,987 |
26,831 |
153,278 |
Wealth & Retail Banking |
44,299 |
9,523 |
- |
53,822 |
Ventures |
2,041 |
142 |
12 |
2,195 |
Central & other items |
36,044 |
(173) |
3,758 |
39,629 |
Total risk-weighted assets |
188,844 |
29,479 |
30,601 |
248,924 |
|
30.06.24 |
|||
Credit risk |
Operational risk |
Market risk |
Total risk |
|
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 |
Operational risk |
Market risk |
Total risk |
|
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 |
Market risk |
Total risk |
||||
Corporate & Investment Banking |
Wealth & Retail Banking |
Ventures |
Central & other items |
Total |
||||
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 |
Asset growth & mix |
(4,424) |
728 |
535 |
1,183 |
(1,978) |
- |
- |
(1,978) |
Asset quality |
(391) |
390 |
- |
2,684 |
2,683 |
- |
- |
2,683 |
Risk-weighted assets efficiencies |
- |
- |
- |
(688) |
(688) |
- |
- |
(688) |
Model updates |
(597) |
(151) |
- |
(151) |
(899) |
- |
500 |
(399) |
Methodology and policy changes |
- |
(196) |
- |
- |
(196) |
- |
(800) |
(996) |
Acquisitions and disposals |
(1,630) |
- |
- |
- |
(1,630) |
- |
- |
(1,630) |
Foreign currency translation |
(386) |
(303) |
- |
(2,035) |
(2,724) |
- |
- |
(2,724) |
Other, including non-credit risk movements |
- |
- |
- |
- |
- |
684 |
4,488 |
5,172 |
At 31 December 2023 |
102,675 |
42,559 |
1,885 |
44,304 |
191,423 |
27,861 |
24,867 |
244,151 |
Asset growth & mix |
3,890 |
520 |
156 |
(4,753) |
(187) |
- |
- |
(187) |
Asset quality |
(934) |
371 |
- |
(1,837) |
(2,400) |
- |
- |
(2,400) |
Risk-weighted assets efficiencies |
- |
- |
- |
- |
- |
- |
- |
- |
Model updates |
474 |
(1) |
- |
- |
473 |
- |
- |
473 |
Methodology and policy changes |
16 |
485 |
- |
- |
501 |
- |
(1,300) |
(799) |
Acquisitions and disposals |
- |
- |
- |
- |
- |
- |
- |
- |
Foreign currency translation |
339 |
365 |
- |
(436) |
268 |
- |
- |
268 |
Other, including non-credit risk movements |
- |
- |
- |
(1,234) |
(1,234) |
1,618 |
7,034 |
7,418 |
At 30 September 2024 |
106,460 |
44,299 |
2,041 |
36,044 |
188,844 |
29,479 |
30,601 |
248,924 |
Page 30
|
30.09.24 |
30.06.24 |
Change3 |
31.12.23 |
Change3 |
Tier 1 capital |
41,932 |
41,902 |
- |
39,806 |
5 |
Derivative financial instruments |
56,318 |
48,647 |
16 |
50,434 |
12 |
Derivative cash collateral |
10,612 |
8,099 |
31 |
10,337 |
3 |
Securities financing transactions (SFTs) |
100,636 |
104,981 |
(4) |
97,581 |
3 |
Loans and advances and other assets |
704,607 |
673,700 |
5 |
664,492 |
6 |
Total on-balance sheet assets |
872,173 |
835,427 |
4 |
822,844 |
6 |
Regulatory consolidation adjustments1 |
(87,268) |
(82,607) |
6 |
(92,709) |
(6) |
Derivatives adjustments |
|
|
|
|
|
Derivatives netting |
(45,204) |
(36,580) |
24 |
(39,031) |
16 |
Adjustments to cash collateral |
(10,091) |
(6,876) |
47 |
(9,833) |
3 |
Net written credit protection |
1,842 |
1,316 |
40 |
1,359 |
36 |
Potential future exposure on derivatives |
50,091 |
45,488 |
10 |
42,184 |
19 |
Total derivatives adjustments |
(3,362) |
3,348 |
nm |
(5,321) |
nm |
Counterparty risk leverage exposure measure for SFTs |
4,065 |
3,885 |
5 |
6,639 |
(39) |
Off-balance sheet items |
121,668 |
125,194 |
(3) |
123,572 |
(2) |
Regulatory deductions from Tier 1 capital |
(8,107) |
(7,474) |
8 |
(7,883) |
3 |
Total exposure measure excluding claims on central banks |
899,169 |
877,773 |
2 |
847,142 |
6 |
Leverage ratio excluding claims on central banks (%)2 |
4.7% |
4.8% |
(0.1) |
4.7% |
(0.0) |
Average leverage exposure measure excluding claims on |
887,398 |
870,657 |
2 |
853,968 |
4 |
Average leverage ratio excluding claims on central banks (%)2 |
4.6% |
4.7% |
(0.1) |
4.6% |
0.0 |
Countercyclical leverage ratio buffer2 |
0.2% |
0.2% |
- |
0.1% |
0.1 |
G-SII additional leverage ratio buffer2 |
0.4% |
0.4% |
- |
0.4% |
- |
1 Includes adjustment for qualifying central bank claims and unsettled regular way trades
2 Change is the percentage point difference between two periods, rather than percentage change
3 Variance is increase/(decrease) comparing current reporting period to prior periods
Page 31
|
9 months ended 30.09.24 |
9 months ended 30.09.23 |
Interest income |
21,180 |
20,218 |
Interest expense |
(16,523) |
(14,309) |
Net interest income |
4,657 |
5,909 |
Fees and commission income |
3,551 |
3,153 |
Fees and commission expense |
(644) |
(622) |
Net fee and commission income |
2,907 |
2,531 |
Net trading income |
7,228 |
4,805 |
Other operating income |
(51) |
405 |
Operating income |
14,741 |
13,650 |
Staff costs |
(6,473) |
(6,255) |
Premises costs |
(268) |
(313) |
General administrative expenses |
(1,502) |
(1,149) |
Depreciation and amortisation |
(784) |
(821) |
Operating expenses |
(9,027) |
(8,538) |
Operating profit before impairment losses and taxation |
5,714 |
5,112 |
Credit impairment |
(418) |
(453) |
Goodwill, property, plant and equipment and other impairment |
(235) |
(811) |
Profit from associates and joint ventures |
153 |
108 |
Profit before taxation |
5,214 |
3,956 |
Taxation |
(1,698) |
(1,432) |
Profit for the period |
3,516 |
2,524 |
|
|
|
Profit attributable to: |
|
|
Non-controlling interests |
(12) |
(9) |
Parent company shareholders |
3,528 |
2,533 |
Profit for the period |
3,516 |
2,524 |
|
cents |
cents |
Earnings per share: |
|
|
Basic earnings per ordinary share |
120.2 |
74.9 |
Diluted earnings per ordinary share |
117.2 |
73.3 |
Page 32
|
30.09.24 |
30.09.23 |
Profit for the period |
3,516 |
2,524 |
Other comprehensive loss |
|
|
Items that will not be reclassified to income statement: |
(188) |
(84) |
Own credit losses on financial liabilities designated at fair value through profit or loss |
(351) |
(137) |
Equity instruments at fair value through other comprehensive (loss)/income |
(3) |
66 |
Actuarial gains on retirement benefit obligations |
33 |
14 |
Revaluation Surplus |
16 |
- |
Taxation relating to components of other comprehensive income |
117 |
(27) |
Items that may be reclassified subsequently to income statement: |
932 |
(364) |
Exchange differences on translation of foreign operations: |
|
|
Net gains/(losses) taken to equity |
32 |
(1,363) |
Net gains on net investment hedges |
149 |
446 |
Share of other comprehensive income/(loss) from associates and joint ventures |
15 |
(5) |
Debt instruments at fair value through other comprehensive income: |
|
|
Net valuation gains taken to equity |
342 |
113 |
Reclassified to income statement |
134 |
108 |
Net impact of expected credit losses |
(24) |
(51) |
Cash flow hedges: |
|
|
Net movements in cash flow hedge reserve |
394 |
422 |
Taxation relating to components of other comprehensive income |
(110) |
(34) |
Other comprehensive income/(loss) for the period, net of taxation |
744 |
(448) |
Total comprehensive income for the period |
4,260 |
2,076 |
|
|
|
Total comprehensive income attributable to: |
|
|
Non-controlling interests |
(16) |
(46) |
Parent company shareholders |
4,276 |
2,122 |
Total comprehensive income for the period |
4,260 |
2,076 |
Page 33
Financial statements continued
Condensed consolidated interim balance sheet
|
30.09.24 |
31.12.23 |
Assets |
|
|
Cash and balances at central banks |
64,905 |
69,905 |
Financial assets held at fair value through profit or loss |
189,218 |
147,222 |
Derivative financial instruments |
56,318 |
50,434 |
Loans and advances to banks |
47,512 |
44,977 |
Loans and advances to customers |
287,257 |
286,975 |
Investment securities |
148,068 |
161,255 |
Other assets |
63,580 |
47,594 |
Current tax assets |
517 |
484 |
Prepayments and accrued income |
3,361 |
3,033 |
Interests in associates and joint ventures |
1,116 |
966 |
Goodwill and intangible assets |
6,279 |
6,214 |
Property, plant and equipment |
2,283 |
2,274 |
Deferred tax assets |
540 |
702 |
Retirement benefit schemes in surplus |
116 |
- |
Assets classified as held for sale |
1,103 |
809 |
Total assets |
872,173 |
822,844 |
|
|
|
Liabilities |
|
|
Deposits by banks |
32,172 |
28,030 |
Customer accounts |
478,140 |
469,418 |
Repurchase agreements and other similar secured borrowing |
9,865 |
12,258 |
Financial liabilities held at fair value through profit or loss |
95,771 |
83,096 |
Derivative financial instruments |
62,105 |
56,061 |
Debt securities in issue |
64,783 |
62,546 |
Other liabilities |
55,664 |
39,221 |
Current tax liabilities |
1,140 |
811 |
Accruals and deferred income |
6,632 |
6,975 |
Subordinated liabilities and other borrowed funds |
11,327 |
12,036 |
Deferred tax liabilities |
710 |
770 |
Provisions for liabilities and charges |
342 |
299 |
Retirement benefit schemes in deficit |
276 |
183 |
Liabilities included in disposal groups held for sale |
510 |
787 |
Total liabilities |
819,437 |
772,491 |
|
|
|
Equity |
|
|
Share capital and share premium account |
6,728 |
6,815 |
Other reserves |
9,954 |
9,171 |
Retained earnings |
28,577 |
28,459 |
Total parent company shareholders' equity |
45,259 |
44,445 |
Other equity instruments |
7,080 |
5,512 |
Total equity excluding non-controlling interests |
52,339 |
49,957 |
Non-controlling interests |
397 |
396 |
Total equity |
52,736 |
50,353 |
Total equity and liabilities |
872,173 |
822,844 |
Page 34
|
Ordinary share capital and share premium account |
Preference share capital and share premium account |
Capital and merger reserves1 |
Own credit adjust-ment reserve |
Fair value through other compre-hensive income reserve - debt |
Fair value through other compre-hensive income reserve - equity |
Cash flow hedge reserve |
Trans-lation reserve |
Retained earnings |
Parent company share-holders' equity |
Other equity instru-ments |
Non-controlling interests |
Total |
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 |
- |
- |
- |
- |
- |
- |
- |
- |
3,469 |
3,469 |
- |
(7) |
3,462 |
Other comprehensive income/(loss)2 |
- |
- |
- |
163 |
426 |
124 |
655 |
(489) |
(47)3 |
832 |
- |
(31) |
801 |
Distributions |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(26) |
(26) |
Redemption of other equity instruments |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(1,000) |
- |
(1,000) |
Treasury shares net movement |
- |
- |
- |
- |
- |
- |
- |
- |
(189) |
(189) |
- |
- |
(189) |
Share option expense, net |
- |
- |
- |
- |
- |
- |
- |
- |
173 |
173 |
- |
- |
173 |
Dividends on ordinary shares |
- |
- |
- |
- |
- |
- |
- |
- |
(568) |
(568) |
- |
- |
(568) |
Dividends on preference shares and AT1 securities |
- |
- |
- |
- |
- |
- |
- |
- |
(452) |
(452) |
- |
- |
(452) |
Share buy-back4,5 |
(115) |
- |
115 |
- |
- |
- |
- |
- |
(2,000) |
(2,000) |
- |
- |
(2,000) |
Other movements |
- |
- |
- |
- |
- |
- |
- |
126 |
66 |
18 |
86 |
1107 |
136 |
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 |
- |
- |
- |
- |
- |
- |
- |
- |
3,528 |
3,528 |
- |
(12) |
3,516 |
Other comprehensive (loss)/income2 |
- |
- |
- |
(305) |
427 |
(87)12 |
325 |
173 |
2153,13 |
748 |
- |
(4) |
744 |
Distributions |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(35) |
(35) |
Other equity instruments issued, net of expenses |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
1,56814 |
- |
1,568 |
Treasury shares net movement |
- |
- |
- |
- |
- |
- |
- |
- |
(1) |
(1) |
- |
- |
(1) |
Share option expense, net |
- |
- |
- |
- |
- |
- |
- |
- |
205 |
205 |
- |
- |
205 |
Dividends on ordinary shares |
- |
- |
- |
- |
- |
- |
- |
- |
(780) |
(780) |
- |
- |
(780) |
Dividends on preference shares and AT1 securities |
- |
- |
- |
- |
- |
- |
- |
- |
(428) |
(428) |
- |
- |
(428) |
Share buy-back8,9 |
(87) |
- |
87 |
- |
- |
- |
- |
- |
(2,500) |
(2,500) |
- |
- |
(2,500) |
Other movements |
- |
- |
- |
- |
7 |
- |
- |
1566 |
(121)10 |
42 |
- |
5211 |
94 |
As at 30 September 2024 |
5,234 |
1,494 |
17,540 |
(205) |
(256) |
243 |
416 |
(7,784) |
28,577 |
45,259 |
7,080 |
397 |
52,736 |
1 Includes capital reserve of $5 million, capital redemption reserve of $424 million and merger reserve of $17,111 million
2 All the amounts are net of tax
3 Comprises actuarial gain, net of taxation on Group defined benefit schemes
4 On 16 February 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 $58 million, and the total consideration paid was $1,000 million and the buyback completed on 29 September 2023. The total number of shares purchased was 116,710,492, representing 4.03 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
5 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
6 Movement related to Translation adjustment and AT1 Securities charges. September 2024 balance includes $190 million translation adjustment loss from sale of SCB Zimbabwe Limited recycled to other operating income
7 Movements primarily from non-controlling interest pertaining to Mox Bank Limited ($48 million), Trust Bank Singapore Limited ($34 million) and Zodia Custody Limited ($28 million)
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 On 30 July 2024, the Group announced the buyback programme for a share buyback of its ordinary shares of $0.50 each. As at Q3 2024 the buyback is ongoing, but the total number of shares purchased was 61,080,300 representing 2.39 per cent of the ordinary shares in issue, the total consideration paid was $603 million, and a further $897 million relating to irrevocable obligation to buy back shares under the buyback programme has been recognised. The nominal value of the shares was transferred from the share capital to the capital redemption reserve account
10 Includes $80 million loss to retained earnings related to Ghana Hyperinflation and AT1 Securities charges
11 Movements related to non-controlling interest from Mox Bank Limited ($4 million) and Trust Bank Singapore Ltd ($48 million)
12 Includes $174 million gain on sale of equity investment transferred to retained earnings partly offset by $76 million reversal of deferred tax liability
13 Includes $174 million gain on sale of equity investment in other comprehensive income reserve transferred to retained earnings partly offset by $13 million capital gain tax
14 Includes $992 million and $576 million (SGD 750 million) fixed rate resetting perpetual subordinated contingent convertible AT1 securities issued by Standard Chartered PLC
Page 35
Financial statements continued
This statement covers the results of Standard Chartered PLC together with its subsidiaries and equity accounted interest in associates and jointly controlled entities (the Group) for the nine months ended 30 September 2024. The financial information on which this statement is based, and the data set out in the appendix to this statement, are unaudited and have been prepared in accordance with the Group's accounting policies. The Group's material accounting policies are described in the Annual Report 2023, which have been prepared in accordance with UK-adopted international accounting standards and International Financial Reporting Standards (IFRS) as adopted by the European Union (EU IFRS) and in conformity with the requirements of the Companies Act 2006. There are no significant differences between UK-adopted international accounting standards and EU IFRS. The Group's Annual Report 2024 will continue to be prepared in accordance with these frameworks.
The interim financial information does not constitute a full or condensed set of financial statements under IAS 34 'Interim Financial Reporting' as contained in UK-adopted international accounting standards or EU IFRS. The interim financial information has been prepared in accordance with the recognition and measurement principles, but not the disclosure requirements under UK-adopted international accounting standards and EU IFRS.
The information in this interim financial report is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. All references to reported performance/results within this interim financial report means amounts reported under UK-adopted IAS and EU IFRS or in reference to the statutory accounts for the year ended 31 December 2023, unless otherwise stated. This document was approved by the Board on 30 October 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.
The directors assessed the Group's ability to continue as a going concern, including a review of the Group's forecasts, Funding and Liquidity metrics, Capital and Liquidity plans, Legal and regulatory matters, Credit impairment, macroeconomic conditions and geopolitical headwinds, and confirm they are satisfied that the Group has adequate resources to continue in business for a period of twelve months from 30 October 2024. For this reason, the Group continues to adopt the going concern basis of accounting for preparing the interim financial information.
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Other supplementary financial information
Net Interest Margin
|
3 months ended 30.09.24 |
3 months ended 30.06.24 |
3 months ended 30.09.23 |
Interest income (reported) |
6,986 |
7,057 |
7,391 |
Average interest earning assets |
532,459 |
533,869 |
579,713 |
Gross yield (%) |
5.22 |
5.32 |
5.06 |
|
|
|
|
Interest expense (reported) |
5,504 |
5,454 |
5,466 |
Adjustment for trading book funding cost and others |
(1,124) |
(959) |
(455) |
Adjusted interest expense for trading book funding cost and others |
4,380 |
4,495 |
5,011 |
Average interest-bearing liabilities |
540,691 |
538,054 |
548,297 |
Rate paid (%) |
3.22 |
3.36 |
3.63 |
Net yield (%) |
2.00 |
1.96 |
1.43 |
|
|
|
|
Net interest income adjusted for adjustment for trading book funding cost and others |
2,606 |
2,562 |
2,380 |
Net interest margin (%) |
1.95 |
1.93 |
1.63 |
Page 37
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 or 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 Group's 2023 Annual Report 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 cause its plans and objectives, to differ materially from those expressed or implied in any forward-looking statements.
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.
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.
If there is a dispute between any translation and the English version of this Q3 2024 Results, the English text shall prevail.
Page 38
Standard Chartered Group
1 Basinghall Avenue
London, EC2V 5DD
United Kingdom
telephone: +44 (0)20 7885 8888
facsimile: +44 (0)20 7885 9999
ShareCare information
website: sc.com/shareholders
helpline: +44 (0)370 702 0138
ShareGift information
website: ShareGift.org
helpline: +44 (0)20 7930 3737
The Pavilions
Bridgwater Road
Bristol, BS99 6ZZ
helpline: +44 (0)370 702 0138
17M Floor, Hopewell Centre
183 Queen's Road East
Wan Chai
Hong Kong
website: computershare.com/hk/investors
17M Floor, Hopewell Centre
183 Queen's Road East
Wan Chai
Hong Kong
website: investorcentre.co.uk
For further information, please contact:
Manus Costello, Global Head of Investor Relations
+44 (0) 20 7885 0017
LSE Stock code: STAN.LN
HKSE Stock code: 02888
Page 39