REG - Standard Chrtrd PLC - Additional Financial Information Part 1
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RNS Number : 1098U Standard Chartered PLC 24 February 2026
Standard Chartered PLC - Additional Financial information
Highlights
Standard Chartered PLC (the Group) today releases its results for the year
ended 31 December 2025. The following pages provide additional information
related to the announcement.
Table of contents
Risk review and Capital review
Enterprise Risk Management Framework 02
Principal risks 07
Risk profile 15
Capital review 67
Statement of directors' responsibilities 73
Shareholder information 74
Page 01
Enterprise Risk Management Framework
Risk management is at the heart of banking, it is what we do. Managing risk
effectively is how we drive commerce and prosperity for our clients and our
communities, and it is how we grow sustainably and profitably as an
organisation.
Effective risk management is essential in delivering consistent and
sustainable performance for all our stakeholders and is a central part of the
financial and operational management of the Group. The Group adds value to
clients and the communities in which they operate by balancing risk and reward
to generate returns for shareholders.
The Enterprise Risk Management Framework (ERMF) enables the Group to manage
enterprise-wide risks, with the objective of maximising risk-adjusted returns
while remaining within our Risk Appetite (RA). The ERMF is complemented by
frameworks, policies and standards which are mainly aligned to the Principal
Risk Types (PRTs), and is embedded across the Group, including its branches
and subsidiaries(1). It is reviewed and approved by the Board annually, with
the latest version being effective from August 2025.
Risk culture
Risk culture encompasses our general awareness, attitudes, and behaviours
towards risk, as well as how risk is managed at enterprise level.
A healthy risk culture is one in which everyone takes personal responsibility
to identify and assess, openly discuss, and take prompt action to address
existing and emerging risks. We expect our control functions to provide
oversight and challenge constructively, collaboratively, and in a timely
manner on the risks owned by the first line of defence. This effort is
reflected in our valued behaviours and underpinned by our Code of Conduct and
Ethics.
The risks we face constantly evolve, and we must always look for ways to
manage them as effectively as possible. While unfavourable outcomes will occur
from time to time, a healthy risk culture means that we react quickly and
transparently. We can then take the opportunity to learn from our experience
and improve our framework and processes.
Strategic risk management
The Group's approach to strategic risk management includes the following:
• Risk identification: impact analyses of risks that arise from the
Group's growth plans, strategic initiatives, and business model
vulnerabilities are reviewed. This assesses how existing risks have evolved in
terms of relative importance and whether new risks have emerged.
• Risk Appetite: impact analysis is performed to assess if strategic
initiatives can be achieved within RA and highlight areas where additional RA
should be considered.
• Stress testing: identified risks are used to develop scenarios for
enterprise stress tests.
Roles and responsibilities
Senior Managers Regime(2)
Roles and responsibilities under the ERMF are aligned to the objectives of the
Senior Managers Regime. The Group Chief Risk Officer (GCRO) is responsible for
the overall development and maintenance of the Group's ERMF and for
identifying material risks which the Group may be exposed to.
The GCRO delegates effective implementation of the Risk Type Frameworks
(RTF) to Risk Framework Owners (RFO), who provide second line of defence
oversight for their respective PRTs.
The Risk function
The Risk function provides independent oversight and challenge on the Group's
risk management, ensuring that business is conducted in line with regulatory
expectations. The GCRO directly manages the Risk function, which is
independent from the origination, trading, and sales functions of the
businesses. The Risk function is responsible for:
• proposing the RA for approval by the Board
• maintaining the ERMF, ensuring that it remains relevant and appropriate
to the Group's business activities, and is effectively communicated and
implemented across the Group
• ensuring that risks are properly assessed, risk and return decisions are
transparent and risks are controlled in accordance with the Group's standards
and RA
• overseeing and challenging the management of PRTs under the ERMF
• ensuring that the necessary balance in making risk and return decisions
is not compromised by short-term pressures to generate revenues.
1 The Group's ERMF and system of internal control applies only to wholly
controlled subsidiaries of the Group, and not to associates, joint ventures
or structured entities of the Group.
2 Senior managers refer to individuals designated as senior management
functions under the FCA and PRA Senior Managers Regime.
Page 02
We have a unified second line of defence, with all the PRTs reporting into the
GCRO. The unified second line supports the Group's strategy by building a
sustainable ERMF that places regulatory and compliance standards, together
with culture of appropriate conduct, at the forefront of the Group's agenda.
Three lines of defence model
The Group applies a three lines of defence model to its day-to-day activities
for effective risk management, and to reinforce a strong governance and
control environment. Typically:
• Businesses and functions engaged in or supporting revenue generating
activities that own and manage risks constitute the first line of defence.
• Group Control functions, independent of the first line of defence, that
provide oversight and challenge of risk management activities act as the
second line of defence.
• Internal Audit acts as the third line of defence, providing independent
assurance on the effectiveness of controls supporting the activities of the
first and second lines of defence.
Each PRT has an RTF which outlines the areas of governance and risk management
and is the formal mechanism through which authorities are delegated. Risk
management plans, processes, activities, and resource allocations are
consistent with the three lines of defence model prescribed by the ERMF.
Risk identification and assessment
Identification and assessment of potentially adverse risk events is an
essential first step in managing the risks of any business or activity. To
ensure consistency we use PRTs to classify our risk exposures. However, we
also recognise the need to maintain a holistic perspective since:
• a single transaction or activity may give rise to multiple types of risk
exposure
• risk concentrations may arise from multiple exposures that are closely
correlated
• a given risk exposure may change its form from one risk type to another.
There are also sources of risk that arise beyond our own operations, such as
the Group's dependency on suppliers for the provision of services and
technology.
As the Group remains accountable for risks arising from the actions of such
third parties, failure to adequately monitor and manage these relationships
could materially impact the Group's ability to operate.
The Group maintains a taxonomy of risks inherent to the strategy and business
model, as well as a risk inventory which captures identified risks, including
the Topical and Emerging Risks (TERs) which the Group is or might be exposed
to. Multiple identification and assessment techniques are used to ensure
breadth and depth of understanding of the internal and external risk
environment, as well as potential opportunities. A risk assessment of the
corporate plan is undertaken annually, supplemented by risk assessments of new
initiatives. Risk identification findings inform the related risk oversight
process, RA and controls setting, scenario selection and design, and model
refinement and development.
The GCRO and the Group Risk Committee (GRC) regularly review reports on the
risk profile for the PRTs, adherence to Group RA, stress test results and the
risk identification results including TERs.
Risk Appetite and profile
The Group recognises the following constraints which determine the risks that
we are willing to take in pursuit of our strategy and the development of a
sustainable business:
• Risk capacity is the maximum level of risk the Group can assume, given
its current capabilities and resources, before breaching constraints
determined by capital and liquidity requirements or the internal operational
environment, or otherwise failing to meet the expectations of regulator and
law enforcement agencies.
• RA is defined by the Group and approved by the Board. It is the
boundary for the risk that the Group is willing to undertake to achieve its
strategic objectives and corporate plan. We set our RA to enable us to grow
sustainably while managing our risks, giving confidence to our stakeholders.
The Group RA is supplemented by risk control tools such as granular level
limits, policies, and standards to maintain the Group's risk profile within
approved RA.
The Board is responsible for approving the RA Statements, which are
underpinned by a set of financial and operational control parameters known as
RA metrics and their associated thresholds. These set boundaries for the
aggregate risk exposures that can be taken across the Group.
The Group RA is reviewed at least annually to ensure that it is fit for
purpose and aligned with strategy, with focus given to new or emerging risks.
Risk Appetite Statement
The Group will not compromise adherence to its RA in order to pursue revenue
growth or higher returns.
See the table for the set of RA Statements.
Page 03
Stress testing
The objective of stress testing is to support the Group in assessing that it:
• does not carry excessive risk concentrations that could produce
unacceptably high losses under severe but plausible scenarios
• has sufficient financial resources to withstand stress, including under
severe but plausible scenarios
• understands key business model risks and considers what kind of event
might crystallise those risks - even if extreme and with a low likelihood of
occurring - and identifies, as required, actions to mitigate the likelihood
or impact of those events
• can meet risk appetite and planned distributions after considering
relevant downside scenarios
• has set RA metrics at appropriate levels.
Enterprise stress tests incorporate capital and liquidity adequacy stress
tests, including recovery and resolution, as well as reverse stress tests. The
Group uses historical, topical, emerging and hypothetical forward-looking
scenarios. A common set of scenarios is used across all legal entities
complemented in some cases with entity-specific scenarios.
Stress tests are performed at the Group, country, business, and portfolio
level under a wide range of risks and at varying degrees of severity. Unless
specifically set by the regulator, scenario design is a bespoke process that
aims to explore risks that can adversely impact the Group.
The Board delegates approval of the Bank of England (BoE) stress test
submissions to the Board Risk Committee (BRC), which reviews the
recommendations from the GRC. Based on the stress test results, the Group
Chief Financial Officer (GCFO) and GCRO can recommend strategic actions to the
Board to ensure that the Group's strategy remains within RA.
In addition, analysis is run at the PRT level to assess specific risks and
concentrations that the Group may be exposed to. These include qualitative
assessments such as stressing of credit sectors or portfolios, and
quantitative assessments such as potential losses from severe but plausible
market risk scenarios or internal stressed liquidity metrics. RA for market
risk stress losses is set at the Group as well as legal entity level.
Non-financial risk types are also stressed to assess the necessary capital
requirements and/or operational resilience under the Operational and
Technology RTF.
The Group has also undertaken a number of Climate Risk stress tests, both
those mandated by regulators as well as management scenarios.
Principal Risk Types
PRTs are those risks that are inherent in our strategy and business model and
have been formally defined in the Group's ERMF. These risks are managed
through distinct RTFs which are approved by the GCRO.
The PRTs and associated RA Statements are reviewed annually. The table below
shows the Group's current PRTs, their definitions and RA statements.
Principal Risk Types Definition Risk Appetite Statement
Credit Risk Potential for loss due to failure of a counterparty to meet its agreed The Group manages its credit exposures following the principle of
obligations to pay the Group. diversification across products, geographies, client segments and industry
sectors.
Traded Risk Potential for market or counterparty credit risk losses resulting from The Group should control its financial markets activities to ensure that
activities undertaken by the Group in fair valued financial market market and counterparty credit risk losses do not cause material damage to the
instruments. Group's franchise.
Treasury Risk Potential for insufficient capital, liquidity, or funding to support our The Group should maintain sufficient capital, liquidity and funding to support
operations, the risk of reductions in earnings or value from movements in its operations, and an interest rate profile ensuring that the reductions in
interest rates impacting banking book items and the potential for losses from earnings or value from movements in interest rates impacting banking book
a shortfall in the Group's pension plans. items do not cause material damage to the Group's franchise. In addition, the
Group should ensure that its pension plans are adequately funded.
Operational and Technology Risk Potential for loss resulting from inadequate or failed internal processes, The Group aims to mitigate and control Operational and Technology risks, to
technology events, human error, or from the impact of external events seek to ensure that events, including any related to conduct of business
(including legal risks). matters, do not cause the Group material harm as a result of business
disruption, financial loss or reputational damage.
Information and Cyber Security (ICS) Risk Risk to the Group's assets, operations, and individuals due to the potential The Group aims to mitigate and control ICS risks to ensure that incidents do
for unauthorised access, use, disclosure, disruption, modification, or not cause the Group material harm, business disruption, financial loss or
destruction of information assets and/or information systems. reputational damage, recognising that while incidents are unwanted, they
cannot be entirely avoided.
Page 04
Principal Risk Types Definition Risk Appetite Statement
Financial Crime Risk(1) Potential for legal or regulatory penalties, material financial loss or The Group has no appetite for breaches of laws and regulations related to
reputational damage resulting from the failure to comply with applicable laws Financial Crime, recognising that while incidents are unwanted, they cannot be
and regulations relating to international sanctions, anti-money laundering and entirely avoided.
anti-bribery and corruption, and fraud.
Compliance Risk Potential for penalties or loss to the Group or for an adverse impact to our The Group has no appetite for breaches of laws and regulations related to
clients or stakeholders or to the integrity of the markets we operate in regulatory non-compliance; recognising that while incidents are unwanted, they
through a failure on our part to comply with laws, or regulations. cannot be entirely avoided.
Environmental, Social and Governance and Reputational (ESGR) Risk Potential or actual adverse impact on the environment and/or society, the The Group aims to measure and manage financial and non-financial risks arising
Group's financial performance, operations, or the Group's name, brand or from climate change, reduce emissions in line with our net zero strategy and
standing, arising from environmental, social or governance factors, or as a protect the Group from material reputational damage by upholding responsible
result of the Group's actual or perceived actions or inactions. conduct and striving to do no significant environmental and social harm.
Model Risk Potential loss that may occur because of decisions or the risk of The Group has no appetite for material adverse implications arising from
misestimation that could be principally based on the output of models, due to misuse of models or errors in the development or implementation of models;
errors in the development, implementation, or use of such models. while accepting some model uncertainty.
1 Fraud forms part of the Financial Crime RA Statement but, in line with
market practice, does not apply a zero-tolerance approach.
ERMF effectiveness reviews
The GCRO is responsible for annually affirming the effectiveness of the ERMF
to the BRC via an effectiveness review. This review is based on the principle
of evidence-based self-assessments for all the RTFs and relevant policies. A
top-down review and challenge of the results is conducted by the GCRO with all
RFOs and an opinion on the internal control environment is provided by Group
Internal Audit.
The ERMF effectiveness review measures year-on-year progress. The key outcomes
of the 2025 review are:
• Continued focus on embedding the ERMF across the organisation.
• Financial risks remain effectively managed, and the Group is continually
making progress in embedding non-financial risk management.
• Self-assessments performed in branches and banking subsidiaries reflect
the embeddedness of the ERMF. Country and cluster risk committees continue to
play an active role in overseeing and managing risks across our footprint
markets.
Ongoing effectiveness reviews allow for a structured approach to identify
improvement opportunities and build plans to address them.
Executive and Board risk oversight
Overview
The corporate governance and committee structure helps the Group to conduct
our business. The Board has ultimate responsibility for risk management and
approves the ERMF based on the recommendation of the BRC, which also
recommends the Group RA Statement for all PRTs and other risks. In addition to
the BRC and Audit Committee, the Culture and Sustainability Committee oversees
the Group's culture and key sustainability priorities.
Group Risk Committee
The GRC, which derives its authority from the GCRO, is responsible for
ensuring the effective management of risk throughout the Group in support of
the Group's strategy. The GCRO chairs the GRC, whose members are drawn from
the Group Management Team. The GRC oversees the effective implementation of
the ERMF for the Group, including the delegation of any part of its
authorities to appropriate individuals or sub-committees.
Group Risk Committee sub-committees Chair Roles and responsibilities
Group Non-Financial Risk Committee (GNFRC) Global Head, Operational, Technology and Cyber Risk Governs the non-financial risks, including Fraud Risk, throughout the Group in
support of the ERMF and the Group's strategy.
Group Financial Crime Risk Committee (GFCRC) Group Head, CFCR Ensures that the Financial Crime Risk profile (excluding Fraud Risk and
Secondary Reputational Risk arising from Financial Crime Risk) is managed
within RA and policies.
Group Responsibility and Reputational Risk Committee (GRRRC) Global Head ERM Ensures the effective management of Environmental, Social, Governance and
Reputational Risk across the Group. This includes providing oversight of
matters arising from clients, products, transactions and strategic
coverage-related decisions and matters escalated by the respective RFOs.
International Financial Reporting Standards (IFRS) 9 Impairment Committee Co-chaired by the Global Head ERM and Group Head, Central Finance Ensures the effective management of expected credit loss (ECL) computations,
(IIC) as well as stage allocation of financial assets for quarterly financial
reporting.
Page 05
Group Risk Committee sub-committees Chair Roles and responsibilities
Model Risk Committee (MRC) Global Head, Model Risk Management Supports the Group strategy by ensuring the effective measurement and
management of Model Risk in line with internal policies and model RA.
Investment Committee Global Head of Stressed Assets Risk Ensures the optimised wind-down of the Group's non-core direct investment
activities in equities, quasi-equities (excluding mezzanine), funds and other
alternative investments (excluding debt/debt-like instruments).
SC Ventures (SCV) Risk Committee CRO, SC Ventures & Global Head, Digital Asset Risk Oversees the effective management of risk throughout SCV and the portfolio of
controlled entities operating under SCV.
Regulatory Interpretation Committee (RIC) Co-chaired by the Global Head ERM and Group Head, Central Finance Provides oversight of material regulatory interpretations for the Capital
Requirements Regulation (as amended by UK legislation), the Prudential
Regulatory Authority (PRA) rulebook and other relevant regulations impacting
Group regulatory capital calculations and reporting. The areas and risk types
in scope are credit risk, traded risk, operational risk, large exposures,
leverage ratio and securitisation.
Digital Assets Risk Committee (DRC) CRO, SC Ventures & Global Head, Digital Asset Risk Oversees effective risk management of the Digital Assets (DA) Risk profile of
the Group. This includes providing subject matter expertise and oversight of
DA Risk matters across the PRTs.
Corporate & Investment Banking Financial Risk Committee (CIBFRC) Co-Heads CRO CIB and CRO, ASEAN & South Asia Ensures the effective management of financial risk throughout CIB in support
of the Group's strategy.
Wealth & Retail Banking Risk Committee (WRBRC) Chief Risk Officer, WRB & GCNA Ensures the effective management of risk throughout WRB in support of the
Group's strategy.
HK & GCNA Risk Committee (HK&GCNA RC) CRO, Hong Kong & GCNA These committees ensure the effective management of risk in the clusters in
support of the Group's strategy.
SG & ASEAN Risk Committee (SG&ASEAN RC) CRO, Singapore & ASEAN
Standard Chartered Bank (SCB) India Country Risk Committee (CRC & CNFRC) CRO, India & South Asia
UK & Europe Risk Committee (UK & ERC) CRO, Europe
US Risk Committee (URC) CRO, Americas
Middle East and Pakistan Risk Committee (MEPRC) CRO, AME
Africa Risk Committee CRO, AME
Group Asset and Liability Committee
The Group Asset and Liability Committee (GALCO) is chaired by the GCFO. Its
members are drawn principally from the Management Team. GALCO is responsible
for determining the Group's balance sheet strategy and ensuring that, in
executing the Group's strategy, the Group operates within RA and regulatory
requirements relating to capital, loss-absorbing capacity, liquidity,
leverage, Interest Rate Risk in the Banking Book (IRRBB), Banking Book Basis
Risk and Structural Foreign Exchange Risk. GALCO is also responsible for
ensuring that internal and external recovery planning requirements are met.
Page 06
Principal risks
We manage and control our PRTs through distinct RTFs, policies and RA.
Credit Risk
Mitigation
Segment-specific policies are in place for Corporate & Investment Banking
(CIB) and Wealth & Retail Banking (WRB) which set the principles that must
be followed for the end-to-end credit process covering initiation, assessment,
documentation, approval, monitoring and governance.
The Group also sets out standards for the eligibility, enforceability, and
effectiveness of mitigation arrangements. Potential losses are mitigated using
a range of tools, such as collateral, netting agreements, credit insurance,
credit derivatives and guarantees.
Risk mitigants are carefully assessed for their market value, legal
enforceability, correlation, and counterparty risk of the protection provider.
Collateral is valued prior to drawdown and monitored regularly thereafter as
required, to reflect current market conditions, the probability of recovery
and the period of time to realise the collateral in the event of liquidation.
The Group also seeks to diversify its collateral holdings across asset classes
and markets.
Where guarantees, credit insurance, standby letters of credit or credit
derivatives are used as Credit Risk mitigation, the creditworthiness of the
protection provider is assessed and monitored using the same credit process
applied to the obligor.
Monitoring
The Group regularly monitors credit exposures, portfolio performance, external
trends and emerging risks that may impact risk management outcomes. Internal
risk management reports that are presented to risk committees contain
information on key political and economic trends across major portfolios and
countries, portfolio delinquency and loan impairment performance.
In CIB, clients and portfolios are subject to additional review when they
display signs of actual or potential weakness; for example, where there is a
decline in the client's position within their industry, financial
deterioration, a breach of covenants, or non-performance of an obligation
within the stipulated period. Such accounts are subject to a dedicated early
alert process overseen by the Credit Issues Committee in the relevant
countries where client account strategies and credit grades are re-evaluated.
In addition, remedial actions can be undertaken, such as exposure reduction,
security enhancement or exiting the account. Credit-impaired accounts are
managed by the Group's specialist recovery unit, Stressed Asset Group (SAG),
which is independent of the Client Coverage/Relationship Managers. Stressed
Asset Risk is the second line risk unit and is responsible for
the independent challenge, monitoring and approving of the credit risk
decisions including stage 3 credit impairment provision of the credit-impaired
accounts.
Regular portfolio reviews across industries are conducted. Senior members from
the CIB business and Risk participate in more extensive portfolio reviews
(known as the 'industry portfolio review') for certain industry groups. In
addition to a review of the portfolio information, this industry portfolio
review incorporates industry outlook, key elements of the business strategy,
RA, credit profile and emerging and horizon risks. A summary of these industry
portfolio reviews is also shared with the CIB Financial Risk Committee.
For WRB, exposures and collateral monitoring are performed at the counterparty
and/or portfolio level across different client segments to ensure transactions
and portfolio exposures remain within RA. Portfolio delinquency trends are
also monitored. Accounts that are past due (or perceived as high risk but not
yet past due) are subject to collections or recovery processes managed by a
specialist independent function. In some countries, aspects of collections and
recovery activities are outsourced. For discretionary lending portfolios,
similar processes to those of CIB are followed.
Any material in-country developments that may impact sovereign ratings are
monitored closely by Country Risk within the ERM function. The Country Risk
Early Warning system, a triage-based risk identification system, categorises
countries based on a forward-looking view of possible downgrades and the
potential incremental risk-weighted assets (RWA) impact.
In addition, an independent Credit Risk review team within the ERM function
performs assessments of the Credit Risk profiles at various portfolio levels.
They focus on selected countries and segments through deep dives, comparative
analysis, and review and challenge of the basis of credit approvals. The
review aims to ensure that the evolving Credit Risk profiles of CIB and WRB
are well managed within RA and policies. Results of the reviews are reported
to the GRC and BRC.
Credit rating and measurement
All credit proposals are subject to a robust credit risk assessment. It
includes a comprehensive evaluation of the client's credit quality, including
willingness, ability, and capacity to repay. The primary lending consideration
for counterparties is based on their credit quality and operating cash flows,
while for individual borrowers it is based on personal income or wealth. The
risk assessment gives due consideration to the client's liquidity and leverage
position.
Where applicable, the assessment includes a detailed analysis of the Credit
Risk mitigation arrangements to determine the level of reliance on such
arrangements as the secondary source of repayment in the event of a
significant deterioration in a client's credit quality leading to default.
Client income, net worth, and the liquidity of assets by class are considered
for overall risk assessment for wealth lending. Wealth lending credit limits
are subject to the availability of qualified collateral.
Page 07
We implement a standard alphanumeric Credit Risk grade system to differentiate
the credit quality of exposures for CIB clients, whereby credit grades (CG) 1
to 12 are assigned to reflect the probability of default of performing clients
(CG 1 being the best performing), and credit grades 13 and 14 are assigned to
non-performing or defaulted clients.
WRB internal ratings-based portfolios use application and behavioural credit
scores that are calibrated to generate a probability of default. The Risk
Decision Framework uses a credit rating system to define the portfolio/new
booking segmentation, shape and decision criteria for the unsecured consumer
business segment.
Advanced Internal Ratings-Based (AIRB) models cover the majority of our
exposures and are used in assessing risks at a customer and portfolio level,
setting strategy, and optimising our risk-return decisions. The Model Risk
Committee (MRC) approves material internal ratings-based risk measurement
models. Prior to review and approval, all internal ratings-based models are
validated by an independent model validation team. Reviews are also triggered
if the performance of a model deteriorates materially against predetermined
thresholds, measured through the ongoing model performance monitoring process.
We adopt the AIRB approach under the Basel regulatory framework to calculate
Credit Risk capital requirements for the majority of our exposures. The Group
has also established a global programme to assess capital requirements
necessary to be implemented to meet the latest revised Basel III regulation
(referred to as Basel 3.1 or Basel IV).
Credit Concentration Risk
Credit Concentration Risk for CIB is managed through concentration limits
covering large exposure limit to a single counterparty or a group of connected
counterparties (based on control and economic dependence criteria), or at
portfolio level for multiple exposures that are closely correlated. Single
name and Portfolio RA metrics are set, where appropriate, by credit grade,
industry, products, tenor, collateralisation level, top clients, and exposure
to holding companies.
For concentrations that are material at a Group level, breaches and potential
breaches are monitored by the respective governance committees and reported to
the GRC and BRC.
Credit impairment
For CIB, in line with the regulatory guidelines, Stage 3 expected credit loss
(ECL) is considered when an obligor is more than 90 days past due on any
amount payable to the Group, or the obligor has symptoms of unlikeliness to
pay its credit obligations in full as they fall due. These credit-impaired
accounts are managed by SAG.
In WRB, loans to individuals and small businesses are considered
credit-impaired as soon as any payment of interest or principal is 90 days
overdue or they meet other objective evidence of impairment, such as
bankruptcy, debt restructuring, fraud, or death, with unlikely continuation of
contractual payments. Financial assets are written off, in the amount that is
determined to be irrecoverable, when they meet conditions set such that
empirical evidence suggests the client is unlikely to meet their contractual
obligations, or a loss of principal is reasonably expected.
Estimating the amount and timing of future recoveries involves significant
judgement and considers the assessment of matters such as future economic
conditions and the value of collateral, for which there may not be a readily
accessible market. The total amount of the Group's impairment provision is
inherently uncertain, being sensitive to changes in economic and credit
conditions across the markets in which the Group operates.
Underwriting
The underwriting of securities and loans is in scope of the CIB RA. The
Underwriting Committee approves individual proposals to underwrite new
security issues and loans for our clients in compliance with the RA statement.
Additional risk triggers are set based on the type of exposure and credit
grade as approved by the GCRO.
Traded Risk
Mitigation
Traded Risk limits are calibrated to ensure that risk exposure is affordable
under both BAU and stress conditions. The Traded Risk Policy sets the
principles that must be followed for the end-to-end traded risk management
process including limit setting, risk capture and measurement, limit
monitoring and escalation, risk mitigation and stress testing. Policies are
reviewed and approved by the Global Head, Traded Risk Management periodically
to ensure their ongoing effectiveness.
Market Risk measurement
The Group uses a VaR model to measure the risk of losses arising from future
potential adverse movements in market rates, prices, and volatilities.
VaR provides a consistent measure that can be applied across trading
businesses and products over time and can be set against actual daily trading
profit and loss outcomes.
For day-to-day risk management, VaR is calculated as at the close of business,
generally at UK time, for expected market movements over one business day and
to a confidence level of 97.5 per cent.
Page 08
The Group applies two VaR methodologies:
• Historical simulation: this involves the revaluation of all existing
positions to reflect the effect of historically observed changes in Market
Risk factors on the valuation of the current portfolio. This approach is
applied for general Market Risk factors and the majority of specific (credit
spread) risk factors. The enhanced Volatility Scaling VaR (VSV) model went
live in January 2025, where risk factors' returns are scaled to reflect
historical volatility. The VSV model is more responsive to volatility changes
observed in the market.
• Monte Carlo simulation: this methodology is used in conjunction with
historical simulations when historical data are not directly available. This
approach is applied for the idiosyncratic credit spread risk factor or single
name equity risk factor. The simulation is performed by calibrating the model
to preserve volatility of risk factors.
As an input to regulatory capital, trading book VaR is calculated for expected
movements over 10 business days and to a confidence level of 99 per cent. Some
types of market risk are not captured in the regulatory VaR measure and these
risks not in VaR are subject to capital add-ons.
Counterparty Credit Risk measurement
A Potential Future Exposure (PFE) model is used to measure the credit exposure
arising from the positive mark-to-market of traded products. The PFE model
provides a quantitative estimate of future potential movements in market
rates, prices, and volatilities at a certain confidence level over different
time horizons based on the tenor of the transactions.
The Group applies two PFE methodologies: simulation-based, used for the bulk
of FX, interest rates and commodity products, and add-on-based for credit
products and residual non-simulation-based products.
Monitoring
Traded Risk Management monitors the overall portfolio risk and ensures that it
is within specified limits and therefore RA. Limits are typically reviewed at
least once a year.
All material Traded Risks are monitored daily against approved limits. Traded
Risk limits apply at all times unless separate intra-day limits have been set.
Treasury Risk
Mitigation
The Group develops policies to address material Treasury Risks and aims to
maintain its risk profile within RA. In order to do this, metrics are set
against Capital Risk, Liquidity and Funding Risk and IRRBB. Where appropriate,
RA metrics are cascaded down to clusters and countries in the form of limits
and management action triggers.
Capital Risk
In order to manage Capital Risk, strategic business financial plans and
capital plans (Corporate Plan) are drawn up covering a five-year horizon and
are approved by the Board annually. The plan ensures that adequate levels of
capital, including loss-absorbing capacity, and an efficient mix of the
different components of capital, are maintained to support our strategy and
business plans. This process considers downside scenarios and the availability
of recovery actions to course correct, as appropriate.
Treasury is responsible for the ongoing assessment of the demand for capital
and the updating of the Group's capital plan.
RA metrics including capital, leverage, minimum requirement for own funds and
eligible liability (MREL) and double leverage are assessed within the
Corporate Plan to ensure that the strategy can be achieved within risk
tolerances.
Structural Foreign Exchange Risk
The Group's structural FX position results from the Group's non-US dollar
investment in the share capital and reserves of subsidiaries and branches.
The FX translation gains or losses are recorded in the Group's translation
reserves with a direct impact on the Group's Common Equity Tier 1 ratio.
The Group contracts hedges to manage its structural FX position in accordance
with the RA, and as a result the Group has taken net investment hedges to
partially cover its exposure to certain non-US dollar currencies to mitigate
the FX impact of such positions on its CET1 ratio.
Liquidity and Funding Risk
At Group, cluster and entity level we implement various business-as-usual and
stress risk metrics to monitor and manage Liquidity and Funding risk. This
ensures that the Group maintains an adequate and well-diversified liquidity
buffer, as well as a stable funding base, to meet its liquidity and funding
regulatory requirements.
The risk management approach and RA are assessed annually through the Internal
Liquidity Adequacy Assessment Process. A funding plan, which is part of the
Corporate Plan process, is developed for efficient liquidity projections to
ensure that the Group is adequately funded to support the business growth and
meet its obligations and client funding needs.
Page 09
Interest Rate Risk in the Banking Book
This risk arises from differences in the repricing profile, interest rate
basis, and optionality of banking book assets, liabilities and off-balance
sheet items. IRRBB represents an economic and earnings risk to the Group and
its capital adequacy. The Group monitors and manages IRRBB using multiple
RA metrics.
Pension Risk
Pension Risk is the potential for loss due to having to meet an actuarially
assessed shortfall in the Group's pension plans. Pension Risk arises from the
Group's contractual or other liabilities with respect to its occupational
pension plans or other long-term benefit obligations. For a funded plan, it
represents the risk that additional contributions will need to be made because
of a future funding shortfall. For unfunded obligations, it represents the
risk that the cost of meeting future benefit payments is greater than
currently anticipated.
The Pension Risk is monitored against the RA and reported to the GRC. The RA
metric is calculated as the total capital requirement (including both Pillar 1
and Pillar 2A capital) in respect of Pension Risk, expressed as a number of
basis points of RWA.
Recovery and resolution planning
In line with PRA requirements, the Group maintains a Recovery Plan, which is a
live document to be used by management in the event of financial stress in
order to restore the Group's financial strength to a stable and sustainable
position. The Recovery Plan includes a set of recovery indicators,
an escalation framework, and a set of management actions capable of being
implemented during a stress. A Recovery Plan is also maintained within each
major entity, and all Recovery Plans are subject to periodic fire-drill
testing.
As the UK resolution authority, the BoE set a single point of entry bail-in at
the ultimate holding company level (Standard Chartered PLC) as the preferred
resolution strategy for the Group. In support of this strategy, the Group has
a set of capabilities, arrangements, and resources in place to maintain, test
and improve resolution capabilities, and continues to meet the required
resolvability outcomes on an ongoing basis.
The Resolvability Self-Assessment Report was submitted by the Group to the
PRA in October 2023, with an update provided in January 2024. The Group also
published its latest resolvability disclosure, as required by the BoE, on 6
August 2024. The next Group Resolvability Self-Assessment Report will be
submitted to the BoE/PRA in October 2026.
Monitoring
On a day-to-day basis, Treasury Risk is managed by Treasury, Finance and
country CEOs. The Group regularly reports and monitors Treasury Risk inherent
in its business activities and those that arise from internal and external
events.
Internal risk management reports covering the balance sheet and the capital,
liquidity, and IRRBB positions are presented to the relevant country Asset and
Liability Committee. The reports contain key information on balance sheet
trends, exposures against RA and supporting risk measures which enable members
to make informed decisions around the overall management of the balance sheet.
In addition, an independent Treasury CRO team within ERM reviews the prudency
and effectiveness of Treasury Risk management.
Pension Risk is managed by the Head of Pensions and Reward Analytics, and
monitored by the Treasury CRO on a periodic basis.
Operational and Technology Risk
Mitigation
The Operational and Technology RTF sets out the Group's overall approach to
the management of Operational and Technology Risk in line with the Group's
Operational and Technology RA. This is supported by the Risk and Control
Self-Assessment (RCSA), which provides a systematic approach for
identification and assessment of operational risks, including design and
operation of mitigating controls (applicable to all risks as per the
Non-Financial Risk Taxonomy).
The RCSA is used to determine the design and operating effectiveness of each
process, and requires:
• the recording of end-to-end processes which deliver our key client
journey and business outcomes
• the identification of risks to support the achievement of client and
business outcomes
• the assessment of inherent risk on the impact to client and business
outcomes, and likelihood of occurrence
• the design and monitoring of key controls to effectively and efficiently
mitigate prioritised risks within acceptable levels and
• the assessment of residual risk and timely treatment of elevated risks.
Elevated Residual Risks require treatment plans to address the underlying
causes and reduce the risks to within the RA.
We continue to strengthen our commitment to operational resilience through a
robust risk management framework which enables the Group to anticipate,
prevent, adapt, respond to, recover from, and learn from both internal
and external disruptions, supported by ongoing reviews, control testing, and
scenario-based assessments aimed at anticipating and reducing the potential
impact of operational disruptions. The Group is required to conduct an annual
self-assessment to evaluate its operational resilience. This self-assessment
reviews the effectiveness of the operational resilience framework, identifies
areas for improvement, and ensures compliance with regulatory expectations.
These activities support the continuous oversight and improvement of our
response and recovery capabilities.
Page 10
Monitoring
To deliver services to clients and to participate in the financial services
sector, the Group runs processes which are exposed to Operational and
Technology risks. The Group prioritises and manages risks which are
significant to our clients and to the financial services sectors. The control
indicators are regularly monitored to determine the Group's exposure
to residual risk.
The residual risk assessments and reporting of events form the Group's
Operational and Technology Risk profile. The completeness of the Operational
and Technology Risk profile ensures appropriate prioritisation and timeliness
of risk decisions, including risk acceptances with treatment plans for risks
that exceed acceptable thresholds.
The BRC is informed on adherence to Operational and Technology RA through
metrics reported for selected risks. These metrics are monitored, and
escalation thresholds are devised based on the materiality and significance of
the risk. These Operational and Technology RA metrics are consolidated on a
regular basis and reported at the relevant Group committees, providing senior
management with the relevant information to inform their risk decisions.
Information and Cyber Security (ICS) Risk
Mitigation
ICS Risk is managed through the ICS RTF, comprising a risk assessment
methodology and supporting policy, standards, and methodologies. The ICS
Policy and standards are aligned to industry best practice models including
the National Institute of Standards and Technology Cyber Security Framework.
ISO 27001, Payment Card Industry-Data Security Standard (PCI-DSS), Swift
Customer Security Controls Framework (CSCF) and Legal, Regulatory and
Mandatory (LRM) requirements. We undertake an annual ICS Effectiveness Review
to evaluate ICS Risk management practices in alignment with the ERMF.
Monitoring
The Group Chief Information Security Officer (CISO) function monitors the
evolving threat landscape covering cyber threats, attack vectors and threat
actors that could target the Group. This includes performing a threat-led risk
assessment to identify key threats, in-scope applications and key controls
required to ensure the Group remains within RA.
The ICS Risk profiles of all businesses, functions and countries are
consolidated to present a holistic Group-level ICS Risk profile for ongoing
monitoring. During these reviews, the status of each risk is assessed against
the Group's controls to identify any changes to impact and likelihood, which
affects the overall risk rating.
ICS Board level responsibility and oversight is assured through the BRC. The
Board education programme includes updates on the cyber security strategy,
which is in place at a Group and Business level to adhere to internal
standards and applicable laws and regulations.
ICS Risk Security Testing and External Reviews
The Group assesses its cyber posture through extensive control testing and by
executing offensive security testing exercises, including independent
vulnerability analysis and testing, code reviews, penetration tests and Red
and Purple Team(1) attack simulation testing. This approach constantly tests
the Group's defences and approach to cyber security. These show a wider
picture of the Group's risk profile, leading to better visibility on potential
'in flight' risks.
We perform independent third-party verification regarding the state of our
internal information technology and ICS controls through industry recognised
certifications and attestations:
• PCI DSS controls are assessed annually, in line with market regulatory
requirements.
• We are System and Organisation Controls 2 type 2 certified, the scope of
which covers the digital products and services to financial markets, global
banking, cross products, cash management, trade finance, securities services
and client services group using the Straight2Bank application suite.
• We undergo assessment based on the requirements stipulated by Swift's
Customer Security Programme (CSP) to ensure high compliance.
The Group also tracks remediation of security matters identified by external
reviews, such as the BoE CBEST Threat Intelligence-Led Assessment and the Hong
Kong Monetary Authority's (HKMA) Intelligence-led Cyber Attack Simulation
Testing (iCAST).
The CISO and OTCR functions monitor the ICS Risk profile and ensure that
breaches of RA are escalated to the appropriate governance committee or
authority levels for remediation and tracking.
1 Red Team focuses on simulating real-world attacks to identify
vulnerabilities and test the effectiveness of an organization's defences,
acting as adversaries
to challenge the security measures. Purple Team enhances collaboration between
the Red Team and the Blue Team (defenders) to improve threat detection,
response, and overall security posture by sharing insights and strategies from
both offensive and defensive perspectives
Page 11
Financial Crime Risk
Roles and responsibilities
The Group Head, CFCR is the Group's Chief Compliance and Money-Laundering
Reporting Officer and performs the Financial Conduct Authority (FCA) Senior
Management Control Functions SMF 16 and SMF 17 in accordance with requirements
set out by the FCA, including those set out in the Systems and Controls
chapter of the FCA Handbook.
Mitigation
The CFCR function is responsible for the establishment and maintenance of
policies, standards, and oversight of first line of defence controls to
ensure continued compliance with financial crime laws and regulations, and
the mitigation of Financial Crime Risk. This includes controls covering key
financial crime risks such as money laundering, terrorist financing, sanctions
compliance, bribery and corruption, and fraud. We mitigate these risks through
core controls such as client due-diligence, sanctions screening and other
risk-based measures, supported by ongoing efforts to build awareness and
capability across our people. In this, the requirements of the Operational
and Technology RTF are followed to ensure a consistent approach to the
management of processes and controls.
Financial Crime Risk management is built on a risk-based approach, meaning the
risk management plans, processes, activities, and resource allocations are
determined according to the level of risk.
1 Red Team focuses on simulating real-world attacks to identify
vulnerabilities and test the effectiveness of an organization's defences,
acting as adversaries
to challenge the security measures. Purple Team enhances collaboration between
the Red Team and the Blue Team (defenders) to improve threat detection,
response, and overall security posture by sharing insights and strategies from
both offensive and defensive perspectives
Monitoring
The Group monitors enterprise-wide financial crime risks through the Financial
Crime Risk Assessment. This is undertaken annually to assess the inherent
financial crime risk exposures and the associated processes and controls
by which these exposures are mitigated. As part of this, the Group monitors
sanctions compliance risk, reflecting changes in global sanctions requirements
and developments across an increasingly complex sanctions landscape.
The controls designed to mitigate Financial Crime Risk in business operations
are governed in line with the Operational and Technology RTF. The Group has a
monitoring and reporting process in place for Financial Crime Risk, which
includes escalation and reporting to the CFCR and relevant Country, Business,
Senior Management and Board committees.
While not a formal governance committee, the CFCR Oversight Group provides
oversight of CFCR risks including the effective implementation of the
Financial Crime RTF. It also provides oversight, challenge and direction to
CFCR policy owners on material changes and positions taken in CFCR-owned
policies, including issues relating to regulatory interpretation and the
Group's Financial Crime Risk RA.
Compliance Risk
Roles and responsibilities
The Group Head, CFCR is the Group's Chief Compliance and Money-Laundering
Reporting Officer and performs the FCA Senior Management Control Functions
SMF 16 and SMF 17 in accordance with requirements set out by the FCA,
including those set out in the Systems and Controls chapter of the FCA
Handbook.
All activities that the Group engages in must comply with the relevant
country/local specific and extraterritorial regulations.
Compliance Risk includes the risks associated with a failure to comply with
all regulations that are applicable to the Group regardless of the issuing
regulatory authority. Where Compliance Risk arises, or could arise, from
failure to manage another PRT, the oversight and management processes for that
specific PRT must be followed, to ensure that effective oversight and
challenge of the first line of defence can be provided by the appropriate
second line of defence function.
Areas of regulation can be broadly divided into two distinct categories: those
issued by financial service regulatory authorities and those issued by
non-financial service regulators. The Group is exposed to both categories of
regulation, and roles and responsibilities differ depending on the category.
For regulations issued by financial services regulatory authorities and other
regulators that may issue regulations pertaining to Compliance Risk, CFCR
identifies new and amended regulations as and when issued and communicates the
relevant regulatory obligations to the country RFO. Where regulatory
obligations do not relate to risks for which CFCR is the RFO, the respective
RTF sets out second line of defence ownership.
Each of the assigned second line of defence functions have responsibilities,
including monitoring relevant regulatory developments from non-financial
services regulators at both Group and country levels, policy development,
implementation, and validation as well as oversight and challenge of first
line of defence processes and controls.
Mitigation
The CFCR function is responsible for the establishment and maintenance of
policies, standards, and oversight of the first line of defence controls to
ensure compliance with laws and regulations, and the mitigation of Compliance
Risk. In this, the requirements of the Operational and Technology RTF
are followed to ensure a consistent approach to the management of processes
and controls.
Monitoring
The monitoring of controls designed to mitigate the risk of regulatory
non-compliance in processes is governed in line with the Operational and
Technology RTF. Compliance Risk reporting includes escalation and reporting to
the CFCR and relevant Country, Business, Senior Management and BRC.
Page 12
While not a formal governance committee, the CFCR Oversight Group provides
oversight of CFCR risks including the effective implementation of the
Compliance RTF, and oversight, challenge and direction to CFCR policy owners
on material changes and positions taken in CFCR-owned policies, including
issues relating to regulatory interpretation and the Group's Compliance Risk
RA. The Regulatory Change Oversight Forum provides visibility and oversight of
material and/or complex large-scale regulatory change impacting non-financial
risks.
Environmental, Social and Governance and Reputational (ESGR) Risk
Mitigation
The ESGR RTF provides the overall risk management approach for ESGR risks.
The ESG Risk policy outlines the Group's commitment to integrating ESG
considerations into its business, operations, and decision-making process. The
policy sets out the requirements for identifying, assessing, escalating and
managing ESG risks for the Group's operations, clients/ transactions and third
parties. The Reputational Risk policy outlines the requirements for
identifying, assessing, escalating and managing negative shifts in stakeholder
perception arising from client onboarding and due diligence, transactions,
product design and product features, or strategic coverages such as entry into
new markets or investments. Whenever potential for stakeholder concerns is
identified, issues are subject to review and decision by both the first and
second lines of defence. The policy also sets out the key considerations for
mitigating greenwashing risk that can arise during product and/or deal
lifecycle, sustainability reporting and disclosures, and external campaigns
related to sustainability themes.
Monitoring
Exposure to Reputational Risks arising from transactions, clients, products
and strategic coverage is monitored through established triggers to prompt
the appropriate risk-based considerations and assessment by the first line
of defence and escalations to the second line of defence. Risk acceptance
decisions and thematic trends are also reviewed on a periodic basis.
Exposure to ESG Risks is monitored through triggers embedded within the first
line of defence processes. The environmental and social risks are considered
for clients and transactions via Client Environmental, Social and Governance
Risk Assessments (C-ESGRA), Transaction Environmental and Social Risk
Assessments (ESRA), Reputational Risk Materiality Assessments (RRMA) and/or
Climate Risk Assessments (CRA).
Vendors that are identified as high risk which meet the high‑risk category
and country combinations based on responses provided by the supplier at
onboarding, are assessed for modern slavery risk.
Exposure to Climate Risk is monitored in conjunction with other PRTs. We have
embedded qualitative and quantitative climate considerations into the Group's
Credit Underwriting Principles for Oil and Gas, Mining, Shipping, Commercial
Real Estate and Project Finance portfolios. Starting October 2025, we have
introduced a client-level Physical Risk Grading Framework in order to identify
and monitor key risk hotspots in the CIB portfolio with regard to clients'
exposure to extreme weather events. This is in addition to the Transition Risk
Grading already in place for CIB clients. We have also expanded coverage of
Climate and Credit Risk considerations to physical collateral, as they serve
as key risk mitigants, especially in default events. We use available data or
proxy methodologies to assess the portfolios within WRB for transition risks
particularly consumer mortgage. We assess physical risk concentrations for our
WRB portfolio on a quarterly basis and assess the physical risk
vulnerabilities of our sites periodically and when new sites are onboarded. We
have initiated an evaluation of physical risk vulnerabilities at our primary
vendors' delivery sites this year. We are also monitoring the climate
risk-related vulnerabilities and readiness of our top corporate liquidity
providers, including the concentration of liquidity exposures with clients
with high transition and/or high physical risk.
Our Net Zero Climate Risk Working Forum meets at least quarterly to discuss
account plans and risk management strategies for high climate risk and net
zero divergent clients. We are also enhancing the oversight on any new
materially misaligned clients through a mandatory second line review as part
of the deal approval process. Stress testing and scenario analysis are used
to assess the impact of ESGR-related risks. The impact on capital
requirements has been included in the Group Internal Capital Adequacy
Assessment Process (ICAAP). Management information is reviewed at a quarterly
frequency and any breaches in RA are reported to the GRC and BRC.
Model Risk
Mitigation
The Model Risk Policy and Standards define requirements for model
development, validation, implementation and use, including regular model
performance monitoring and, where required, model risk mitigants.
Model deficiencies identified through the development or validation process,
or model performance issues identified through ongoing monitoring, are
mitigated through respective model risk mitigants. Mitigants include model
overlays as either post-model adjustments (PMAs) or management adjustments,
model restrictions and potentially a model recalibration or redevelopment, all
of which undergo independent review, challenge, and approval. PMAs are
used to address observed deficiencies caused from within the model, by
adjusting the model output either directly or indirectly (e.g. adjusting
parameters).
Page 13
Where a PMA is applied as a mitigant for a model used in Pillar 1 or Pillar 2
calculations or models with material impact on financial accounting
disclosures (e.g. IFRS 9), the independent review must be performed by Group
Model Validation (GMV) with sign-off from the Model Approver prior to
implementation. Management adjustments are used to address issues by applying
management decisions without adjusting a direct modelling component.
As with all PRTs, operational controls are used to govern all Model
Risk-related processes, with regular risk assessments performed to assess
appropriateness and effectiveness of those controls, in line with the
Operational and Technology RTF, with remediation plans implemented where
necessary. Group Model Risk Policy and Standards also define requirements for
Deterministic Quantitative Methods (DQMs) that are used as part of an
end-to-end modelled process. DQMs are similar in nature to a model, however
the processing component is either purely deterministic or has an element of
expert judgement. Unlike a model, there is no use of statistical, economic,
financial or mathematical theories.
Monitoring
The Group monitors Model Risk via a set of RA metrics. Adherence to Model RA
and any threshold breaches are reported to the BRC, GRC and MRC. These metrics
and thresholds are reviewed twice per year to ensure that threshold
calibration remains appropriate, and the themes adequately cover the current
risks.
Models undergo regular performance monitoring based on their level of
perceived Model Risk, with monitoring results presented, and breaches
escalated to the Model Sponsor, Model Owner, GMV and respective MRC or
Individual Delegated Model Approvers. In addition, all models are subject to
periodic revalidation, with frequency and intensity of the revalidation work
determined by the materiality and uncertainty of the model.
Model Risk management produces Model Risk reports covering the model
landscape, which include performance metrics, identified model issues and
remediation plans. These are presented for discussion at the Model Risk
governance committees on a regular basis.
Page 14
Risk profile
Credit Risk (audited)
Basis of preparation
Unless otherwise stated, the balance sheet and income statement information
presented within this section is based on the booking location. The accounting
policy for the presentation of geographic information has been changed from
being based on a management view which was principally the location from which
a client relationship is managed, to being based on a view reflecting the
location in which exposures are financially booked in 2025. Read more in Note
1 to the financial statements. Prior period amounts have been re-presented in
line with this change with the impact presented in Note 40 to the financial
statements.
Loans and advances to customers and banks held at amortised cost in this 'Risk
profile' section include reverse repurchase agreement balances held at
amortised cost, per Note 16 'Reverse repurchase and repurchase agreements
including other similar secured lending and borrowing'.
Credit risk overview
Credit Risk is the potential for loss due to the failure of a counterparty to
meet its contractual obligations to pay the Group. Credit exposures arise
from both the banking and trading books.
Impairment model
IFRS 9 mandates an impairment model that requires the recognition of expected
credit losses (ECL) on all financial debt instruments held at amortised cost,
Fair Value through Other Comprehensive Income (FVOCI), undrawn loan
commitments and financial guarantees. Read more on the accounting policy on
and the IFRS 9 methodology in the annual report.
Staging of financial instruments
Financial instruments that are not already credit-impaired are originated into
stage 1 and a 12-month ECL provision is recognised.
Instruments will remain in stage 1 until they are repaid, unless they
experience significant credit deterioration (stage 2) or they become
credit-impaired (stage 3).
Instruments will transfer to stage 2 and a lifetime ECL provision is
recognised when there has been a significant change in the Credit Risk
compared to what was expected at origination.
The framework used to determine a Significant Increase in Credit Risk (SICR)
is set out below.
Stage 1
• 12-month ECL
• Performing
Stage 2
• Lifetime ECL
• Performing but has exhibited SICR
Stage 3
• Credit-impaired
• Non-performing
IFRS 9 ECL principles and approaches
The main methodology principles and approach adopted by the Group are set out
in the following table.
Title Supplementary Information
Approach for determining ECL • IFRS 9 ECL methodology
• Application of lifetime ECL
Key assumptions and judgements in determining ECL • Incorporation of forward-looking information
• Forecast of key macroeconomic variables underlying the ECL calculation
and the impact of non-linearity
• Impact of multiple economic scenarios
• Judgemental adjustments and management overlays
• Sensitivity of ECL calculation to macroeconomic variables
Significant Increase in Credit Risk (SICR) • Quantitative and Qualitative criteria
Credit‑impaired (or defaulted) exposures (Stage 3) • Expert credit judgement
Page 15
Title Supplementary Information
Transfers between stages • Movement in gross exposures and credit impairment
Modified financial assets • Forborne and other modified loans
Governance of PMAs and application of expert credit judgement in respect of • IFRS 9 Impairment Committee
ECL
Summary of Credit Risk Performance
Maximum Exposure
The Group's on-balance sheet maximum exposure to Credit Risk increased by
$43.2 billion to $866.6 billion (31 December 2024: $823.4 billion). Cash and
balances at Central banks increased by $14.3 billion to $77.7 billion (31
December 2024: $63.4 billion) reflecting deposit growth in Greater China and
North Asia requiring a corresponding increase in statutory reserve placements,
and increased unrestricted balances driven by funding inflows and high-quality
liquid asset deployment.
Debt securities (not held at fair value through profit or loss) increased by
$22.2 billion to $165.8 billion (31 December 2024: $143.6 billion) due to
deployment of excess surplus and liquidity buffer purposes. Loans and advances
to customers increased by $5.8 billion to $286.8 billion (31 December 2024:
$281.0 billion), which comprises of a $3.0 billion increase in CIB, $9.1
billion increase in WRB and Ventures, offset by $7.1 billion decrease in
Central and other items. Fair value through profit and loss increased by $14.1
billion to $186.2 billion (31 December 2024: $172.0 billion), largely due to
an increase in treasury bills and in loans to customers in the financing,
insurance and non-banking and commercial real estate sectors.
Derivative financial instruments decreased by $15.7 billion to $65.8 billion
(31 December 2024: $81.5 billion) mainly due to the weakening of the US
dollar. Off-balance sheet instruments increased by $40.3 billion to $313.4
billion (31 December 2024: $273.2 billion), due to an increase in undrawn
commitments, financial guarantees and other equivalents driven by client
demand.
Loans and Advances
The Group continues to focus on high-quality origination with 95 per cent (31
December 2024: 94 per cent) of the Group's gross loans and advances to
customers classified as stage 1.
Stage 1 gross loans and advances to customers increased by $6.0 billion to
$275.1 billion (31 December 2024: $269.1 billion). CIB gross stage 1 balances
increased by $4.1 billion to $132.8 billion (31 December 2024: $128.7 billion)
across several sectors including transport, telecom and utilities and
commercial real estate. WRB and Ventures gross stage 1 balances increased by
$8.9 billion to $127.3 billion (31 December 2024: $118.4 billion), mainly due
to a $5.3 billion increase in the mortgage portfolio across Korea and
Singapore and $5.2 billion increase in secured wealth products due to higher
demand in Singapore and Hong Kong. Central and other items, gross stage 1
balances decreased by $7.0 billion to $15.0 billion (31 December 2024: $22.0
billion) primarily due to maturity of placements held with the Monetary
Authority of Singapore.
Stage 2 gross loans and advances to customers decreased by $0.8 billion to
$9.8 billion (31 December 2024: $10.6 billion). CIB gross stage 2 balances
decreased by $0.8 billion to $7.9 billion (31 December 2024: $8.6 billion),
largely due to lower balances in the financing, insurance and non-banking
sector from a sovereign portfolio upgrade. WRB and Ventures gross stage 2
loans and advances to customers balances remained stable at $2.0 billion (31
December 2024: $2.0 billion).
Stage 3 gross loans and advances decreased by $0.2 billion to $6.0 billion (31
December 2024: $6.2 billion) primarily in CIB due to restructuring related
write-offs in the China commercial real estate sector offset by a downgrade in
the government sector. This also contributed to a reduction in the CIB stage
3 cover ratio before collateral. The total stage 3 cover ratio reduced by
11.8 per cent to 51.8 per cent (31 December 2024: 63.6 per cent) of which
around 8 per cent was related to CRE restructuring and 7 per cent was related
to downgrades with low levels of coverage, where strong credit mitigants are
in place. This was partially offset by other portfolio movements. The total
stage 3 cover ratio post tangible collateral decreased to 68.4 per cent (31
December 2024: 77.8 per cent) with some of the downgrades being covered by
guarantees and insurance which are not included as tangible collateral. The
WRB stage 3 cover ratio after collateral increased to 88.5 per cent (31
December 2024: 83.1 per cent) driven by an increase in credit impairment
provisions and collateral values.
Analysis of Stage 2
The proportion of CIB exposures in stage 2 due to quantitative factors
decreased mainly due to model changes and a sovereign portfolio upgrade. In
Central and other items, balances reduced to $1.7 billion (31 December 2024:
$2.1 billion) primarily due to a sovereign upgrade and portfolio movements.
Credit Impairment charges
The Group's ongoing credit impairment was a net charge of $676 million (31
December 2024: $557 million).
WRB contributed a net charge of $595 million (31 December 2024: $623 million)
which is mainly driven by unsecured products as per normalised flow and
provisions for stressed assets. The year-on-year decrease was due to portfolio
quality improvements and a reduction in unsecured exposures which is in line
with our strategic pivot to affluent.
Page 16
CIB contributed a net charge of $4 million (31 December 2024: $120 million
release). The increase was mainly due to portfolio movements, higher
judgemental overlays, and lower releases compared to 2024. Ventures had a
charge of $59 million (31 December 2024: $73 million) as delinquency rates
have improved following a change in credit underwriting criteria. Central and
other items contributed a net charge of $18 million (31 December 2024: $19
million release), which included the impact of model updates in 2025.
Commercial Real Estate (CRE)
The Group provides loans to CRE and data centres counterparties of which $10
billion(1) is to counterparties in the CIB segment where the source of
repayment is substantially derived from rental or sale of real estate and is
secured by real estate collateral. The remaining CRE loans comprise working
capital loans to real estate corporates, loans with non-property collateral,
unsecured loans and loans to real estate entities of diversified
conglomerates. The average loan-to-value (LTV) ratio of the performing book
CRE portfolio remained stable at 54 per cent (31 December 2024: 54 per cent).
The proportion of loans with an LTV greater than 80 per cent has increased to
6 per cent (31 December 2024: 4 per cent).
Total on and off-balance sheet exposure to China CRE decreased by $1.2 billion
to $0.8 billion (31 December 2024: $2.0 billion) mainly from restructuring
related write-offs and exposure reductions which also reduced stage 3 exposure
to $0.4 billion (31 December 2024: $1.3 billion) and stage 3 provision
coverage to 67 per cent (31 December 2024: 87 per cent). The Group continues
to hold a judgemental management overlay, which decreased by $34 million
to $36 million (31 December 2024: $70 million) due to repayments and
utilisation during the year. The Group is further indirectly exposed to China
CRE through its associate investment in China Bohai Bank.
The Group's loans and advances to Hong Kong CRE clients decreased by $1.0
billion to $1.5 billion (31 December 2024: $2.5 billion), due to repayments.
32 per cent (31 December 2024: 21 per cent) were in stage 2 and 6 per cent (31
December 2024: nil) in stage 3. Within stage 2, $0.4 billion (31 December
2024: nil) is rated as CG12. The portfolio is 86 per cent (31 December 2024:
82 per cent) secured with an average LTV of below 50 per cent (31 December
2024: below 40 per cent) and continues to be subject to proactive risk
management with close monitoring of valuations and regular stress tests.
The Group continues to hold a judgemental management overlay, which decreased
by $11 million to $47 million (31 December 2024: $58 million) due
to repayments and upgrades.
High carbon sectors
The Group's high carbon sectors exposure has increased by $5.4 billion to
$43.1 billion (31 December 2024: $37.7 billion) due to the oil and gas, CRE
and power sectors. High carbon sector exposure is at 12.6 per cent of the
Group's maximum exposure (31 December 2024: 11.8 per cent).
Oil and gas exposure has increased by $2.0 billion to $9.5 billion (31
December 2024: $7.4 billion) due to an increase in short-term trade products,
increased lending to gas infrastructure projects, and increased Carbon
Capture, Utilisation and Storage (CCUS) exposure.
CRE and power exposures have increased by $3 billion to $17 billion (31
December 2024: $14 billion) due to the growth of these sectors. Power
continues to show a positive growth in lower carbon generation, through
renewables financing, carbon efficient gas and the run-down of coal
generation.
The increase in high carbon exposure does not directly translate into higher
emissions intensity, as the exposure includes lending to both higher and lower
emissions intensity counterparties, including sustainable finance and
transition finance lending.
1 The Group's CRE net nominal exposure, adjusted for non-profit
collateral.
Page 17
Maximum exposure to Credit Risk (audited)
The table below presents the Group's maximum exposure to Credit risk for its
on-balance sheet and off-balance sheet financial instruments as at 31 December
2025, before and after taking into account any collateral held or other Credit
risk mitigation.
2025 2024
Credit risk management Cred
it
risk
mana
geme
nt
Maximum exposure Collateral(8) Master netting agreements Net Maximum exposure Collateral(8) Master netting agreements Net
$million $million $million exposure $million $million $million exposure $million
$million
On-balance sheet
Cash and balances at central banks 77,746 - - 77,746 63,447 - - 63,447
Loans and advances to banks(1) 43,901 3,724 - 40,177 43,593 2,946 - 40,647
Of which - reverse repurchase agreements and other similar secured lending 3,724 3,724 - - 2,946 2,946 - -
Loans and advances to customers(1) 286,788 134,253 - 152,535 281,032 119,047 - 161,985
Of which - reverse repurchase agreements and other similar secured lending 8,242 8,242 - - 9,660 9,660 - -
Investment securities - Debt securities and other eligible bills(2,3) 165,753 - - 165,753 143,562 - - 143,562
Fair value through profit or loss(4) 186,173 84,130 - 102,043 172,031 86,195 - 85,836
Loans and advances to banks 2,984 - - 2,984 2,213 - - 2,213
Loans and advances to customers 12,355 - - 12,355 7,084 - - 7,084
Reverse repurchase agreements and other similar lending 84,130 84,130 - - 86,195 86,195 - -
Investment securities - Debt securities and other eligible bills(4) 86,704 - - 86,704 76,539 - - 76,539
Derivative financial instruments(5) 65,782 14,168 44,712 6,902 81,472 15,005 60,280 6,187
Accrued income 2,631 - - 2,631 2,776 - - 2,776
Assets held for sale(9) 1,042 - - 1,042 889 - - 889
Other assets(6) 36,770 - - 36,770 34,585 - - 34,585
Total balance sheet 866,586 236,275 44,712 585,599 823,387 223,193 60,280 539,914
Off-balance sheet(7)
Undrawn Commitments 199,245 3,513 - 195,732 182,529 2,489 - 180,040
Financial Guarantees and other equivalents 114,193 3,214 - 110,979 90,632 1,807 - 88,825
Total off-balance sheet 313,438 6,727 - 306,711 273,161 4,296 - 268,865
Total 1,180,024 243,002 44,712 892,310 1,096,548 227,489 60,280 808,779
1 Amounts are net of ECL provisions. An analysis of credit quality is set
out in the credit quality analysis section. Further details of collateral held
by client
segment and stage are set out in the collateral analysis section. The Group
also has credit mitigation through Credit Default Swaps and Credit Linked
Notes.
2 Excludes equity and other investments of $1,203 million (31 December 2024:
$994 million). Further details are set out in Note 13 financial instruments.
3 The Group has credit insurance over $4.2 billion (31 December 2024: $4.03
billion) of other eligible bills.
4 Excludes equity and other investments of $9,084 million (31 December 2024:
$5,486 million). Further details are set out in Note 13 financial instruments.
5 The Group enters into master netting agreements, which in the event of
default result in a single amount owed by or to the counterparty through
netting the sum of the positive and negative mark-to-market values of
applicable derivative transactions.
6 Other assets include Hong Kong certificates of indebtedness, cash
collateral, and acceptances, in addition to unsettled trades and other
financial assets.
7 Excludes ECL provisions of $224 million (31 December 2024: $255 million)
which are reported under Provisions for liabilities and charges.
8 Adjusted for over-collateralisation, which has been determined with
reference to the drawn and undrawn component as this best reflects the effect
on the amount arising from expected credit losses.
9 The amount is after ECL provisions. Further details are set out in Note 21
Assets held for sale and associated liabilities.
Page 18
Analysis of financial instruments by stage (audited)
The table below presents the gross and credit impairment balances by stage for
the Group's amortised cost and FVOCI financial instruments as at 31 December
2025.
2025
Stage 1 Stage 2 Stage 3 Tot
al
Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net
$million $million carrying value $million $million carrying value $million $million carrying value $million $million carrying value
$million $million $million $million
Cash and balances at central banks 76,520 - 76,520 463 (1) 462 773 (9) 764 77,756 (10) 77,746
Loans and advances to banks (amortised cost) 43,608 (6) 43,602 217 (1) 216 90 (7) 83 43,915 (14) 43,901
Loans and advances to customers (amortised cost) 275,062 (528) 274,534 9,823 (446) 9,377 5,964 (3,087) 2,877 290,849 (4,061) 286,788
Debt securities and other eligible bills(5) 164,283 (56) 1,198 (5) 296 (5) 165,777 (66)
Amortised cost 57,005 (22) 56,983 243 (2) 241 26 - 26 57,274 (24) 57,250
FVOCI(2) 107,278 (34) 955 (3) 270 (5) 108,503 (42) -
Accrued income (amortised cost)(4) 2,631 2,631 - - 2,631 - 2,631
Assets held for sale 1,053 (22) 1,031 8 - 8 8 (5) 3 1,069 (27) 1,042
Other assets(4) 36,769 - 36,769 - - - 7 (6) 1 36,776 (6) 36,770
Undrawn commitments(3) 195,032 (49) 4,208 (33) 5 (2) 199,245 (84)
Financial guarantees, trade credits and irrevocable letter of credits(3) 112,091 (26) 1,511 (16) 591 (98) 114,193 (140)
Total 907,049 (687) 17,428 (502) 7,734 (3,219) 932,211 (4,408)
1 Gross carrying amount for off-balance sheet refers to notional values.
2 These instruments are held at fair value on the balance sheet. The ECL
provision in respect of debt securities measured at FVOCI is held within the
OCI
reserve.
3 These are off-balance sheet instruments. Only the ECL is recorded
on-balance sheet as a liability and therefore there is no 'net carrying
amount'. ECL
allowances on off-balance sheet instruments are held as liability provisions
to the extent that the drawn and undrawn components of loan exposures can be
separately identified. Otherwise they will be reported against the drawn
component.
4 Stage 1 ECL is not material.
5 Stage 3 gross includes $278 million originated credit-impaired debt
securities with impairment of $5 million.
Page 19
2024
Stage 1 Stage 2 Stage 3 Tot
al
Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net Gross balance1 Total credit impairment Net Gross balance(1) Total credit impairment Net
$million $million carrying value $million $million carrying value $million $million carrying value $million $million carrying value
$million $million $million $million
Cash and balances at central banks 62,597 - 62,597 432 (4) 428 426 (4) 422 63,455 (8) 63,447
Loans and advances to banks (amortised cost) 43,208 (10) 43,198 318 (1) 317 83 (5) 78 43,609 (16) 43,593
Loans and advances to customers (amortised cost) 269,102 (483) 268,619 10,631 (473) 10,158 6,203 (3,948) 2,255 285,936 (4,904) 281,032
Debt securities and other eligible bills(5) 141,862 (23) 1,614 (4) 103 (2) 143,579 (29)
Amortised cost 54,637 (15) 54,622 475 (2) 473 42 - 42 55,154 (17) 55,137
FVOCI(2) 87,225 (8) 1,139 (2) 61 (2) 88,425 (12)
Accrued income (amortised cost)(4) 2,776 2,776 - - 2,776 - 2,776
Assets held for sale 840 (7) 833 38 - 38 58 (45) 13 936 (52) 884
Other assets(4) 34,585 - 34,585 - - - 3 (3) - 34,588 (3) 34,585
Undrawn commitments(3) 178,516 (50) 4,006 (52) 7 (1) 182,529 (103)
Financial guarantees, trade credits and irrevocable letter of credits(3) 87,991 (16) 2,038 (7) 603 (129) 90,632 (152)
Total 821,477 (589) 19,077 (541) 7,486 (4,137) 848,040 (5,267)
1 Gross carrying amount for off-balance sheet refers to notional values.
2 These instruments are held at fair value on the balance sheet. The ECL
provision in respect of debt securities measured at FVOCI is held within the
OCI
reserve.
3 These are off-balance sheet instruments. Only the ECL is recorded
on-balance sheet as a liability and therefore there is no 'net carrying
amount'. ECL
allowances on off-balance sheet instruments are held as liability provisions
to the extent that the drawn and undrawn components of loan exposures can be
separately identified. Otherwise they will be reported against the drawn
component.
4 Stage 1 ECL is not material.
5 Stage 3 gross includes $59 million originated credit-impaired debt
securities with impairment of Nil.
Credit quality analysis (audited)
Credit quality by client segment
For CIB, exposures are analysed by credit grade (CG), which plays a central
role in the quality assessment and monitoring of risk. All loans are assigned
a CG, which is reviewed periodically and amended in light of changes in the
borrower's circumstances or behaviour. CGs 1 to 12 are assigned to stage 1 and
stage 2 (performing) clients or accounts, while CGs 13 and 14 are assigned to
stage 3 (credit-impaired) clients. Consumer and Business Banking portfolios
are analysed by days past due and Private Banking by the type of collateral
held.
Mapping of credit quality
The Group uses the following internal risk mapping to determine the credit
quality for loans.
Credit quality description Corporate & Investment Banking Private Banking(1) Wealth & Retail Banking(4)
Internal grade mapping S&P external ratings equivalent Regulatory PD range (%) Internal ratings Internal grade mapping
Strong 1A to 5B AAA/AA+ 0 to 0.425 Class I and Class IV Current loans (no past dues nor impaired)
to BBB-/ BB+(2)
Satisfactory 6A to 11C BB to CCC+(3) 0.426 to 15.75 Class II and Class III Loans past due till 29 days
Higher risk Grade 12 CCC+ to C 15.751 to 99.999 Stressed Assets Group (SAG) Managed Past due loans 30 days and over till 90 days
1 For Private Banking, classes of risk represent the type of collateral
held. Class I represents facilities with liquid collateral, such as cash and
marketable
securities. Class II represents unsecured/partially secured facilities and
those with illiquid collateral, such as equity in private enterprises. Class
III represents facilities with residential or commercial real estate
collateral. Class IV covers margin trading facilities.
2 Banks' rating: AAA/AA+ to BB+/BB. Sovereigns' rating: AAA to BB+.
3 Banks' rating: BB to 'CCC+ to C'. Sovereigns' rating: BB+/BB to B-/CCC+.
4 Wealth & Retail Banking excludes Private Banking. Medium enterprise
clients within Business Banking are managed using the same internal credit
grades as CIB.
The table below sets out the gross loans and advances held at amortised cost,
ECL provisions and ECL coverage by business segment and stage. ECL coverage
represents the ECL reported for each segment and stage as a proportion of the
gross loan balance for each segment and stage.
Page 20
Loans and advances by client segment (audited)
Amortised cost 2025
Banks Customers Undrawn commitments Financial Guarantees
$million $million $million
Corporate & Investment Banking Wealth & Retail Banking Ventures Central & Customer Total
other items
$million $million $million
$million
$million
Stage 1 43,608 132,772 124,657 2,649 14,984 275,062 195,032 112,091
• Strong 31,257 94,399 119,351 2,628 14,228 230,606 176,123 67,184
• Satisfactory 12,351 38,373 5,306 21 756 44,456 18,909 44,907
Stage 2 217 7,859 1,903 61 - 9,823 4,208 1,511
• Strong 42 1,767 1,414 39 - 3,220 1,340 351
• Satisfactory 172 4,984 154 8 - 5,146 2,662 1,052
• Higher risk 3 1,108 335 14 - 1,457 206 108
Of which (stage 2):
• Less than 30 days past due - 86 154 8 - 248 - -
• More than 30 days past due 3 158 335 14 - 507 - -
Stage 3, credit-impaired financial assets 90 4,201 1,723 38 2 5,964 5 591
Gross balance(1) 43,915 144,832 128,283 2,748 14,986 290,849 199,245 114,193
Stage 1 (6) (128) (346) (42) (12) (528) (49) (26)
• Strong (2) (59) (304) (39) (12) (414) (28) (12)
• Satisfactory (4) (69) (42) (3) - (114) (21) (14)
Stage 2 (1) (310) (114) (22) - (446) (33) (16)
• Strong (1) (4) (79) (13) - (96) (4) -
• Satisfactory - (217) (12) (3) - (232) (20) (9)
• Higher risk - (89) (23) (6) - (118) (9) (7)
Of which (stage 2):
• Less than 30 days past due - (9) (12) (3) - (24) - -
• More than 30 days past due - (1) (23) (6) - (30) - -
Stage 3, credit-impaired financial assets (7) (2,214) (846) (25) (2) (3,087) (2) (98)
Total credit impairment (14) (2,652) (1,306) (89) (14) (4,061) (84) (140)
Net carrying value 43,901 142,180 126,977 2,659 14,972 286,788
Stage 1 0.0% 0.1% 0.3% 1.6% 0.1% 0.2% 0.0% 0.0%
• Strong 0.0% 0.1% 0.3% 1.5% 0.1% 0.2% 0.0% 0.0%
• Satisfactory 0.0% 0.2% 0.8% 14.3% 0.0% 0.3% 0.1% 0.0%
Stage 2 0.5% 3.9% 6.0% 36.1% 0.0% 4.5% 0.8% 1.1%
• Strong 2.4% 0.2% 5.6% 33.3% 0.0% 3.0% 0.3% 0.0%
• Satisfactory 0.0% 4.4% 7.8% 37.5% 0.0% 4.5% 0.8% 0.9%
• Higher risk 0.0% 8.0% 6.9% 42.9% 0.0% 8.1% 4.4% 6.5%
Of which (stage 2):
• Less than 30 days past due 0.0% 10.5% 7.8% 37.5% 0.0% 9.7% 0.0% 0.0%
• More than 30 days past due 0.0% 0.6% 6.9% 42.9% 0.0% 5.9% 0.0% 0.0%
Stage 3, credit-impaired financial assets (S3) 7.8% 52.7% 49.1% 65.8% 100.0% 51.8% 40.0% 16.6%
• Stage 3 Collateral - 314 678 - - 992 - 56
• Stage 3 Cover ratio (after collateral) 7.8% 60.2% 88.5% 65.8% 100.0% 68.4% 40.0% 26.1%
Cover ratio 0.0% 1.8% 1.0% 3.2% 0.1% 1.4% 0.0% 0.1%
Fair value through profit or loss
Performing 36,580 62,780 2 1 - 62,783 - -
• Strong 28,277 39,351 2 1 - 39,354 - -
• Satisfactory 8,303 23,429 - - - 23,429 - -
• Higher risk - - - - - - - -
Impaired (CG13-14) 92 14 - - - 14 - -
Gross balance (FVTPL)(2) 36,672 62,794 2 1 - 62,797 - -
Net carrying value (incl FVTPL) 80,573 204,974 126,979 2,660 14,972 349,585 - -
1 Loans and advances includes reverse repurchase agreements and other
similar secured lending of $8,242 million under Customers and of $3,724
million under Banks, held at amortised cost.
2 Loans and advances includes reverse repurchase agreements and other
similar secured lending of $50,443 million under Customers and of $33,689
million under Banks, held at fair value through profit or loss.
Page 21
Amortised cost 2024
Banks Customers Undrawn commitments Financial Guarantees
$million $million $million
Corporate & Investment Banking Wealth & Ventures Central & Customer
Retail Banking
other items
Total
$million
$million
$million $million $million
Stage 1 43,208 128,746 117,015 1,383 21,958 269,102 178,516 87,991
• Strong 31,239 90,725 111,706 1,367 21,540 225,338 162,574 56,070
• Satisfactory 11,969 38,021 5,309 16 418 43,764 15,942 31,921
Stage 2 318 8,643 1,905 48 35 10,631 4,006 2,038
• Strong 8 1,229 1,413 31 - 2,673 994 471
• Satisfactory 125 6,665 155 6 - 6,826 2,862 1,403
• Higher risk 185 749 337 11 35 1,132 150 164
Of which (stage 2):
• Less than 30 days past due - 55 155 6 - 216 - -
• More than 30 days past due 2 7 337 11 - 355 - -
Stage 3, credit-impaired financial assets 83 4,476 1,617 12 98 6,203 7 603
Gross balance(1) 43,609 141,865 120,537 1,443 22,091 285,936 182,529 90,632
Stage 1 (10) (80) (383) (20) - (483) (50) (16)
• Strong (7) (28) (325) (18) - (371) (33) (7)
• Satisfactory (3) (52) (58) (2) - (112) (17) (9)
Stage 2 (1) (303) (147) (23) - (473) (52) (7)
• Strong - (41) (70) (14) - (125) (10) -
• Satisfactory (1) (218) (32) (3) - (253) (32) (4)
• Higher risk - (44) (45) (6) - (95) (10) (3)
Of which (stage 2):
• Less than 30 days past due - (1) (32) (3) - (36) - -
• More than 30 days past due - - (45) (6) - (51) - -
Stage 3, credit-impaired financial assets (5) (3,178) (759) (11) - (3,948) (1) (129)
Total credit impairment (16) (3,561) (1,289) (54) - (4,904) (103) (152)
Net carrying value 43,593 138,304 119,248 1,389 22,091 281,032 - -
Stage 1 0.0% 0.1% 0.3% 1.4% 0.0% 0.2% 0.0% 0.0%
• Strong 0.0% 0.0% 0.3% 1.3% 0.0% 0.2% 0.0% 0.0%
• Satisfactory 0.0% 0.1% 1.1% 12.5% 0.0% 0.3% 0.1% 0.0%
Stage 2 0.3% 3.6% 7.7% 47.9% 0.0% 4.4% 1.3% 0.3%
• Strong 0.0% 3.3% 5.0% 45.2% 0.0% 4.7% 1.0% 0.0%
• Satisfactory 0.8% 3.3% 20.6% 50.0% 0.0% 3.7% 1.1% 0.3%
• Higher risk 0.0% 5.9% 13.4% 54.5% 0.0% 8.4% 6.7% 1.8%
Of which (stage 2):
• Less than 30 days past due 0.0% 1.8% 20.6% 50.0% 0.0% 16.7% 0.0% 0.0%
• More than 30 days past due 0.0% 0.0% 13.4% 54.5% 0.0% 14.4% 0.0% 0.0%
Stage 3, credit-impaired financial assets (S3) 6.0% 71.0% 46.9% 91.7% 0.0% 63.6% 14.3% 21.4%
• Stage 3 Collateral 1 297 584 - - 881 - 46
• Stage 3 Cover ratio (after collateral) 7.2% 77.6% 83.1% 91.7% 0.0% 77.8% 14.3% 29.0%
Cover ratio 0.0% 2.5% 1.1% 3.7% 0.0% 1.7% 0.1% 0.2%
Fair value through profit or loss
Performing 36,967 58,506 6 - - 58,512 - -
• Strong 30,799 38,084 3 - - 38,087 - -
• Satisfactory 6,158 20,314 3 - - 20,317 - -
• Higher risk 10 108 - - - 108 - -
Impaired (CG13-14) - 13 - - - 13 - -
Gross balance (FVTPL)(2) 36,967 58,519 6 - - 58,525 - -
Net carrying value (incl FVTPL) 80,560 196,823 119,254 1,389 22,091 339,557 - -
1 Loans and advances includes reverse repurchase agreements and other
similar secured lending of $9,660 million under Customers and of $2,946
million under Banks, held at amortised cost.
2 Loans and advances includes reverse repurchase agreements and other
similar secured lending of $51,441 million under Customers and of $34,754
million under Banks, held at fair value through profit or loss.
Page 22
Loans and advances analysis by client segment, credit quality and key
geography
Credit grade Regulatory 1 year PD range (%) S&P external ratings equivalent 2025
Corporat
e &
Investme
nt
Banking
and
Central
&
other
items
Gross Cred
it
impa
irme
nt
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
$million $million $million $million $million $million $million $million
Strong 108,627 1,767 - 110,394 (71) (4) - (75)
1A-2B 0 - 0.045 A+ and above 27,495 71 - 27,566 (14) - - (14)
3A-4A 0.046 - 0.110 A/A- to BBB+/BBB 32,856 428 - 33,284 (3) - - (3)
4B-5B 0.111 - 0.425 BBB to BBB-/BB+ 48,276 1,268 - 49,544 (54) (4) - (58)
Satisfactory 39,129 4,984 - 44,113 (69) (217) - (286)
6A-7B 0.426 - 1.350 BB+/BB to BB- 24,871 1,564 - 26,435 (16) (26) - (42)
8A-9B 1.351 - 4.000 BB-/B+ to B 9,738 1,758 - 11,496 (36) (125) - (161)
10A-11C 4.001 - 15.75 B/B- to B-/CCC+ 4,520 1,662 - 6,182 (17) (66) - (83)
Higher risk - 1,108 - 1,108 - (89) - (89)
12 15.751 - 99.999 CCC/C - 1,108 - 1,108 - (89) - (89)
Credit-impaired - - 4,203 4,203 - - (2,216) (2,216)
13-14 100 Impaired - - 4,203 4,203 - - (2,216) (2,216)
Total 147,756 7,859 4,203 159,818 (140) (310) (2,216) (2,666)
2024
Strong 112,265 1,229 - 113,494 (28) (41) - (69)
1A-2B 0 - 0.045 A+ and above 32,160 31 - 32,191 (2) - - (2)
3A-4A 0.046 - 0.110 A/A- to BBB+/BBB 40,712 524 - 41,236 (8) (33) - (41)
4B-5B 0.111 - 0.425 BBB to BBB-/BB+ 39,393 674 - 40,067 (18) (8) - (26)
Satisfactory 38,439 6,665 - 45,104 (52) (218) - (270)
6A-7B 0.426 - 1.350 BB+/BB to BB- 24,928 2,677 - 27,605 (21) (24) - (45)
8A-9B 1.351 - 4.000 BB-/B+ to B 9,514 2,618 - 12,132 (20) (169) - (189)
10A-11C 4.001 - 15.75 B/B- to B-/CCC+ 3,997 1,370 - 5,367 (11) (25) - (36)
Higher risk - 784 - 784 - (44) - (44)
12 15.751 - 99.999 CCC/C - 784 - 784 - (44) - (44)
Credit-impaired - - 4,574 4,574 - - (3,178) (3,178)
13-14 100 Impaired - - 4,574 4,574 - - (3,178) (3,178)
Total 150,704 8,678 4,574 163,956 (80) (303) (3,178) (3,561)
Page 23
Undrawn commitment and financial guarantees by client segment and credit
quality
Credit grade Regulatory 1 year PD range (%) S&P external ratings equivalent 2025
Corporat
e &
Investme
nt
Banking
and
Central
&
other
items
Notional Cred
it
impa
irme
nt
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
$million $million $million $million $million $million $million $million
Strong 165,772 1,499 - 167,271 (26) (1) - (27)
1A-2B 0 - 0.045 A+ and above 30,194 344 - 30,538 (2) - - (2)
3A-4A 0.046 - 0.110 A/A- to BBB+/BBB 60,619 453 - 61,072 (5) - - (5)
4B-5B 0.111 - 0.425 BBB to BBB-/BB+ 74,959 702 - 75,661 (19) (1) - (20)
Satisfactory 62,472 3,652 - 66,124 (32) (28) - (60)
6A-7B 0.426 - 1.350 BB+/BB to BB- 46,842 1,299 - 48,141 (16) (3) - (19)
8A-9B 1.351 - 4.000 BB-/B+ to B 11,762 1,388 - 13,150 (11) (16) - (27)
10A-11C 4.001 - 15.75 B/B- to B-/CCC+ 3,868 965 - 4,833 (5) (9) - (14)
Higher risk - 292 - 292 - (16) - (16)
12 15.751 - 99.999 CCC+/C - 292 - 292 - (16) - (16)
Credit-impaired - - 583 583 - - (100) (100)
13-14 100 Impaired - - 583 583 - - (100) (100)
Total 228,244 5,443 583 234,270 (58) (45) (100) (203)
2024
Strong 140,733 1,265 - 141,998 (22) (6) - (29)
1A-2B 0 - 0.045 A+ and above 29,623 280 - 29,903 (1) - - (1)
3A-4A 0.046 - 0.110 A/A- to BBB+/BBB 53,568 492 - 54,060 (4) - - (4)
4B-5B 0.111 - 0.425 BBB to BBB-/BB+ 57,542 493 - 58,035 (17) (6) - (23)
Satisfactory 46,394 4,200 - 50,594 (23) (33) - (56)
6A-7B 0.426 - 1.350 BB+/BB to BB- 2,544 1,065 - 3,609 (4) (6) - (10)
8A-9B 1.351 - 4.000 BB-/B+ to B 30,438 1,162 - 31,600 (11) (16) - (27)
10A-11C 4.001 - 15.75 B/B- to B-/CCC+ 13,412 1,973 - 15,385 (8) (11) - (19)
Higher risk - 286 - 286 - (11) - (11)
12 15.751 - 99.999 CCC+/C - 286 - 286 - (11) - (11)
Credit-impaired - - 593 593 - - (129) (129)
13-14 100 Impaired - - 593 593 - - (129) (129)
Total 187,127 5,751 593 193,471 (45) (50) (129) (224)
Page 24
Loans and advances analysis by client segment, credit quality and key
geography
Corporate & Investment Banking and Central & other items
2025
Gross Credit
Impairment
Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 St T
ag o
e t
3 a
l
C
o
v
e
r
a
g
e
%
Strong Satisfactory Total Strong Satisfactory Higher Risk Total Defaulted Total Strong Satisfactory Total Strong Satisfactory Higher Risk Total Impaired Total
$million $million $million $million $million $million $million $million $million $million $million $million $million $million $million $million $million $million
Hong Kong 29,977 11,244 41,221 235 1,140 433 1,808 1,181 1,181 (19) (25) (44) - (78) (78) (156) (424) (424) (1.4)%
Corporate Lending 15,933 4,481 20,414 215 1,127 382 1,724 546 546 (16) (20) (36) - (75) (78) (153) (384) (384) (2.5)%
Non Corporate Lending(1) 5,337 2,255 7,592 20 13 51 84 588 588 (1) (4) (5) - (3) - (3) (39) (39) (0.6)%
Banks 8,707 4,508 13,215 - - - - 47 47 (2) (1) (3) - - - - (1) (1) (0.0)%
Singapore 25,585 9,638 35,223 636 962 25 1,623 240 240 (4) (11) (15) (2) (16) - (18) (170) (170) (0.5)%
Corporate Lending 9,996 4,552 14,548 617 849 25 1,491 162 162 (3) (9) (12) (2) (16) - (18) (159) (159) (1.2)%
Non Corporate Lending(1) 11,217 1,198 12,415 - 71 - 71 39 39 (1) (1) (2) - - - - (8) (8) (0.1)%
Banks 4,372 3,888 8,260 19 42 - 61 39 39 - (1) (1) - - - - (3) (3) (0.0)%
China 12,149 1,718 13,867 - 123 12 135 89 89 (2) (1) (3) - - - - (16) (16) (0.1)%
Corporate Lending 4,410 1,196 5,606 - 122 12 134 87 87 (1) (1) (2) - - - - (14) (14) (0.3)%
Non Corporate Lending(1) 4,321 210 4,531 - - - - - - (1) - (1) - - - - - - (0.0)%
Banks 3,418 312 3,730 - 1 - 1 2 2 - - - - - - - (2) (2) (0.1)%
UK 16,597 7,627 24,224 52 1,300 462 1,814 868 868 - - - - (30) - (30) (371) (371) (1.5)%
Corporate Lending 7,136 3,350 10,486 52 1,129 462 1,643 538 538 - - - - (28) - (28) (346) (346) (3.0)%
Non Corporate Lending(1) 7,028 2,188 9,216 - 87 - 87 329 329 - - - - (2) - (2) (24) (24) (0.3)%
Banks 2,433 2,089 4,522 - 84 - 84 1 1 - - - - - - - (1) (1) (0.0)%
US 20,847 3,737 24,584 431 417 - 848 298 298 (2) (3) (5) - (21) - (21) (53) (53) (0.3)%
Corporate Lending 6,629 3,075 9,704 163 367 - 530 298 298 (1) (3) (4) - (20) - (20) (53) (53) (0.7)%
Non Corporate Lending(1) 13,681 171 13,852 258 44 - 302 - - (1) - (1) - (1) - (1) - - (0.0)%
Banks 537 491 1,028 10 6 - 16 - - - - - - - - - - - 0.0%
Others 34,729 17,516 52,245 455 1,214 179 1,848 1,617 1,617 (46) (33) (79) (3) (72) (11) (86) (1,189) (1,189) (2.4)%
Corporate Lending 18,355 13,663 32,018 428 1,108 176 1,712 1,341 1,341 (30) (25) (55) (2) (65) (11) (78) (997) (997) (3.2)%
Non Corporate Lending(1) 4,586 2,788 7,374 14 67 - 81 275 275 (15) (7) (22) - (7) - (7) (192) (192) (2.9)%
Banks 11,788 1,065 12,853 13 39 3 55 1 1 (1) (1) (2) (1) - - (1) - - (0.0)%
Total 139,884 51,480 191,364 1,809 5,156 1,111 8,076 4,293 4,293 (73) (73) (146) (5) (217) (89) (311) (2,223) (2,223) (1.3)%
1 Include financing, insurance and non-banking corporations and
governments.
Page 25
Corporate & Investment Banking and Central & other items
2024
Gross Credit Impairment
Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Total Coverage
%
Strong Satisfactory Total Strong Satisfactory Higher Risk Total Defaulted Total Strong Satisfactory Total Strong Satisfactory Higher Risk Total Impaired Total
$million $million $million $million $million $million $million $million $million $million $million $million $million $million $million $million $million $million
Hong Kong 29,643 12,079 41,722 230 1,539 64 1,833 1,308 1,308 (8) (8) (16) (33) (107) (9) (149) (1,157) (1,157) (2.9)%
Corporate Lending 13,230 6,180 19,410 225 1,329 64 1,618 1,296 1,296 (5) (4) (9) (33) (102) (9) (144) (1,157) (1,157) (5.9)%
Non Corporate Lending(1) 4,526 2,730 7,256 4 206 - 210 12 12 (1) (3) (4) - (5) - (5) - - (0.1)%
Banks 11,887 3,169 15,056 1 4 - 5 - - (2) (1) (3) - - - - - - (0.0)%
Singapore 34,114 8,762 42,876 500 1,019 35 1,554 337 337 - (8) (8) (4) (14) - (18) (196) (196) (0.5)%
Corporate Lending 9,545 4,457 14,002 469 658 35 1,162 265 265 - (6) (6) (4) (14) - (18) (195) (195) (1.4)%
Non Corporate Lending(1) 20,156 1,091 21,247 29 358 - 387 - - - (1) (1) - - - - - - (0.0)%
Banks 4,413 3,214 7,627 2 3 - 5 72 72 - (1) (1) - - - - (1) (1) (0.0)%
China 10,370 2,744 13,114 49 133 14 196 171 171 (3) (1) (4) - - - - (86) (86) (0.7)%
Corporate Lending 4,934 2,143 7,077 49 133 14 196 168 168 (1) (1) (2) - - - - (83) (83) (1.1)%
Non Corporate Lending(1) 3,241 363 3,604 - - - - - - (1) - (1) - - - - - - (0.0)%
Banks 2,195 238 2,433 - - - - 3 3 (1) - (1) - - - - (3) (3) (0.2)%
UK 21,555 5,985 27,540 48 1,940 141 2,129 756 756 (10) (4) (14) - (27) (6) (33) (258) (258) (1.0)%
Corporate Lending 2,331 2,082 4,413 47 1,433 27 1,507 658 658 (9) (3) (12) - (27) (6) (33) (237) (237) (4.3)%
Non Corporate Lending(1) 17,040 1,753 18,793 1 507 112 620 97 97 (1) (1) (2) - - - - (21) (21) (0.1)%
Banks 2,184 2,150 4,334 - - 2 2 1 1 - - - - - - - - - 0.0%
US 15,707 4,400 20,107 92 433 33 558 4 4 (4) (1) (5) (1) (1) - (2) (3) (3) (0.0)%
Corporate Lending 5,334 2,705 8,039 77 322 - 399 1 1 (3) (1) (4) (1) (1) - (2) - - (0.1)%
Non Corporate Lending(1) 9,688 123 9,811 15 79 - 94 3 3 (1) - (1) - - - - (3) (3) (0.0)%
Banks 685 1,572 2,257 - 32 33 65 - - - - - - - - - - - 0.0%
Others 32,116 16,437 48,553 318 1,726 681 2,725 2,081 2,081 (10) (33) (43) (3) (70) (29) (102) (1,483) (1,483) (3.1)%
Corporate Lending 21,909 12,516 34,425 291 1,030 490 1,811 1,883 1,883 (6) (26) (32) (3) (38) (28) (69) (1,333) (1,333) (3.8)%
Non Corporate Lending(1) 332 2,296 2,628 22 610 41 673 191 191 - (6) (6) - (31) (1) (32) (149) (149) (5.4)%
Banks 9,875 1,625 11,500 5 86 150 241 7 7 (4) (1) (5) - (1) - (1) (1) (1) (0.1)%
Total(2) 143,505 50,407 193,912 1,237 6,790 968 8,995 4,657 4,657 (35) (55) (90) (41) (219) (44) (304) (3,183) (3,183) (1.7)%
1 Include financing, insurance and non-banking corporations and
governments.
2 Amounts have been re-presented from management view to financial booking
basis in line with RNS on Re-Presentation of Financial Information issued on
2 April 2025. Refer to the bridge tables in Note 40.
Page 26
Wealth & Retail Banking and Ventures
2025
Gross Credit impairment
Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage To
3 ta
l
Co
ve
ra
ge
%
Strong Satisfactory Total Strong Satisfactory Higher Risk Total Defaulted Total Strong Satisfactory Total Strong Satisfactory Higher Risk Total Impaired Total
$million $million $million $million $million $million $million $million $million $million $million $million $million $million $million $million $million $million
Hong Kong 43,564 220 43,784 265 64 39 368 230 230 (74) (10) (84) (32) (5) (9) (46) (77) (77) (0.5)%
Mortgages 31,375 150 31,525 70 46 12 128 67 67 (1) - (1) - - - - (3) (3) (0.0)%
Credit cards 4,332 33 4,365 112 18 23 153 19 19 (49) (5) (54) (30) (5) (9) (44) (16) (16) (2.5)%
Others 7,857 37 7,894 83 - 4 87 144 144 (24) (5) (29) (2) - - (2) (58) (58) (1.1)%
Singapore 33,327 52 33,379 448 25 32 505 347 347 (63) (17) (80) (7) (2) (7) (16) (279) (279) (1.1)%
Mortgages 15,809 12 15,821 196 18 11 225 16 16 - - - - - - - (7) (7) (0.0)%
Credit cards 2,531 25 2,556 18 7 20 45 22 22 (47) (17) (64) (5) (2) (7) (14) (17) (17) (3.6)%
Others 14,987 15 15,002 234 - 1 235 309 309 (16) - (16) (2) - - (2) (255) (255) (1.8)%
Korea 19,829 190 20,019 269 7 20 296 190 190 (23) (2) (25) (12) (2) (1) (15) (78) (78) (0.6)%
Mortgages 15,321 150 15,471 232 6 15 253 88 88 (1) - (1) (1) - - (1) (3) (3) (0.0)%
Credit cards 16 - 16 - - - - - - - - - - - - - - - 0.0%
Others 4,492 40 4,532 37 1 5 43 102 102 (22) (2) (24) (11) (2) (1) (14) (75) (75) (2.4)%
Rest of World 25,259 4,865 30,124 471 66 258 795 994 994 (183) (16) (199) (41) (6) (12) (59) (437) (437) (2.2)%
Mortgages 15,532 2,321 17,853 196 41 149 386 471 471 (4) (5) (9) (2) - (1) (3) (148) (148) (0.9)%
Credit cards 1,124 15 1,139 95 4 9 108 28 28 (21) (3) (24) (20) (1) (2) (23) (21) (21) (5.3)%
Others 8,603 2,529 11,132 180 21 100 301 495 495 (158) (8) (166) (19) (5) (9) (33) (268) (268) (3.9)%
Total 121,979 5,327 127,306 1,453 162 349 1,964 1,761 1,761 (343) (45) (388) (92) (15) (29) (136) (871) (871) (1.1)%
2024
Hong Kong 41,906 320 42,226 288 47 40 375 228 228 (59) (14) (73) (33) (20) (4) (57) (69) (69) (0.5)%
Mortgages 31,080 265 31,345 55 14 24 93 75 75 - - - - - - - (7) (7) (0.0)%
Credit cards 4,210 19 4,229 93 30 1 124 14 14 (36) (11) (47) (27) (19) (1) (47) (14) (14) (2.5)%
Others 6,616 36 6,652 140 3 15 158 139 139 (23) (3) (26) (6) (1) (3) (10) (48) (48) (1.2)%
Singapore 26,755 52 26,807 441 39 34 514 312 312 (29) (26) (55) (6) (6) (6) (18) (265) (265) (1.2)%
Mortgages 13,531 12 13,543 160 32 15 207 9 9 - - - - - - - (4) (4) (0.0)%
Credit cards 2,248 25 2,273 14 5 16 35 16 16 (9) (26) (35) (5) (5) (4) (14) (19) (19) (2.9)%
Others 10,976 15 10,991 267 2 3 272 287 287 (20) - (20) (1) (1) (2) (4) (242) (242) (2.3)%
Korea 18,062 220 18,282 378 9 22 409 112 112 (22) (1) (23) (28) (4) (1) (33) (33) (33) (0.5)%
Mortgages 13,198 171 13,369 250 8 17 275 62 62 - - - - - - - (2) (2) (0.0)%
Credit cards 36 1 37 1 - - 1 - - (1) - (1) - - - - - - (2.6)%
Others 4,828 48 4,876 127 1 5 133 50 50 (21) (1) (22) (28) (4) (1) (33) (31) (31) (1.7)%
Rest of World 26,085 4,998 31,083 338 76 241 655 977 977 (239) (13) (252) (39) (5) (18) (62) (403) (403) (2.2)%
Mortgages 15,079 2,007 17,086 136 43 141 320 459 459 (4) (2) (6) - - (1) (1) (124) (124) (0.7)%
Credit cards 1,148 351 1,499 29 12 19 60 40 40 (33) (1) (34) (21) - (1) (22) (27) (27) (5.2)%
Others 9,858 2,640 12,498 173 21 81 275 478 478 (202) (10) (212) (18) (5) (16) (39) (252) (252) (3.8)%
Total 112,808 5,590 118,398 1,445 171 337 1,953 1,629 1,629 (349) (54) (403) (106) (35) (29) (170) (770) (770) (1.1)%
Page 27
Undrawn commitment and financial guarantees - by client segment credit quality
Amortised cost Wealth & Retail Banking and Ventures
2025
Notional ECL
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
$million $million $million $million $million $million $million $million
Strong 70,447 82 - 70,529 (13) (4) - (17)
Satisfactory 467 10 - 477 (2) (1) - (3)
Higher risk - 22 - 22 - (1) - (1)
Impaired - - 4 4 - - - -
Total 70,914 114 4 71,032 (15) (6) - (21)
2024
Strong 70,595 100 - 70,695 (15) (3) - (18)
Satisfactory 850 11 - 861 (5) (1) - (6)
Higher risk - 21 - 21 - (3) - (3)
Impaired - - 8 8 - - - -
Total 71,445 132 8 71,585 (20) (7) - (27)
Movement in gross exposures and credit impairment for loans and advances,
debt securities, undrawn commitments and financial guarantees (audited)
The tables overleaf set out the movement in gross exposures and credit
impairment by stage in respect of amortised cost loans to banks and customers,
undrawn commitments, financial guarantees and debt securities classified at
amortised cost and FVOCI. The tables are presented for the Group and
separately for CIB and WRB (which also includes a separate presentation for
secured and unsecured exposures).
Methodology
The movement lines within the tables are an aggregation of monthly movements
over the year and will therefore reflect the accumulation of multiple trades
during the year. The credit impairment charge in the income statement
comprises the amounts within the boxes in the table below, less recoveries of
amounts previously written off. Discount unwind is reported in net interest
income and related to stage 3 financial instruments only.
The approach for determining the key line items in the tables is set out
below.
• Transfers - transfers between stages are deemed to occur at the
beginning of a month based on prior month closing balances.
• Net remeasurement from stage changes - the remeasurement of credit
impairment provisions arising from a change in stage is reported within the
stage that the assets are transferred to. For example, assets transferred into
stage 2 are remeasured from a 12-month to a lifetime ECL, with the effect of
remeasurement reported in stage 2. For stage 3, this represents the initial
remeasurement from specific provisions recognised on individual assets
transferred into stage 3 in the year.
• Net changes in exposures - new business written less repayments in the
year. Within stage 1, new business written will attract up to 12 months of ECL
charges. Repayments of non-amortising loans (primarily within CIB) will have
low amounts of ECL provisions attributed to them, due to the release of
provisions over the term to maturity. In stages 2 and 3, the net change in
exposures reflects repayments although stage 2 may include new facilities
where clients are on non-purely precautionary early alert, are CG 12.
• Changes in risk parameters - for stages 1 and 2, this reflects changes
in the probability of default (PD), loss given default (LGD) and exposure at
default (EAD) of assets during the year, which includes the impact of
releasing provisions over the term to maturity. It also includes the effect of
changes in forecasts of macroeconomic variables during the year. In stage 3,
this line represents additional specific provisions recognised on exposures
held within stage 3.
• Interest due but not paid - change in contractual amount of interest due
in stage 3 financial instruments but not paid, being the net of accruals,
repayments and write-offs, together with the corresponding change in credit
impairment.
Changes to ECL models, which incorporate changes to model approaches and
methodologies, are not reported as a separate line item as these have an
impact over a number of lines and stages.
Page 28
Movements during the year
Stage 1 gross exposures increased by $69.4 billion to $790.1 billion (31
December 2024: $720.7 billion). CIB exposure increased by $45.5 billion to
$412.6 billion (31 December 2024: $367.1 billion), due to an increase in
exposures in financial guarantees in the financing, insurance and non-banking
sector. WRB exposures increased by $6.5 billion to $186.1 billion (31 December
2024: $179.6 billion), largely driven by mortgages in Korea and Singapore, and
increased demand in secured wealth products. Debt securities increased by
$22.4 billion, largely in the Central and other items segment which had also
seen a $7.0 billion reduction in loan balances to customers. Total stage 1
provisions increased by $83 million to $665 million (31 December 2024: $582
million). CIB provisions increased by $61 million to $194 million (31 December
2024: $133 million), due to an increase in management overlays and portfolio
movements. WRB provisions reduced by $41 million to $351 million (31 December
2024: $392 million), due to a pivot to affluent clients.
Stage 2 gross exposures decreased by $1.7 billion to $17.0 billion (31
December 2024: $18.6 billion), primarily driven by a net reduction in CIB
exposures primarily due to a sovereign upgrade, model changes and portfolio
movements. WRB exposures were broadly stable at $2.0 billion (31 December
2024: $2.0 billion). Stage 2 provisions decreased by $36 million to $501
million (31 December 2024: $537 million). CIB provisions decreased by $8
million to $354 million (31 December 2024: $362 million), due to portfolio
movements and sovereign upgrade. WRB provisions decreased by $31 million to
$120 million (31 December 2024: $151 million) mainly driven by improvements
from credit remediation actions. Debt securities primarily held in the Central
and other items segment decreased by $416 million, due to sovereign upgrades.
Stage 3 gross exposures remained stable at $6.9 billion (31 December 2024:
$7.0 billion). CIB exposures decreased by $0.3 billion to $4.9 billion (31
December 2024: $5.2 billion) due to repayments, restructuring related
write-offs, which was offset by one downgrade in the government sector.
Debt securities classified as purchased or originated credit‑impaired
instruments (POCI) increased by $0.2 billion to $0.3 billion (31 December
2024: $0.1 billion) due to higher holdings of treasury bills in one defaulted
sovereign. WRB exposures remained stable at $1.7 billion (31 December
2024: $1.6 billion). CIB provisions decreased by $1 billion to $2.3 billion
(31 December 2024: $3.3 billion), due to releases from repayments and
restructuring related write-offs. WRB provisions remained stable at $0.8
billion (31 December 2024: $0.8 billion). The amount of stage 3 exposures
written off in 2025 that remain subject to enforcement activity is $1.7
billion (31 December 2024: $1.2 billion).
Page 29
All segments (audited)
Amortised cost and FVOCI Stage 1 Stage 2 Stage 3(5) Total
Gross balance(3) Total credit impairment Net Gross balance(3) Total credit impairment Net Gross balance(3) Total credit impairment Net Gross balance(3) Total credit impairment Net
$million $million $million $million $million $million $million $million $million $million $million $million
As at 1 January 2024 723,876 (526) 723,350 22,268 (517) 21,751 8,144 (4,499) 3,645 754,288 (5,542) 748,746
Transfers to stage 1 16,433 (543) 15,890 (16,423) 543 (15,880) (10) - (10) - - -
Transfers to stage 2 (33,301) 128 (33,173) 33,770 (153) 33,617 (469) 25 (444) - - -
Transfers to stage 3 (1,631) 63 (1,568) (146) 168 22 1,777 (231) 1,546 - - -
Net change in exposures 29,928 (173) 29,755 (18,435) 80 (18,355) (1,383) 622 (761) 10,110 529 10,639
Net remeasurement from stage changes - 61 61 - (185) (185) - (203) (203) - (327) (327)
Changes in risk parameters - 84 84 - (242) (242) - (873) (873) - (1,031) (1,031)
Write-offs - - - - - - (1,260) 1,260 - (1,260) 1,260 -
Interest due but unpaid - - - - - - 53 (53) - 53 (53) -
Discount unwind - - - - - - - 135 135 - 135 135
Exchange translation differences and other movements(1) (14,626) 324 (14,302) (2,427) (231) (2,658) 147 (268) (121) (16,906) (175) (17,081)
As at 31 December 2024(2) 720,679 (582) 720,097 18,607 (537) 18,070 6,999 (4,085) 2,914 746,285 (5,204) 741,081
Income statement ECL (charge)/release(6) (28) (347) (454) (829)
Recoveries of amounts previously written off - - 279 279
Total credit impairment (charge)/release(4) (28) (347) (175) (550)
As at 1 January 2025 720,679 (582) 720,097 18,607 (537) 18,070 6,999 (4,085) 2,914 746,285 (5,204) 741,081
Transfers to stage 1 17,431 (630) 16,801 (17,429) 630 (16,799) (2) - (2) - - -
Transfers to stage 2 (39,710) 125 (39,585) 40,040 (144) 39,896 (330) 19 (311) - - -
Transfers to stage 3 (170) 1 (169) (3,038) 255 (2,783) 3,208 (256) 2,952 - - -
Net change in exposures 74,970 (221) 74,749 (19,400) 5 (19,395) (1,558) 502 (1,056) 54,012 286 54,298
Net remeasurement from stage changes - 73 73 - (176) (176) - (187) (187) - (290) (290)
Changes in risk parameters - 168 168 - (135) (135) - (1,035) (1,035) - (1,002) (1,002)
Write-offs - - - - - - (1,718) 1,718 - (1,718) 1,718 -
Interest due but unpaid - - - - - - (159) 159 - (159) 159 -
Discount unwind - - - - - - - 102 102 - 102 102
Exchange translation differences and other movements(1) 16,876 401 17,277 (1,823) (399) (2,222) 506 (136) 370 15,559 (134) 15,425
As at 31 Dec 2025(2) 790,076 (665) 789,411 16,957 (501) 16,456 6,946 (3,199) 3,747 813,979 (4,365) 809,614
Income statement ECL (charge)/release(6) 20 (306) (720) (1,006)
Recoveries of amounts previously written off - - 341 341
Total credit impairment (charge)/release(4) 20 (306) (379) (665)
1 Includes fair value adjustments and amortisation on debt securities.
2 Excludes Cash and balances at central banks, Accrued income, Assets held
for sale and Other assets gross balances of $118,232 million (31 December
2024: $101,755 million) and Total credit impairment of $43 million (31
December 2024: $63 million).
3 The gross balance includes the notional amount of off balance sheet
instruments.
4 Reported basis.
5 Stage 3 gross includes $278 million (31 December 2024: $59 million)
originated credit-impaired debt securities with impairment of $5 million (31
December 2024: $Nil).
6 Does not include charge relating to Other assets of $7 million (31
December 2024: release of $3 million).
Page 30
Corporate & Investment Banking (audited)
Amortised cost and FVOCI Stage 1 Stage 2 Stage 3 Total
Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net
$million $million $million $million $million $million $million $million $million $million $million $million
As at 1 January 2024 337,189 (151) 337,038 16,873 (318) 16,555 6,256 (3,651) 2,605 360,318 (4,120) 356,198
Transfers to stage 1 10,390 (245) 10,145 (10,390) 245 (10,145) - - - - - -
Transfers to stage 2 (25,698) 47 (25,651) 25,810 (58) 25,752 (112) 11 (101) - - -
Transfers to stage 3 (186) (4) (190) (186) 22 (164) 372 (18) 354 - - -
Net change in exposures 50,866 (50) 50,816 (16,508) 88 (16,420) (1,063) 607 (456) 33,295 645 33,940
Net remeasurement from stage changes - 16 16 (4) (36) (40) - (100) (100) (4) (120) (124)
Changes in risk parameters(2) - 32 32 - (129) (129) - (324) (324) - (421) (421)
Write-offs - - - - - - (321) 321 - (321) 321 -
Interest due but unpaid - - - - - - 25 (25) - 25 (25) -
Discount unwind - - - - - - - 104 104 - 104 104
Exchange translation differences and other movements(2) (5,455) 222 (5,233) (726) (176) (902) 13 (237) (224) (6,168) (191) (6,359)
As at 31 December 2024 367,106 (133) 366,973 14,869 (362) 14,507 5,170 (3,312) 1,858 387,145 (3,807) 383,338
Income statement ECL (charge)/release(2) (2) (77) 183 104
Recoveries of amounts previously written off - - 26 26
Total credit impairment (charge)/release (2) (77) 209 130
As at 1 January 2025 367,106 (133) 366,973 14,869 (362) 14,507 5,170 (3,312) 1,858 387,145 (3,807) 383,338
Transfers to stage 1 11,606 (387) 11,219 (11,606) 387 (11,219) - - - - - -
Transfers to stage 2 (30,544) 29 (30,515) 30,795 (48) 30,747 (251) 19 (232) - - -
Transfers to stage 3 (111) - (111) (1,567) 56 (1,511) 1,678 (56) 1,622 - - -
Net change in exposures 58,190 (119) 58,071 (17,214) 32 (17,182) (883) 505 (378) 40,093 418 40,511
Net remeasurement from stage changes - 4 4 (1) (16) (17) - (145) (145) (1) (157) (158)
Changes in risk parameters - 55 55 - (79) (79) - (299) (299) - (323) (323)
Write-offs - - - - - - (1,075) 1,075 - (1,075) 1,075 -
Interest due but unpaid - - - - - - (187) 187 - (187) 187 -
Discount unwind - - - - - - - 69 69 - 69 69
Exchange translation differences and other movements 6,343 357 6,700 (1,597) (324) (1,921) 431 (365) 66 5,177 (332) 4,845
As at 31 December 2025 412,590 (194) 412,396 13,679 (354) 13,325 4,883 (2,322) 2,561 431,152 (2,870) 428,282
Income statement ECL (charge)/release (60) (63) 61 (62)
Recoveries of amounts previously written off - - 54 54
Total credit impairment (charge)/release (60) (63) 115 (8)
1 The gross balance includes the notional amount of off balance sheet
instruments.
2 Business segments have been re-presented in line with the RNS on
Re-Presentation of Financial information issued on 2 April 2025.
Page 31
Wealth & Retail Banking (audited)
Amortised cost and FVOCI Stage 1 Stage 2 Stage 3 Total
Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net
$million $million $million $million $million $million $million $million $million $million $million $million
As at 1 January 2024 190,999 (325) 190,674 2,472 (140) 2,332 1,485 (759) 726 194,956 (1,224) 193,732
Transfers to stage 1 5,126 (288) 4,838 (5,116) 288 (4,828) (10) - (10) - - -
Transfers to stage 2 (7,393) 80 (7,313) 7,525 (80) 7,445 (132) - (132) - - -
Transfers to stage 3 (98) 1 (97) (1,254) 211 (1,043) 1,352 (212) 1,140 - - -
Net change in exposures (3,926) (89) (4,015) (1,505) 21 (1,484) (431) - (431) (5,862) (68) (5,930)
Net remeasurement from stage changes - 29 29 - (144) (144) - (44) (44) - (159) (159)
Changes in risk parameters(2) - 35 35 - (152) (152) - (531) (531) - (648) (648)
Write-offs - - - - - - (808) 808 - (808) 808 -
Interest due but unpaid - - - - - - 28 (28) - 28 (28) -
Discount unwind - - - - - - - 30 30 - 30 30
Exchange translation differences and other movements(2) (5,128) 165 (4,963) (92) (155) (247) 139 (22) 117 (5,081) (12) (5,093)
As at 31 December 2024 179,580 (392) 179,188 2,030 (151) 1,879 1,623 (758) 865 183,233 (1,301) 181,932
Income statement ECL (charge)/release(2) (25) (275) (575) (875)
Recoveries of amounts previously written off - - 253 253
Total credit impairment (charge)/release (25) (275) (322) (622)
As at 1 January 2025 179,580 (392) 179,188 2,030 (151) 1,879 1,623 (758) 865 183,233 (1,301) 181,932
Transfers to stage 1 5,261 (234) 5,027 (5,259) 234 (5,025) (2) - (2) - - -
Transfers to stage 2 (8,822) 92 (8,730) 8,901 (92) 8,809 (79) - (79) - - -
Transfers to stage 3 (52) 1 (51) (1,437) 193 (1,244) 1,489 (194) 1,295 - - -
Net change in exposures 6,130 (47) 6,083 (2,291) (5) (2,296) (772) - (772) 3,067 (52) 3,015
Net remeasurement from stage changes - 40 40 - (155) (155) - (42) (42) - (157) (157)
Changes in risk parameters - 50 50 - (37) (37) - (681) (681) - (668) (668)
Write-offs - - - - - - (604) 604 - (604) 604 -
Interest due but unpaid - - - - - - 28 (28) - 28 (28) -
Discount unwind - - - - - - - 33 33 - 33 33
Exchange translation differences and other movements 3,965 139 4,104 65 (107) (42) 43 220 263 4,073 252 4,325
As at 31 December 2025 186,062 (351) 185,711 2,009 (120) 1,889 1,726 (846) 880 189,797 (1,317) 188,480
Income statement ECL (charge)/release 43 (197) (723) (877)
Recoveries of amounts previously written off - - 287 287
Total credit impairment (charge)/release 43 (197) (436) (590)
1 The gross balance includes the notional amount of off-balance sheet
instruments.
2 Business segments have been re-presented in line with the RNS on
Re-Presentation of Financial Information issued on 2 April 2025.
Page 32
Wealth & Retail Banking - Secured (audited)
Amortised cost and FVOCI Stage 1 Stage 2 Stage 3 Total
Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net
$million $million $million $million $million $million $million $million $million $million $million $million
As at 1 January 2024 129,798 (33) 129,765 1,827 (16) 1,811 1,062 (525) 537 132,687 (574) 132,113
Transfers to stage 1 3,839 (23) 3,816 (3,836) 23 (3,813) (3) - (3) - - -
Transfers to stage 2 (4,952) 13 (4,939) 5,054 (13) 5,041 (102) - (102) - - -
Transfers to stage 3 (43) - (43) (566) 19 (547) 609 (19) 590 - - -
Net change in exposures 2,570 (11) 2,559 (917) 8 (909) (268) - (268) 1,385 (3) 1,382
Net remeasurement from stage changes - 6 6 - (15) (15) - (7) (7) - (16) (16)
Changes in risk parameters(2) - 10 10 - (6) (6) - (123) (123) - (119) (119)
Write-offs - - - - - - (114) 114 - (114) 114 -
Interest due but unpaid - - - - - - 53 (53) - 53 (53) -
Discount unwind - - - - - - - 16 16 - 16 16
Exchange translation differences and other movements(2) (4,496) (10) (4,506) (57) (31) (88) (33) 41 8 (4,586) - (4,586)
As at 31 December 2024 126,716 (48) 126,668 1,505 (31) 1,474 1,204 (556) 648 129,425 (635) 128,790
Income statement ECL (charge)/release(2) 5 (13) (130) (138)
Recoveries of amounts previously written off - - 80 80
Total credit impairment (charge)/release 5 (13) (50) (58)
As at 1 January 2025 126,716 (48) 126,668 1,505 (31) 1,474 1,204 (556) 648 129,425 (635) 128,790
Transfers to stage 1 4,097 (17) 4,080 (4,095) 17 (4,078) (2) - (2) - - -
Transfers to stage 2 (6,064) 7 (6,057) 6,121 (7) 6,114 (57) - (57) - - -
Transfers to stage 3 (3) - (3) (634) 14 (620) 637 (14) 623 - - -
Net change in exposures 8,276 (11) 8,265 (1,687) 9 (1,678) (447) - (447) 6,142 (2) 6,140
Net remeasurement from stage changes - 4 4 - (32) (32) - (7) (7) - (35) (35)
Changes in risk parameters - (18) (18) - 41 41 - (174) (174) - (151) (151)
Write-offs - - - - - - (101) 101 - (101) 101 -
Interest due but unpaid - - - - - - 53 (53) - 53 (53) -
Discount unwind - - - - - - - 19 19 - 19 19
Exchange translation differences and other movements 3,767 18 3,785 63 (28) 35 10 64 74 3,840 54 3,894
As at 31 December 2025 136,789 (65) 136,724 1,273 (17) 1,256 1,297 (620) 677 139,359 (702) 138,657
Income statement ECL (charge)/release (25) 18 (181) (188)
Recoveries of amounts previously written off - - 93 93
Total credit impairment (charge)/release (25) 18 (88) (95)
1 The gross balance includes the notional amount of off balance sheet
instruments.
2 Business segments have been re-presented in line with the RNS on
Re-Presentation of Financial Information issued on 2 April 2025.
Page 33
Wealth & Retail Banking - Unsecured (audited)
Amortised cost and FVOCI Stage 1 Stage 2 Stage 3 Total
Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net Gross balance(1) Total credit impairment Net
$million $million $million $million $million $million $million $million $million $million $million $million
As at 1 January 2024 61,201 (292) 60,909 645 (124) 521 423 (234) 189 62,269 (650) 61,619
Transfers to stage 1 1,287 (265) 1,022 (1,280) 265 (1,015) (7) - (7) - - -
Transfers to stage 2 (2,441) 67 (2,374) 2,471 (67) 2,404 (30) - (30) - - -
Transfers to stage 3 (55) 1 (54) (688) 192 (496) 743 (193) 550 - - -
Net change in exposures (6,496) (78) (6,574) (588) 13 (575) (163) - (163) (7,247) (65) (7,312)
Net remeasurement from stage changes - 23 23 - (129) (129) - (37) (37) - (143) (143)
Changes in risk parameters - 25 25 - (146) (146) - (408) (408) - (529) (529)
Write-offs - - - - - - (694) 694 - (694) 694 -
Interest due but unpaid - - - - - - (25) 25 - (25) 25 -
Discount unwind - - - - - - - 14 14 - 14 14
Exchange translation differences and other movements (632) 175 (457) (35) (124) (159) 172 (63) 109 (495) (12) (507)
As at 31 December 2024 52,864 (344) 52,520 525 (120) 405 419 (202) 217 53,808 (666) 53,142
Income statement ECL (charge)/release (30) (262) (445) (737)
Recoveries of amounts previously written off - - 172 172
Total credit impairment (charge)/release (30) (262) (273) (565)
As at 1 January 2025 52,864 (344) 52,520 525 (120) 405 419 (202) 217 53,808 (666) 53,142
Transfers to stage 1 1,164 (217) 947 (1,164) 217 (947) - - - - - -
Transfers to stage 2 (2,758) 85 (2,673) 2,780 (85) 2,695 (22) - (22) - - -
Transfers to stage 3 (49) 1 (48) (803) 179 (624) 852 (180) 672 - - -
Net change in exposures (2,146) (36) (2,182) (604) (14) (618) (325) - (325) (3,075) (50) (3,125)
Net remeasurement from stage changes - 36 36 - (123) (123) - (35) (35) - (122) (122)
Changes in risk parameters - 68 68 - (78) (78) - (507) (507) - (517) (517)
Write-offs - - - - - - (503) 503 - (503) 503 -
Interest due but unpaid - - - - - - (25) 25 - (25) 25 -
Discount unwind - - - - - - - 14 14 - 14 14
Exchange translation differences and other movements 198 121 319 2 (79) (77) 33 156 189 233 198 431
As at 31 December 2025 49,273 (286) 48,987 736 (103) 633 429 (226) 203 50,438 (615) 49,823
Income statement ECL (charge)/release 68 (215) (542) (689)
Recoveries of amounts previously written off - - 194 194
Total credit impairment (charge)/release 68 (215) (348) (495)
1 The gross balance includes the notional amount of off balance sheet
instruments.
Page 34
Analysis of stage 2 balances
The table below analyses total stage 2 gross on-and off-balance sheet
exposures and associated expected credit provisions by the key SICR driver
that caused the exposures to be classified as stage 2 as at 31 December 2025
and 31 December 2024 for each segment.
Where multiple drivers apply, the exposure is allocated based on the table
order. For example, a loan may have breached the defined IFRS 9 PD thresholds,
which is a quantitative trigger, and could also be on non-purely precautionary
early alert, a qualitative trigger; in this instance, the exposure
is reported under 'Quantitative'. Management overlay ECL is reported
separately as the impact is spread across exposures with both quantitative and
qualitative drivers.
2025
Corporate & Investment Banking Wealth & Retail Banking Ventures Central & other items(1) Tot
al
Gross ECL Coverage Gross ECL Coverage Gross ECL Coverage Gross ECL Coverage Gross ECL Coverage
$million $million % $million $million % $million $million % $million $million % $million $million %
Quantitative 6,742 131 1.9% 1,291 89 6.9% 60 18 30.0% 297 3 1.0% 8,390 241 2.9%
Qualitative 6,937 101 1.5% 571 10 1.8% - - 0.0% 1,373 3 0.2% 8,881 114 1.3%
30 days past due - - 0.0% 147 15 10.2% 10 4 40.0% - - 0.0% 157 19 12.1%
Management overlay - 122 0.0% - 6 0.0% - - 0.0% - - 0.0% - 128 0.0%
Total stage 2 13,679 354 2.6% 2,009 120 6.0% 70 22 31.4% 1,670 6 0.4% 17,428 502 2.9%
2024(2)
Quantitative 8,465 112 1.3% 1,366 104 7.6% 48 20 41.7% 154 - 0.0% 10,033 236 2.4%
Qualitative 6,404 93 1.5% 452 6 1.3% - - 0.0% 1,970 1 0.1% 8,826 100 1.1%
30 days past due - - 0.0% 212 19 9.0% 6 4 66.7% - - 0.0% 218 23 10.6%
Management overlay - 157 0.0% - 22 0.0% - 3 0.0% - - 0.0% - 182 0.0%
Total stage 2 14,869 362 2.4% 2,030 151 7.4% 54 27 50.0% 2,124 1 0.0% 19,077 541 2.8%
1 Includes Gross and ECL for Cash and balances at central banks and Assets
held for sale.
2 Amounts previously reported as 'Increase in PD' have been reported as
Quantitative and all other amounts have been aggregated into and reported as
Qualitative.
Page 35
Credit impairment charge (audited)
The table below analyses credit impairment charges or releases of the ongoing
business portfolio and restructuring business portfolio for the year ended 31
December 2025.
2025 2024(1)
Stage 1 & 2 Stage 3 Total Stage 1 & 2 Stage 3 Total
$million $million $million $million $million $million
Ongoing business portfolio
Corporate and Investment Banking 121 (117) 4 78 (198) (120)
Wealth and Retail Banking 159 436 595 301 322 623
Ventures (2) 61 59 10 63 73
Central & other items 18 - 18 (18) (1) (19)
Credit impairment charge/(release) 296 380 676 371 186 557
Restructuring business portfolio
Others (3) (1) (4) 1 (11) (10)
Credit impairment charge/(release) (3) (1) (4) 1 (11) (10)
Total credit impairment charge 293 379 672 372 175 547
1 Business segments have been re-presented in line with the RNS on
Re-Presentation of Financial Information issued on 2 April 2025, with no
change in total credit impairment charge.
Problem credit management and provisioning (audited)
Forborne and other modified loans by client segment
A forborne loan arises when a concession has been made to the contractual
terms of a loan in response to a customer's financial difficulties.
Net forborne loans increased by $238 million to $1,022 million (31 December
2024: $784 million), of which CIB accounted for $167 million largely driven
by a new performing forborne loan in Hong Kong. WRB increased by $71 million
to $254 million (31 December 2024: $183 million) mainly due to higher
conversion in Malaysia and introduction of forbearance measures in China.
Amortised cost 2025 2024
Corporate & Investment Banking Wealth & Total Corporate & Investment Banking Wealth & Total
Retail Banking
Retail Banking
$million
$million $million
$million
$million $million
Gross stage 1 and 2 forborne loans 295 61 356 17 36 53
Modification of terms and conditions(1) 90 61 151 17 36 53
Refinancing(2) 205 - 205 - - -
Impairment provisions (68) - (68) - (1) (1)
Modification of terms and conditions(1) (8) - (8) - (1) (1)
Refinancing(2) (60) - (60) - - -
Net stage 1 and 2 forborne loans 227 61 288 17 35 52
Collateral 4 36 40 - 27 27
Gross stage 3 forborne loans 1,295 311 1,606 2,065 258 2,323
Modification of terms and conditions(1) 1,208 311 1,519 1,824 258 2,082
Refinancing(2) 87 - 87 241 - 241
Impairment provisions (754) (118) (872) (1,481) (110) (1,591)
Modification of terms and conditions(1) (727) (118) (845) (1,242) (110) (1,352)
Refinancing(2) (27) - (27) (239) - (239)
Net stage 3 forborne loans 541 193 734 584 148 732
Collateral 175 25 200 172 55 227
Net carrying value of forborne loans 768 254 1,022 601 183 784
1 Modification of terms is any contractual change apart from refinancing,
as a result of credit stress of the counterparty, i.e. interest reductions,
loan covenant waivers.
2 Refinancing is a new contract to a borrower in credit stress, such that
they are refinanced and can pay other debt contracts that they were unable to
honour.
Page 36
Forborne and other modified loans by key geography
Net forborne loans increased by $238 million to $1,022 million (31 December
2024: $784 million), mainly due to performing forborne loans in Hong Kong.
Amortised cost 2025 2024(1)
Hong Kong Korea China Singapore UK US Other Total Hong Kong Korea China Singapore UK US Other Total
$million $million $million $million $million $million $million $million $million $million $million $million $million $million $million $million
Performing forborne loans 147 10 - 3 48 - 80 288 2 8 - 3 - - 39 52
Stage 3 forborne loans 131 24 73 32 103 - 371 734 110 25 85 25 81 1 405 732
Net forborne loans 278 34 73 35 151 - 451 1,022 112 33 85 28 81 1 444 784
1 Amounts have been re-presented from management view to financial booking
basis in line with RNS on Re-Presentation of Financial Information issued on
2 April 2025. Refer to the bridge tables in Note 40.
Credit Risk mitigation
Potential credit losses from any given account, customer or portfolio are
mitigated using a range of tools such as collateral, netting arrangements,
credit insurance and credit derivatives, taking into account expected
volatility and guarantees.
The reliance that can be placed on these mitigants is carefully assessed in
light of issues such as legal certainty and enforceability, market valuation
correlation and counterparty risk of the guarantor.
Collateral (audited)
A secured loan is one where the borrower pledges an asset as collateral of
which the Group is able to take possession in the event that the borrower
defaults.
The collateral values in the table below (which covers loans and advances to
banks and customers, excluding those held at fair value through profit or
loss) are adjusted where appropriate in accordance with our risk mitigation
policy and for the effect of over-collateralisation. The extent of
over‑collateralisation has been determined with reference to both the drawn
and undrawn components of exposure as this best reflects the effect of
collateral and other credit enhancements on the amounts arising from ECL. The
value of collateral reflects management's best estimate and is backtested
against our prior experience.
Collateral held on loans and advances
The table below details collateral held against exposures, separately
disclosing stage 2 and stage 3 exposure and corresponding collateral.
Amortised cost 2025
Net amount outstanding Collateral Net
exp
osu
re
Total Stage 2 financial Credit-impaired financial Total(2) Stage 2 financial Credit-impaired financial Total Stage 2 financial Credit-impaired financial
assets
assets (S3)
assets
assets (S3)
assets
assets (S3)
$million
$million
$million
$million $million $million $million $million $million
Corporate & Investment Banking(1) 186,081 7,765 2,070 34,122 2,292 314 151,959 5,473 1,756
Wealth & Retail Banking 126,977 1,789 877 99,641 916 678 27,336 873 199
Ventures 2,659 39 13 - - - 2,659 39 13
Central & other items 14,972 - - 4,214 - - 10,758 - -
Total 330,689 9,593 2,960 137,977 3,208 992 192,712 6,385 1,968
2024
Corporate & Investment Banking(1) 181,897 8,657 1,376 36,750 3,052 298 145,147 5,605 1,078
Wealth & Retail Banking 119,248 1,758 858 85,163 891 584 34,085 867 274
Ventures 1,389 25 1 - - - 1,389 25 1
Central & other items 22,091 35 98 80 35 - 22,011 - 98
Total 324,625 10,475 2,333 121,993 3,978 882 202,632 6,497 1,451
1 Includes loans and advances to banks.
2 Adjusted for over-collateralisation based on the drawn and undrawn
components of exposures.
Page 37
Collateral - Corporate & Investment Banking (audited)
Our underwriting standards encourage taking specific charges on assets and we
consistently seek high-quality, investment grade collateral.
Collateral taken for longer-term and sub-investment grade corporate loans
increased to 55 per cent (31 December 2024: 49 per cent).
For CIB, the unadjusted market value of collateral across all asset types,
without adjusting for over collateralisation, increased to $412 billion (31
December 2024: $383 billion) predominantly due to an increase in reverse
repos.
84 per cent (31 December 2024: 88 per cent) of tangible collateral excluding
reverse repurchase agreements and financial guarantees held comprises physical
assets with the remainder held in cash. Overall collateral remained broadly
stable at $34.1 billion (31 December 2024: $36.8 billion).
Non-tangible collateral, such as guarantees and standby letters of credit, is
also held against corporate exposures, although the financial effect of this
type of collateral is less significant in terms of recoveries. However, this
is considered when determining the loss given default and other credit related
factors. Collateral is also held against off-balance sheet exposures,
including undrawn commitments and trade-related instruments.
Corporate & Investment Banking
Amortised cost 2025 2024
$million $million
Maximum exposure 186,081 181,897
Property 9,086 8,504
Plant, machinery and other stock 783 935
Cash 3,034 1,973
Reverse repos 7,816 12,568
AAA 587 -
AA- to AA+ 233 938
A- to A+ 2,454 8,324
BBB- to BBB+ 2,122 1,437
Lower than BBB- - 95
Unrated 2,420 1,774
Financial guarantees and insurance 7,717 7,075
Commodities 11 33
Ships and aircraft 5,675 5,662
Total value of collateral(1,2) 34,122 36,750
Net exposure 151,959 145,147
1 Adjusted for over-collateralisation based on the drawn and undrawn
components of exposures.
2 The Group also has credit mitigation through Credit default swaps and
Credit Linked Notes.
Collateral - Wealth & Retail Banking (audited)
In WRB, fully secured products increased to 88 per cent of the total portfolio
(31 December 2024: 85 per cent), due to an increase in the mortgage portfolio
and higher demand for secured wealth products.
The following table presents an analysis of loans to individuals by product;
split between fully secured, partially secured and unsecured.
Amortised cost 2025 2024
Fully Partially secured(1) Unsecured Total(2) Fully Partially secured(1) Unsecured Total(2)
secured(1) $million $million $million secured(1) $million $million $million
$million $million
Maximum exposure 111,633 490 14,854 126,977 101,264 536 17,448 119,248
Loans to individuals
Mortgages 82,128 - - 82,128 76,696 - - 76,696
CCPL(5) - - 13,372 13,372 - - 16,343 16,343
Secured wealth products 27,055 - - 27,055 21,928 - - 21,928
Other(4,5) 2,450 490 1,482 4,422 2,640 536 1,105 4,281
Total collateral(2) 99,641 85,163
Net exposure(3) 27,336 34,085
Percentage of total loans 88% 0% 12% 85% 0% 15%
1 Secured loans are fully secured if the fair value of the collateral is
equal to or greater than the loan at the time of origination. All other
secured loans are
considered to be partially secure.
2 Collateral values are adjusted where appropriate in accordance with our
risk mitigation policy and for the effect of over-collateralisation.
3 Amounts net of ECL.
4 Includes Auto Loans previously presented separately. Prior period has been
represented.
5 Prior period has been represented between CCPL and Other for $463 million
under Fully secured to align product classification'.
Page 38
Mortgage loan-to-value ratios by geography (audited)
Loan-to-value (LTV) ratios measure the ratio of the current mortgage
outstanding to the current fair value of the properties on which they are
secured.
For the majority of mortgage loans, the value of property held as security
significantly exceeds the principal outstanding of the loan. The average LTV
of the overall mortgage portfolio remains stable at 48.0 per cent (31 December
2024: 48.9 per cent). The decrease in Hong Kong residential mortgage LTV to
55.9 per cent (31 December 2024: 58.6 per cent) was due to an increase in
property prices. However, 28.8 per cent of Hong Kong mortgage exposure is
backed by credit insurance. Specifically, 94.6 per cent of Hong Kong mortgage
exposure with LTV greater than 80 per cent is backed by credit insurance.
An analysis of LTV ratios by geography for the mortgage portfolio is presented
in the table below.
Amortised cost 2025 2024
Hong Kong Singapore Korea Other Total Hong Kong Singapore Korea Other Total
% % % % % % % % % %
Gross Gross Gross Gross Gross Gross Gross Gross Gross Gross
Less than 50 per cent 42.7 51.8 62.9 46.7 51.0 40.9 52.7 64.1 50.2 51.3
50 per cent to 59 per cent 17.3 19.4 13.3 14.8 16.0 17.6 21.8 13.2 15.4 16.5
60 per cent to 69 per cent 14.5 15.8 13.7 17.2 15.1 12.7 15.6 13.5 17.0 14.3
70 per cent to 79 per cent 5.3 12.7 8.9 14.2 9.5 5.5 9.6 8.3 12.7 8.5
80 per cent to 89 per cent 8.6 0.2 0.9 5.9 4.3 5.1 0.1 0.8 4.1 2.9
90 per cent to 99 per cent 6.7 0.0 0.2 0.7 2.4 8.2 0.0 0.1 0.5 3.0
100 per cent and greater 4.9 0.1 0.1 0.5 1.7 10.1 0.1 0.1 0.2 3.5
Average portfolio loan-to-value 55.9 42.7 41.8 49.9 48.0 58.6 42.5 42.1 48.0 48.9
Loans to individuals - mortgages ($million) 31,714 16,054 15,808 18,552 82,128 31,506 13,756 13,703 17,731 76,696
Collateral and other credit enhancements possessed or called upon (audited)
The Group obtains assets by taking possession of collateral (such as property,
plant and equipment) or calling upon other credit enhancements (such as
guarantees). Repossessed properties are sold in an orderly fashion. Where the
proceeds are in excess of the outstanding loan balance, the excess is returned
to the borrower.
Certain equity securities acquired may be held by the Group for investment
purposes and are classified as fair value through profit or loss, and the
related loan written off. The carrying value of collateral possessed that is
held on the Group's balance sheet as of 31 December 2025 is $nil (31 December
2024: $24 million).
Other Credit Risk mitigation (audited)
Other forms of credit risk mitigation are set out below.
Credit default swaps
The Group has entered into credit default swaps for portfolio management
purposes, referencing loan assets with a notional value of $3.5 billion (31
December 2024: $3.5 billion). These credit default swaps are accounted for as
financial guarantees as per IFRS 9 as they will only reimburse the holder for
an incurred loss on an underlying debt instrument. The Group continues to hold
the underlying assets referenced in the credit default swaps and it continues
to be exposed to related Credit Risk and Foreign Exchange Rate Risk on these
assets.
Credit linked notes
The Group has issued credit linked notes for portfolio management purposes,
referencing loan assets with a notional value of $22.4 billion (31 December
2024: $18.6 billion). The Group continues to hold the underlying assets for
which the credit linked notes provide mitigation. The credit linked notes of
$1.9 billion (31 December 2024: $2.0 billion) are recognised as a financial
liability at amortised cost on the balance sheet and are adjusted, where
appropriate, for reductions in expected future cash flows with a corresponding
credit impairment in the income statement.
Off-balance sheet exposures
For certain types of exposures, such as letters of credit and guarantees, the
Group obtains collateral such as cash depending on internal Credit Risk
assessments, as well as in the case of letters of credit holding legal title
to the underlying assets should a default take place.
Other portfolio analysis
This section provides maturity analysis by credit quality by industry, and
industry and retail products analysis by key geography.
Page 39
Maturity analysis of loans and advances by client segment
Shorter maturities give us the flexibility to respond promptly to events and
rebalance or reduce our exposure to clients or sectors that are facing
increased pressure or uncertainty.
Loans and advances in the CIB segment remain predominantly short-term, with
$84.0 billion (31 December 2024: $91.1 billion) maturing in less than one
year. 90 per cent (31 December 2024: 91 per cent) of loans to banks mature
in less than one year, with exposures remaining stable at $43.9 billion (31
December 2024: $43.6 billion).
The WRB short-term book of one year or less, is broadly stable at 29 per cent
(31 December 2024: 27 per cent). The WRB long-term book of over five years,
also remained broadly stable at 62 per cent (31 December 2024: 62 per cent).
Amortised cost 2025 2024
One year or less One to five years Over five Total One year One to five years Over five Total
years
or less
years
$million $million
$million
$million
$million
$million $million $million
Corporate & Investment Banking 83,996 40,495 20,341 144,832 91,065 33,130 17,670 141,865
Wealth & Retail Banking 36,930 12,317 79,036 128,283 32,252 13,194 75,091 120,537
Ventures 1,917 819 12 2,748 1,001 442 - 1,443
Central & other items 14,723 259 4 14,986 22,085 2 4 22,091
Gross loans and advances to customers 137,566 53,890 99,393 290,849 146,403 46,768 92,765 285,936
Impairment provisions (3,523) (443) (95) (4,061) (4,369) (409) (126) (4,904)
Net loans and advances to customers 134,043 53,447 99,298 286,788 142,034 46,359 92,639 281,032
Net loans and advances to banks 39,360 3,946 595 43,901 39,591 3,699 303 43,593
Credit quality by industry
Loans and advances
This section provides an analysis of the Group's amortised cost portfolio by
industry on a gross, total credit impairment and net basis.
Amortised cost 2025
Stage 1 Stage 2 Stage 3 Tot
al
Gross balance Total credit impairment Net Gross balance Total credit impairment Net Gross balance Total credit impairment Net carrying amount Gross balance Total credit impairment Net
carrying amount
carrying amount
carrying amount
$million $million
$million $million
$million $million $million $million $million
$million $million $million
Industry:
Energy 13,541 (34) 13,507 803 (37) 766 461 (412) 49 14,805 (483) 14,322
Manufacturing 20,599 (14) 20,585 744 (19) 725 598 (320) 278 21,941 (353) 21,588
Financing, insurance and non-banking 37,062 (13) 37,049 506 (10) 496 278 (181) 97 37,846 (204) 37,642
Transport, telecom and utilities 17,893 (11) 17,882 2,281 (43) 2,238 390 (108) 282 20,564 (162) 20,402
Food and household products 8,319 (9) 8,310 295 (17) 278 186 (177) 9 8,800 (203) 8,597
Commercial real estate 13,103 (12) 13,091 2,067 (161) 1,906 706 (418) 288 15,876 (591) 15,285
Mining and quarrying 4,881 (5) 4,876 244 (7) 237 33 (29) 4 5,158 (41) 5,117
Consumer durables 6,279 (7) 6,272 288 (15) 273 239 (230) 9 6,806 (252) 6,554
Construction 2,046 (9) 2,037 353 (1) 352 127 (127) - 2,526 (137) 2,389
Trading companies & distributors 633 (1) 632 11 - 11 81 (47) 34 725 (48) 677
Government 17,915 (17) 17,898 119 - 119 950 (82) 868 18,984 (99) 18,885
Other 5,485 (8) 5,477 148 - 148 154 (85) 69 5,787 (93) 5,694
Total(2) 147,756 (140) 147,616 7,859 (310) 7,549 4,203 (2,216) 1,987 159,818 (2,666) 157,152
Retail Products:
Mortgage 80,672 (11) 80,661 992 (5) 987 641 (161) 480 82,305 (177) 82,128
Credit Cards 8,077 (129) 7,948 289 (74) 215 64 (53) 11 8,430 (256) 8,174
Personal Loans and other unsecured lending 7,719 (186) 7,533 194 (44) 150 334 (160) 174 8,247 (390) 7,857
Secured wealth products 26,609 (43) 26,566 324 (6) 318 530 (359) 171 27,463 (408) 27,055
Other 4,229 (19) 4,210 165 (7) 158 192 (138) 54 4,586 (164) 4,422
Total 127,306 (388) 126,918 1,964 (136) 1,828 1,761 (871) 890 131,031 (1,395) 129,636
Net carrying value (customers)(1) 275,062 (528) 274,534 9,823 (446) 9,377 5,964 (3,087) 2,877 290,849 (4,061) 286,788
Net carrying value (Banks)(1) 43,608 (6) 43,602 217 (1) 216 90 (7) 83 43,915 (14) 43,901
1 Includes reverse repurchase agreements and other similar secured lending
held at amortised cost of $8,242 million for customers and $3,724 million for
Banks.
2 Include Central & other items loans and advances to customers balance
as set out in the Loans and advances by client segment table.
Page 40
Amortised cost 2024
Stage 1 Stage 2 Stage 3 Tot
al
Gross balance Total credit impairment Net carrying amount Gross balance Total credit impairment Net carrying amount Gross balance Total credit impairment Net carrying amount Gross balance Total credit impairment Net carrying amount
$million $million $million $million $million $million $million $million $million $million $million $million
Industry:
Energy 12,147 (9) 12,138 468 (57) 411 870 (559) 311 13,485 (625) 12,860
Manufacturing 19,942 (12) 19,930 840 (16) 824 418 (305) 113 21,200 (333) 20,867
Financing, insurance and non-banking 34,452 (16) 34,436 1,238 (6) 1,232 154 (142) 12 35,844 (164) 35,680
Transport, telecom and utilities 16,099 (11) 16,088 2,309 (32) 2,277 330 (85) 245 18,738 (128) 18,610
Food and household products 8,425 (8) 8,417 267 (8) 259 251 (198) 53 8,943 (214) 8,729
Commercial real estate 12,135 (10) 12,125 1,714 (126) 1,588 1,485 (1,265) 220 15,334 (1,401) 13,933
Mining and quarrying 5,542 (3) 5,539 287 (12) 275 124 (57) 67 5,953 (72) 5,881
Consumer durables 5,988 (6) 5,982 218 (26) 192 292 (259) 33 6,498 (291) 6,207
Construction 1,925 (2) 1,923 528 (5) 523 171 (160) 11 2,624 (167) 2,457
Trading companies & distributors 589 - 589 24 (1) 23 88 (48) 40 701 (49) 652
Government 28,870 - 28,870 441 (12) 429 205 (18) 187 29,516 (30) 29,486
Other 4,590 (3) 4,587 344 (2) 342 186 (82) 104 5,120 (87) 5,033
Total(4) 150,704 (80) 150,624 8,678 (303) 8,375 4,574 (3,178) 1,396 163,956 (3,561) 160,395
Retail Products:
Mortgage 75,340 (8) 75,332 896 (2) 894 606 (136) 470 76,842 (146) 76,696
Credit Cards 8,037 (121) 7,916 222 (80) 142 71 (60) 11 8,330 (261) 8,069
Personal Loans and other unsecured lending(3) 9,563 (228) 9,335 236 (53) 183 274 (129) 145 10,073 (410) 9,663
Secured wealth products 21,404 (37) 21,367 402 (6) 396 518 (353) 165 22,324 (396) 21,928
Other(2,3) 4,054 (9) 4,045 197 (29) 168 160 (92) 68 4,411 (130) 4,281
Total 118,398 (403) 117,995 1,953 (170) 1,783 1,629 (770) 859 121,980 (1,343) 120,637
Net carrying value (customers)(1) 269,102 (483) 268,619 10,631 (473) 10,158 6,203 (3,948) 2,255 285,936 (4,904) 281,032
Net carrying value (Banks)(1) 43,208 (10) 43,198 318 (1) 317 83 (5) 78 43,609 (16) 43,593
1 Includes reverse repurchase agreements and other similar secured lending
held at amortised cost of $9,660 million for customers and $2,946 million for
Banks.
2 Includes Auto Loans previously presented separately. Prior period has been
represented.
3 Prior period has been represented between Personal Loan and other
unsecured lending and Other for $463 million to align product classification.
4 Include Central & other items loans and advances to customers balance
as set out in the Loans and advances by client segment table.
Industry and Retail Products analysis of loans and advances by key geography
This section provides an analysis of the Group's amortised cost loan
portfolio, net of provisions, by industry and geography.
The geographic disclosures below are presented on a booking location basis. As
the Group operates a global booking model across CIB and Central and other
items, the booking location does not necessarily reflect the country of risk
(which is the country that can directly or indirectly put the counterparty at
risk for the highest amount of potential financial losses) of the underlying
counterparties.
On a country of risk basis, the countries analysed in the table below for CIB
and Central and other items would cover approximately 50 per cent (31
December 2024: 53 per cent) of net loans and advances compared to 74 per cent
(31 December 2024: 75 per cent) on a reported booking location basis.
Loans and advances to customers in the United Kingdom, Hong Kong
and Singapore would be approximately lower by 49 per cent (31 December
2024: 65 per cent), 70 per cent (31 December 2024: 59 per cent) and 39 per
cent (31 December 2024: 26 per cent) respectively. Loans and advances to
customers in China and United States would be approximately higher by 49 per
cent (31 December 2024: 55 per cent) and 6 per cent (31 December 2024: 9 per
cent) respectively.
The manufacturing sector group is spread across a diverse range of industries,
including automobiles and components, capital goods, pharmaceuticals, biotech
and life sciences, technology hardware and equipment, chemicals, paper
products and packaging, with lending spread over 3,340 clients.
Page 41
Corporate & Investment Banking and Central & other items
Amortised Cost 2025 2024(1)
Hong Kong China Singapore UK US Other Total Hong Kong China Singapore UK US Other Total
$million $million $million $million $million $million $million $million $million $million $million $million $million $million
Industry:
Energy 2,254 103 4,005 3,685 1,730 2,545 14,322 1,036 60 3,089 3,666 1,771 3,238 12,860
Manufacturing 4,653 3,311 2,775 848 2,553 7,448 21,588 4,077 4,200 1,655 660 2,307 7,968 20,867
Financing, insurance and non-banking 4,225 4,404 1,959 8,119 14,150 4,785 37,642 3,633 3,486 2,401 12,282 9,900 3,978 35,680
Transport, telecom and utilities 6,125 87 4,337 1,817 1,552 6,484 20,402 5,131 612 3,766 2,596 880 5,625 18,610
Food and household products 341 301 1,489 1,162 1,081 4,223 8,597 1,038 428 1,472 1,151 685 3,955 8,729
Commercial Real estate 4,067 231 1,209 2,000 2,296 5,482 15,285 4,512 334 1,421 1,107 1,575 4,984 13,933
Mining and Quarrying 434 541 401 1,525 101 2,115 5,117 608 606 866 1,644 214 1,943 5,881
Consumer durables 2,416 503 359 308 414 2,554 6,554 2,780 293 504 154 481 1,995 6,207
Construction 179 119 354 198 247 1,292 2,389 318 156 482 96 247 1,158 2,457
Trading Companies & Distributors 47 143 126 31 36 294 677 95 103 106 31 40 277 652
Government 3,993 126 10,557 1,486 2 2,721 18,885 3,836 117 20,266 1,671 4 3,592 29,486
Other 1,594 472 956 720 445 1,507 5,694 1,419 563 816 724 233 1,278 5,033
Net Loans and advances to Customers 30,328 10,341 28,527 21,899 24,607 41,450 157,152 28,483 10,958 36,844 25,782 18,337 39,991 160,395
Net Loans and advances to Banks 13,258 3,731 8,356 4,606 1,044 12,906 43,901 15,058 2,432 7,701 4,337 2,322 11,743 43,593
1 Amounts have been re-presented from management view to financial booking
basis in line with RNS on Re-Presentation of Financial Information issued on
2 April 2025 and also to include Central & other items amounts. Refer to
the bridge tables in Note 40.
Wealth & Retail Banking and Ventures
Amortised Cost 2025 2024(2)
Hong Kong Korea Singapore Other Total Hong Kong Korea Singapore Other Total
$million $million $million $million $million $million $million $million $million $million
Mortgages 31,714 15,808 16,054 18,552 82,128 31,506 13,703 13,756 17,731 76,696
Credit Cards 4,424 17 2,529 1,204 8,174 4,262 38 2,252 1,517 8,069
Personal Loans and other unsecured lending(3) 996 2,474 332 4,055 7,857 1,057 2,796 301 5,509 9,663
Secured wealth products 6,444 19 14,812 5,780 27,055 5,229 24 10,793 5,882 21,928
Other Retail(1,3) 597 2,069 129 1,627 4,422 579 2,153 194 1,355 4,281
Net Loans and advances to Customers 44,175 20,387 33,856 31,218 129,636 42,633 18,714 27,296 31,994 120,637
1 Includes Auto Loans previously presented separately. Prior period has
been represented.
2 Prior year has been represented to include Ventures.
3 Prior period has been represented between Personal Loans and other
unsecured lending and Other Retail for $463 million to align product
classification.
High carbon sectors
Sectors are identified and grouped as per the International Standard
Industrial Classification (ISIC) system and exposure numbers have been updated
to include all in-scope ISIC codes used for target setting among the high
carbon sectors. The exposure is a mixture of high carbon loans, and lending
tagged as sustainable finance such as green buildings in commercial real
estate, renewable plants in power, and CCUS in oil and gas.
The maximum exposures shown in the table include loans and advances at
amortised cost, Fair Value through profit or loss, and committed facilities
available as per IFRS 9 - Financial Instruments.
Page 42
Maximum exposure
2025
Maximum on Balance Sheet Exposure Collateral Net On Balance Sheet Exposure Undrawn Commitments Financial Guarantees Net Off Balance Sheet Exposure Total
(net of credit impairment)
On & Off Balance Sheet Net Exposure
$million $million (net of credit impairment) (net of credit impairment) $million
$million
$million
$million $million
Industry:
Automotive manufacturers 4,409 412 3,997 4,712 730 5,442 9,439
Aviation 2,010 1,176 834 1,206 820 2,026 2,860
Steel 1,767 296 1,471 834 237 1,071 2,542
Coal Mining 2 1 1 - 8 8 9
Aluminium 875 39 836 371 93 464 1,300
Cement 781 52 729 693 264 957 1,686
Shipping 6,861 4,300 2,561 2,183 180 2,363 4,924
Commercial Real Estate 9,397 4,406 4,991 3,050 188 3,238 8,229
Oil & Gas 9,462 992 8,470 12,257 8,314 20,571 29,041
Power 7,585 1,180 6,405 6,138 1,548 7,686 14,091
Total(1,5) 43,149 12,854 30,295 31,444 12,382 43,826 74,121
Total Corporate & Investment Banking(2) 204,974 27,925 177,049 135,410 105,414 240,824 417,872
Total Group(3,4) 430,158 137,977 292,181 208,841 114,053 322,894 615,074
2024
Industry:
Automotive manufacturers 3,881 69 3,812 3,331 605 3,936 7,748
Aviation 1,829 960 869 842 928 1,770 2,639
Steel 1,526 316 1,210 816 325 1,141 2,351
Coal Mining 25 - 25 - - - 25
Aluminium 1,341 32 1,309 354 53 407 1,716
Cement 709 55 654 637 267 904 1,558
Shipping 7,038 5,037 2,001 2,176 397 2,573 4,574
Commercial Real Estate 7,635 3,400 4,235 2,758 684 3,442 7,677
Oil & Gas 7,421 988 6,433 7,928 7,079 15,007 21,440
Power 6,341 1,500 4,841 4,538 1,124 5,662 10,503
Total(1,5) 37,746 12,357 25,389 23,380 11,462 34,842 60,231
Total Corporate & Investment Banking(2) 196,823 32,152 164,671 118,106 81,132 199,238 363,909
Total Group(3,4) 420,117 121,993 298,124 193,115 90,602 283,717 581,841
1 Maximum on balance sheet exposure includes FVTPL amount of High Carbon
sector is $2,202 million (31 December 2024: $749 million).
2 Includes on balance sheet FVTPL amount of $62,795 million (31 December
2024: $ 58,519 million) for Corporate & Investment Banking loans to
customers.
3 Total Group includes net loans and advances to banks and net loans and
advances to customers held at amortised cost of $43,901 million (31 December
2024: $43,593 million) and $286,788 million (31 December 2024: $ 281,032
million) respectively and loans to banks and loans and advances to customers
held at FVTPL of $36,673 million (31 December 2024: $ 36,967 million) and
$62,798 million (31 December 2024: $ 58,525 million) respectively. Refer to
Loans and advances by client segment table.
4 Agriculture is a further sector for which the Group set a net zero target
in 2025 (see net zero section). The value chain in scope for this sector
incorporates from pre-farm production (fertiliser) to post-farm processing
(food traders, processors and wholesales). The total outstanding loan exposure
to this sector is $11,239 million (31 December 2024: $11,531 million) with
financial guarantees of $1,908 million (31 December 2024: $2,174 million) and
undrawn commitments of $10,977 million (31 December 2024: $8,791 million)
Whilst there is a net zero target on this sector and transition risk is a
consideration, the sector is not considered a traditional high carbon sector
as it is not linked to heavy industry and the consumption of energy.
5 The ratio of total high carbon sector lending to the Group's total assets
is 5.9 % (31 December 2024: 5.8%), which is the high carbon sector and
agriculture sector balances over the total Group balance sheet.
Page 43
Maturity and ECL for high-carbon sectors
Sector 2025 2024
Loans and advances (Drawn funding) Maturity Buckets(1) Expected Credit Loss Loans and advances (Drawn funding) Maturity Buckets(1) Expected Credit Loss
$million $million $million $million
Less than 1 year More than 1 More than 5 years Less than 1 year More than 1 More than 5 years
to 5 years
to 5 years
$million
$million $million
$million
$million $million
Automotive Manufacturers 4,411 3,137 1,041 233 1 3,883 3,458 369 56 2
Aviation 2,013 329 201 1,483 3 1,833 231 404 1,198 4
Steel 1,790 863 167 760 23 1,598 941 133 524 72
Coal Mining 15 15 - - 12 38 25 13 - 13
Aluminium 882 731 151 - 8 1,352 1,089 177 86 11
Cement 820 579 241 - 39 724 356 368 - 15
Shipping 6,884 737 2,413 3,734 23 7,053 1,035 2,450 3,568 15
Commercial Real Estate 9,552 5,264 4,081 207 155 7,773 3,880 3,680 213 138
Oil & Gas 9,525 3,483 1,739 4,303 64 7,580 2,601 2,407 2,572 159
Power 7,646 2,079 1,725 3,842 61 6,401 1,700 1,404 3,297 60
Total balance(1) 43,538 17,217 11,759 14,562 389 38,235 15,316 11,405 11,514 489
1 Gross of credit impairment.
Sectors of interest
Commercial real estate
2025
Maximum on Balance Sheet Exposure (net of credit impairment)(1) Collateral Net On Undrawn Commitments Financial Guarantees Net Off Total
Balance Sheet Exposure
Balance Sheet Exposure
On & Off
$million $million
(net of credit impairment) (net of credit impairment)
Balance Sheet Net Exposure
$million
$million
$million $million $million
Commercial Real Estate 16,230 6,848 9,382 7,662 244 7,906 17,288
2024
Commercial Real Estate 14,037 5,947 8,090 4,932 670 5,602 13,692
1 Includes net loans and advances of $15,286 million (31 December 2024:
$13,933 million) as detailed in the table below.
Analysis of credit quality of loans and advances of Commercial Real Estate
Amortised costs 2025 2024
Gross Gross
$million $million
Strong 9,070 7,222
Satisfactory 5,728 6,515
Higher risk 372 112
Credit impaired (stage 3) 706 1,485
Total Gross Balance 15,876 15,334
Strong (4) (83)
Satisfactory (95) (44)
Higher risk (73) (9)
Credit impaired (stage 3) (418) (1,265)
Total Credit Impairment (590) (1,401)
Total Net of Credit Impairment 15,286 13,933
Strong 0.0% 1.1%
Satisfactory 1.6% 0.7%
Higher risk 19.6% 8.0%
Credit impaired (stage 3) 59.2% 85.1%
Cover Ratio 3.7% 9.1%
An analysis of the net CRE loans and advances by key geography.
Page 44
Debt securities and other eligible bills (audited)
This section provides further detail on gross debt securities and treasury
bills.
The credit quality descriptions in the table below align to those used for CIB
and Central and other items. Debt securities held that have a short-term
external rating are reported against the long-term rating of the issuer.
For securities that are unrated, the Group applies an internal credit rating,
as described under the 'Credit rating and measurement' section.
Total gross debt securities and other eligible bills increased by $22.2
billion to $165.8 billion (31 December 2024: $143.6 billion) primarily due to
an increase in high quality liquidity assets held in stage 1, mainly in Hong
Kong and Singapore. Stage 2 balances decreased by $0.4 billion to $1.2 billion
(31 December 2024: $1.6 billion) largely due to sovereign upgrades. Stage 3
balances increased by $0.2 billion to $0.3 billion (31 December 2024: $0.1
billion) largely due to higher exposures to previously defaulted sovereigns in
Africa.
Amortised cost and FVOCI 2025 2024
Gross ECL Net(2) Gross ECL Net(2)
$million $million $million $million $million $million
Stage 1 164,283 (56) 164,227 141,862 (23) 141,839
• Strong 160,390 (49) 160,341 138,353 (19) 138,334
• Satisfactory 3,893 (7) 3,886 3,509 (4) 3,505
Stage 2 1,198 (5) 1,193 1,614 (4) 1,610
• Strong 68 - 68 562 - 562
• Satisfactory 1,130 (5) 1,125 31 - 31
• High Risk - - - 1,021 (4) 1,017
Stage 3 296 (5) 291 103 (2) 101
Gross balance(1) 165,777 (66) 165,711 143,579 (29) 143,550
1 Stage 3 gross includes $278 million (31 December 2024: $59 million)
originated credit-impaired debt securities with $5 million impairment (31
December 2024: $Nil). The Group also has credit insurance over $4.2 billion
(31 December 2024: $4.03 billion) of other eligible bills.
2 FVOCI instruments are not presented net of ECL on the balance sheet. While
the presentation is on a net basis for the table, the total net on-balance
sheet amount is $165,753 million (31 December 2024: $143,562 million). Refer
to the Analysis of financial instrument by stage table.
Page 45
IFRS 9 ECL methodology (audited)
Approach for determining ECL
Credit loss terminology
Component Definition
Probability of default (PD) The probability that a counterparty will default, over the next 12 months from
the reporting date (stage 1) or over the lifetime of the product (stage 2),
incorporating the impact of forward-looking economic assumptions that have an
effect on Credit Risk, such as unemployment rates and GDP forecasts. The PD
estimates will fluctuate in line with the economic cycle. The lifetime (or
term structure) PDs are based on statistical models, calibrated using
historical data and adjusted to incorporate forward-looking economic
assumptions.
Loss given default (LGD) The loss that is expected to arise on default, incorporating the impact of
forward-looking economic assumptions where relevant, which represents the
difference between the contractual cashflows due and those that the bank
expects to receive. The Group estimates LGD based on the history of recovery
rates and considers the recovery of any collateral that is integral to the
financial asset, taking into account forward-looking economic assumptions
where relevant.
Exposure at default (EAD) The expected balance sheet exposure at the time of default, taking into
account expected changes over the lifetime of the exposure. This incorporates
the impact of drawdowns of facilities with limits, repayments of principal and
interest, and amortisation.
To determine the ECL, these components are multiplied together: PD for the
reference period (up to 12 months or lifetime) x LGD x EAD and discounted to
the balance sheet date using the effective interest rate as the discount rate.
IFRS 9 ECL models have been developed for the CIB businesses on a global
basis, in line with their respective portfolios. However, for some of the key
countries, country‑specific models have also been developed.
The calibration of forward-looking information is assessed at a country or
region level to take into account local macroeconomic conditions.
Retail ECL models are country and product specific, given the local nature of
the WRB business.
For less material portfolios, primarily in retail, the Group has adopted less
sophisticated approaches based on historical roll rates or loss rates:
• For medium-sized portfolios, a roll rate model is applied, which uses a
matrix that gives the average loan migration rate between delinquency states
from period to period. A matrix multiplication is then performed to generate
the final PDs by delinquency bucket over different time horizons.
• For smaller portfolios, a loss rate approach is applied. These use an
adjusted gross charge-off rate, developed using monthly write-off and
recoveries over an appropriate historical observation window (typically 12
months, extended to 24 months for certain portfolios where this provides a
more stable and representative estimate), and total outstanding balances.
• While the loss rate approaches do not incorporate forward looking
information, to the extent that there are significant changes in the
macroeconomic forecasts an assessment will be completed on whether an
adjustment to the modelled output is required.
For a limited number of exposures, proxy parameters or approaches are used
where the data is not available to calculate the origination PDs for the
purpose of applying the SICR criteria or for some retail portfolios where a
full history of LGD data is not available, estimates based on the loss
experience from similar portfolios are used. The use of proxies is monitored
and will reduce over time.
When existing IFRS 9 PD models are redeveloped, where material and without
undue cost or effort, origination PDs are recalibrated if there is a change in
measurement approach to ensure credit risk is measured on a consistent basis.
A change in measurement approach refers to changes in the conceptual or
methodological basis of PD estimation that affect comparability of estimates
with the previous model.
The following processes are in place to assess the ongoing performance of the
models:
• Quarterly model monitoring that uses recent data to compare the
differences between model predictions and actual outcomes against approved
thresholds.
• Annual independent validation performed by Group Model Validation (GMV)
with the depth of validation determined by the model materiality. Material
models would go through a full annual re-validation process, while a less
intensive validation process will be performed on non-material models.
Application of lifetime ECL
ECL is estimated based on the period over which the Group is exposed to
Credit Risk. For the majority of exposures this equates to the maximum
contractual period. For retail credit cards and corporate overdraft
facilities, however, the Group does not typically enforce the contractual
period, which can be as short as one day. As a result, the period over which
the Group is exposed to Credit Risk for these instruments reflects their
behavioural life, which incorporates expectations of customer behaviour and
the extent to which Credit Risk management actions curtail the period of that
exposure. The average behavioural life for retail credit cards is between 3
and 6 years across our footprint markets.
The behavioural life for corporate overdraft facilities is 36 months.
Page 46
Composition of credit impairment provisions (audited)
The table below summarises the key components of the Group's credit impairment
provision balances as at 31 December 2025 and 31 December 2024.
2025 2024
Corporate & Investment Banking Wealth & Retail Banking Ventures Central & Total Corporate & Investment Banking Wealth & Ventures Central & Total
other items(4)
$ million
Retail Banking
other items(4)
$ million
$ million $ million $ million
$ million
$ million
$ million $ million $ million
Modelled ECL provisions (base forecast) 375 527 96 63 1,061 337 613 61 37 1,048
Impact of multiple economic scenarios(1) 56 31 3 23 113 24 19 - - 43
Modelled ECL provisions before management judgements 431 558 99 86 1,174 361 632 61 37 1,091
Includes: Model performance post model adjustments - 10 - - 10 - 14 - - 14
Judgemental post model adjustments(2) - (10) (2) - (12) - (23) - - (23)
Management overlays(3) 167 24 - 11 202 179 27 7 - 213
Total modelled provisions 598 572 97 97 1,364 540 636 68 37 1,281
Of which:
Stage 1 194 351 49 92 686 133 392 30 34 589
Stage 2 354 120 24 5 503 362 151 27 1 541
Stage 3 50 101 24 - 175 45 93 11 2 151
Stage 3 non‑modelled provisions 2,272 745 - 27 3,044 3,267 665 - 54 3,986
Total credit impairment provisions 2,870 1,317 97 124 4,408 3,807 1,301 68 91 5,267
1 Includes upwards judgemental post-model adjustment of $90 million (31
December 2024: $28 million).
2 Excludes $90 million upwards judgemental post-model adjustment which is
included in 'Impact of multiple economic scenarios'.
3 $61 million (31 December 2024: $32 million) is in stage 1, $128 million
(31 December 2024: $181 million) in stage 2 and $14 million (31 December 2024:
Nil) in stage 3.
4 Includes ECL on cash and balances at central banks, accrued income, assets
held for sale and other assets.
Model performance post model adjustments (PMAs)
As part of model monitoring and independent validation processes, where a
model's performance breaches the approved monitoring thresholds or validation
standards, an assessment is performed to determine whether a model
performance PMA is required to temporarily remediate the model issue. Read
more on the process for the determination of PMAs in the 'Governance of PMAs
and application of expert credit judgement in respect of ECL' section.
As at 31 December 2025, model performance PMAs have been applied for 4 models
out of the total of 110 models. In aggregate, these PMAs increase the Group's
impairment provisions by $10 million (less than one per cent of modelled
provisions) compared with a $14 million increase at 31 December 2024.
In addition to these model performance PMAs, separate judgemental post model
and management adjustments have also been applied.
2025 2024
$ million $ million
Model performance PMAs
Corporate & Investment Banking - -
Wealth & Retail Banking 10 14
Total model performance PMAs 10 14
Page 47
Key assumptions and judgements in determining ECL
Incorporation of forward-looking information
The evolving economic environment is a key determinant of the ability of a
bank's clients to meet their obligations as they fall due. It is a fundamental
principle of IFRS 9 that the provisions banks hold against potential future
Credit Risk losses should not just depend on the health of the economy today,
but should also take into account potential changes to the economic
environment. For example, if a bank were to anticipate a sharp slowdown in
the world economy over the coming year, it should hold more provisions today
to absorb the credit losses likely to occur in the near future.
To capture the effect of changes to the economic environment, the PDs and LGDs
used to calculate ECL incorporate forward-looking information in the form
of forecasts of the values of economic variables and asset prices that are
likely to have an effect on the repayment ability of the Group's clients.
The 'base forecast' of the economic variables and asset prices is based on
management's view of the five-year outlook, supported by projections from the
Group's in-house research team and outputs from a third-party model
that project specific economic variables and asset prices. The research team
takes consensus views into consideration, and senior management review
projections for some core country variables against consensus when forming
their view of the outlook. For the period beyond five years, management
utilises the in-house research view and third-party model outputs, which allow
for a reversion to long-term growth rates or norms. All projections are
updated on a quarterly basis.
Forecast of key macroeconomic variables underlying the ECL calculation and the impact on non-linearity
In the Base Forecast - management's view of the most likely outcome - the
pace of growth of the world economy in 2026 is expected to remain broadly
unchanged from 2025 at around 3.1 per cent. This compares to the average of
3.7 per cent growth for the 10 years prior to COVID-19 (between 2010 and
2019). Growth in 2025 had been supported by exporters front-loading exports to
the US and consumers in key markets remaining resilient. 2026 for many
economies is likely to be a year of transition from monetary to fiscal policy,
and from export-led to increasingly domestic (particularly investment-led)
growth.
The US economy is expected to grow slightly faster in 2026 than the 1.5 per
cent growth for last year. The outlook is supported by strong business
investment and spending, which will be underpinned by corporate tax cuts and
the race for AI adoption. Similarly, the outlook for the Middle East is
expected to be slightly better in 2026 as OPEC+ cuts are phased out resulting
in the gradual recovery in oil output.
Ongoing diversification and infrastructure programmes will also support
investment spending. In Asia growth is expected to remain robust though
moderate on the fading effects from the strong front-loading of exports to the
US in 2025. Political uncertainty in some countries may also weigh on growth.
Africa is expected to remain strong, with the region less exposed than others
to trade tensions. In larger economies such as Nigeria and South Africa,
reform momentum will provide additional support. In contrast, growth prospects
in the Euro area are expected to remain muted around 1 per cent (unchanged
from 2025) given trade pressures - both from US tariffs and increasing
competition from China - and the uneven picture across economies in the
region.
The risks around the economic outlook remain elevated amid persistent trade
policy uncertainty, heightened geopolitical tensions, including around
disruptions to global international relationships, and fears of
financial-market corrections - all of which point to potentially higher
probability of adverse outcomes.
While the quarterly Base Forecasts inform the Group's strategic plan, one key
requirement of IFRS 9 is that the assessment of provisions should consider
multiple future economic environments. For example, the global economy may
grow at a different pace than the Base Forecast, and these variations would
have different implications for the provisions that the Group should hold
today. As the negative impact of an economic downturn on credit losses tends
to be greater than the positive impact of an economic upturn, if the Group
sets provisions only on the ECL under the Base Forecast it might maintain a
level of provisions that does not appropriately capture the range of
potential outcomes. To address the inherent uncertainty in economic forecast,
and the property of skewness (or non-linearity), IFRS 9 requires reported ECL
to be a probability-weighted ECL, calculated over a range of possible
outcomes.
To assess the range of possible outcomes, the Group simulates a set of 50
scenarios around the Base Forecast, calculates the ECL under each of them and
assigns an equal weight of 2 per cent to each scenario outcome.
These scenarios are generated by a Monte Carlo simulation, which addresses
the challenges of crafting many realistic alternative scenarios in the many
countries in which the Group operates. The alternative scenarios are modelled
while considering the degree of historical uncertainty (or volatility)
observed from Q1 1990 to Q3 2025 around economic outcomes, the trends in each
macroeconomic variable modelled and the correlation in the unexplained
movements around these trends. Collectively, the 50 scenarios explore a range
of hypothetical alternative outcomes for the global economy, including
scenarios that turn out better than expected and those that amplify
anticipated stresses.
The GDP graphs below illustrate the shape of the Base Forecast for key
footprint markets in relation to prior periods' actuals. The long-term growth
rates are based on the pace of economic expansion expected for 2030. The
tables below provide a summary of the Group's Base Forecast for these markets.
The peak/trough amounts show the highest and lowest points within the Base
Forecast.
Page 48
China's GDP growth is expected to ease slightly to 4.3 per cent in 2026 from
4.9 per cent in 2025, reflecting the fading impact from the front-loading of
activity last year and the ongoing correction in the property sector.
Similarly, GDP growth is expected to moderate in Hong Kong and ease more
sharply in Singapore as external demand turns less supportive in 2026. While
growth in India is also expected to ease to 6.5 per cent from 6.9 per cent in
2025, it will remain amongst the fastest growing economies in the world.
The outlook will be supported by consumption supported by policies such as
tax cuts, ample rainfall and low inflation. Korea's GDP growth is expected to
accelerate to 2 per cent in 2026 from 1 per cent in 2025 as construction
investment turns positive, facility investment stays stable and private
consumption strengthens.
2025 year-end forecasts
China Hong
Kong
GDP growth Unemployment 3-month interest rates House prices(5) GDP growth Unemployment 3-month interest rates House prices(8)
(YoY%) % % (YoY %) (YoY%) % % (YoY %)
Base forecast(1)
2025 4.9 3.5 1.7 (3.8) 2.8 3.6 3.2 (4.0)
2026 4.3 3.4 1.5 (2.0) 2.5 3.6 3.5 4.2
2027 4.1 3.3 1.4 (1.2) 2.5 3.3 3.5 5.0
2028 3.9 3.3 1.4 (0.3) 2.1 3.2 3.5 4.3
2029 3.5 3.3 1.4 0.9 1.5 3.2 3.5 3.9
5-year average(2) 3.8 3.3 1.4 (0.1) 2.0 3.3 3.5 4.2
Quarterly peak 4.7 3.4 1.5 2.3 2.6 3.7 3.5 5.7
Quarterly trough 3.3 3.3 1.4 (2.5) 1.1 3.2 3.5 2.3
Monte Carlo
Low(3) (6.9) 2.9 (0.3) (8.3) (4.3) 1.7 (0.8) (21.0)
High(4) 14.3 3.8 3.6 15.4 7.5 5.5 7.4 33.9
2025 year-end forecasts
Singapore Kore
a
GDP growth Unemployment(6) 3-month interest rates House prices GDP growth Unemployment 3-month interest rates House prices
(YoY%) % % (YoY %) (YoY%) % % (YoY %)
Base forecast(1)
2025 4.2 2.9 1.8 3.8 1.0 3.0 2.7 0.1
2026 2.0 3.0 1.1 3.0 2.0 3.2 2.4 0.5
2027 2.9 2.8 2.1 2.6 1.8 3.1 2.3 1.2
2028 3.2 2.8 3.0 2.7 2.0 3.0 2.3 1.7
2029 2.6 2.8 3.0 2.7 2.1 3.0 2.3 1.7
5-year average(2) 2.7 2.8 2.4 2.8 2.0 3.1 2.3 1.3
Quarterly peak 4.3 3.0 3.0 3.7 2.6 3.2 2.4 1.7
Quarterly trough 0.5 2.8 1.0 2.6 1.5 3.0 2.3 0.4
Monte Carlo
Low(3) (5.5) 1.7 (0.4) (16.8) (3.4) 1.1 (1.0) (6.4)
High(4) 9.8 4.3 6.4 22.5 6.6 5.2 6.3 8.6
2025 year-end forecasts Brent Crude
$ pb
Indi
a
GDP growth Unemployment(7) 3-month interest rates House prices
(YoY%) % % (YoY %)
Base forecast(1)
2025 6.9 NA 5.5 5.0 69.1
2026 6.5 NA 6.0 6.3 63.4
2027 6.5 NA 6.4 6.4 66.9
2028 6.4 NA 6.5 6.3 70.8
2029 6.2 NA 6.5 6.2 72.3
5-year average(2) 6.3 NA 6.3 6.3 69.5
Quarterly peak 6.5 NA 6.5 6.5 75.2
Quarterly trough 5.9 NA 5.8 6.1 62.0
Monte Carlo
Low(3) 3.0 NA 1.0 2.0 30.0
High(4) 10.5 NA 13.7 10.6 146.5
Page 49
2024 year-end forecasts
China Hong
Kong
GDP growth Unemployment 3-month interest rates House prices(5) GDP growth Unemployment 3-month interest rates House prices(8)
(YoY%) % % (YoY %) (YoY%) % % (YoY %)
5-year average(2) 4.1 3.3 1.7 (1.3) 2.2 3.1 2.4 3.8
Quarterly peak 5.3 3.5 1.9 2.3 3.5 3.2 2.9 6.8
Quarterly trough 3.2 3.1 1.6 (5.6) 1.5 3.0 2.1 (2.6)
Monte Carlo
Low(3) (1.0) 2.8 0.6 (10.1) (1.8) 1.8 0.3 (13.1)
High(4) 9.3 3.7 3.0 7.8 5.8 5.1 5.3 22.2
2024 year-end forecasts
Singapore Kore
a
GDP growth Unemployment(6) 3-month interest rates House prices GDP growth Unemployment 3-month interest rates House prices
(YoY%) % % (YoY %) (YoY%) % % (YoY %)
5-year average(2) 2.3 2.7 2.0 2.4 2.0 2.8 2.9 2.8
Quarterly peak 3.4 2.8 2.4 3.2 2.2 2.9 3.2 4.8
Quarterly trough 0.6 2.7 1.6 (0.4) 1.5 2.8 2.9 1.9
Monte Carlo
Low(3) (2.7) 2.0 0.3 (10.5) (1.3) 2.2 0.8 (4.3)
High(4) 7.0 3.6 3.9 17.5 5.2 3.5 5.7 9.8
2024 year-end forecasts
Indi B
a r
e
n
t
c
r
u
d
e
$
p
b
GDP growth Unemployment 3-month House prices
interest rates
(YoY%) %
(YoY %)
%
5-year average(2) 6.6 NA 6.0 6.4 76.2
Quarterly peak 7.1 NA 6.2 7.3 77.8
Quarterly trough 5.9 NA 6.0 6.0 74.8
Monte Carlo
Low(3) 3.2 NA 1.9 (0.1) 44.5
High(4) 10.0 NA 10.3 12.6 107.8
1 Data presented are those used in the calculation of ECL and presented as
average growth for the year. These may differ slightly to forecasts presented
elsewhere in the Annual Report as they are finalised before the period end.
2 5-year averages covering 20 quarters from Q1 2026 to Q4 2030 for the 2025
annual report. They cover Q1 2025 to Q4 2029 for the numbers reported for the
2024 Annual Report.
3 Represents the 10th percentile in the range of economic scenarios used to
determine non-linearity.
4 Represents the 90th percentile in the range of economic scenarios used to
determine non-linearity.
5 A judgemental management adjustment is held in respect of the China
commercial real estate sector.
6 Singapore unemployment rate covers the resident unemployment rate, which
refers to citizens and permanent residents.
7 India unemployment is not available due to insufficient data.
8 A judgmental management adjustment is held for risks relating to the
property sector in Hong Kong.
Impact of multiple economic scenarios
The Monte Carlo approach generates many alternative scenarios that cover our
global footprint and while the range of scenarios was restricted through the
use of ceilings and floors applied to the underlying macroeconomic variables,
these were redeveloped in the first half of 2025 to capture a broader range
of outcomes.
Given continuing heightened level of geopolitical and trade uncertainty, $90
million (31 December 2024: $28 million) judgemental non-linearity PMAs have
been applied, comprising $63 million (31 December 2024: $13 million)
for CIB and Central and other items, and $27million (31 December 2024: $15
million) for WRB and Ventures.
The total amount of non-linearity has primarily been estimated by assigning
probability weights of 59 per cent, 26 per cent and 15 per cent respectively
to the Base Forecast, 'Market Correction' (MC), and 'Bank Capital Stress Test'
(BCST) scenarios and comparing this to the unweighted Base Forecast ECL.
At 31 December 2024, probability weights of 68 per cent, 22 per cent and 10
per cent respectively were assigned to the Base Forecast, 'Higher for Longer
Commodities and Rates', and 'Global Trade and Geopolitical Tensions' scenarios
as disclosed in the 2024 Annual Report.
The judgemental non-linearity PMA represents the difference between the
probability weighted ECL calculated using the three scenarios and the
probability weighted ECL calculated by the Monte Carlo model together with an
adjustment of $12 million (31 December 2024: $nil million) primarily to
incorporate non-linearity for portfolios under a loss rate approach.
Page 50
The total amount of non-linearity including these PMAs is $113 million (31
December 2024: $43 million). The CIB and Central and other items portfolios
accounted for $79 million (31 December 2024: $24 million) of the calculated
non‑linearity, with the remaining $34 million (31 December 2024: $19
million) attributable to WRB and Ventures portfolios.
The impact of multiple economic scenarios on total modelled ECL is set out in
the table below, together with the management overlays and other judgemental
adjustments.
Base forecast Multiple Management overlays Total
modelled ECL(2)
$million economic and other judgemental adjustments
scenarios(1)
$million
$million
$million
Total modelled expected credit loss at 31 December 2025 1,061 113 190 1,364
Total modelled expected credit loss at 31 December 2024 1,048 43 190 1,281
1 Includes upwards judgemental PMAs of $90 million (31 December 2024: $28
million).
2 Total modelled ECL comprises stage 1 and stage 2 balances of $1,189
million (31 December 2024: $1,130 million) and $175 million (31 December 2024:
$151
million) of modelled ECL on stage 3 loans.
The average ECL under multiple scenarios is 11 per cent (31 December 2024: 4
per cent) higher than the ECL calculated using only the most likely scenario
(the Base Forecast). Portfolios that are more sensitive to non-linearity
include those with greater leverage and/or a longer tenor, such as commercial
real estate, project finance and shipping finance portfolios. Sovereign
exposures also contributed to increased non-linearity in 2025 as the BCST
scenario included a significant decline in equity indices. Other portfolios
displayed minimal non-linearity owing to limited responsiveness to
macroeconomic impacts for structural reasons, such as significant
collateralisation as with the WRB mortgage portfolios.
Stage 3 assets
Credit-impaired assets managed by Stressed Asset Group (SAG) incorporate
forward-looking economic assumptions in respect of the recovery outcomes
identified and are assigned individual probability weightings per IFRS 9.
These assumptions are not based on a Monte Carlo simulation but are informed
by the Base Forecast. Read more on the assessment of credit-impaired financial
assets in Note 8 to the financial statements.
Judgemental management adjustments
As at 31 December 2025, the Group held judgemental adjustments for ECL as set
out in the table below. All of the judgemental adjustments have been
determined after taking account of the model performance PMAs. They are
reassessed quarterly and are reviewed and approved by the IFRS 9 Impairment
Committee (IIC) and will be released when no longer relevant.
31 December 2025 Corporate & Investment Banking Wealth & Retail Banking and Ventures Central & other Total
$million $million $million
Mortgages Credit Cards Other Total
$million $million $million $million
Judgemental post model adjustments(1) 44 (6) (3) 23 14 20 78
Judgemental management overlays 167 - 5 19 24 11 202
Total judgemental adjustments 211 (6) 2 42 38 31 280
Judgemental adjustments by stage:
Stage 1 61 - (4) 15 11 31 103
Stage 2 150 (6) 4 14 12 - 162
Stage 3 - - 2 13 15 - 15
31 December 2024
Judgemental post model adjustments(1) 13 - 9 (17) (8) 5
Judgemental management overlays 179 - 5 29 34 213
Total judgemental adjustments 192 - 14 12 26 218
Judgemental adjustments by stage:
Stage 1 27 - 10 (7) 3 30
Stage 2 165 - 5 28 33 198
Stage 3 - - (1) (9) (10) (10)
1 Includes upwards judgemental PMAs of $90 million (31 December 2024: $28
million) relating to non-linearity. Excluding this judgemental PMAs are $12
million release (31 December 2024: $23 million release).
Judgemental PMAs
As at 31 December 2025, judgemental PMAs have been applied to increase ECL by
a net $78 million (31 December 2024: $5 million increase). $90 million (31
December 2024: $28 million) of the increase in ECL related to multiple
economic scenarios (see 'Impact of multiple economic scenarios' section). This
was partly offset by a reduction of ECL of $12 million (31 December 2024: $23
million) for certain WRB models, primarily to adjust for temporary factors
impacting modelled outputs. These will be released when these factors
normalise.
Page 51
Judgemental management overlays
In CIB and Central and other items, judgemental management overlays of $178
million (31 December 2024: $179 million) includes:
Hong Kong
The Group's loans and advances to Hong Kong CRE clients were $1.5 billion as
at 31 December 2025 (31 December 2024: $2.5 billion), with the decrease due to
repayments.
The overlay of $47 million (31 December 2024: $58 million) in Hong Kong
reflects subdued economic activity and increasing commercial property vacancy
rates, which contributes to an uncertain outlook that is not yet fully
reflected in the credit grades and modelled ECL. During 2025, there has been
increased pressure in property prices/valuations, interest serviceability and
repayment capacity. The risk of further impairment remains as a result of
subdued economic activity in the property sector and the related liquidity
constraints faced by counterparties as a result. The overlay has been
determined by estimating the impact of a deterioration to certain exposures.
The decrease from 31 December 2024 was driven by repayments and upgrades.
China CRE
The Group's loans and advances to China CRE clients decreased by $1.1 billion
to $0.8 billion (31 December 2024: $1.9 billion), due to debt restructuring
related write-offs and repayments during the year. Heightened risk management
continues to be carried out on this portfolio and a management overlay of $36
million (31 December 2024: $70 million) has been retained by estimating the
impact of further deterioration to exposures in this sector. The $34 million
overlay decrease from 31 December 2024 was primarily driven by repayments and
utilisation due to movement to stage 3.
Other
In CIB and Central and other items, additional overlays of $95 million (31
December 2024: $51 million) have been taken in Bangladesh together with
marginal amounts for climate risks and other items. The overlay in Bangladesh
reflects the political situation that has contributed to an increasing level
of uncertainty in the macroeconomic outlook as well as the impact of a recent
change in the restructuring policy announced by the local regulator and has
been determined by estimating the impact of a deterioration to certain
exposures.
In WRB and Ventures, judgemental management overlays of $24 million (31
December 2024: $34 million) includes $12 million (31 December 2024: $21
million) in Korea to cover the risks relating to the failure of two e-commerce
payment platforms in 2024, and marginal amounts for climate risks and other
items.
Read more on the adjustment for Climate Risk as set out in Note 1 of the
'Notes to the financial statements'.
Sensitivity of ECL calculation to macroeconomic variables
The ECL calculation relies on multiple variables and is inherently non-linear
and portfolio-dependent, which implies that no single analysis can fully
demonstrate the sensitivity of the ECL to changes in the macroeconomic
variables. The Group has conducted a series of analyses with the aim
of identifying the macroeconomic variables which might have the greatest
impact on the overall ECL. These encompassed single variable and
multi-variable exercises, using simple up/ down variation and extracts from
actual calculation data, as well as bespoke scenario design assessments.
The primary conclusion of these exercises is that no individual macroeconomic
variable is materially influential. The Group believes this is plausible as
the number of variables used in the ECL calculation is large. This does not
mean that macroeconomic variables are uninfluential; rather, that the Group
believes that consideration of macroeconomics should involve whole scenarios,
as this aligns with the multi-variable nature of the calculation.
The Group faces downside risks in the operating environment related to the
uncertainties surrounding the macroeconomic outlook. To explore this, a
sensitivity analysis of ECL was undertaken to explore the effect of slower
economic recoveries across the Group's footprint markets. Two downside
scenarios are considered. The first scenario explores a modest downturn driven
by financial market corrections in the US and other major economies. The
second is a roll forward of the 2025 BCST scenario and is characterised by a
synchronised and severe downturn across all key markets, global supply side
disruptions (including tariffs) and a high commodity price, inflation and
interest rate environment.
Baseline Market Correction Bank Capital Stress Test
Five year average Peak/Trough Five year average Peak/Trough Five year average Peak/Trough
China GDP 3.8 4.7/3.3 3.4 4.1/1.9 2.8 4.4/(1.8)
China unemployment 3.3 3.4/3.3 3.5 3.7/3.3 4.4 5.0/3.6
China property prices (0.1) 2.3/(2.5) (2.6) 1.8/(10.0) (4.1) 10.8/(12.4)
Hong Kong GDP 2.0 2.6/1.1 1.4 2.2/0.4 0.2 2.8/(7.0)
Hong Kong unemployment 3.3 3.7/3.2 3.8 4.2/3.2 6.7 8.2/4.3
Hong Kong property prices 4.2 5.7/2.3 3.8 5.3/1.0 (3.1) 7.9/(9.9)
US GDP 1.9 2.1/1.2 1.2 2.5/(0.8) 0.1 1.4/(3.8)
Singapore GDP 2.7 4.3/0.5 2.2 3.7/(1.2) 1.1 3.8/(7.0)
India GDP 6.3 6.5/5.9 5.9 6.3/4.9 4.8 6.2/0.0
Crude oil 69.5 75.2/62.0 67.5 75.2/55.6 109.1 139.2/81.0
Page 52
Period covered from Q1 2026 to Q4 2030.
Base (GDP, YoY%) Market Correction Difference from Base
2026 2027 2028 2029 2030 2026 2027 2028 2029 2030 2026 2027 2028 2029 2030
China 4.3 4.1 3.9 3.5 3.3 2.7 3.5 3.4 3.2 4.0 (1.6) (0.6) (0.5) (0.2) 0.6
Hong Kong 2.5 2.5 2.1 1.5 1.2 1.0 1.8 1.5 1.2 1.4 (1.5) (0.7) (0.6) (0.3) 0.2
US 1.7 1.8 1.9 2.1 2.0 (0.5) 1.0 1.4 1.8 2.4 (2.2) (0.8) (0.5) (0.2) 0.4
Singapore 2.0 2.9 3.2 2.6 2.6 0.2 2.5 2.9 2.4 3.1 (1.8) (0.5) (0.3) (0.2) 0.5
India 6.5 6.5 6.4 6.2 6.1 5.4 6.2 6.1 6.1 6.1 (1.1) (0.3) (0.3) (0.2) (0.0)
Each year is from Q1 to Q4. For example 2026 is from Q1 2026 to Q4 2026.
Base (GDP, YoY%) Bank Capital Stress Test Difference from Base
2026 2027 2028 2029 2030 2026 2027 2028 2029 2030 2026 2027 2028 2029 2030
China 4.3 4.1 3.9 3.5 3.3 0.7 0.6 4.3 4.2 4.0 (3.6) (3.5) 0.4 0.7 0.7
Hong Kong 2.5 2.5 2.1 1.5 1.2 (3.4) (3.4) 2.6 2.6 2.6 (5.9) (5.9) 0.4 1.1 1.4
US 1.7 1.8 1.9 2.1 2.0 (1.4) (1.9) 1.2 1.3 1.3 (3.1) (3.8) (0.7) (0.8) (0.8)
Singapore 2.0 2.9 3.2 2.6 2.6 (2.4) (3.2) 3.5 3.6 3.6 (4.4) (6.1) 0.3 1.0 1.0
India 6.5 6.5 6.4 6.2 6.1 2.5 3.2 6.2 6.2 6.3 (4.0) (3.3) (0.2) (0.1) 0.3
Each year is from Q1 to Q4. For example 2026 is from Q1 2026 to Q4 2026.
The total modelled stage 1 and 2 ECL provisions (including both on and
off-balance sheet instruments) would be approximately $101 million higher
under the 'MC' scenario, and $498 million higher under the 'BCST' roll-forward
scenario than the baseline ECL provisions (which excluded the impact of
multiple economic scenarios and management overlays which may already capture
some of the risks in these scenarios). Stage 2 exposures as a proportion of
stage 1 and 2 exposures would increase from 2.2 per cent in the base case to
2.3 per cent and 3.5 per cent respectively under the 'MC', and 'BCST'
roll-forward scenarios. This includes the impact of exposures transferring to
stage 2 from stage 1 but does not consider an increase in stage 3 defaults.
Under both scenarios, the majority of the increase in ECL in CIB came from the
Corporate, commercial real estate and Sovereign portfolios. For the main
corporate portfolios, ECL would increase by $44 million and $23 million for
'MC', and 'BCST' roll-forward scenarios respectively and the proportion of
stage 2 exposures would increase from 3.6 per cent in the base case to 4.1 per
cent and 4.7 per cent respectively.
For the WRB portfolios, most of the increase in ECL came from the unsecured
retail portfolios, particularly the credit card portfolios in Hong Kong and
Singapore and Private Banking, although Mortgages in Korea and Malaysia were
also impacted in the BCST scenario. Under the 'MC', and 'BCST' roll-forward
scenarios, credit card ECL would increase by $7 million and $51 million
respectively, largely in the Singapore and Hong Kong portfolios and the
proportion of stage 2 credit card exposures would increase from 2.4 per cent
in the base case to 2.7 per cent and 4.6 per cent for each scenario
respectively, with the Singapore portfolio most impacted. Mortgages ECL would
increase by $2 million and $29 million for each scenario respectively, with
portfolios in Korea and Malysia impacted in the 'BCST' scenario and the
proportion of stage 2 mortgages would increase from 1.5 per cent in the base
case to 1.5 per cent and 1.7 per cent respectively.
There was no material change in modelled stage 3 provisions as these
primarily relate to unsecured WRB exposures for which the LGD is not sensitive
to changes in the macroeconomic forecasts. There is also no material change
for non-modelled stage 3 exposures as these are more sensitive to client
specific factors than to alternative macroeconomic scenarios.
The actual outcome of any scenario may be materially different due to, among
other factors, the effect of management actions to mitigate potential
increases in risk and changes in the underlying portfolio.
Page 53
Gross as ECL as ECL Market Bank Capital
Stress Test
reported(1) reported(2) Base case Correction
$million
$million $million $million $million
Stage 1 modelled
Corporate & Investment Banking 412,590 149 127 159 165
Wealth & Retail Banking and Ventures 198,220 404 392 404 420
• Mortgages 82,421 12 11 11 15
• Credit cards 47,125 154 148 148 147
• Other 68,674 238 233 245 258
Central & Other items 179,266 57 34 45 115
Total stage 1 excluding management judgements(4) 790,076 610 553 608 700
Stage 2 modelled
Corporate & Investment Banking 13,679 232 198 237 410
Wealth & Retail Banking and Ventures 2,079 144 122 129 208
• Mortgages 1,002 13 12 13 37
• Credit cards 299 81 75 82 127
• Other 778 50 35 34 44
Central & Other items 1,199 5 5 5 58
Total stage 2 excluding management judgements(4) 16,957 381 325 371 676
Total Stage 1 & 2 modelled
Corporate & Investment Banking 426,269 381 325 396 575
Wealth & Retail Banking and Ventures 200,299 548 514 533 628
• Mortgages 83,423 25 23 24 52
• Credit cards 47,424 235 223 230 274
• Other 69,452 288 268 279 302
Central & Other items 180,465 62 39 50 173
Total excluding management judgements(4) 807,033 991 878 979 1,376
Stage 3 exposures excluding other assets 6,946 3,184
Other financial assets(3) 118,232 43
ECL from management judgements(4) 190
Total financial assets reported as at 31 December 2025 932,211 4,408
1 Gross balances includes both on- and off- balance sheet instruments;
allocation between stage 1 and 2 will differ by scenario.
2 Includes ECL for both on- and off-balance sheet instruments.
3 Includes cash and balances at central banks, Accrued income, Other
financial assets; and Assets held for sale.
4 Management judgements are disclosed in the annual report except for $90
million relating to non-linearity. The difference between total stage 1 and 2
ECL as reported and the total stage 1 and 2 ECL Base case reflect the total
non-linearity of $113 million.
Page 54
Significant increase in Credit Risk (SICR)
Quantitative criteria
SICR is assessed by comparing the risk of default at the reporting date to the
risk of default at origination. Whether a change in the risk of default is
significant or not is assessed using quantitative and qualitative criteria.
These criteria have been separately defined for each business and where
meaningful are consistently applied across business lines.
Assets are considered to have experienced SICR if they have breached both
relative and absolute thresholds for the change in the average annualised IFRS
9 lifetime probability of default (IFRS 9 PD) over the residual term of the
exposure.
The absolute measure of increase in credit risk is used to capture instances
where the IFRS 9 PDs on exposures are relatively low at initial recognition as
these may increase by several multiples without representing a significant
increase in credit risk. Where IFRS 9 PDs are relatively high at initial
recognition, a relative measure is more appropriate in assessing whether there
is a significant increase in credit risk, as the IFRS 9 PDs increase more
quickly.
The SICR thresholds have been calibrated based on the following principles:
• Stability - The thresholds are set to achieve a stable stage 2
population at a portfolio level, trying to minimise the number of accounts
moving back and forth between stage 1 and stage 2 in a short period of time.
• Accuracy - The thresholds are set such that there is a materially higher
propensity for stage 2 exposures to eventually default than is the case for
stage 1 exposures.
• Dependency from backstops - The thresholds are stringent enough such
that a high proportion of accounts transfer to stage 2 due to movements in
forward-looking IFRS 9 PDs rather than relying on backward-looking backstops
such as arrears.
• Relationship with business and product risk profiles - the thresholds
reflect the relative risk differences between different products, and are
aligned to business processes.
For CIB clients the quantitative thresholds are a relative 100 per cent
increase in IFRS 9 PD and an absolute change in IFRS 9 PD of between 50 and
100 bps for investment grade and sub-investment grade assets.
For WRB (excluding Private Banking) clients, portfolio specific quantitative
thresholds are across the following portfolios: Credit Cards (Hong Kong,
Singapore, Malaysia, UAE), Personal Loans (Taiwan, Korea), Business Client
Mortgages (India), and Mortgages (Hong Kong, UAE). In 2025, we have updated
SICR for Hong Kong mortgage, UAE mortgage, Singapore Credit Cards and Malaysia
Credit Cards. The impact of the threshold changes in 2025 was immaterial.
These thresholds capture both relative and absolute increases in IFRS 9 PD,
with average lifetime IFRS 9 PD cut-offs. They are further tailored based on
customer utilisation bands for credit cards; behavioural score and months on
book for personal loans; and maximum delinquency in the last 12 months for
business client mortgages. The approach also differentiates between exposures
that are current and those that are one to 29 days past due.
The range of thresholds applied are:
Portfolio Relative Absolute Customer Months on book Average
IFRS 9 PD IFRS 9 PD utilisation (months) IFRS 9 PD
increase increase (%) (lifetime)
(%) (%)
Credit cards - Current 70-200 3.4-6.2 85 - 95 - 4.1 - 13.5
Credit cards - 1-29 days past due 20-210 2.5-6.1 25 - 67 - 1.6 - 9.5
Personal loan - Current 100-250 8.5 - >=60 -
Personal loan - 1-29 days past due 100-300 8.5 - >=12 -
Mortgages - Current 100-500 2.7-3.5 - - -
Mortgages - 1-29 days past due 100-700 3.5 - - -
Business Client Mortgages - Current 100 4.4 - - -
Business Client Mortgages - 1-29 days past due 100 7.0 - - -
For all other material WRB portfolios (excluding Private Banking) for which a
statistical model has been built, the quantitative SICR thresholds applied are
a relative threshold of 100 per cent increase in IFRS 9 PD and an absolute
change in IFRS 9 PD of between 100 and 350 bps depending on the product.
Certain countries have a higher absolute threshold reflecting the lower
default rate within their Personal loan portfolios compared with the Group's
other personal loan portfolios. The original lifetime IFRS 9 PD term structure
is determined based on the original application score or risk segment of the
client.
For all Private Banking classes, in line with risk management practice, an
increase in credit risk is deemed to have occurred where margining or LTV
covenants have been breached. For Class I assets (lending against diversified
liquid collateral), if these margining requirements have not been met within
30 days of a trigger, a significant increase in credit risk is assumed to
have occurred. For Class I and Class III assets (real-estate lending), a
significant increase in credit risk is assumed to have occurred where the
bank is unable to 'sell down' the applicable assets to meet revised
collateral requirements within five days of a trigger. Class II assets are
typically unsecured or partially secured, or secured against illiquid
collateral such as shares in private companies. Significant credit
deterioration of these assets is deemed to have occurred when any early alert
trigger has been breached.
Page 55
Qualitative criteria
Qualitative factors that indicate that there has been a significant increase
in credit risk include processes linked to current risk management, such as
placing loans on non‑purely precautionary early alert or being assigned a
CG12 rating. An account is placed on non-purely precautionary early alert if
it exhibits risk or potential weaknesses of a material nature requiring closer
monitoring, supervision or attention by management. Weaknesses in such a
borrower's account, if left uncorrected, could result in deterioration of
repayment prospects and the likelihood of being downgraded. Indicators could
include a rapid erosion of position within the industry, concerns over
management's ability to manage operations, weak/deteriorating operating
results, liquidity strain and overdue balances, among other factors.
All client assets that have been assigned a CG12 rating, equivalent to 'Higher
risk', are deemed to have experienced a significant increase in credit risk.
Accounts rated CG12 are primarily managed by relationship managers in the CIB
unit with support from SAG for certain accounts. All CIB clients are placed in
CG12 when they are 30 DPD unless they are granted a waiver through a strict
governance process.
In WRB, SICR is also assessed for where specific risk elevation events have
occurred in a market that are not yet reflected in modelled outcomes or in
other metrics. This is applied collectively either to impacted specific
products/customer cohorts or across the overall consumer banking portfolio
in the affected market.
For less material portfolios, which are modelled based on a roll-rate or
loss-rate approach, SICR is primarily assessed through the 30 DPD trigger,
supplemented where relevant by qualitative factors.
Backstop
Across all portfolios, accounts that are 30 or more DPD on contractual
payments of principal and/or interest that have not been captured by the
criteria above are considered to have experienced a significant increase in
credit risk.
Expert credit judgement may be applied in assessing SICR to the extent that
certain risks may not have been captured by the models or through the above
criteria. Such instances are expected to be rare, for example due to events
and material uncertainties arising close to the reporting date.
Governance of PMAs and application of expert credit judgement in respect of ECL
The Group's Credit Policy and Standards framework details the requirements for
continuous monitoring to identify any changes in credit quality and resultant
ratings, as well as ensuring a consistent approach to monitoring, managing
and mitigating credit risks. The framework aligns with the governance of ECL
estimation through the early recognition of significant deteriorations in
ratings which drive stage 2 and 3 ECL.
The models used in determining ECL are reviewed and approved by the Group
Credit Model Assessment Committee (CMAC) or Delegate Model Approver (DMA),
which is appointed by the Model Risk Committee. CMAC has the responsibility to
assess and approve the use of models and to review all IFRS 9 interpretations
related to models. CMAC also provides oversight on operational matters related
to model development, performance monitoring and model validation activities,
including standards and regulatory matters.
Prior to submission to CMAC for approval, the models are validated by GMV, a
function which is independent of the business and the model developers.
GMV's analysis comprises review of model documentation, model design
and methodology, data validation, review of the model development and
calibration process, out-of-sample performance testing, and assessment of
compliance review against IFRS 9 rules and internal standards.
Model performance PMAs
The process of PMA identification, calculation and approval are prescribed in
the Credit Risk IFRS 9 ECL Model Family Standards, which are approved by the
Global Head, Model Risk Management. PMA calculations are reviewed by GMV and
submitted to CMAC for approval and will be removed when the estimates return
to being within the monitoring thresholds or validation standards. The level
of PMAs and remediation plans are regularly tracked at CMAC.
Judgemental adjustments
These comprise judgemental PMAs and judgemental management overlays, and
account for events that are not captured in the Base Case Forecast or the
resulting ECL calculated by the models. Judgemental adjustments must be
approved by the IIC having considered the nature of the event, why the risk is
not captured in the model, and the basis on which the quantum of the overlay
has been calculated. Judgemental adjustments are subject to quarterly review
and re-approval by the IIC, and will be released when the risks are no longer
relevant.
The IFRS 9 Impairment Committee:
• Oversees the appropriateness of all Business Model Assessment and Solely
Payments of Principal and Interest (SPPI) tests.
• Reviews and approves ECL for financial assets classified as stages 1, 2
and 3 for each financial reporting period.
• Reviews and approves stage allocation rules and thresholds.
• Approves material adjustments in relation to ECL for fair value through
other comprehensive income (FVOCI) and amortised cost financial assets.
• Reviews, challenges and approves base macroeconomic forecasts and the
multiple macroeconomic scenarios approach that are utilised in the
forward-looking ECL calculations.
Page 56
The IIC consists of senior representatives from Risk and Finance. It meets
atleast twice every quarter - once before the models are run to approve key
inputs into the calculation, and once after the models are run to approve the
ECL provisions and any judgemental management overlays that may be necessary.
The IIC is supported by an expert panel which also reviews and challenges the
base case projections and multiple macroeconomic scenarios. The expert panel
consists of members of Enterprise Risk Management (which includes
the Scenario Design team), Finance, Group Economic Research and country
representatives of major jurisdictions.
Traded risk
Counterparty Credit Risk
Counterparty Credit Risk is the potential for loss in the event of the default
of a derivative counterparty, after taking into account the value of eligible
collaterals and risk mitigation techniques. The Group's counterparty credit
exposures are included in the Credit Risk section.
Derivative financial instruments Credit Risk mitigation
The Group enters into master netting agreements, which in the event of
default result in a single amount owed by or to the counterparty through
netting the sum of the positive and negative mark-to-market values of
applicable derivative transactions.
In addition, the Group enters into collateral agreements with counterparties
when collateral is deemed a necessary or desirable mitigant to the exposure.
Cash collateral includes collateral called under a variation margin process
from counterparties if total uncollateralised mark-to-market exposure exceeds
the threshold and minimum transfer amount specified in the CSA. With certain
counterparties, the CSA is reciprocal and requires the Group to post
collateral if the overall mark-to-market values of positions are in
the counterparty's favour and exceed an agreed threshold. To mitigate
settlement risk of FX transactions, the Group uses safe settlement processes
like Delivery versus Payment (DvP) and Continuously Linked Settlement (CLS).
The group also enters into risk-reducing bilateral netting agreements to net
payments and receipts of the same currency on the same day.
Market Risk (audited)
Market Risk is the potential for fair value loss due to adverse moves in
financial markets.
A summary of our current policies and practices regarding Market Risk
management is provided in the 'Principal Risks' section.
The primary categories of Market Risk for the Group are:
• Interest Rate Risk: arising from changes in yield curves and implied
volatilities
• Foreign Exchange Risk: arising from changes in currency exchange rates
and implied volatilities
• Commodity Risk: arising from changes in commodity prices and implied
volatilities
• Credit Spread Risk: arising from changes in the price of debt
instruments and credit-linked derivatives and driven by factors other than the
level of risk-free interest rates
• Equity Risk: arising from changes in the prices of equities and implied
volatilities
Market Risk movements (audited)
Value at Risk (VaR) allows the Group to manage Market Risk across the trading
book and most of the fair valued non-trading books.
Global financial markets generally proved resilient in 2025. The first half of
the year was marked by trade concerns due to the US' raising tariffs to the
highest levels in a century and causing developed market equities to record a
year-to-date fall of 17 per cent in April. The second half of the year saw
fiscal and monetary stimulus with all major asset classes delivering positive
returns and developed market equities ending the year with a 22 per cent
return from the low in April. Highlights included: President Trump's April
tariff announcement triggering a two-day $5 trillion stock market retracement
followed by recovery as tariffs were paused and/or negotiated; the Federal
Reserve cutting rates three times in 2025, while the European Central Bank cut
rates eight times and the Bank of Japan hiked; oil prices reaching $78/barrel
in June after military confrontation between Israel and Iran but falling to
$60/barrel by year-end on increased supply and weakening demand; Big
Technology firms spending c$400 billion on AI infrastructure, raising concerns
about the viability of returns; notable defaults in Q4 in the Private Credit
market, including First Brands Group and Tricolor Holdings; and the price of
gold increasing by 65 per cent as it is increasingly perceived as a safe haven
asset.
Trading VaR
The Group's exposure to Market Risk arises predominantly from the Trading
book:
• The Group provides clients with access to markets, facilitation of which
entails the Group taking moderate Market Risk positions. All trading teams
support client activity. There are no proprietary trading teams. Hence, income
earned from Market Risk-related activities is primarily driven by the volume
of client activity.
Page 57
The average level of trading VaR in 2025 was $25.4 million, 20 per cent higher
than 2024 ($21.1 million). The increase in average trading VaR was driven by
an increase in market volatility combined with a VaR model enhancement to make
the model more responsive to market volatility.
Daily Value at Risk (VaR at 97.5%, one day) (audited)
Trading 2025 2024
Average High Low Year end Average High Low Year end
$million $million $million $million $million $million $million $million
Interest Rate Risk 12.7 19.8 7.9 11.5 12.7 22.0 7.0 12.0
Credit Spread Risk 9.7 13.4 5.4 8.6 6.6 9.6 4.8 5.4
Commodity Risk 9.9 21.7 2.9 6.3 4.8 10.0 2.4 4.3
Foreign Exchange Risk 6.3 12.3 3.1 3.9 9.2 15.0 5.0 7.4
Diversification effect (13.2) NA NA (12.8) (12.2) NA NA (8.3)
Total(1) 25.4 34.9 15.5 17.5 21.1 33.1 13.0 20.8
The following table sets out how trading VaR is distributed across the Group's
businesses:
Trading 2025 2024
Average High Low Year end Average High Low Year end
$million $million $million $million $million $million $million $million
Macro Trading(2) 18.1 28.2 9.9 11.2 17.0 29.9 10.0 17.1
Global Credit 10.9 15.8 6.9 7.2 6.8 11.1 4.3 5.8
Central Funding Desk 9.0 15.6 2.5 6.8 4.1 5.6 2.4 2.8
XVA 3.0 4.9 2.3 2.7 3.3 4.4 2.4 2.4
Diversification effect (15.6) NA NA (10.4) (10.1) NA NA (7.3)
Total(1) 25.4 34.9 15.5 17.5 21.1 33.1 13.0 20.8
1 The total VaR is non-additive across risk types due to diversification
effects, which is measured as the difference between the sum of the VaR by
individual risk type or business and the combined total VaR. As the maximum
and minimum occur on different days for different risk types or businesses, it
is not meaningful to calculate a portfolio diversification benefit for these
measures.
2 Macro Trading comprises the Rates, FX and Commodities businesses.
Risks not in VaR
In 2025, the main market risks not reflected in VaR were:
• basis risks for which the historical market price data is limited and
is therefore proxied, giving rise to potential proxy basis risk that is not
captured in VaR
• deal contingent FX and IR derivatives where the risk of a specific
condition not being met, typically the closing of a merger & acquisition
transaction, and the derivative being unwound at a loss is not captured in VaR
• potential depeg risk from currencies currently pegged or managed, where
the historical one-year VaR observation period may not reflect the possibility
of a change in the currency regime or a sudden depegging
Additional capital is set aside to cover such 'risks not in VaR'.
Backtesting
In 2025, there were no regulatory backtesting negative exceptions at Group
level.
An enhancement to the VaR model was implemented from January 2025 to increase
the model's responsiveness to abrupt upturns in market volatility.
Page 58
Structural foreign exchange exposures
The tables below set out the principal structural foreign exchange exposures
(net of investment hedges) of the Group and the net investment hedges using
derivative financial instruments to partly cover the Group's exposure to
various foreign exchange currencies.
2025 2024
Structural Net investment hedges Structural Net investment hedges
foreign exchange
foreign exchange
exposure $million
exposure $million
(net of investment (net of investment
hedges)
hedges)
$million $million
Hong Kong dollar 4,537 5,516 4,232 5,359
Singapore dollar 3,956 - 3,306 -
Chinese Renminbi 2,833 2,558 3,593 1,640
Indian rupee 2,160 3,099 3,480 1,784
Malaysian ringgit 1,637 - 1,539 -
Euro 1,449 - 1,112 -
Taiwanese dollar 1,221 1,135 1,087 1,092
Bangladeshi taka 1,102 - 1,113 -
Korean won 1,010 3,389 1,363 3,048
Thai baht 769 - 763 -
UAE dirham 636 1,852 807 1,470
Pakistani rupee 381 - 392 -
Indonesian rupiah 266 - 230 -
Other 3,848 29 3,407 -
Total 25,805 17,578 26,424 14,393
Changes in the valuation of these positions are taken to translation
reserves. For analysis of the Group's capital position and requirements, refer
to the 'Capital review' section.
Non-Trading VaR
The Group's exposure to Market Risk also arises from the Non-trading book:
• Treasury is required to hold a liquid assets buffer, much of which is
held in high-quality marketable debt securities
• The Group underwrites and sells down loans, and invests in select
investment grade debt securities with no trading intent
The average level of non-trading VaR in 2025 was $47 million, 37 per cent
higher than 2024 ($34.2 million). The increase in average non-trading VaR was
driven by an increase in market volatility combined with a VaR model
enhancement to make the model more responsive to market volatility and larger
US agency bonds inventory in the CIB non-trading portfolio.
Daily Value at Risk (VaR at 97.5%, one day) (audited)
Non-trading(1) 2025 2024
Average High Low Year end Average High Low Year end
$million $million $million $million $million $million $million $million
Interest Rate Risk 41.7 64.6 23.8 39.7 28.0 35.5 17.4 32.5
Credit Spread Risk 18.8 29.0 13.5 13.9 17.2 24.8 10.0 15.7
Commodity Risk 1.8 4.8 0.8 1.6 1.3 1.8 0.6 0.8
Equity Risk - - - - 0.4 0.9 - -
Diversification effect (15.3) NA NA (12.0) (12.7) NA NA (10.2)
Total(2) 47.0 66.6 32.3 43.2 34.2 44.3 28.6 38.8
Page 59
The following table sets out how non-trading VaR is distributed across the
Group's businesses:
Non-trading(1) 2025 2024
Average High Low Year end Average High Low Year end
$million $million $million $million $million $million $million $million
Treasury 34.3 47.8 26.0 29.3 32.9 40.8 26.9 38.6
Global Credit 24.2 34.1 9.9 24.1 5.0 13.4 2.4 8.8
Macro Trading 1.8 4.8 0.8 1.6 - - - -
Listed Private Equity - - - - 0.4 0.9 - -
Diversification effect (13.3) NA NA (11.8) (4.1) NA NA (8.6)
Total(2) 47.0 66.6 32.3 43.2 34.2 43.3 28.6 38.8
1 The non-trading book VaR generally does not include fair value loans.
2 The total VaR is non-additive across risk types due to diversification
effects, which is measured as the difference between the sum of the VaR by
individual risk type or business and the combined total VaR. As the maximum
and minimum occur on different days for different risk types or businesses, it
is not meaningful to calculate a portfolio diversification benefit for these
measures.
Liquidity and Funding Risk
Liquidity and Funding Risk is the risk that the Group may not have sufficient
stable or diverse sources of funding to meet its obligations as they fall due.
The Group's Liquidity and Funding Risk framework requires each country to
ensure that it operates within predefined liquidity limits and remains in
compliance with Group liquidity policies and practices, as well as local
regulatory requirements.
The Group achieves this through a combination of setting Risk Appetite and
associated limits, policy formation, risk measurement and monitoring,
prudential and internal stress testing, governance and review.
Throughout 2025, the Group retained a robust liquidity position across key
metrics. The Group continues to focus on improving the quality and
diversification of its funding mix and remains committed to supporting its
clients.
Primary sources of funding (audited)
The Group's funding strategy is largely driven by its policy to maintain
adequate liquidity at all times, in all countries. This is done to ensure the
Group can meet all of its obligations as they fall due. The Group's funding
profile is therefore well diversified across different sources, maturities and
currencies.
The Group's assets are funded predominantly by customer deposits, supplemented
with wholesale funding, which is diversified by type and maturity.
The Group maintains access to wholesale funding markets in all major financial
centres in which it operates. This seeks to ensure that the Group has market
intelligence, maintains stable funding lines and can obtain optimal pricing
when performing cashflow management activities.
In 2025, the Group issued approximately $10 billion worth of securities from
its holding company, Standard Chartered PLC. The issuances included $2 billion
of Additional Tier 1 securities and approximately $8 billion of senior debt
securities across multiple currencies. Over this same period, there were
Additional Tier 1 calls of $1 billion, Tier 2 calls of around $2.1 billion and
senior debt redemptions (calls and maturities) of $4.9 billion. There is
approximately $7.8 billion of the Group's Additional Tier 1, senior and
subordinated debt securities that are either falling due for repayment
contractually or callable by the Group before the end of Q4 2026.
Liquidity and Funding Risk metrics
The Group continually monitors key liquidity metrics, both on a country basis
and consolidated across the Group.
The following liquidity and funding Board Risk Appetite metrics define the
maximum amount and type of risk that the Group is willing to assume in pursuit
of its strategy: liquidity coverage ratio (LCR), internal liquidity stress
tests, recovery capacity and net stable funding ratio (NSFR). In addition
to the Board Risk Appetite, there are further limits that apply at Group
and country level to measure and monitor specific risks such as cross
currency risk, concentration risk and short term funding risk.
Liquidity coverage ratio (LCR)
The LCR is a regulatory requirement set to ensure the Group has sufficient
unencumbered high-quality liquid assets to meet its liquidity needs in a
30-calendar-day liquidity stress scenario.
The Group monitors and reports its liquidity positions under the Liquidity
Coverage Ratio (CRR) Part of the PRA Rulebook and has maintained its LCR above
the prudential requirement. The Group maintained robust liquidity ratios
throughout 2025.
At the reporting date, the Group LCR was 155 per cent (31 December 2024: 138
per cent), with a surplus to both Board-approved Risk Appetite and regulatory
requirements.
Page 60
Adequate liquidity was held across our footprint to meet all local prudential
LCR requirements where applicable. The Liquidity buffer reported below is
after deductions made to reflect the impact of limitations in the
transferability of liquidity held at an entity level across the Group.
This resulted in an adjustment of $44 billion to LCR HQLA as at 31 December
2025.
2025 2024
$million $million
Liquidity buffer 194,827 170,306
Total net cash outflows 125,383 123,226
Liquidity coverage ratio 155% 138%
Stressed coverage
The Group intends to maintain a prudent and sustainable funding and liquidity
position, in all countries, such that it can withstand a severe but plausible
liquidity stress.
Our approach to managing liquidity and funding is reflected in the Board-level
Risk Appetite Statement which includes the following:
"The Group should have sufficient stable and diverse sources of funding to
meet its contractual and contingent obligations as they fall due."
The Group's internal liquidity adequacy assessment process ('ILAAP') stress
testing framework covers the following stress scenarios:
• Standard Chartered-specific - Captures the liquidity impact from an
idiosyncratic event affecting Standard Chartered only with the rest of the
market assumed to be operating normally.
• Market wide - Captures the liquidity impact from a market-wide crisis
affecting all participants in a country, region or globally.
• Combined - Assumes both Standard Chartered-specific and Market-wide
events affect the Group simultaneously and hence is the most severe scenario.
All scenarios include, but are not limited to, modelled outflows for retail
and wholesale funding, off-balance sheet funding risk, cross-currency funding
risk, intraday risk, franchise risk and risks associated with a deterioration
of a firm's credit rating. Concentration risk approach captures single name
and industry concentrations.
ILAAP stress testing results show that, as at 31 December 2025, Group and all
countries were able to survive for a period of time with positive surpluses as
defined under each scenario. The results take into account currency
convertibility and portability constraints while calculating the liquidity
surplus at Group level.
Standard Chartered Bank's credit ratings as at 31 December 2025 were A+ with
stable outlook (Fitch), A+ with stable outlook (S&P) and A1 with stable
outlook (Moody's). As of 31 December 2025, the estimated contractual outflow
of a three-notch long-term ratings downgrade is $1.3 billion.
Advances-to-deposits ratio
This is defined as the ratio of total loans and advances to customers relative
to total customer deposits. An advances-to-deposits ratio below 100 per cent
demonstrates that customer deposits exceed customer loans as a result of the
emphasis placed on generating a high level of funding from customers.
The Group's advances-to-deposits ratio has remained stable in 2025 at 51.4 per
cent. Deposits from customers as at 31 December 2025 are $549,575 million (31
December 2024: $486,261 million).
2025 2024
$million $million
Total loans and advances to customers(1,2) 282,427 259,269
Total customer accounts(3) 549,575 486,261
Advances-to-deposits ratio 51.4% 53.3%
1 Excludes reverse repurchase agreement and other similar secured lending
of $8,242 million (31 December 2024: $9,660 million) and includes loans and
advances to customers held at fair value through profit and loss of $12,355
million (31 December 2024: $7,084 million).
2 Loans and advances to customers for the purpose of the
advances-to-deposits ratio excludes $8,474 million of approved balances held
with central banks, confirmed as repayable at the point of stress (31 December
2024: $19,187 million).
3 Includes customer accounts held at fair value through profit or loss of
$19,414 million (31 December 2024: $21,772 million).
Net stable funding ratio (NSFR)
The NSFR is a PRA regulatory requirement that stipulates institutions to
maintain a stable funding profile in relation to an assumed duration of their
assets and off-balance sheet activities over a one-year horizon. It is the
ratio between the amount of available stable funding (ASF) and the amount of
required stable funding (RSF). ASF factors are applied to balance sheet
liabilities and capital, based on their perceived stability and the amount of
stable funding they provide. Likewise, RSF factors are applied to assets and
off-balance sheet exposures according to the amount of stable funding they
require. The regulatory requirements for NSFR are to maintain a ratio of at
least 100 per cent. The average ratio for the past four quarters is 139 per
cent.
Page 61
Liquidity pool
The liquidity value of the Group's LCR eligible liquidity pool at the
reporting date was $195 billion. The figures in the table below account for
haircuts, currency convertibility and portability constraints per PRA rules
for transfer restrictions (amounting to $44 billion as at 31 December 2025),
and therefore are not directly comparable with the consolidated balance sheet.
A liquidity pool is held to offset stress outflows as defined in the LCR per
PRA rulebook.
2025 2024
$million $million
Level 1 securities
Cash and balances at central banks 78,290 76,094
Central banks, governments /public sector entities 101,122 74,182
Multilateral development banks and international organisations 10,623 14,386
Other 396 343
Total Level 1 securities 190,431 165,005
Level 2 A securities 3,643 4,367
Level 2 B securities 753 934
Total LCR eligible assets 194,827 170,306
Liquidity analysis of the Group's balance sheet (audited)
Contractual maturity of assets and liabilities
The following table presents assets and liabilities by maturity groupings
based on the remaining period to the contractual maturity date as at the
balance sheet date on a discounted basis. Contractual maturities do not
necessarily reflect actual repayments or cash flows.
Within the tables below, cash and balances with central banks, interbank
placements and investment securities that are fair valued through other
comprehensive income are used by the Group principally for liquidity
management purposes.
As at the reporting date, assets remain predominantly short-dated, with 58 per
cent maturing in less than one year.
2025
One Between Between Between Between Between Between More than Total
month one month and three months six months nine months one year two years five years $million
or less three months and and and and and and undated
$million $million six months nine months one year two years five years $million
$million $million $million $million $million
Assets
Cash and balances at central banks 66,116 - - - - - - 11,630 77,746
Derivative financial instruments 15,827 11,627 10,412 5,333 3,983 5,451 8,309 4,840 65,782
Loans and advances to banks(1,2) 21,323 21,142 12,878 6,884 5,379 7,437 3,672 1,858 80,573
Loans and advances to customers(1,2) 78,546 42,487 20,359 15,298 14,309 41,579 34,064 102,943 349,585
Investment securities(1) 20,439 36,061 19,632 17,255 15,152 33,157 49,952 71,096 262,744
Other assets(1) 18,173 50,528 1,406 994 1,474 388 31 10,531 83,525
Total assets 220,424 161,845 64,687 45,764 40,297 88,012 96,028 202,898 919,955
Liabilities
Deposits by banks(1,3) 32,466 2,001 1,370 690 644 2,105 2,359 4 41,639
Customer accounts(1,4) 415,483 42,912 29,297 12,974 13,881 8,931 58,405 3,291 585,174
Derivative financial instruments 16,630 14,829 9,795 5,701 3,534 5,145 8,392 4,178 68,204
Senior debt(5) 879 1,513 2,665 1,948 1,500 9,190 19,390 22,503 59,588
Other debt securities in issue(1) 2,885 3,412 9,108 5,880 3,725 2,188 1,384 697 29,279
Other liabilities 17,665 40,951 3,453 1,054 1,413 1,485 1,892 4,738 72,651
Subordinated liabilities and other borrowed funds 16 60 25 154 14 1,442 741 6,382 8,834
Total liabilities 486,024 105,678 55,713 28,401 24,711 30,486 92,563 41,793 865,369
Net liquidity gap (265,600) 56,167 8,974 17,363 15,586 57,526 3,465 161,105 54,586
1 Loans and advances, investment securities, deposits by banks, customer
accounts and debt securities in issue include financial instruments held at
fair value through profit or loss, see Note 13 Financial instruments.
2 Loans and advances include reverse repurchase agreements and other similar
secured lending of $96.1 billion (31 December 2024: $98.8 billion).
3 Deposits by banks include repurchase agreements and other similar secured
borrowing of $8.5 billion (31 December 2024: $8.7 billion).
4 Customer accounts include repurchase agreements and other similar secured
borrowing of $35.6 billion (31 December 2024: $37.0 billion).
5 Senior debt maturity profiles are based upon contractual maturity, which
may be later than call options over the debt held by the Group.
Page 62
2024
One Between Between Between Between Between Between More than Total
month one month three months six months nine months one year two years five years $million
or less and and and and and and and undated
$million three months six months nine months one year two years five years $million
$million $million $million $million $million $million
Assets
Cash and balances at central banks 55,646 - - - - - - 7,801 63,447
Derivative financial instruments 22,939 15,556 12,217 7,265 4,328 7,067 7,448 4,652 81,472
Loans and advances to banks(1,2) 22,381 21,722 10,588 6,771 4,986 8,407 3,715 1,990 80,560
Loans and advances to customers(1,2) 65,688 58,765 25,739 15,479 16,192 31,240 31,766 94,688 339,557
Investment securities(1) 13,016 25,886 21,546 14,789 14,688 32,815 41,423 62,418 226,581
Other assets(1) 12,601 32,130 1,333 381 931 71 64 10,560 58,071
Total assets 192,271 154,059 71,423 44,685 41,125 79,600 84,416 182,109 849,688
Liabilities
Deposits by banks(1,3) 24,293 2,345 1,621 848 571 4,342 1,939 3 35,962
Customer accounts(1,4) 379,926 37,502 25,863 10,152 10,123 9,695 47,367 2,635 523,263
Derivative financial instruments 21,680 17,115 11,773 7,018 4,353 6,660 8,144 5,321 82,064
Senior debt(5) 609 1,755 4,074 2,132 932 7,926 18,784 17,886 54,098
Other debt securities in issue(1) 2,734 2,663 6,550 4,535 5,015 851 1,206 688 24,242
Other liabilities 12,173 43,574 3,020 1,441 155 4,494 682 2,854 68,393
Subordinated liabilities and other borrowed funds - 64 23 180 13 359 1,978 7,765 10,382
Total liabilities 441,415 105,018 52,924 26,306 21,162 34,327 80,100 37,152 798,404
Net liquidity gap (249,144) 49,041 18,499 18,379 19,963 45,273 4,316 144,957 51,284
1 Loans and advances, investment securities, deposits by banks, customer
accounts and debt securities in issue include financial instruments held at
fair value through profit or loss, see Note 13 Financial instruments.
2 Loans and advances include reverse repurchase agreements and other similar
secured lending of $96.1 billion (31 December 2024: $98.8 billion).
3 Deposits by banks include repurchase agreements and other similar secured
borrowing of $8.5 billion (31 December 2024: $8.7 billion).
4 Customer accounts include repurchase agreements and other similar secured
borrowing of $35.6 billion (31 December 2024: $37.0 billion).
5 Senior debt maturity profiles are based upon contractual maturity, which
may be later than call options over the debt held by the Group.
Behavioural maturity of financial assets and liabilities
The cash flows presented in the previous section reflect the cash flows that
will be contractually payable over the residual maturity of the instruments.
However, contractual maturities do not necessarily reflect the timing of
actual repayments or cashflow. In practice, certain assets and liabilities
behave differently from their contractual terms, especially for short-term
customer accounts, credit card balances and overdrafts, which extend to a
longer period than their contractual maturity. On the other hand, mortgage
balances tend to have a shorter repayment period than their contractual
maturity date. Expected customer behaviour is assessed and managed on a
country basis using qualitative and quantitative techniques, including
analysis of observed customer behaviour over time.
Maturity of financial liabilities on an undiscounted basis (audited)
The following table analyses the contractual cash flows payable for the
Group's financial liabilities by remaining contractual maturities on an
undiscounted basis (except for trading liabilities and derivatives not
treated as hedging derivatives). The financial liability balances in the table
below will not agree with the balances reported in the consolidated balance
sheet as the table incorporates all contractual cashflows, on an undiscounted
basis, relating to both principal and interest payments. Derivatives not
treated as hedging derivatives are included in the 'On demand' time bucket and
not by contractual maturity.
Within the 'More than five years and undated' maturity band are undated
financial liabilities, the majority of which relate to subordinated debt, on
which interest payments are not included as this information would not be
meaningful, given the instruments are undated. Interest payments on these
instruments are included within the relevant maturities up to five years.
Page 63
2025
One month Between Between Between Between Between Between More than Total
or less one month three months six months nine months one year two years five years $million
$million and three months and and and and and and undated
$million six months nine months one year two years five years $million
$million $million $million $million $million
Deposits by banks 32,536 2,012 1,381 704 658 2,137 2,395 4 41,827
Customer accounts 416,850 43,261 29,727 13,247 14,222 9,090 58,627 4,033 589,057
Derivative financial instruments 67,101 13 35 34 51 110 492 512 68,348
Debt securities in issue 4,081 5,139 12,176 8,290 5,590 13,118 24,492 26,510 99,396
Subordinated liabilities and other borrowed funds 35 116 50 164 15 1,529 978 11,934 14,821
Other liabilities 16,179 41,722 3,276 1,044 1,410 1,485 1,892 6,171 73,179
Total liabilities 536,782 92,263 46,645 23,483 21,946 27,469 88,876 49,164 886,628
2024
One month Between Between Between Between Between Between More than Total
or less one month three months six months nine months one year two years five years $million
$million and three months and and and and and and undated
$million six months nine months one year two years five years $million
$million $million $million $million $million
Deposits by banks 24,303 2,360 1,660 862 589 4,347 1,939 4 36,064
Customer accounts 380,377 37,790 26,277 10,384 10,438 9,937 47,642 3,396 526,241
Derivative financial instruments 80,055 13 12 10 3 216 592 1,163 82,064
Debt securities in issue 3,622 4,551 11,007 7,056 6,319 10,261 23,184 21,337 87,337
Subordinated liabilities and other borrowed funds 19 134 46 206 14 392 2,345 13,800 16,956
Other liabilities 10,421 44,933 2,894 1,408 152 4,433 682 4,802 69,725
Total liabilities 498,797 89,781 41,896 19,926 17,515 29,586 76,384 44,502 818,387
Interest Rate Risk in the Banking Book
The following table provides the estimated impact to a hypothetical base case
projection of the Group's earnings under the following scenarios:
• A 50 basis point parallel interest rate shock (up and down) to the
current market-implied path of rates, across all yield curves
• A 100 basis point parallel interest rate shock (up and down) to the
current market-implied path of rates, across all yield curves
These interest rate shock scenarios assume all other economic variables remain
constant. The sensitivities shown represent the estimated change to a
hypothetical base case projected net interest income (NII), plus the change in
interest rate implied income and expense from FX swaps used to manage banking
book currency positions, under the different interest rate shock scenarios.
The base case projected NII is based on the current market-implied path of
rates and forward rate expectations. The NII sensitivities below stress this
base case by a further 50 or 100bps. Actual observed interest rate changes
will likely differ from market expectation. Accordingly, the shocked NII
sensitivity does not represent a forecast of the Group's net interest income.
The interest rate sensitivities are indicative stress tests and based on
simplified scenarios, estimating the aggregate impact of an unanticipated,
instantaneous parallel shock across all yield curves over a one-year horizon.
The assessment assumes that the size and mix of the balance sheet remain
constant and that there are no specific management actions in response to the
change in rates. No assumptions are made in relation to the impact on credit
spreads in a changing rate environment.
Significant modelling and behavioural assumptions are made regarding scenario
simplification, market competition, pass-through rates, asset and liability
re-pricing tenors, and price flooring. In particular, the assumption that
interest rates of all currencies and maturities shift by the same amount
concurrently, and that no actions are taken to mitigate the impacts arising
from this are considered unlikely. Reported sensitivities will vary over time
due to a number of factors including changes in balance sheet composition,
market conditions, customer behaviour and risk management strategy. Therefore,
while the NII sensitivities are a relevant measure of the Group's interest
rate exposure, they should not be considered an income or profit forecast.
Page 64
Net interest income sensitivity (audited)
Estimated one-year impact to earnings from a parallel shift in yield curves 2025
at the beginning of the period of:
USD bloc HKD bloc SGD bloc GBP bloc CNY bloc(2) JPY bloc EUR bloc Other currency bloc(1) Total
$million $million $million $million $million $million $million $million $million
+ 50 basis points 50 60 20 20 - 10 20 80 260
- 50 basis points (90) (30) (20) (20) (10) (10) (20) (90) (290)
+ 100 basis points 90 120 30 50 - 20 30 160 500
- 100 basis points (170) (80) (30) (50) (30) (30) (40) (190) (620)
2024
+ 50 basis points 20 30 10 10 20 10 10 100 210
- 50 basis points (40) (30) (20) (10) (30) (10) (20) (110) (270)
+ 100 basis points 30 60 20 20 30 10 30 190 390
- 100 basis points (90) (50) (40) (30) (50) (20) (40) (230) (550)
1 The largest exposures within the Other currency bloc are TWD and KRW.
2 The +50bps and +100bps CNY sensitivities are positive, but round to zero.
As at 31 December 2025, the Group estimates the one-year impact of an
instantaneous, parallel increase across all yield curves of 50 basis points to
increase projected NII by $260 million. The equivalent impact from a parallel
decrease of 50 basis points would result in a reduction in projected NII of
$290 million. The Group estimates the one-year impact of an instantaneous,
parallel increase across all yield curves of 100 basis points to increase
projected NII by $500 million. The equivalent impact from a parallel decrease
of 100 basis points would result in a reduction in projected NII of $620
million.
The benefit from rising interest rates is primarily from reinvesting at higher
yields and from assets re-pricing faster and to a greater extent than
deposits. NII sensitivity in falling rate scenarios has increased versus 31
December 2024, due to an increase in balance sheet size, with assets repricing
faster than liabilities, and due to lower HIBOR rates. This impact was
partially offset by an increase in programmatic hedging.
Over the course of 2025, the notional of interest rate swaps, Hold to Collect
(HTC)-accounted bond portfolios and fixed rate commercial assets used to
reduce NII sensitivity through the cycle increased from $80 billion to $109
billion. As at 31 December 2025, the $87 billion interest rate swaps and
HTC-accounted bond portfolios had a yield of 3.4 per cent and a weighted
average maturity of 2.5 years, which reflects the behaviouralised lives of the
rate-insensitive deposit and equity balances that they hedge.
Page 65
Operational and Technology Risk
Operational and Technology Risk profile
Operational and Technology risks remain elevated in areas such as Operational
Resilience, Third-Party Risk Management, Change Mismanagement Risk and
Transaction Processing Risk, which are being addressed by ongoing processes
and system enhancement programmes.
The Group continues to monitor and manage Operational and Technology risks
associated with external factors such as geopolitical factors, Nth Party Risk
and the risk arising from adoption and use of Artificial Intelligence. This
enables the Group to keep pace with new business developments, whilst ensuring
that its risk and control frameworks evolve accordingly. The Group continues
to enhance its risk management capabilities to understand the full spectrum of
risks in the operating environment, strengthen its defences and improve its
overall resilience.
Operational and Technology risk events and losses
Operational losses are one indicator of the effectiveness and robustness of
our non-financial risk and control environment
The Group's profile of operational loss events in 2025 and 2024 is summarised
in the table below, which shows the distribution of gross operational losses
by Basel business line. In 2025, Payments and Settlements is higher due to
high value payment related events and Retail Banking due to prior period
adjustments.
Distribution of Operational Losses by Basel business line(2) % Loss
2025 2024(1)
Agency Services 8.9% 0.0%
Asset Management 0.0% 0.0%
Commercial Banking 5.2% 1.3%
Corporate Finance 0.0% 0.1%
Corporate Items 8.1% 61.7%
Payment and Settlements 30.6% 7.6%
Retail Banking 42.1% 27.1%
Retail Brokerage 0.0% 0.0%
Trading and Sales 5.1% 2.2%
The Group's profile of operational loss events in 2025 and 2024 is also
summarised by Basel event type in the table below. It shows the distribution
of gross operational losses by Basel event type.
Distribution of Operational Losses by Basel event type(2) % Loss
2025 2024(1)
Business disruption and system failures 1.9% 1.7%
Clients products and business practices 1.5% 22.9%
Damage to physical assets 0.0% 0.0%
Employment practices and workplace safety 0.0% 0.1%
Execution delivery and process management 78.5% 71.8%
External fraud 12.5% 3.2%
Internal fraud 5.6% 0.3%
Other principal risks
The losses arising from operational failures for other principal and
integrated risks are reported as operational losses. Operational losses do not
include operational risk-related credit impairments.
1 Losses in 2024 have been restated to include incremental events
recognised in 2025.
2 Operational losses for 2024 and 2025 are based on data as of 5 January
2026.
Page 66
Capital review
The Capital review provides an analysis of the Group's capital and leverage
position, and requirements.
Capital summary
The Group's capital, leverage and minimum requirements for own funds and
eligible liabilities (MREL) position is managed within the Board-approved risk
appetite. The Group is well capitalised with low leverage and high levels of
loss-absorbing capacity.
2025 2024
CET1 capital 14.1% 14.2%
Tier 1 capital 17.0% 16.9%
Total capital 20.6% 21.5%
Leverage ratio 4.7% 4.8%
MREL ratio 33.5% 34.2%
Risk-weighted assets (RWA) $million 258,031 247,065
The Group's capital, leverage and MREL positions were all above current
requirements and Board-approved risk appetite. For further detail see the
Capital section in the Standard Chartered PLC Pillar 3 Disclosures for FY
2025. The Group's CET1 capital was 12 basis points lower than 2024. Profits,
movements in other comprehensive income and FX translation reserves were
offset by RWA growth, increase in regulatory deductions and distributions
(including ordinary share buybacks of $2.8 billion during the year).
The PRA updated the Group's Pillar 2A requirement during Q3 2025. As at 31
December 2025, the Group's Pillar 2A was 3.3 per cent of RWA, of which at
least 1.9 per cent must be held in CET1 capital. The Group's minimum CET1
capital requirement was 10.3 per cent at 31 December 2025.
The Group CET1 capital ratio as at 31 December 2025 reflects the share
buyback of $2.8 billion during the year. The CET1 capital ratio also includes
an accrual for the FY 2025 dividend. The Board has recommended a final
dividend for FY 2025 of $1,092 million or 49 cents per share resulting in
a full year 2025 dividend of 61 cents per share, a 64 per cent increase on
the 2024 dividend per share. In addition, the Board has announced a further
share buyback of $1.5 billion, the impact of which will reduce the Group's
CET1 capital by around 58 basis points in the first quarter of 2026.
The Group expects to manage CET1 capital dynamically within our 13-14 per cent
target range, in support of our aim of delivering future sustainable
shareholder distributions.
The Group's MREL leverage requirement as at 31 December 2025 was 28.4 per cent
of RWA. This is composed of a minimum requirement of 24.5 per cent of RWA and
the Group's combined buffer (comprising the capital conservation buffer, the
G-SII buffer and the countercyclical buffer). The Group's MREL ratio was 33.5
per cent of RWA and 9.2 per cent of leverage exposure at 31 December 2025.
During 2025, the Group successfully raised $9.9 billion of MREL eligible
securities from its holding company, Standard Chartered PLC. Issuance includes
$2.0 billion of Additional Tier 1 and $7.9 billion of callable senior debt.
The Group raised an additional $0.6 billion of Additional Tier 1 and $3.7
billion in senior securities post the balance sheet date, i.e. not included in
the FY 2025 MREL position.
The Group is a G-SII, with a 1.0 per cent G-SII CET1 capital buffer.
Page 67
Capital base(1) (audited)
2025 2024
$million $million
CET1 capital instruments and reserves
Capital instruments and the related share premium accounts 5,120 5,201
Of which: share premium accounts 3,989 3,989
Retained earnings 24,528 24,950
Accumulated other comprehensive income (and other reserves) 10,406 8,724
Non-controlling interests (amount allowed in consolidated CET1) 262 235
Independently audited year-end profits 5,100 4,072
Foreseeable dividends (1,377) (923)
CET1 capital before regulatory adjustments 44,039 42,259
CET1 regulatory adjustments
Additional value adjustments (prudential valuation adjustments) (693) (624)
Intangible assets (net of related tax liability) (6,145) (5,696)
Deferred tax assets that rely on future profitability (excludes those arising (15) (31)
from temporary differences)
Fair value reserves related to net losses on cash flow hedges (315) (4)
Deduction of amounts resulting from the calculation of excess expected loss (599) (702)
Net gains on liabilities at fair value resulting from changes in own credit 412 278
risk
Defined-benefit pension fund assets (149) (149)
Fair value gains arising from the institution's own credit risk related to (70) (97)
derivative liabilities
Exposure amounts which could qualify for risk weighting of 1250% (25) (44)
Total regulatory adjustments to CET1 (7,599) (7,069)
CET1 capital 36,440 35,190
Additional Tier 1 capital (AT1) instruments 7,529 6,502
AT1 regulatory adjustments (20) (20)
Tier 1 capital 43,949 41,672
Tier 2 capital instruments 9,308 11,449
Tier 2 regulatory adjustments (30) (30)
Tier 2 capital 9,278 11,419
Total capital 53,227 53,091
Total risk-weighted assets (unaudited) 258,031 247,065
1 Capital base is prepared on the regulatory scope of consolidation.
Page 68
Movement in total capital (audited)
2025 2024
$million $million
CET1 at 1 January 35,190 34,314
Ordinary shares issued in the period and share premium - -
Share buyback (2,800) (2,500)
Profit for the period 5,100 4,072
Foreseeable dividends deducted from CET1 (1,377) (923)
Difference between dividends paid and foreseeable dividends (557) (469)
Movement in goodwill and other intangible assets (449) 432
Foreign currency translation differences 931 (525)
Non-controlling interests 26 18
Movement in eligible other comprehensive income 283 636
Deferred tax assets that rely on future profitability 16 10
Decrease/(increase) in excess expected loss 101 52
Additional value adjustments (prudential valuation adjustment) (69) 106
IFRS 9 transitional impact on regulatory reserves including day one - 2
Exposure amounts which could qualify for risk weighting 18 -
Fair value gains arising from the institution's own Credit Risk related to 27 19
derivative liabilities
Others - (54)
CET1 at 31 December 36,440 35,190
AT1 at 1 January 6,482 5,492
Net issuances (redemptions) 1,026 1,015
Foreign currency translation difference and others 1 (25)
AT1 at 31 December 7,509 6,482
Tier 2 capital at 1 January 11,419 11,935
Regulatory amortisation (227) 1,189
Net issuances (redemptions) (2,175) (1,517)
Foreign currency translation and fair value differences 251 (191)
Tier 2 ineligible minority interest 10 (3)
Others - 6
Tier 2 capital at 31 December 9,278 11,419
Total capital at 31 December 53,227 53,091
The main movements in capital in the period were:
• CET1 capital increased by $1.2 billion as retained profits of $5.1
billion, movement in other comprehensive income of $0.5 billion and foreign
currency translation impact of $0.9 billion were partly offset by share
buyback of $2.8 billion, distributions paid and foreseeable of $1.9 billion,
and an increase in regulatory deductions and other movements of $0.5 billion.
• AT1 capital increased by $1.0 billion following the issuance of $1.0
billion of 7.63 per cent securities and $1.0 billion of 7.00 per cent
securities partly offset by the redemption of $1.0 billion of 6.00 per cent
securities.
• Tier 2 capital decreased by $2.1 billion due to the redemption of $2.2
billion of Tier 2 during the year partly offset by the reversal of regulatory
amortisation and foreign currency translation impact.
Page 69
Risk-weighted assets by business
2025
Credit risk Operational risk Market risk Total risk
$million $million $million $million
Corporate & Investment Banking 125,366 23,842 26,713 175,921
Wealth & Retail Banking 45,075 11,707 - 56,782
Ventures 4,352 475 76 4,903
Central & other items 17,352 (801) 3,874 20,425
Total risk-weighted assets 192,145 35,223 30,663 258,031
2024(1)
Credit risk Operational risk Market risk Total risk
$million $million $million $million
Corporate & Investment Banking 124,635 19,987 24,781 169,403
Wealth & Retail Banking 47,764 9,523 - 57,287
Ventures 2,243 142 21 2,406
Central & other items 14,661 (173) 3,481 17,969
Total risk-weighted assets 189,303 29,479 28,283 247,065
Movement in risk-weighted assets
Credit risk
Corporate & Wealth & Ventures Central & Total Operational risk Market risk Total risk
Investment Banking
Retail Banking
$million
other items
$million
$million
$million
$million
$million
$million
$million
At 1 January 2024 116,621 50,771 1,885 22,146 191,423 27,861 24,867 244,151
Assets growth & mix 11,616 (491) 358 (5,176) 6,307 - - 6,307
Asset quality (2,472) (316) - (384) (3,172) - - (3,172)
Model updates 1,620 (1) - - 1,619 - (400) 1,219
Methodology and policy changes 38 39 - - 77 - (1,300) (1,223)
Acquisitions and disposals - - - - - - - -
Foreign currency translation (2,788) (1,397) - (691) (4,876) - - (4,876)
Other, Including non-credit risk movements - (841) - (1,234) (2,075) 1,618 5,116 4,659
At 31 December 2024(1) 124,635 47,764 2,243 14,661 189,303 29,479 28,283 247,065
Assets growth & mix (1,712) (3,361) 2,109 1,919 (1,045) - - (1,045)
Asset quality 1,343 (483) - 567 1,427 - - 1,427
Model updates (1,265) 198 - - (1,067) - 63 (1,004)
Methodology and policy changes - - - - - - - -
Acquisitions and disposals (293) (92) - (19) (404) - - (404)
Foreign currency translation 2,658 1,049 - 224 3,931 - - 3,931
Other, Including non-credit risk movements - - - - - 5,744 2,317 8,061
At 31 December 2025 125,366 45,075 4,352 17,352 192,145 35,223 30,663 258,031
1 RWA balances are now presented to reflect the RNS on Presentation of
Financial Information issued on 2 April 2025. Prior periods have been
re-presented and there is no change in total RWA.
Page 70
Movements in risk-weighted assets
RWA increased by $11.0 billion, or 4.4 per cent from 31 December 2024 to
$258.0 billion. This was due to the increase in Credit Risk RWA of $2.8
billion, Market Risk RWA of $2.4 billion and Operational Risk RWA of $5.7
billion.
Corporate & Investment Banking
Credit Risk RWA increased by $0.7 billion, or 0.6 per cent, from 31 December
2024 to $125.4 billion due to:
• $2.7 billion increase from foreign currency translation
• $1.3 billion increase mainly due to deterioration in asset quality from
sovereign downgrades and other client grade moves
• $1.7 billion decrease from changes in asset growth and mix
- $5.0 billion decrease from optimisation actions
- $3.3 billion increase from asset growth
• $1.3 billion decrease from industry-wide regulatory changes to align IRB
model performance
• $0.3 billion decrease from exit of business in Cameroon.
Wealth & Retail Banking
Credit Risk RWA decreased by $2.7 billion, or 5.6 per cent, from 31 December
2024 to $45.1 billion mainly due to:
• $3.4 billion decrease from changes in asset growth and mix
• $0.5 billion decrease mainly due to improvement in asset quality
• $0.1 billion decrease from exit of business in Gambia
• $1.0 billion increase from foreign currency translation
• $0.2 billion increase from industry-wide regulatory changes to align IRB
model performance
Ventures
Ventures is comprised of Mox Bank Limited, Trust Bank and SC Ventures. Credit
Risk RWA increased by $2.1 billion, or 94.0 per cent from 31 December 2024 to
$4.4 billion from asset balance growth from Mox Bank Limited and SC Ventures.
Central & other items
Central & other items RWA mainly relate to the Treasury Market's liquidity
portfolio, equity investments and current and deferred tax assets.
Credit Risk RWA increased by $2.7 billion, or 18.4 per cent, from 31 December
2024 to $17.4 billion mainly due to:
• $1.9 billion increase from changes in asset growth and mix
• $0.6 billion increase due to deterioration in asset quality mainly from
sovereign downgrades and other client grade moves
• $0.2 billion increase from foreign currency translation.
Market Risk
Total Market Risk RWA increased by $2.4 billion, or 8.4 per cent, from 31
December 2024 to $30.7 billion mainly due to a $2.1 billion increase in
Standardised Approach (SA) Specific Interest Rate Risk RWA due primarily to
increases in the Credit Trading Portfolio.
Operational Risk
Operational Risk RWA increased by $5.7 billion, or 19.5 per cent, from 31
December 2024 to $35.2 billion, primarily driven by an increase in average
income measured over a rolling three-year time horizon. The Group has brought
forward the annual refresh of Operational Risk RWA with RWA increase
recognised in Q4'25 rather than Q1'26, as earlier guided, resulting in two
operational risk RWA increases in 2025.
Page 71
Leverage ratio
The Group's leverage ratio, which excludes qualifying claims on central banks,
was 4.7 per cent at FY 2025, which was above the current minimum requirement
of 3.7 per cent. The leverage ratio was 11 basis points lower than FY 2024.
Leverage exposure increased by $69.8 billion from the increase in Loans and
advances and other assets of $85.2 billion, an increase in Derivatives of $3.7
billion partly offset by decrease in claims on central banks of $16.9 billion,
decrease in Off-balance sheet items of $1.3 billion, and decrease in asset
amounts deducted in determining Tier 1 capital (Leverage) of $0.8 billion.
Tier 1 capital increased by $2.3 billion as CET1 capital increased by $1.2
billion and AT1 capital increased by $1.0 billion following the issuance of
$2.0 billion partly offset by the redemption of $1.0 billion AT1 securities.
Leverage ratio 2025 2024
$million $million
Tier 1 capital (end point) 43,949 41,672
Derivative financial instruments 65,782 81,472
Derivative cash collateral 12,868 11,046
Securities financing transactions (SFTs) 96,096 98,801
Loans and advances and other assets 745,209 658,369
Total on-balance sheet assets 919,955 849,688
Regulatory consolidation adjustments(1) (96,565) (76,197)
Derivatives adjustments
Derivatives netting (51,827) (63,934)
Adjustments to cash collateral (10,011) (10,169)
Net written credit protection 2,604 2,075
Potential future exposure on derivatives 58,062 51,323
Total derivatives adjustments (1,172) (20,705)
Counterparty risk leverage exposure measure for SFTs 6,715 4,198
Off-balance sheet items 117,341 118,607
Regulatory deductions from Tier 1 capital (8,084) (7,247)
Total exposure measure excluding claims on central banks 938,190 868,344
Leverage ratio excluding claims on central banks (%) 4.7% 4.8%
Average leverage exposure measure excluding claims on central banks 949,214 894,296
Average leverage ratio excluding claims on central banks (%) 4.6% 4.7%
Countercyclical leverage ratio buffer 0.1% 0.1%
G-SII additional leverage ratio buffer 0.4% 0.4%
1 Includes adjustment for qualifying central bank claims and unsettled
regular way trades
Page 72
Statement of directors' responsibilities
The directors are responsible for preparing the Annual Report and the Group
and Company financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare Group and Company financial
statements for each financial year. Under that law:
• the Group financial statements have been prepared in accordance with
UK-adopted International Accounting Standards and International Financial
Reporting Standards as adopted by the European Union
• the Company financial statements have been properly prepared in
accordance with UK-adopted International Accounting Standards as applied in
accordance with section 408 of the Companies Act 2006, and
• the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of their profit or loss for that period.
In preparing each of the Group and Company financial statements, the directors
are required to:
• select suitable accounting policies and then apply them consistently
• make judgements and estimates that are reasonable, relevant and reliable
• state whether they have been prepared in accordance with UK-adopted
International Accounting Standards and International Financial Reporting
Standards as adopted by the European Union
• assess the Group and the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern, and
• use the going concern basis of accounting unless they either intend to
liquidate the Group or the Company or to cease operations or have no
realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that its financial statements comply with the Companies
Act 2006. They are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and detect fraud and other
irregularities.
Under applicable law and regulations, the directors are also responsible for
preparing a Strategic Report, a Directors' Report, a Directors' Remuneration
Report and a Corporate Governance Statement that comply with that law
and those regulations.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK governing the preparation and dissemination of financial
statements differs from legislation in other jurisdictions.
Responsibility statement of the directors in respect of the annual financial report
We confirm that to the best of our knowledge:
• The financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole, and
• The Strategic report includes a fair review of the development and
performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together with a
description of the emerging risks and uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Group's position and performance, business model
and strategy.
By order of the Board.
Bill Winters, CBE
Group Chief Executive
24 February 2026
Page 73
Shareholder information
Dividend and interest payment dates
Ordinary shares Final dividend
Results and dividend announced 24 February 2026
Ex-dividend date 18 (HK) 19 (UK) March 2026
Record date for dividend 20 March 2026
Last date to amend currency election instructions for cash dividend* 16 April 2026
Dividend payment date 14 May 2026
* In either US dollars, pound sterling or Hong Kong dollars.
Preference shares 1st half yearly dividend 2nd half yearly dividend
73 ∕8 per cent non-cumulative irredeemable preference shares of £1 1 April 2026 1 October 2026
81 ∕4 per cent non-cumulative irredeemable preference shares of £1 each 1 April 2026 1 October 2026
6.409 per cent non-cumulative redeemable preference shares of $5 each 30 January and 30 April 2026 30 July and 30 October 2026
7.014 per cent non-cumulative redeemable preference shares of $5 each 30 January 2026 30 July 2026
Annual General Meeting (AGM)
The AGM will be held on Thursday, 7 May 2026 at 11.00am UK time (6.00pm Hong
Kong time). Further details regarding the format, location and business to be
transacted at the meeting will be disclosed within the 2026 Notice of AGM.
Interim results
The interim results will be announced to the London Stock Exchange and the
Stock Exchange of Hong Kong Limited and put on the Company's website.
Country-by-country reporting
In accordance with the requirements of the Capital Requirements
(country-by-country reporting) Regulations 2013, the Group will publish
additional country-by-country information in respect of the year ended 31
December 2025, on or before 31 December 2026. We have also published our UK
tax strategy.
Pillar 3 reporting
In accordance with the Pillar 3 disclosure requirements, the Group has
published the Pillar 3 disclosures in respect of the year ended 31 December
2025.
ShareCare
ShareCare is available to shareholders on the Company's UK register who have a
UK address and bank account. It allows you to hold your Standard Chartered PLC
shares in a nominee account. Your shares will be held in electronic form, so
you will no longer have to worry about keeping your share certificates safe.
If you join ShareCare, you will still be invited to attend the Company's AGM
and you will receive any dividend at the same time as everyone else. ShareCare
is free to join and there are no annual fees to pay.
Donating shares to ShareGift
Shareholders who have a small number of shares often find it uneconomical to
sell them. An alternative is to consider donating them to the charity
ShareGift (registered charity 1052686), which collects donations of unwanted
shares until there are enough to sell and uses the proceeds to support UK
charities. There is no implication for capital gains tax (no gain or loss)
when you donate shares to charity, and UK taxpayers may be able to claim
income tax relief on the value of their donation.
Bankers' Automated Clearing System
Dividends can be paid straight into your bank or building society account.
Registrars and shareholder enquiries
If you have any enquiries relating to your shareholding and you hold your
shares on the UK register, please contact our registrar at
investorcentre.co.uk. Alternatively, please contact Computershare Investor
Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ or call the
shareholder helpline number on 0370 702 0138. If you hold your shares on the
Hong Kong branch register and you have enquiries, please contact Computershare
Hong Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183 Queen's
Road East, Wan Chai, Hong Kong.
Page 74
Substantial shareholders
The Company and its shareholders have been granted partial exemption from the
disclosure requirements under Part XV of the Securities and Futures Ordinance
(SFO). As a result of this exemption, shareholders, directors and chief
executives, no longer have an obligation under Part XV of the SFO (other than
Divisions 5, 11 and 12 thereof) to notify the Company of substantial
shareholding interests, and the Company is no longer required to maintain a
register of interests of substantial shareholders under section 336 of the
SFO, nor a register of directors' and chief executives' interests under
section 352 of the SFO. The Company is, however, required to file with The
Stock Exchange of Hong Kong Limited any disclosure of interests made in the
UK.
Taxation
The Company has a Group-wide policy on tax strategy and governance, which
details that we seek to apply our approach to tax in all jurisdictions in
which we operate and are committed to paying all taxes legally due. This
policy is approved by the Board annually and is available on our website
sc.com/regulatory-disclosures
No tax is currently withheld from payments of dividends by Standard Chartered
PLC. Shareholders and prospective purchasers should consult an appropriate
independent professional adviser regarding the tax consequences of an
investment in shares in light of their particular circumstances, including the
effect of any national, state or local laws.
Chinese translation
If you would like a Chinese language version of the 2025 Annual Report, please
contact Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell
Centre, 183 Queen's Road East, Wan Chai, Hong Kong.
二〇二五年年報之中文譯本可向香港中央證券登記有限公司索取,
地址：香港灣仔皇后大道東183號合和中心17M樓。
Shareholders on the Hong Kong branch register who have asked to receive
corporate communications in either Chinese or English can change this election
by contacting Computershare. If there is any inconsistency between the English
version of this document and any translation of the English version, the
English version shall prevail.
Electronic communications
If you hold your shares on the UK register and in future you would like to
receive the Annual Report electronically rather than by post, please register
online at: www.investorcentre.co.uk. Click on 'register now' and follow the
instructions. You will need to have your Shareholder or ShareCare reference
number to hand. You can find this on your share certificate or ShareCare
statement. Once you have registered and confirmed your email communication
preference, you will receive future notifications via email enabling you to
submit your proxy vote online. In addition, as a member of Investor Centre,
you will be able to manage your shareholding online and change your bank
mandate or address information.
Important notices
Forward-looking statements
The information included in this document may contain 'forward-looking
statements' based upon current expectations or beliefs as well as statements
formulated with assumptions about future events. Forward-looking statements
include, without limitation, projections, estimates, commitments, plans,
approaches, ambitions and targets (including, without limitation, ESG
commitments, ambitions and targets). 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 to any of the foregoing. Forward-looking statements may also
(or additionally) be identified by the fact that they do not relate only to
historical or current facts.
By their very nature, forward-looking statements are subject to known and
unknown risks and uncertainties and 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 which could cause the Group's actual results and its
plans and objectives to differ materially from those expressed or implied in
forward-looking statements. The factors include (but are not limited to):
changes in global, political, economic, business, competitive and market
forces or conditions, or in future exchange and interest rates; changes in
environmental, geopolitical, social or physical risks; legal, regulatory and
policy developments, including regulatory measures addressing climate change
and broader sustainability-related issues; the development of standards and
interpretations, including evolving requirements and practices in ESG
reporting; 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 cyber-attacks, data, information or
security breaches or technology failures involving the Group; changes in tax
rates or policy; future business combinations or dispositions; and other
factors specific to the Group, including those identified in Standard
Chartered PLC's Annual Report and the financial statements of the Group. To
the extent that any forward-looking statements contained in this document are
based on past or current trends and/or activities of the Group, they should
not be taken as a representation that such trends or activities will continue
in the future.
Page 75
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 that it is made. 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 Standard Chartered PLC's 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.
Non-IFRS performance measures and alternative performance measures
The Group financial statements have been prepared in accordance with
UK-adopted international accounting standards and International Financial
Reporting Standards (IFRS) as adopted by the European Union. Standard
Chartered PLC's financial statements have been prepared in accordance with
UK-adopted international accounting standards (IAS) as applied in conformity
with section 408 of the Companies Act 2006. This document may contain
financial measures and ratios not specifically defined under IFRS or IAS
and/or alternative performance measures as defined in the European Securities
and Market Authority guidelines. Such measures may exclude certain items which
management believes are not representative of the underlying performance of
the business and which distort period-on-period comparison. These measures are
not a substitute for IAS or IFRS measures and are based on a number of
assumptions that are subject to uncertainties and change. Please refer to the
Annual Report and the financial statements of the Group for further
information, including reconciliations between the underlying and reported
measures.
Financial instruments
Nothing in this document shall constitute, in any jurisdiction, an offer or
solicitation to sell or purchase any securities or other financial
instruments, nor shall it constitute a recommendation or advice in respect of
any securities or other financial instruments or any other matter.
Caution regarding climate and environment related information
Some of the climate and environment related information in this document is
subject to certain limitations, and therefore the reader should treat the
information provided, as well as conclusions, projections and assumptions
drawn from such information, with caution. The information may be limited due
to a number of factors, which include (but are not limited to): a lack of
reliable data; a lack of standardisation of data; and future uncertainty. The
information includes externally sourced data that may not have been verified.
Furthermore, some of the data, models and methodologies used to create the
information is subject to adjustment which is beyond our control, and the
information is subject to change without notice.
General
You are advised to exercise your own independent judgement (with the advice of
your professional advisers as necessary) with respect to the risks and
consequences of any matter contained in this document. The Group, its
affiliates, directors, officers, employees or agents expressly disclaim any
liability and responsibility for any decisions or actions which you may take
and for any damage or losses you may suffer from your use of or reliance on
the information contained in this document.
Basis of preparation and caution regarding data limitations
This section is specifically relevant to, among others, the sustainability and
climate models, calculations and disclosures throughout this report. The
information contained in this document has been prepared on the following
basis:
i disclosures in the Strategic report, Financial review, Sustainability
review, Directors' report, Risk review and Capital review and Supplementary
information are unaudited unless otherwise stated;
ii all information, positions and statements set out in this document are
subject to change without notice;
iii. the information included in this document does not constitute any
investment, accounting, legal, regulatory or tax advice or an invitation or
recommendation to enter into any transaction;
iv the information included in this document may have been prepared
using models, methodologies and data that are subject to certain limitations.
These limitations include: the limited availability of reliable data, data
gaps and the nascent nature of the methodologies and technologies underpinning
this data; the limited standardisation of data (given, among other things,
limited international coordination on data and methodology standards); and
future uncertainty (due, among other things, to changing projections relating
to technological development and global and regional laws, regulations and
policies, and the current inability to make use of strong historical data);
v models, external data and methodologies used in information included in
this document are or could be subject to adjustment which is beyond our
control;
vi any opinions and estimates should be regarded as indicative,
preliminary and for illustrative purposes only. Expected and actual outcomes
may differ from those set out in this document (as explained in the
'Forward-looking statements' section above);
vii some of the related information appearing in this document may have
been obtained from public and other sources and, while the Group believes such
information to be reliable, it has not been independently verified by
the Group and no representation or warranty is made by the Group as to its
quality, completeness, accuracy, fitness for a particular purpose or
noninfringement of such information;
Page 76
viii for the purposes of the information included in this document, a number
of key judgements and assumptions have been made. It is possible that the
assumptions drawn, and the judgement exercised may subsequently turn out to be
inaccurate. The judgements and data presented in this document are not a
substitute for judgements and analysis made independently by the reader;
ix any opinions or views of third parties expressed in this document
are those of the third parties identified, and not of the Group, its
affiliates, directors, officers, employees or agents. By incorporating or
referring to opinions and views of third parties, the Group is not, in any
way, endorsing or supporting such opinions or views;
x while the Group bears primary responsibility for the information
included in this document, it does not accept responsibility for the external
input provided by any third parties for the purposes of developing the
information included in this document;
xi the data contained in this document reflects available information
and estimates at the relevant time;
xii where the Group has used any methodology or tools developed by a third
party, the application of the methodology or tools (or consequences of its
application) shall not be interpreted as conflicting with any legal or
contractual obligations and such legal or contractual obligations shall take
precedence over the application of the methodology or tools;
xiii where the Group has used any underlying data provided or sourced by a
third party, the use of the data shall not be interpreted as conflicting with
any legal or contractual obligations and such legal or contractual obligations
shall take precedence over the use of the data;
xiv this Important Notice is not limited in applicability to those
sections of the document where limitations to data, metrics and methodologies
are identified and where this Important Notice is referenced. This Important
Notice applies to the whole document;
xv further development of reporting, standards or other principles
could impact the information included in this document or any metrics, data
and targets included in this document (it being noted that ESG reporting and
standards are subject to rapid change and development); and
xvi while all reasonable care has been taken in preparing the
information included in this document, neither the Group nor any of its
affiliates, directors, officers, employees or agents make any representation
or warranty as to its quality, accuracy or completeness, and they accept no
responsibility or liability for the contents of this information, including
any errors of fact, omission or opinion expressed.
You are advised to exercise your own independent judgement (with the advice of
your professional advisers as necessary) with respect to the risks and
consequences of any matter contained in this document.
The Group, its affiliates, directors, officers, employees or agents expressly
disclaim any liability and responsibility for any decisions or actions that
you may take and for any damage or losses you may suffer from your use of or
reliance on the information contained in this document.
Copyright in all materials, text, articles and information contained in this
document (other than third-party materials, text, articles and information) is
the property of, and may only be reproduced with permission of an authorised
signatory of, the Group.
Copyright in materials, text, articles and information created by third
parties and the rights under copyright of such parties are hereby
acknowledged. Copyright in all other materials not belonging to third parties
and copyright in these materials as a compilation vests and shall remain at
all times copyright of the Group and should not be reproduced or used except
for business purposes on behalf of the Group or save with the express prior
written consent of an authorised signatory of the Group.
All rights reserved.
Page 77
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