REG - Standard Chrtrd PLC - SCPLC Final Results 2024
21/02/2025 07:00
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RNS Number : 9807X Standard Chartered PLC 21 February 2025
Standard Chartered PLC
4Q'24 and FY'24 Results
21 February 2025
Registered in England under company No. 966425
Registered Office: 1 Basinghall Avenue, London, EC2V 5DD, UK~
Page 1
Table of contents
Performance highlights 3
Statement of results 5
Group Chairman's statement 6
Group Chief Executive's review 9
Group Chief Financial Officer's review 12
Financial review 15
Supplementary financial information 21
Underlying versus reported results reconciliations 33
Group Chief Risk Officer's review 37
Risk review 44
Capital review 47
Financial statements 52
Other supplementary information 57
Shareholder information 62
Unless another currency is specified, the word 'dollar' or symbol '$' in this
document means US dollar and the word 'cent' or symbol 'c' means one-hundredth
of one US dollar.
Unless the context requires, within the document, 'China' refers to the
People's Republic of China and, for the purposes of this document only,
excludes Hong Kong Special Administrative Region (Hong Kong), Macau Special
Administrative Region (Macau) and Taiwan. 'Korea' or 'South Korea' refers to
the Republic of Korea. Asia includes Australia, Bangladesh, Brunei, Cambodia,
India, Indonesia, Laos, Malaysia, Myanmar, Nepal, Philippines, Singapore, Sri
Lanka, Thailand, Vietnam, China, Hong Kong, Japan, Korea, Macau and Taiwan;
Africa includes Botswana, Côte d'Ivoire, Egypt, Ghana, Kenya, Mauritius,
Nigeria, South Africa, Tanzania, Uganda and Zambia. The Middle East includes
Bahrain, Iraq, Oman, Pakistan, Qatar and Saudi Arabia and the UAE. Europe
includes Belgium, Falkland Islands, France, Germany, Jersey, Luxembourg,
Poland, Sweden, Türkiye and the UK. The Americas includes Argentina, Brazil,
Colombia and the US.
Within the tables in this report, blank spaces indicate that the number is not
disclosed, dashes indicate that the number is zero and 'nm' stands for not
meaningful. Standard Chartered PLC is incorporated in England and Wales with
limited liability, and is headquartered in London.
The Group's head office provides guidance on governance and regulatory
standards. Standard Chartered PLC stock codes are: HKSE 02888 and LSE STAN.LN.
Page 2
Standard Chartered PLC - full-year and fourth quarter 2024 results
All figures are presented on an underlying basis and comparisons are made to
2023 on a reported currency basis, unless otherwise stated. A reconciliation
of restructuring and other items excluded from underlying results is set out
on pages 33-36.
Bill Winters, Group Chief Executive, said:
"We produced a strong set of results in 2024. Our strategy of combining
differentiated cross-border capabilities for corporate and institutional
clients with leading wealth management expertise for affluent clients is
firing on all cylinders, driving an increase in return on tangible equity to
11.7%. We delivered record income of $19.7bn, including a very strong
performance in Wealth Solutions, up 29%, and double-digit growth in Global
Markets and Global Banking, and momentum has continued into 2025. We are
increasing shareholder distributions, announcing today a $1.5bn share buyback
and a proposed final dividend of 28 cents per share, bringing our total
shareholder distributions announced since our full-year 2023 results to
$4.9bn, well on the way to our target of at least $8bn."
Selected information on FY'24 financial performance with comparisons to FY'23 unless otherwise stated
• Operating income up 14% at constant currency (ccy) to $19.7bn, up 12% at
ccy excluding notable items and reclassification of deposit insurance to
expenses (the reclassification)
- Net interest income (NII) up 10% at ccy to $10.4bn, up 8% at ccy
excluding the reclassification
- Non NII up 20% at ccy to $9.3bn, up 16% at ccy excluding notable items
- Wealth Solutions up 29% at ccy, record performance, with double-digit
growth in both Investment Products and Bancassurance
- Global Markets up 15% at ccy, with strong performance in both flow and
episodic income
- Global Banking up 15% at ccy, driven by higher origination volumes
- Sustainable Finance income up 36% to $982m, well on-track to deliver
>$1bn target in 2025
• Operating expenses up 7% at ccy to $11.7bn, up 6% at ccy excluding the
reclassification; driven by business growth, targeted investments and
inflation, partly offset by efficiency savings
- Positive 7% income-to-cost jaws at ccy; positive 6% excluding notable
items and the reclassification
• Credit impairment charge of $557m up 5%. Wealth & Retail Banking
(WRB) charge of $644m up $290m, mainly from higher interest rates impacting
repayments in some unsecured portfolios, and the growth and maturation of
digital partnership portfolios. This was partially offset by a net recovery of
$106m in Corporate & Investment Banking (CIB)
- Loan-loss rate of 19bps, up 2bps on prior year
• Other impairment charge of $588m, of which $561m relates to the
write-off of software assets with no impact on capital ratios
• Underlying profit before tax of $6.8bn, up 21% at ccy; reported profit
before tax of $6bn, up 19% at ccy
• Restructuring charges of $441m include $156m related to the Fit for
Growth programme; Other items of $332m are primarily the recycling of FX
translation losses and a provision in respect of the Korea equity linked
securities portfolio
• Tax charge of $1,972m: underlying effective tax rate of 30.6%, up by
1.5%pts
• Balance sheet remains strong, liquid and well diversified
- Loans and advances to customers of $281bn, down $6bn or 2% since
31.12.23; up $12bn or 4% on an underlying basis, after adjusting for FX, and
Treasury and Global Markets securities backed lending activities
- Customer deposits of $464bn, down $5bn or 1% since 31.12.23; up $4bn or
1% at ccy
• Risk-weighted assets (RWA) of $247bn, up $2.9bn since 31.12.23; Market
risk RWA up $3.4bn, Operational RWA up $1.6bn and Credit risk RWA was down
$2.1bn
• The Group remains strongly capitalised
- Common Equity Tier 1 (CET1) ratio 14.2% (31.12.23: 14.1%), above 13-14%
target range
- $1.5bn share buyback starting imminently is expected to reduce CET1
ratio by approximately 61bps
- Proposed final dividend of $679m or 28 cents per share will result in a
full-year dividend of $909m or 37 cents per share, up 37%
• Underlying earnings per share (EPS) increased 39.2 cents to 168.1
cents; Reported EPS increased 32.7 cents to 141.3 cents
• Tangible net asset value per share of $15.41 up 11% or 148 cents
• Return on Tangible Equity (RoTE) of 11.7%, up 160bps
Page 3
Standard Chartered PLC - full-year and fourth quarter 2024 results continued
Selected information on Q4'24 financial performance with comparisons to Q4'23 unless otherwise stated
• Operating income up 21% to $4.8bn, up 16% at ccy excluding notable items
and the reclassification
- NII up 20% at ccy to $2.9bn, up 14% at ccy excluding the
reclassification
- Non NII up 21% at ccy to $2bn, up 20% at ccy excluding notable items
- Wealth Solutions up 36% at ccy, record Q4 performance driven by
broad-based double-digit growth in Investment Products
- Global Markets up 47% at ccy, with strong performance in both flow
income and episodic income
- Global Banking up 26% at ccy, driven by higher origination volumes
• Operating expenses up 16% to $3.2bn, up 11% at ccy excluding the
reclassification
• Credit impairment charge of $130m includes $185m from WRB which was up
slightly quarter-on-quarter primarily from higher interest rates impacting
affordability in some unsecured portfolios, and the growth and maturation of
digital partnership portfolios, offset by a $61m net recovery in CIB
• Other impairment charge of $353m mostly relates to write-off of software
assets with no impact on capital ratios
• Underlying profit before tax of $1bn, broadly flat year-on-year
• Loans and advances to customers of $281bn, down $6bn or 2% since
30.9.24; up $7bn or 2% on an underlying basis
• Customer deposits of $464bn, down $14bn or 3% since 30.9.24; down $6bn
or 1% at ccy mainly in CIB
• RWA of $247bn, down $1.9bn since 30.9.24; Credit risk RWA and
Operational RWA stable quarter-on-quarter, with Market risk RWA down $2bn
Guidance
The 2025 and 2026 guidance is as follows:
• Income:
- Operating income to increase 5-7% CAGR in 2023-2026 at ccy excluding the
reclassification, currently tracking towards the upper end of the range
- 2025 growth expected to be below the 5-7% range at ccy excluding notable
items
• Expenses:
- Operating expenses to be below $12.3bn in 2026 at ccy, now including the
UK bank levy and the ongoing impact of the reclassification; there has been no
change to the 2026 guidance on a like-for-like basis
- Expense saves of around $1.5bn and cost to achieve of no more than
$1.5bn from the Fit for Growth programme
- Positive income-to-cost jaws in each year at ccy, excluding notable
items
• Assets and RWA:
- Low single-digit percentage growth in underlying loans and advances to
customers and RWA
- Basel 3.1 day-1 impact expected to be close to neutral
• Continue to expect the loan-loss rate to normalise towards the
historical through-the-cycle 30 to 35bps range
• Capital:
- Continue to operate dynamically within the full 13-14% CET1 ratio target
range
- Plan to return at least $8bn to shareholders cumulative 2024 to 2026
- Continue to increase full-year dividend per share over time
- RoTE approaching 13% in 2026 and to progress thereafter
Page 4
Statement of results
2024 2023 Change¹
$million
$million
%
Underlying performance
Operating income 19,696 17,378 13
Operating expenses (11,790) (11,136) (6)
Credit impairment (557) (528) (5)
Other impairment (588) (130) nm
Profit from associates and joint ventures 50 94 (47)
Profit before taxation 6,811 5,678 20
Profit attributable to ordinary shareholders² 4,276 3,581 19
Return on ordinary shareholders' tangible equity (%) 11.7 10.1 160bps
Cost-to-income ratio (excluding bank levy) (%) 59.4 63.4 404bps
Reported performance
Operating income 19,543 18,019 8
Operating expenses (12,502) (11,551) (8)
Credit impairment (547) (508) (8)
Goodwill & other impairment (588) (1,008) 42
Profit from associates and joint ventures 108 141 (23)
Profit before taxation 6,014 5,093 18
Taxation (1,972) (1,631) (21)
Profit for the period 4,042 3,462 17
Profit attributable to parent company shareholders 4,050 3,469 17
Profit attributable to ordinary shareholders2 3,593 3,017 19
Return on ordinary shareholders' tangible equity (%) 9.7 8.4 130bps
Cost-to-income ratio (%) 64.0 64.1 13bps
Net interest margin (%) (adjusted) 1.94 1.67 27bps
Balance sheet and capital
Total assets 849,688 822,844 3
Total equity 51,284 50,353 2
Average tangible equity attributable to ordinary shareholders2 36,876 36,098 2
Loans and advances to customers 281,032 286,975 (2)
Customer accounts 464,489 469,418 (1)
Risk-weighted assets 247,065 244,151 1
Total capital 53,091 51,741 3
Total capital ratio (%) 21.5 21.2 30bps
Common Equity Tier 1 35,190 34,314 3
Common Equity Tier 1 ratio (%) 14.2 14.1 19bps
Advances-to-deposits ratio (%)(3) 53.3 53.3 nm
Liquidity coverage ratio (%) 138 145 (670)bps
UK leverage ratio (%) 4.8 4.7 10bps
Cents Cents Change¹
Information per ordinary share
Earnings per share - underlying(4) 168.1 128.9 39.2
- reported(4) 141.3 108.6 32.7
Net asset value per share(5) 1,781 1,629 152
Tangible net asset value per share(5) 1,541 1,393 148
Number of ordinary shares at period end (millions) 2,408 2,637 (9)
1 Variance is better/(worse) other than assets, liabilities and
risk-weighted assets. Change is percentage points difference between two
points rather than percentage change for total capital ratio (%), common
equity tier 1 ratio (%), net interest margin (%), advances-to-deposits ratio
(%), liquidity coverage ratio (%), UK leverage ratio (%). Change is cents
difference between two points rather than percentage change for earnings per
share, net asset value per share and tangible net asset value per share
2 Profit attributable to ordinary shareholders is after the deduction of
dividends payable to the holders of non-cumulative redeemable preference
shares and Additional Tier 1 securities classified as equity
3 When calculating this ratio, total loans and advances to customers
excludes reverse repurchase agreements and other similar secured lending,
excludes approved balances held with central banks, confirmed as repayable at
the point of stress and includes loans and advances to customers held at fair
value through profit and loss. Total customer accounts include customer
accounts held at fair value through profit or loss
4 Represents the underlying or reported earnings divided by the basic
weighted average number of shares
5 Calculated on period end net asset value, tangible net asset value and
number of shares
Page 5
Group Chairman's statement
"The strength of our performance reflects not only the progress we are making
but stronger external confidence and understanding of our business"
Throughout 2024, we made demonstrable progress in delivering on our strategy,
as evidenced by our financial performance for the full year. Our high-growth
markets, where we have prioritised investment, continue to deliver strongly
and provide the basis for us to pursue our role as a super connector across
the established and emerging global corridors of trade, investment and wealth.
This performance was achieved in a year when the geopolitical environment saw
the transition and transfer of power as roughly half the world's population
participated in the global election 'super cycle', with approximately two
billion eligible voters in over 70 national elections. Despite many changes,
and in some cases disruption, our strategy endures. This has been driven by
our own internal discipline as well as our tireless execution in delivering
outstanding service to our clients. The leadership of our Group Chief
Executive, Bill Winters, and his Management Team continues to inspire
confidence and focus across the organisation. Their expertise and dedication
remain essential to our success, and my deepest thanks go to each of them and
their teams.
The refinement of our strategy announced with our Q3 2024 results brings
together two complementary strengths of our business, which are well
positioned as drivers of future growth: the pursuit of cross-border
opportunities through our corporate and investment banking capability and
network, and an unrelenting focus on the fast-growing affluent segment of
clients through our leading wealth management offering.
In sharpening our focus, it has likewise been necessary to make changes to our
business model, including the decision to reshape our mass retail business to
focus on developing our pipeline of future affluent and international banking
clients, and optimise our resource allocation by exiting some markets. While
such changes are difficult, particularly where our presence has been
longstanding, we must consider where we can have the greatest impact and where
our capabilities can be delivered both efficiently and effectively in service
of future growth, value creation and the evolving needs of our clients.
Performance with purpose
In my statement last year, I highlighted that our growth must be achieved in a
strong, safe and sustainable manner, while maintaining both cost and capital
discipline. I am delighted to say that 2024 saw us maintain this level of
rigour in our approach. This led to an improvement in our return on tangible
equity reaching 11.7 per cent, which sets a notable milestone for us ahead of
our 2026 target of approaching 13 per cent. When combined with income growth
of 14 per cent on a constant currency basis it becomes clear that our
underlying business is connected to meaningful opportunities across our
markets.
The strength of our performance in 2024 has also been observed in our share
price over the period, which not only reflects the progress we are making, but
the renewed confidence and understanding of our business in the eyes of our
investors and external stakeholders. The Board and Group Management Team are
pleased to see such results flow through and remain committed to building on
this further. This year, we are pleased to be able to provide an increased
full-year dividend of 37 cents per share (a 37 per cent increase) and are
announcing a further share buyback of $1.5 billion, in addition to the $2.5
billion already announced over the course of the year. Overall, this amounts
to a total of $4.9 billion announced since full-year 2023 results.
Across both Corporate & Investment Banking (CIB) and our Wealth &
Retail Banking (WRB) businesses, we are focused on driving income growth in
high-returning areas. In CIB, our commitment to deepening our relationship
with financial institutions and leveraging our unique network in support of
our corporate client base was underpinned by strong growth in both our Global
Markets and Global Banking business. While in WRB, our decision to make a $1.5
billion investment commitment in service of the affluent client segment
underlines our role as a Bank that offers services throughout the full wealth
continuum. We are targeting $200 billion in net new money and double-digit
CAGR in Wealth Solutions income over the next five years, a business which saw
a record performance in 2024, up 29 per cent at constant currency when
compared with 2023, with double-digit growth in both Investment Products and
Bancassurance.
Beyond financial performance, our purpose and brand promise, here for good,
remain critically important in defining who we are as a business. They aid us
in determining our ambition and help guide our decision making. As a Group we
continue to play our part in helping to address some of the most pressing
societal changes through our Stands: Accelerating Zero, Lifting Participation
and Resetting Globalisation.
In this report we outline further progress against our net zero roadmap as we
disclose the interim targets and science-based methodologies for our financed
emissions in all 12 of the high-emitting sectors as defined by the Net-Zero
Banking Alliance. The addition of a target for the Agriculture sector fulfils
our commitment to target setting in support of our clients as they navigate
the transition of the real-world economy. As a reminder, 2025 is also the year
in which we aim to be net zero in our Scope 1 and 2 emissions, an important
milestone in our own net zero journey as a Group.
This year we also published the Group's inaugural Transition Plan which
outlines our approach to deliver this change and achieve net zero by 2050,
demonstrating to clients, suppliers, customers, and other key stakeholders
that the bank has a clear plan to deliver on the commitments we have made. Our
sustainable and transition finance capabilities are a significant part of our
commercial offering and demonstrate the value of our deep expertise in this
space as a trusted, expert adviser. The growth of this business and the
broadening diversity of our product offering give us a leading advisory
capability that is in high demand in our markets, as they look to deliver
progress against their own adaptation, transition, and sustainability
ambitions.
Page 6
Group Chairman's statement continued
Confident and accountable
As a Board, our role is to ensure the highest standards in corporate
governance and to take a long-term view on how we can responsibly achieve
success for the Group, through both our oversight and constructive partnership
with the Management Team.
As I reach the end of my nine-year term and prepare to step down from the
Board after this year's Annual General Meeting(AGM), I am especially proud
that my successor comes from our existing non-executives. I have every
confidence that Maria Ramos will build on the constructive partnership we have
built with the Group Management Team and in her ability to lead the Group in
its next phase of growth. Under her stewardship, I believe that the Group will
continue to seek out opportunity, leverage the talent of our people, remain
client-centric and resilient, and ensure we can successfully navigate the
challenges that may lie ahead.
In reflecting on my time with the Group, I look back to my original priorities
when joining. These were to deliver long-term value by helping the Bank
achieve its potential, safeguard and strengthen its resilience; and to leave
in place an enhanced model of governance. By these measures, I am proud of
what we have achieved, and grateful for the contribution of the many
colleagues and partners over the years who were integral in helping us to,
collectively, make credible progress.
While such work is never complete in any organisation, our financial
performance highlights the value of our franchise. And as we look to the
future, we must set a renewed level of ambition. Our ability to adapt and
evolve in a fast-changing external and competitive environment, will be the
measure of our long-term success.
I would like to acknowledge the contribution of my fellow Board members during
my tenure, and thank those who retired from the Board. Since our last AGM
David Conner stepped down in December 2024 after nine years. During his tenure
we greatly benefited from his insights and expertise gained over many years of
working across some of our key markets. He has likewise played a key role as a
member of the Board and our committees and led the Board Risk Committee with
distinction. Importantly, we also welcomed new members to the Board. This
includes Diane Jurgens, who was announced last year, and subsequently joined
the Board in March 2024, as well as Lincoln Leong, who joined the Board in
November 2024.
Each of our Board members brings valuable personal perspectives and the weight
of their experience in terms of expertise in markets and industries. The
multi-faceted diversity of our Board remains critically important, and while
all appointments are based on merit, they must also be representative of the
diverse clients we serve and markets in which we operate.
From possibilities to prosperity
The early months of 2025 have already proven that, alongside growth, success
and opportunity, there is always risk. Circumstances can and will change and
what we consider to be norms cannot always be taken for granted. As a Group it
is incumbent on us to aid our clients through such circumstances, to help them
navigate the possibilities that provide a pathway to growth and prosperity.
The world is in a period of transition, from a western-led and progressively
more integrated global economy to an era of 'multi-alignment' where major
players may act more independently and assertively. The long-running trends of
environmental, technological and demographic change are being brought into
sharper relief by these tensions. This is re-shaping the way markets interact
- and, in turn, the where, how and who of globalisation.
In 2024, we saw profound changes across geopolitics, technology, and the need
for a better and more sustainable model of growth. The full scale of the AI
opportunity started to dawn on businesses and governments alike, with greater
appreciation for how incremental investments can drive near-term growth and
impact. In the context of ongoing climate negotiations, the planet exceeded
the 1.5C warming threshold for the first time, bringing us close to a
long-term trend that may be irreversible.
Our role is to help our clients, communities and stakeholders navigate
transition with confidence, underpinned by the belief that change is most
powerful and inclusive when it is delivered in partnership. Although we expect
global growth to slow slightly in 2025, on the back of strong activity in
Asia, Gulf Cooperation Council markets and the US, there is persistent
uncertainty in the outlook, in a large part because of the geopolitical
context.
This uncertainty will create new risks, but also new opportunities in
fast-growing trade corridors, sustainable development, and cross-border
wealth. This context isn't new: in recent years, trade routes have been
rewired, with many of our markets acting as a channel between east and west.
There are opportunities for our business, anchored in our footprint markets.
And also for the world at large, as we have seen concerted efforts to improve
supply chain resilience, including reducing carbon footprints.
Page 7
Group Chairman's statement continued
At the same time, we must guard against unnecessary friction that raises costs
for all involved. We should all remember that, over the last half a century,
trade has been a key driver in powering global economic growth, improving
living standards and reducing household consumption costs. And open trade and
investment will be crucial if we are to leverage the full benefits of the
global technology transformation, and to continue to invest in addressing
climate change - including in the resilience of markets most exposed to its
impacts.
I remain optimistic that, working together, businesses and governments around
the world can power world trade and the next wave of global growth. In that,
our role as a super connector is critical in realising our value as a Group
that operates in service of our clients and other stakeholders.
Dr José Viñals
Group Chairman
21 February 2025
Page 8
Group Chief Executive's review
"Executing a clear strategy, delivering improving returns and increasing
shareholder distributions"
Our team has worked hard to make our bank focused, strong and profitable. We
made good progress over the past several years and 2024 marked further
improvement. We have more that we can do and remain focused on further
strengthening our business and growing our returns.
We are a global bank connecting corporate, institutional and affluent clients
to a network that offers unique access to sustainable growth opportunities
across Asia, Africa and the Middle East. This distinctive proposition puts us
in good stead to help our clients navigate the dynamic conditions we saw
throughout the year.
As a result, we performed strongly in 2024, delivering on our target to
continue to increase our return on tangible equity (RoTE), posting 11.7 per
cent for 2024, up 160 basis points on 2023, and we remain on-track to achieve
our 2026 target of approaching 13 per cent.
Income of $19.7 billion was up 14 per cent on a constant currency basis,
supported by an encouraging performance across our big engines of non-net
interest income, including a record performance in Wealth Solutions, with
income up 29 per cent, and double-digit growth in Global Markets and Global
Banking.
Good cost discipline has enabled us to generate positive income-to-cost jaws,
even with continued underlying investments. Credit impairment rose 5 per cent
year-on-year, mainly from higher charges in Wealth & Retail Banking (WRB),
while Corporate & Investment Banking (CIB) benefitted from recoveries. The
broader portfolios have proved resilient, and we remain vigilant in the face
of a volatile global environment. All this has helped to increase underlying
profit before tax by 21 per cent year-on-year to $6.8 billion.
Our strategy of combining differentiated cross-border capabilities for
corporate and institutional clients with leading wealth management expertise
for affluent clients is working. In CIB, we have increased cross-border
(network) income by 11 per cent compound annual growth rate (CAGR) since 2019,
and it is now 61 per cent of total CIB income. We also recently announced a
long-term strategic partnership with Apollo to support and accelerate
financing for infrastructure, clean transition and renewable energy globally.
In WRB, we continue to build on our strengths in affluent, with $44 billion of
net new money in 2024, up 61 per cent on prior year. This is equivalent to a
strong 16 per cent growth of affluent assets under management coming from net
new money. Also, earlier in 2024 we set-up our first global variable capital
company in Singapore, through which we offer hard-to-access custom-created
investment strategies exclusively to our clients, and have subsequently
launched two such sub-funds.
We remain highly liquid, with a diverse and stable deposit base, and a
liquidity coverage ratio of 138 per cent. We are well capitalised, finishing
the year with a Common Equity Tier 1 (CET1) ratio of 14.2 per cent, above our
target range, allowing us to increase our full-year ordinary dividend by 37
per cent to 37 cents per share. With the proposed final dividend and the $1.5
billion share buyback announced today, our total shareholder returns announced
since the full-year 2023 results is $4.9 billion, well on our way to the at
least $8 billion three-year cumulative target.
As we look to the year ahead, I would like to offer my thanks to our much
valued and long-standing colleague, José Viñals, who will step down as our
Group Chairman later this year. José has been a great partner to me and the
members of our Board. During his tenure he has been a tireless advocate and
champion of our business. Under his diligent stewardship as Chairman, he has
helped steer the Group and made a meaningful contribution to the strong
position we hold today. By embodying our brand promise, here for good, he has
also played critical roles in contributing to the development of the
international finance sector and in mobilising sustainable finance in service
of our markets.
In wishing José a fond farewell, I would also like to extend a warm welcome
to Maria Ramos who will succeed José as the Group Chair, subject to
regulatory approval. Maria first joined our Board as an Independent
Non-Executive Director in January 2021, and she was appointed Chair of the
Board Risk Committee and Senior Independent Director in 2022. Maria is a
seasoned leader and former banker, with a wealth of experience from leadership
positions within the private and public sectors. She also has extensive
international non-executive and Chair experience as well as a deep
understanding of operating across emerging and developing markets.
Taking action to concentrate resources on areas of greatest strength
Our strategy is designed to deliver our purpose, to drive commerce and
prosperity through our unique diversity. This is underpinned by our brand
promise, here for good. In our Q3'24 results, we set out a series of further
actions to double down on our strategy of combining differentiated
cross-border capabilities for corporate and institutional clients with leading
wealth management expertise for affluent clients. We will concentrate capital
and investment in our areas of greatest differentiation and competitive
strength, further simplifying our business and helping us to generate higher
quality growth, deliver sustainably higher returns and improve our RoTE over
the medium term.
We have set ourselves ambitious goals that align to delivering this strategy
and we also upgraded our 2026 RoTE target from 12 per cent to approaching 13
per cent. These goals, outlined below, supersede the commitments we previously
announced with our 2023 results in February last year.
In our CIB business, we will continue to sharpen our focus on serving the
cross-border needs of our larger global corporate and financial institution
clients. We are optimising resource allocation by reducing the number of
clients whose needs do not play directly to our strengths.
Page 9
Group Chief Executive's review continued
As a result of these actions, we are targeting to increase income from
financial institution clients to around 60 per cent of CIB over the
medium-term (51 per cent in 2024), and to increase the percentage of
cross-border (network) income to around 70 per cent (61 per cent in 2024).
In our WRB business, we are solidifying our position as a leading wealth
manager in Asia, Africa and the Middle East with a differentiated,
fast-growing and high-returning international affluent franchise. This will be
enabled by investing $1.5 billion over five years in our wealth and digital
platforms, client centres, people and brand and marketing, to accelerate
income growth and returns. This investment will be funded by reshaping our
mass retail business to focus on developing a strong pipeline of future
affluent and international clients.
We are confident that our increased investment and greater concentration will
help us to outperform the market in terms of asset gathering and income growth
over the medium term, and we are therefore targeting $200 billion of net new
money from 2025 to 2029, a double-digit CAGR in Wealth Solutions income from
2024 to 2029, and for affluent income share of WRB income to reach 75 per cent
by 2029, from 68 per cent in 2024.
In Ventures, SC Ventures will continue to promote a culture of innovation
across the Group, investing in disruptive financial technology and creating
alternative financial services and business models. As our portfolio matures,
we expect to generate gains on sales or mergers of our ventures and will
increasingly obtain third party funding for expansion of ventures,
demonstrating the economic value we are creating. And we expect our two
digital banks, Mox and Trust, to be profitable in 2026.
Strong progress in our leading sustainability business
Our leading sustainability capabilities are an integral part of our client
offering across all our business segments, and the Group as a whole. We have
had another year of strong growth in Sustainable Finance income, which is up
36 per cent year-on-year in 2024, to $982 million, and is very close to our
2025 target of over $1 billion. We have mobilised $121 billion of Sustainable
Finance since the beginning of 2021, making good progress as we advance
towards our $300 billion target by 2030.
Looking forward, in CIB we will continue to scale Sustainable Finance and
support our clients' transition journeys across our markets. In WRB we will
integrate sustainable investments into our Wealth Solutions propositions and
leverage bank-wide sustainability capabilities as a key differentiator to our
affluent clients.
Turning to our net zero roadmap, in 2024 we continued to deliver against our
net zero commitments, completing the baseline and target setting for our 12
highest emitting sectors. But we also recognise that achieving our net zero by
2050 target requires active collaboration and engagement with our clients to
support and accelerate their transition and I am therefore pleased to share
that we have published our inaugural Transition Plan alongside this Annual
Report.
This year, we also demonstrated our commitment to protecting and restoring
nature by becoming an early adopter of the Taskforce on Nature-related
Financial Disclosures. Building on our ambition to shift financial flows
towards nature-positive outcomes, we also partnered with the Government of The
Bahamas, The Nature Conservancy, the Inter-American Development Bank, and
other financial partners to launch an innovative debt conversion, expected to
generate $124 million for marine conservation.
Improving operational leverage through the Fit for Growth programme
In February last year, we launched our bank-wide, three-year, Fit for Growth
programme, which is focused on taking actions to transform the way we operate,
addressing structural inefficiencies and complexity to simplify, standardise
and digitise key elements of our business, setting the stage for accelerated
growth.
This programme is targeting to deliver around $1.5 billion of expense savings
over three years, and we expect to incur a similar amount in terms of the cost
to achieve these sustainable organisational and financial benefits, creating
lasting capacity to reinvest in our growth.
Since its launch we have progressed the programme at pace, having mobilised
over 200 projects during 2024, with initiatives that focus on sustainable
structural improvements. We expect the majority of the $1.5 billion of savings
to ramp up from 2025, with a tail of efficiency effects continuing after 2026,
albeit several projects executed in 2024 have achieved the equivalent of
around $0.2 billion of annualised savings. We expect to incur around 60 per
cent of the $1.5 billion cost-to-achieve by the end of 2025. We remain
committed to delivering positive jaws each year on an underlying basis, and
for costs to be below $12.3 billion in 2026.
Delivering substantial shareholder distributions
Our equity generation and discipline on risk-weighted assets this year have
created capacity for us to continue to deliver substantial shareholder
distributions, and in our Q3'24 results we substantially increased our
shareholder distribution target from at least $5 billion to at least $8
billion from 2024 to 2026.
We remain committed to sharing our success with our shareholders and will
continue to actively manage our capital position with this objective in mind.
We are therefore announcing today a further share buyback programme of
$1.5 billion, to commence imminently. This new share buyback, and a proposed
final dividend of $679 million, brings our total shareholder returns announced
since the full-year 2023 results to $4.9 billion, well on our way to our
improved target of at least $8 billion.
Page 10
Group Chief Executive's review continued
Optimistic outlook for the markets in our footprint
Looking forward, we expect the global growth rate to be broadly flat in 2025,
moderating down slightly to 3.1 per cent from 3.2 per cent in 2024, but then
accelerating in 2026 to 3.3 per cent. Support from looser financial conditions
and expansionary fiscal policy may be partly offset by protectionist trade
policies and interest rates that remain high.
Growth in our footprint markets across Asia, Africa and the Middle East, is
set to outpace global growth, with Asia expanding by 4.8 per cent in 2025,
Africa growing by 4.3 per cent and the Middle East (including Pakistan) by 3.6
per cent. We expect growth in the Association of Southeast Asian Nations
(ASEAN) and India to remain healthy, despite the moderating outlook for key
western trade partners, and we are uniquely positioned to take advantage of
this with our unparalleled presence in all 10 ASEAN markets, as well as being
one of the largest international banks in South Asia.
Our clients find immense value in partnering with us to solve complicated
problems for them in the markets we call home. While we are anchored in Asia,
Africa and the Middle East, our footprint is global and our deep knowledge of,
and expertise in, doing business across our network is hard to replicate.
This is our time
We are a unique organisation - a diverse, global business with unparalleled
cross-border reach and capabilities. As the world gets more complicated, we
become more critical to our clients because we, like no other, understand how
to navigate those complexities.
We have delivered a strong financial performance in 2024 demonstrating the
value of our franchise and the strength of our strategy.
Looking forward, we are targeting a RoTE approaching 13 per cent in 2026, and
for it to progress thereafter. We aim to deliver this through strong income
growth, improving operational leverage aided by our Fit for Growth programme
and maintaining our responsible approach to risk and capital.
Our recent success has made us ambitious and confident for more. My Management
Team and I remain focused on delivering on our targets, seizing the structural
underlying growth opportunities we have, transforming how we work, delivering
better experiences for clients and colleagues, and creating exceptional
long-term value for our shareholders.
Finally, I would like to acknowledge the remarkable efforts of our colleagues
again this year. Their impressive dedication to our clients and the
communities that we serve help to manifest our brand promise of here for good.
Bill Winters
Group Chief Executive
21 February 2025
Page 11
Group Chief Financial Officer's review
"Strong growth leveraging our unique footprint"
Summary of financial performance
All commentary that follows is on an underlying basis and comparisons are made
to the equivalent period in 2023 on a constant currency basis, unless
otherwise stated.
The Group delivered a strong performance in 2024, recording a return on
tangible equity (RoTE) of 11.7 per cent, up 160 basis points year-on-year. A
record performance in Wealth Solutions, and strong double-digit growth in
Global Markets and Global Banking, drove operating income growth of 14 per
cent to $19.7 billion. Operating income was up 12 per cent excluding two
notable items relating to gains on revaluation of FX positions in Egypt and
hyperinflationary accounting adjustments in Ghana, as well as adjusting for
the reclassification of deposit insurance to expenses (the reclassification).
Operating expenses grew 7 per cent or 6 per cent excluding the
reclassification, resulting in positive income-to-cost jaws of 6 per cent
excluding both notables and the reclassification. The credit impairment charge
of $557 million was equivalent to an annualised loan-loss rate of 19 basis
points while the other impairment charge of $588 million mostly related to the
write-off of software assets with no impact on capital ratios. This resulted
in an underlying profit before tax of $6.8 billion, up 21 per cent.
The Group remains well capitalised and highly liquid with a strong and diverse
deposit base. The liquidity coverage ratio of 138 per cent reflects
disciplined asset and liability management. The Common Equity Tier 1 (CET1)
ratio of 14.2 per cent is above the Group's target range of 13 per cent to 14
per cent, enabling the Board to announce a $1.5 billion share buyback
programme to commence imminently.
• Operating income of $19.7 billion increased by 14 per cent or 12 per
cent excluding the benefit of two notable items and the reclassification. The
double-digit growth was driven by record performance in Wealth Solutions and
strong double-digit growth in Global Markets and Global Banking
• Net interest income (NII) increased 10 per cent, benefitting from the
roll-off of short-term hedges of $455 million, and improved asset mix from a
reduction in treasury assets to fund the trading book. This was partly offset
by lower average interest earning asset volumes and the impact of elevated
pass-through rates on deposit margins. Excluding the reclassification, NII was
up 8 per cent.
• Non NII increased 20 per cent. This was driven by a record performance
in Wealth Solutions with broad-based growth across products, strong
performance in Global Markets with double-digit growth in both flow and
episodic income and strong performance in Global Banking from higher
origination volumes. Excluding two notable items of $295 million, non NII
increased 16 per cent.
• Operating expenses excluding the UK bank levy increased 7 per cent, or 6
per cent excluding the reclassification. This was largely driven by inflation,
strategic investments and continued investments into business growth
initiatives, including strategic hiring of Relationship Managers in Wealth
& Retail Banking (WRB) and coverage bankers in Corporate & Investment
Banking (CIB), partly offset by efficiency saves. The Group generated 7 per
cent positive income-to-cost jaws and the cost-to-income ratio improved by 4
percentage points to 59 per cent.
• Credit impairment of $557 million in 2024 was up 5 per cent
year-on-year. WRB impairment of $644 million was up $290 million, mainly from
the higher interest rate environment impacting repayments on credit cards and
personal loans, and the growth and maturation of the digital partnership
portfolios in China and Indonesia. This was partly offset by a $106 million
net recovery in CIB.
• Other impairment of $588 million of which $561 million relates to
write-off of software assets, with no impact on capital ratios.
• Profit from associates and joint ventures was down 47 per cent to $50
million mainly reflecting lower profits at China Bohai Bank.
• Restructuring, other items and Debit Valuation Adjustment (DVA) totalled
$797 million. Restructuring of $441 million reflects the impact of actions to
transform the organisation to structurally improve productivity, of which $156
million relates to the Fit for Growth programme, partly offset by gains on the
remaining Principal Finance portfolio. Other items of $332 million includes
losses related to the sale of Zimbabwe of $172 million, Angola of $26 million
and Sierra Leone of $19 million all primarily from the recycling of FX
translation losses from reserves into the income statement, with no impact on
tangible equity or capital. There was also a $100 million charge booked for
participation in a compensation scheme recommended by the Korean Financial
Supervisory Service. Movements in the DVA were a negative $24 million.
• Taxation was $1,972 million on a reported basis, with an underlying
effective tax rate of 30.6 per cent up from 29.1 per cent in the prior year
reflecting deferred tax not recognised for UK losses, US tax adjustments,
lower tax-exempt income and a change in the geographic mix of profits.
• Underlying RoTE increased by 160 basis points to 11.7 per cent mainly
reflecting an increase in profits.
• Underlying basic earnings per share (EPS) increased 39.2 cents or 30 per
cent to 168.1 cents and reported EPS increased 32.7 cents or 30 per cent to
141.3 cents.
• A final ordinary dividend per share of 28 cents has been proposed taking
the full-year dividend to 37 cents per share, a 37 per cent increase
year-on-year. The Group completed a $1 billion share buyback programme during
the first half of the year and the $1.5 billion share buyback programme
announced on 30 July 2024 was completed on 30 January 2025. The increased
dividend, along with a new share buy-back programme of $1.5 billion to be
commenced imminently, takes the total shareholder distributions announced
since the full-year 2023 results to $4.9 billion.
Page 12
Group Chief Financial Officer's review continued
Guidance
The 2025 and 2026 guidance is as follows:
• Income:
- Operating income to increase 5-7 per cent CAGR in 2023-2026 at constant
currency (ccy) excluding the reclassification, currently tracking towards the
upper end of the range
- 2025 growth expected to be below the 5-7 per cent range at ccy excluding
notable items
• Expenses:
- Operating expenses to be below $12.3 billion in 2026 at ccy, now
including the UK bank levy and the ongoing impact of the reclassification;
there has been no change to the 2026 guidance on a like-for-like basis
- Expense saves of around $1.5 billion and cost to achieve of no more than
$1.5 billion from the Fit for Growth programme
- Positive income-to-cost jaws in each year at ccy, excluding notable
items
• Assets and RWA:
- Low single-digit percentage growth in underlying loans and advances to
customers and RWA
- Basel 3.1 day-1 impact expected to be close to neutral
• Continue to expect the loan-loss rate to normalise towards the
historical through-the-cycle 30 to 35 basis points range.
• Capital:
- Continue to operate dynamically within the full 13-14 per cent CET1
ratio target range
- Plan to return at least $8 billion to shareholders cumulative 2024 to
2026
- Continue to increase full-year dividend per share over time
• RoTE approaching 13 per cent in 2026 and to progress thereafter.
Diego De Giorgi
Group Chief Financial Officer
21 February 2025
Page 13
Group Chief Financial Officer's review continued
Summary of financial performance
4Q'24 4Q'23 Change Constant currency change(1) 3Q'24 Change Constant currency change(1) FY24 FY23 Change Constant currency change(1)
$million
$million
%
%
$million
%
%
$million
$million
%
%
Underlying net interest income 2,861 2,392 20 20 2,606 10 10 10,446 9,557 9 10
Underlying non NII 1,973 1,632 21 21 2,298 (14) (14) 9,250 7,821 18 20
Underlying operating income 4,834 4,024 20 21 4,904 (1) (1) 19,696 17,378 13 14
Other operating expenses (3,175) (2,754) (15) (16) (2,852) (11) (13) (11,700) (11,025) (6) (7)
UK bank levy (102) (108) 6 6 12 nm nm (90) (111) 19 19
Underlying operating expenses (3,277) (2,862) (15) (15) (2,840) (15) (17) (11,790) (11,136) (6) (7)
Underlying operating profit before impairment and taxation 1,557 1,162 34 34 2,064 (25) (25) 7,906 6,242 27 28
Credit impairment (130) (62) (110) (93) (178) 27 25 (557) (528) (5) (5)
Other impairment (353) (41) nm nm (92) nm nm (588) (130) nm nm
Profit from associates and joint ventures (27) (3) nm nm 13 nm nm 50 94 (47) (47)
Underlying profit/(loss) before taxation 1,047 1,056 (1) - 1,807 (42) (43) 6,811 5,678 20 21
Restructuring(4) (200) (63) nm nm (91) (120) (123) (441) (14) nm nm
Goodwill and other impairment(5) - (153) 100 100 - nm nm - (850) 100 100
DVA (3) 35 (109) (109) 5 (160) (160) (24) 17 nm nm
Other items(3) (44) 262 (117) (117) 1 nm nm (332) 262 nm nm
Reported profit/(loss) before taxation 800 1,137 (30) (30) 1,722 (54) (55) 6,014 5,093 18 19
Taxation (274) (199) (38) 45 (575) 52 44 (1,972) (1,631) (21) (24)
Profit/(loss) for the period 526 938 (44) (14) 1,147 (54) (60) 4,042 3,462 17 17
Net interest margin (%)(2) 2.12 1.70 42 1.95 17 1.94 1.67 27
Underlying return on tangible equity (%)(2) 8.1 9.4 (130) 10.8 (270) 11.7 10.1 160
Underlying earnings per share (cents) 28.9 30.4 (5) 39.8 (27) 168.1 128.9 30
1 Comparisons presented on the basis of the current period's transactional
currency rate, ensuring like-for-like currency rates between the two periods
2 Change is the basis points (bps) difference between the two periods
rather than the percentage change
3 Other items 2024 includes $100 million charge relating to Korea
equity linked securities (ELS) portfolio, $172 million primarily relating to
recycling of FX translation losses from reserves into P&L on the sale of
Zimbabwe, $26 million loss on sale of Angola, $19 million loss on Sierra Leone
Partial exit and $15 million loss on the Aviation business disposal
4 Restructuring 2024 includes $156m of Fit For Growth costs that are
primarily severance costs, costs of staff working on FFG initiatives and legal
and professional fees
5 Goodwill and other impairment include $850 million impairment
charge relating to the Group's investment in its associate China Bohai Bank
(Bohai)
Reported financial performance summary
4Q'24 4Q'23 Change Constant currency change(1) 3Q'24 Change Constant currency change(1) FY24 FY23 Change Constant currency change(1)
$million
$million
%
%
$million
%
%
$million
$million
%
%
Net Interest income 1,709 1,860 (8) (7) 1,482 15 17 6,366 7,769 (18) (17)
Non NII 3,093 2,509 23 24 3,468 (11) (10) 13,177 10,250 29 30
Reported operating income 4,802 4,369 10 11 4,950 (3) (2) 19,543 18,019 8 10
Reported operating expenses (3,475) (3,013) (15) (16) (2,971) (17) (19) (12,502) (11,551) (8) (9)
Reported operating profit before impairment and taxation 1,327 1,356 (2) (3) 1,979 (33) (34) 7,041 6,468 9 10
Credit impairment (129) (55) (135) (118) (178) 28 25 (547) (508) (8) (7)
Goodwill & other impairment (353) (197) (79) (80) (88) nm nm (588) (1,008) 42 42
Profit from associates and joint ventures (45) 33 nm nm 9 nm nm 108 141 (23) (24)
Reported profit/(loss) before taxation 800 1,137 (30) (30) 1,722 (54) (55) 6,014 5,093 18 19
Taxation (274) (199) (38) 45 (575) 52 44 (1,972) (1,631) (21) (24)
Profit/(loss) for the period 526 938 (44) (14) 1,147 (54) (60) 4,042 3,462 17 17
Reported return on tangible equity (%)(2) 5.3 10.0 (470) 10.0 (470) 9.7 8.4 130
Reported earnings per share (cents) 20.2 34.0 (41) 36.8 (45) 141.3 108.6 30
1 Comparisons presented on the basis of the current period's transactional
currency rate, ensuring like-for-like currency rates between the two periods
2 Change is the basis points (bps) difference between the two periods
rather than the percentage change
Page 14
Financial review
Operating income by product
4Q'24 4Q'23 Change Constant currency change(1) 3Q'24 Change Constant currency change(1) FY24 FY23 Change Constant currency change(1)
$million
$million
%
%
$million
%
%
$million
$million
%
%
Transaction Services 1,679 1,659 1 1 1,585 6 6 6,484 6,518 (1) -
Payments and Liquidity 1,193 1,207 (1) (1) 1,112 7 7 4,605 4,645 (1) (1)
Securities & Prime Services 161 140 15 15 156 3 3 611 550 11 12
Trade & Working Capital 325 312 4 5 317 3 3 1,268 1,323 (4) (2)
Global Banking 500 400 25 26 475 5 7 1,935 1,705 13 15
Lending & Financial Solutions 434 358 21 22 407 7 8 1,677 1,500 12 13
Capital Markets & Advisory 66 42 57 60 68 (3) - 258 205 26 27
Global Markets 773 534 45 47 840 (8) (8) 3,450 3,049 13 15
Macro Trading 654 463 41 44 683 (4) (4) 2,852 2,620 9 10
Credit Trading 138 92 50 53 174 (21) (21) 644 451 43 47
Valuation & Other Adj (19) (21) 10 - (17) (12) (19) (46) (22) (109) (130)
Wealth Solutions 562 412 36 36 694 (19) (19) 2,490 1,944 28 29
Investment Products 452 298 52 52 507 (11) (11) 1,827 1,357 35 36
Bancassurance 110 114 (4) (4) 187 (41) (41) 663 587 13 14
CCPL & Other Unsecured Lending 304 288 6 6 312 (3) (3) 1,201 1,161 3 5
Deposits 984 933 5 5 946 4 4 3,746 3,570 5 5
Mortgages & Other Secured Lending 68 57 19 25 100 (32) (30) 395 400 (1) 3
Treasury (34) (235) 86 87 (2) nm nm (23) (902) 97 97
Other (2) (24) 92 111 (46) 96 104 18 (67) 127 142
Total underlying operating income 4,834 4,024 20 21 4,904 (1) (1) 19,696 17,378 13 14
1 Comparisons presented on the basis of the current period's
transactional currency rate, ensuring like-for-like currency rates between the
two periods
The operating income by product commentary that follows is on an underlying
basis and comparisons are made to the equivalent period in 2023 on a constant
currency basis, unless otherwise stated.
Transaction Services income was broadly flat. Securities & Prime Services
income was up 12 per cent primarily due to higher custody, funds and prime
brokerage fees. Trade & Working Capital decreased by 2 per cent and
Payments and Liquidity decreased by 1 per cent mainly attributed to margin
compression, albeit passthrough rates were actively managed.
Global Banking income increased 15 per cent as Lending & Financial
Solutions grew 13 per cent from strong pipeline execution which led to higher
origination volumes. Capital Market & Advisory income was up 27 per cent
driven mostly by higher bond issuances.
Global Markets income increased 15 per cent with doubledigit growth in both
flow and episodic income. Flow income grew 12 per cent mostly from increased
income from Financial Institutions clients and increased FX volumes, and
episodic income grew 18 per cent from higher FX and Rates income.
Wealth Solutions income was up 29 per cent, driven by a 36 per cent increase
in Investment Products income, with broad based growth across markets and
products. This was driven by continued momentum in affluent new-to-bank
onboarding, with 265,000 clients onboarded in 2024, and $44 billion of net new
money, up 61 per cent year-on-year driven by strong international flows.
CCPL & Other Unsecured Lending income was up 5 per cent with volume and
margin growth in both Personal Loans and Credit Cards.
Deposits income increased 5 per cent mainly from growth in WRB CASA and Time
Deposit volumes.
Mortgages & Other Secured Lending income was up 3 per cent from higher
margins as the cost of funding reduced, particularly with lower HIBOR rates,
albeit partly offset by lower mortgage volumes.
Treasury loss decreased by $879 million largely driven by benefits from the
roll-off of the short-term hedge of $455 million, $156 million translation
gains on the revaluation of FX positions in Egypt, and repricing of treasury
assets.
Other income of $18 million includes $139 million related to hyperinflationary
accounting adjustments in Ghana partly offset by higher funding costs of
non-financial assets.
Page 15
Financial review continued
Profit before tax by client segment
4Q'24 4Q'23 Change Constant currency change(1) 3Q'24 Change Constant currency change(1) FY24 FY23 Change Constant currency change(1)
$million
$million
%
%
$million
%
%
$million
$million
%
%
Corporate & Investment Banking 1,215 1,266 (4) (4) 1,365 (11) (11) 5,581 5,436 3 4
Wealth & Retail Banking 314 445 (29) (31) 742 (58) (58) 2,463 2,487 (1) (1)
Ventures (92) (133) 31 31 (99) 7 6 (390) (408) 4 4
Central & other items (390) (522) 25 27 (201) (94) (118) (843) (1,837) 54 54
Underlying profit before taxation 1,047 1,056 (1) - 1,807 (42) (43) 6,811 5,678 20 21
1 Comparisons presented on the basis of the current period's
transactional currency rate, ensuring like-for-like currency rates between the
two periods
The client segment and geographic region commentary that follows is on an
underlying basis and comparisons are made to the equivalent period in 2023 on
a constant currency basis, unless otherwise stated.
Corporate & Investment Banking (CIB) profit before taxation increased 4
per cent. Income grew 6 per cent with strong performance in Global Markets
with double-digit growth in both flow and episodic income and strong
performance in Global Banking from higher origination volumes. Expenses were 9
per cent higher, mainly from investments, performance-related pay increases
and inflation, while credit impairment was a net release of $106 million.
Other impairment of $310 million primarily related to the write-off of
software assets.
Wealth & Retail Banking (WRB) profit before taxation was down 1 per cent.
Income grew by 11 per cent, driven by a record performance in Wealth Solutions
with broad-based growth across products and markets as well as a 14 per cent
growth in Bancassurance income. Expenses increased 9 per cent, mainly from
increased investment spend and inflation. Credit impairment charge of $644
million was up $290 million, mainly from the higher interest rate environment
impacting repayments on credit cards and personal loans, and the growth and
maturation of the digital partnership portfolios in China and Indonesia. Other
impairment charge primarily related to the write-off of software assets.
Ventures loss before tax decreased $18 million to $390 million, with income up
16 per cent to $183 million, driven by a 60 per cent increase in income from
the two digital banks to $142 million. Expenses grew by 8 per cent, reflecting
the Group's continued investment in transformational digital initiatives,
while the $74 million impairment charge was down $11 million year-on-year as
delinquency rates have improved in Mox.
Central & other items (C&O) recorded a loss before tax of $843 million
which was 54 per cent lower than the prior year. Treasury losses of $24
million decreased by $908 million, largely driven by benefits from the
roll-off of the short-term hedge and repricing of assets, and $156 million
translation gains on the revaluation of FX positions in Egypt. Other products
loss of $97 million decreased by $73 million mostly driven by a $139 million
gain relating to a hyperinflationary accounting adjustment in Ghana. Expenses,
which include UK bank levy, central corporate costs and recharges, decreased
by $115 million while there was a credit impairment release of $55 million
mostly from sovereign-related portfolio movements.
Adjusted net interest income and margin
4Q'24 4Q'23 Change¹ 3Q'24 Change FY24 FY23 Change¹
$million
$million
%
$million
%
$million
$million
%
Adjusted net interest income(2) 2,865 2,397 20 2,606 10 10,462 9,547 10
Average interest-earning assets 537,410 558,183 (4) 532,459 1 539,338 572,520 (6)
Average interest-bearing liabilities 543,195 537,916 1 540,691 - 539,787 540,350 -
Gross yield (%)(3) 4.95 4.98 (3) 5.22 (27) 5.17 4.76 41
Rate paid (%)(3) 2.79 3.40 (61) 3.22 (43) 3.22 3.27 (5)
Net yield (%)(3) 2.16 1.58 58 2.00 16 1.95 1.49 46
Net interest margin (%)(3,4) 2.12 1.70 42 1.95 17 1.94 1.67 27
1 Variance is better/(worse) other than assets and liabilities which is
increase/(decrease)
2 Adjusted net interest income is reported net interest income less
funding costs for the trading book, cash collateral and prime services
3 Change is the basis points (bps) difference between the two periods
rather than the percentage change
4 Adjusted net interest income divided by average interest-earning
assets, annualised
Adjusted net interest income increased 10 per cent driven by an increase in
the net interest margin, which averaged 194 basis points in the year, a 27
basis points year-on-year uplift, benefitting from the roll-off of the
short-term hedges as well as improved asset mix from a reduction in treasury
assets to fund the trading book. This was partly offset by lower average
interest earning asset volumes, reflecting the reduction in Treasury assets,
and the impact of elevated pass-through rates on deposit pricing within CIB.
• Average interest-earning assets were down by $33 billion
primarily due to a reduction in Treasury assets following on from an increase
in demand for funding of trading book assets, the impact of FX translation and
a decrease in underlying average loans and advances to customers driven by a
decline in mortgages. Gross yields increased 41 basis points compared with the
prior year due to the impact of higher average interest rates and an improved
balance sheet mix
Page 16
Financial review continued
• Average interest-bearing liabilities were broadly stable
year-on-year as growth in WRB customer accounts was offset by the impact of FX
translation and managed outflow of more expensive CIB and Treasury balances.
The rate paid on liabilities decreased 5 basis points in spite of higher
average interest rates and elevated passthrough rates on CIB deposits
reflecting the impacts of the increased trading book funding cost adjustment,
deposit insurance reclassification and roll-off of the loss-making short-term
hedges as well as improved mix with strong growth in WRB deposits
Credit risk summary
Income Statement (Underlying view)
4Q'24 4Q'23 Change(1) 3Q'24 Change(1) FY24 FY23 Change(1)
$million
$million
%
$million
%
$million
$million
%
Total credit impairment charge / (release)(2) 130 62 110 178 (27) 557 528 5
Of which stage 1 and 2(2) 172 4 nm 126 37 371 138 169
Of which stage 3(2) (42) 58 (172) 52 (181) 186 390 (52)
1 Variance is increase/(decrease) comparing current reporting period
to prior reporting periods
2 Refer to Credit Impairment charge table in Risk review section for
reconciliation from underlying to reported credit impairment
Balance sheet
31.12.24 30.09.24 Change(1) 30.06.24 Change(1) 31.12.23 Change(1)
$million
$million
%
$million
%
$million
%
Gross loans and advances to customers(2) 285,936 292,394 (2) 280,893 2 292,145 (2)
Of which stage 1 269,102 275,490 (2) 264,249 2 273,692 (2)
Of which stage 2 10,631 10,369 3 10,005 6 11,225 (5)
Of which stage 3 6,203 6,535 (5) 6,639 (7) 7,228 (14)
Expected credit loss provisions (4,904) (5,137) (5) (4,997) (2) (5,170) (5)
Of which stage 1 (483) (496) (3) (480) 1 (430) 12
Of which stage 2 (473) (390) 21 (362) 31 (420) 13
Of which stage 3 (3,948) (4,251) (7) (4,155) (5) (4,320) (9)
Net loans and advances to customers 281,032 287,257 (2) 275,896 2 286,975 (2)
Of which stage 1 268,619 274,994 (2) 263,769 2 273,262 (2)
Of which stage 2 10,158 9,979 2 9,643 5 10,805 (6)
Of which stage 3 2,255 2,284 (1) 2,484 (9) 2,908 (22)
Cover ratio of stage 3 before/after collateral (%)(3) 64 / 78 65 / 81 (1) / (3) 63 / 82 1 / (4) 60 / 76 4 / 2
Credit grade 12 accounts ($million) 969 943 3 964 1 2,155 (55)
Early alerts ($million) 5,559 5,100 9 5,044 10 5,512 1
Investment grade corporate exposures (%)(3) 74 74 - 74 - 73 1
Aggregate top 20 corporate exposures as a percentage of Tier 1 capital(3,4) 61 60 1 58 3 62 (1)
1 Variance is increase/(decrease) comparing current reporting period
to prior reporting periods
2 Includes reverse repurchase agreements and other similar secured
lending held at amortised cost of $9,660 million at 31 December 2024, $8,955
million at 30 September 2024, $7,788 million at 30 June 2024, and $13,996
million at 31 December 2023
3 Change is the percentage points difference between the two points
rather than the percentage change
4 Excludes repurchase and reverse repurchase agreements
Asset quality remained resilient in 2024, with an improvement in a number of
underlying credit metrics. The Group continues to be vigilant in managing
persistent and evolving geopolitical and macroeconomic risks, which have led
to idiosyncratic stress in a select number of geographies and industry
sectors.
Credit impairment charge of $557 million charge was up 5 per cent
year-on-year, representing a loan loss rate of 19 basis points. WRB charges of
$644 million were up $290 million mainly from the higher interest rate
environment impacting repayments on credit cards and personal loans, and the
growth and maturation of the digital partnership portfolios in China and
Indonesia. The $74 million charge in Ventures was down $11 million
year-on-year, as delinquency rates have improved in Mox. There was net
recovery in CIB of $106 million, benefitting from releases and repayments. The
Group retains a China commercial real estate (CRE) management overlay of $70
million and a $58 million overlay for clients who have exposure to the Hong
Kong CRE sector.
Gross stage 3 loans and advances to customers of $6.2 billion were 14 per cent
lower year-on-year as repayments, client upgrades and write-offs more than
offset new inflows. Credit-impaired loans represented 2.2 per cent of gross
loans and advances, down from 2.5 per cent in the prior year.
The stage 3 cover ratio before collateral of 64 per cent increased by 4
percentage points, while the cover ratio post collateral at 78 per cent
increased 2 percentage points, both due to a reduction in gross stage 3
balances.
Page 17
Financial review continued
Credit grade 12 balances decreased by $1.2 billion to $1.0 billion primarily
from the reversal of an existing $1 billion sovereign related exposure from
reverse repurchase agreements to investment securities. Early alert accounts
of $5.6 billion remained broadly stable year-on-year.
The proportion of investment grade corporate exposures of 74 per cent was
broadly stable year-on-year.
Restructuring, goodwill impairment and other items
FY24 FY23 4Q'24
Restruc-turing³ $million Goodwill and other impair-ment $million DVA $million Net loss on businesses disposed of/ held for sale¹ $million Other items² $million Restruc-turing $million Goodwill and other impair-ment⁴ $million DVA $million Net gain on businesses disposed of/ held for sale $million Other items $million Restruc-turing $million Goodwill and other impair-ment $million DVA $million Net loss on businesses disposed of/ held for sale $million Other items $million
Operating income 103 - (24) (232) - 362 - 17 262 - 15 - (3) (44) -
Operating expenses (612) - - - (100) (415) - - - - (198) - - - -
Credit impairment 10 - - - - 20 - - - - 1 - - - -
Other impairment - - - - - (28) (850) - - - - - - - -
Profit from associates and joint ventures 58 - - - - 47 - - - - (18) - - - -
Profit/(loss) before taxation (441) - (24) (232) (100) (14) (850) 17 262 - (200) - (3) (44) -
1 Net loss on businesses disposed of/ held for sale 2024 includes
$172 million primarily relating to recycling of FX translation losses from
reserves into P&L on the sale of Zimbabwe, $26 million loss on sale of
Angola, $19 million loss on Sierra Leone Partial exit and $15 million loss on
the Aviation business disposal
2 Other items 2024 include $100 million charge relating to Korea
equity linked securities (ELS) portfolio
3 Restructuring Operating expenses 2024 includes $156m of Fit For
Growth costs that are primarily severance costs, costs of staff working on FFG
initiatives and legal and professional fees
4 Goodwill and other impairment include $850 million impairment
charge relating to the Group's investment in its associate China Bohai Bank
(Bohai)
The Group's statutory performance is adjusted for profits or losses of a
capital nature, amounts consequent to investment transactions driven by
strategic intent, other infrequent and/or exceptional transactions that are
significant or material in the context of the Group's normal business earnings
for the period and items which management and investors would ordinarily
identify separately when assessing underlying performance
period-by period.
Restructuring charges of $441 million, reflect the impact of actions to
transform the organisation to improve productivity, primarily additional
redundancy charges, simplifying technology platforms and optimising the
Group's office space and property footprint, of which $156 million relates to
the Fit for Growth programme. This was partly offset by profits on the
remaining Principal Finance portfolio.
Net loss on businesses disposed of/held for sale of $232 million includes
losses related to the sale of Zimbabwe of $172 million, Angola of $26 million
and Sierra Leone of $19 million, all primarily from the recycling of FX
translation losses from reserves into the income statement, with no impact on
tangible equity or capital, and $15 million loss on the sale of the Aviation
business.
Other items of $100 million relate to a charge booked for participation in a
compensation scheme recommended by the Korean Financial Supervisory Service.
Movements in the Debit Valuation Adjustment (DVA) were a negative $24 million
driven by the tightening of the Group's asset swap spreads.
Page 18
Financial review continued
Balance sheet and liquidity
31.12.24 30.09.24 Change 30.06.24 Change 31.12.23 Change(1
$million
$million
%
$million
%
$million ) %
Assets
Loans and advances to banks 43,593 47,512 (8) 45,231 (4) 44,977 (3)
Loans and advances to customers 281,032 287,257 (2) 275,896 2 286,975 (2)
Other assets 525,063 537,404 (2) 514,300 2 490,892 7
Total assets 849,688 872,173 (3) 835,427 2 822,844 3
Liabilities
Deposits by banks 25,400 32,172 (21) 28,087 (10) 28,030 (9)
Customer accounts 464,489 478,140 (3) 468,157 (1) 469,418 (1)
Other liabilities 308,515 309,125 - 287,856 7 275,043 12
Total liabilities 798,404 819,437 (3) 784,100 2 772,491 3
Equity 51,284 52,736 (3) 51,327 - 50,353 2
Total equity and liabilities 849,688 872,173 (3) 835,427 2 822,844 3
Advances-to-deposits ratio (%)(2) 53.3% 52.7% 52.6% 53.3%
Liquidity coverage ratio (%) 138% 143% 148% 145%
1 Variance is increase/(decrease)comparing current reporting period to
prior reporting periods
2 The Group excludes $19,187 million held with central banks
(30.09.24: $20,534 million, 30.06.24: $18,419 million and 31.12.23: $20,710
million) that has been confirmed as repayable at the point of stress. Advances
exclude repurchase agreement and other similar secured lending of $9,660
million (30.09.24: $8,955 million, 30.06.24: $7,788 million and 31.12.23:
$13,996 million) and include loans and advances to customers held at fair
value through profit or loss of $7,084 million (30.09.24: $6,093 million,
30.06.24: $6,877 million and 31.12.23: $7,212 million). Deposits include
customer accounts held at fair value through profit or loss of $21,772 million
(30.09.24: $22,344 million, 30.06.24: $19,850 million and 31.12.23: $17,248
million)
The Group's balance sheet remains strong, liquid and well diversified:
• Loans and advances (L&A) to customers decreased 2 per cent, or
$6 billion, to $281 billion as at 31 December 2024. This was driven by a $9
billion decrease from Treasury and securities-based lending and a $8 billion
decrease from currency translation. Excluding these items L&A was up a net
$12 billion on an underlying basis, mainly from the execution of pipeline
deals in Global Banking, partly offset by a decline in mortgages
• Customer accounts decreased 1 per cent, or $5 billion, to $464
billion. Excluding the $9 billion impact of currency translation, customer
accounts grew 1 per cent. This was primarily driven by an increase of $16
billion in WRB Time Deposits and $7 billion in WRB CASA partly offset by a $5
billion decrease in Transaction Services from CASA outflows and a $12 billion
decrease in Corporate Term Deposits from treasury management activities
• Other assets increased 7 per cent, or $34 billion, from
31 December 2023 with a $31 billion increase in derivative balances and $30
billion increase in financial assets held at fair value through profit or
loss, primarily in reverse repurchase agreements and debt securities and other
eligible bills. This was partly offset by a decrease in cash and balances at
central banks of $6 billion, a $17 billion reduction in investment securities
and $4 billion reduction in other financial assets held at amortised cost
• Other liabilities increased 12 per cent, or $33 billion, from
31 December 2023 with a $26 billion increase in derivative balances and a $5
billion increase in other financial liabilities held at amortised cost
The advances-to-deposits ratio was flat year-on-year at 53.3 per cent. The
point-in-time LCR of 138 per cent decreased 7 percentage points year-on-year
and 5 percentage points quarter-on-quarter due to ongoing treasury liability
optimisation, LCR normalisation from surplus levels and some seasonal CASA
outflows. It remains well above the minimum regulatory requirement of 100 per
cent.
Risk-weighted assets
31.12.24 30.09.24 Change(1) 30.06.24 Change(1) 31.12.23 Change(1)
$million
$million
%
$million
%
$million
%
By risk type
Credit risk 189,303 188,844 - 185,004 2 191,423 (1)
Operational risk 29,479 29,479 - 29,479 - 27,861 6
Market risk 28,283 30,601 (8) 27,443 3 24,867 14
Total RWAs 247,065 248,924 (1) 241,926 2 244,151 1
1. Variance is increase/(decrease) comparing current reporting period to
prior reporting periods
Total risk-weighted assets (RWA) of $247.1 billion increased $2.9 billion or 1
per cent in comparison to 31 December 2023:
• Credit risk RWA decreased by $2.1 billion to $189.3 billion. This
was mainly driven by decreases of $3.2 billion reflecting improved asset
quality, $2.6 billion from optimisation actions and $4.9 billion from foreign
currency translation, partly offset by a $5.0 billion increase from changes in
asset growth and mix, and $3.1 billion increase from derivatives
• Operational Risk RWA increased by $1.6 billion to $29.5 billion
mainly due to a marginal increase in average income as measured over a rolling
three-year time horizon for certain products
Page 19
Financial review continued
• Market risk RWA increased by $3.4 billion to $28.3 billion as
RWA were deployed to help clients capture market opportunities
Capital base and ratios
31.12.24 30.09.24 Change¹ 30.06.24 Change¹ 31.12.23 Change¹
$million
$million
%
$million
%
$million
%
CET1 capital 35,190 35,425 (1) 35,418 (1) 34,314 3
Additional Tier 1 capital (AT1) 6,482 6,507 - 6,484 - 5,492 18
Tier 1 capital 41,672 41,932 (1) 41,902 (1) 39,806 5
Tier 2 capital 11,419 11,726 (3) 11,667 (2) 11,935 (4)
Total capital 53,091 53,658 (1) 53,569 (1) 51,741 3
CET1 capital ratio (%)(2) 14.2 14.2 1bps 14.6 (40)bps 14.1 19bps
Total capital ratio (%)(2) 21.5 21.6 (7)bps 22.1 (65)bps 21.2 30bps
Leverage ratio (%)(2) 4.8 4.7 14bps 4.8 3bps 4.7 10bps
1 Variance is increase/(decrease) comparing current reporting period
to prior reporting periods
2 Change is percentage points difference between two points rather
than percentage change
The Group's CET1 ratio of 14.2 per cent was 19 basis points higher
year-on-year and is 3.8 percentage points above
the Group's latest regulatory minimum of 10.5 per cent. Underlying profit
accretion enabled funding of shareholder distributions.
There was 167 basis points of CET1 accretion from underlying profits, and a
further 61 basis points uplift primarily from fair value gains on other
comprehensive income, FX , software intangibles and regulatory capital
adjustments. This was partly offset by 50 basis points from an increase in
RWAs.
The Group completed a $1 billion share buyback programme on 25 June 2024, and
as of 31 December 2024 the
$1.5 billion share buyback programme announced on 30 July 2024 was nearly
complete, having spent $1,354 million purchasing 126.3 million ordinary
shares. Even though the share buyback completed on 30 January 2025, the entire
$1.5 billion is deducted from CET1 in the reporting period. The 2024 share
buybacks reduced the CET1 ratio by
102 basis points.
The Board has recommended a final dividend of 28 cents per share or $679
million resulting in a total 2024 ordinary dividend of 37 cents a share or
$909 million. This, combined with the payments due to AT1 and preference
shareholders cost approximately 57 basis points.
The Board has announced a share buyback for up to a maximum consideration of
$1.5 billion to further reduce the number of ordinary shares in issue by
cancelling the repurchased shares. The terms of the buyback will be published,
and the programme will start shortly and is expected to reduce the Group's
CET1 ratio in the first quarter of 2025 by 61 basis points.
The Group's UK leverage ratio of 4.8 per cent remains significantly above its
minimum requirement of 3.7 per cent.
Page 20
Supplementary financial information
Underlying performance by client segment
2024 2023
Corporate & Investment Banking Wealth & Retail Ventures Central & other items Total Corporate & Investment Banking Wealth & Retail Ventures Central & Total
$million
Banking
$million
$million
$million
$million
Banking
$million
other items
$million
$million
$million
$million
Operating income 11,818 7,816 183 (121) 19,696 11,218 7,106 156 (1,102) 17,378
External 10,363 3,328 184 5,821 19,696 8,543 3,902 157 4,776 17,378
Inter-segment 1,455 4,488 (1) (5,942) - 2,675 3,204 (1) (5,878) -
Operating expenses (6,033) (4,589) (464) (704) (11,790) (5,627) (4,261) (429) (819) (11,136)
Operating profit/(loss) before impairment losses and taxation 5,785 3,227 (281) (825) 7,906 5,591 2,845 (273) (1,921) 6,242
Credit impairment 106 (644) (74) 55 (557) (123) (354) (85) 34 (528)
Other impairment (310) (120) (18) (140) (588) (32) (4) (26) (68) (130)
Profit from associates and joint ventures - - (17) 67 50 - - (24) 118 94
Underlying profit/(loss) before taxation 5,581 2,463 (390) (843) 6,811 5,436 2,487 (408) (1,837) 5,678
Restructuring (179) (170) (3) (89) (441) 32 (60) (4) 18 (14)
Goodwill and other impairment(4) - - - - - - - - (850) (850)
DVA (24) - - - (24) 17 - - - 17
Other items(3) - (100) - (232) (332) 262 - - - 262
Reported profit/(loss) before taxation 5,378 2,193 (393) (1,164) 6,014 5,747 2,427 (412) (2,669) 5,093
Total assets 485,662 122,404 6,399 235,223 849,688 403,058 128,768 4,009 287,009 822,844
Of which: loans and advances to customers 197,608 119,242 1,388 21,319 339,557 189,395 126,117 1,035 28,939 345,486
loans and advances to customers 139,089 119,236 1,388 21,319 281,032 130,897 126,104 1,035 28,939 286,975
loans held at fair value through profit or loss (FVTPL)(1) 58,519 6 - - 58,525 58,498 13 - - 58,511
Total liabilities 476,502 220,501 5,277 96,124 798,404 464,968 200,263 3,096 104,164 772,491
Of which: customer accounts(2) 297,005 216,476 5,028 4,754 523,263 328,211 195,678 2,825 7,908 534,622
Risk-weighted assets 156,868 50,525 2,406 37,266 247,065 141,979 51,342 1,923 48,907 244,151
Income return on risk-weighted assets (%) 7.8 14.9 8.8 (0.3) 7.9 7.8 14.0 10.3 (2.2) 7.1
Underlying return on tangible equity (%) 19.0 24.4 nm (20.9) 11.7 19.5 25.3 nm (27.0) 10.1
Cost-to-income ratio (%) 51.0 58.7 nm nm 59.4 50.2 60.0 nm nm 63.4
1 Loans held at FVTPL includes $51,441 million of repurchase agreements
2 Customer accounts includes $21,772 million of FVTPL and $37,002 million
of repurchase agreements
3 Other items 2024 includes $100 million charge relating to Korea equity
linked securities (ELS) portfolio, $172 million primarily relating to
recycling of FX translation losses from reserves into P&L on the sale of
Zimbabwe, $26 million loss on sale of Angola, $19 million loss on Sierra Leone
Partial exit and $15 million loss on the Aviation business disposal
4 Goodwill and other impairment include $850 million impairment charge
relating to the Group's investment in its associate China Bohai Bank (Bohai)
Page 21
Supplementary financial information continued
Corporate & Investment Banking
4Q'24 4Q'23 Change(2) Constant currency change(1,2) 3Q'24 Change(2) Constant currency change(1,2) FY24 FY23 Change(2) Constant currency change(1,2)
$million
$million
%
%
$million
%
%
$million
$million
%
%
Operating income 2,940 2,581 14 15 2,887 2 2 11,818 11,218 5 6
Transaction Services 1,666 1,647 1 1 1,572 6 6 6,434 6,470 (1) -
Payments and Liquidity 1,193 1,207 (1) (1) 1,112 7 7 4,605 4,645 (1) (1)
Securities & Prime Services 161 140 15 15 156 3 3 611 550 11 12
Trade & Working Capital 312 300 4 5 304 3 4 1,218 1,275 (4) (3)
Global Banking 500 400 25 26 475 5 7 1,935 1,705 13 15
Lending & Financial Solutions 434 358 21 22 407 7 8 1,677 1,500 12 13
Capital Markets & Advisory 66 42 57 60 68 (3) - 258 205 26 27
Global Markets 773 534 45 47 840 (8) (8) 3,450 3,049 13 15
Macro Trading 654 463 41 44 683 (4) (4) 2,852 2,620 9 10
Credit Trading 138 92 50 53 174 (21) (21) 644 451 43 47
Valuation & Other Adj (19) (21) 10 - (17) (12) (19) (46) (22) (109) (130)
Wealth Solutions 1 - nm nm - nm nm 1 - nm nm
Investment Products 1 - nm nm - nm nm 1 - nm nm
Deposits - - nm nm 1 (100) nm 1 1 - -
Other - - nm nm (1) 100 100 (3) (7) 57 57
Operating expenses (1,637) (1,422) (15) (17) (1,475) (11) (12) (6,033) (5,627) (7) (9)
Operating profit before impairment losses and taxation 1,303 1,159 12 12 1,412 (8) (8) 5,785 5,591 3 4
Credit impairment 61 105 (42) (41) 10 nm nm 106 (123) 186 178
Other impairment (149) 2 nm nm (57) (161) (160) (310) (32) nm nm
Underlying profit before taxation 1,215 1,266 (4) (4) 1,365 (11) (11) 5,581 5,436 3 4
Restructuring (84) (52) (62) (58) (36) (133) (80) (179) 32 nm nm
DVA (3) 35 (109) (109) 5 (160) (160) (24) 17 nm nm
Other items - 262 nm nm - nm nm - 262 nm nm
Reported profit before taxation 1,128 1,511 (25) (25) 1,334 (15) (15) 5,378 5,747 (6) (6)
Total assets 485,662 403,058 20 22 479,357 1 2 485,662 403,058 20 22
Of which: loans and advances to customers(3) 197,608 189,395 4 7 190,034 4 6 197,608 189,395 4 7
Total liabilities 476,502 464,968 2 4 488,355 (2) (1) 476,502 464,968 2 4
Of which: customer accounts(3) 297,005 328,211 (10) (8) 315,270 (6) (4) 297,005 328,211 (10) (8)
Risk-weighted assets 156,868 141,979 10 nm 153,278 2 nm 156,868 141,979 10 nm
Income return on risk-weighted assets (%)(4) 7.5 7.3 20bps nm 7.6 (10)bps nm 7.8 7.8 - nm
Underlying return on tangible equity (%)(4) 15.9 18.5 (260)bps nm 18.5 (260)bps nm 19.0 19.5 (50)bps nm
Cost-to-income ratio (%)(5) 55.7 55.1 (0.6) (1.2) 51.1 (4.6) (4.7) 51.0 50.2 (0.8) (1.0)
1 Comparisons presented on the basis of the current period's
transactional currency rate, ensuring like-for-like currency rates between the
two periods
2 Variance is better/(worse) other than risk-weighted assets, assets
and liabilities which is increase/(decrease)
3 Loans and advances to customers and customer accounts includes
FVTPL and repurchase agreements
4 Change is the basis points (bps) difference between the two periods
rather than the percentage change
5 Change is the percentage points difference between the two periods
rather than the percentage change
Segment overview
Corporate & Investment Banking (CIB) supports local and large
corporations, governments, banks and investors with their transaction
services, banking, and financial market needs. We provide differentiated
cross-border capabilities to over 17,000 clients in some of the world's
fastest-growing economies and most active trade corridors. Our clients operate
or invest in 47 markets across the globe.
Our strong and deep local presence enables us to co-create bespoke financing
solutions and connect our clients multilaterally to investors, suppliers,
buyers and sellers. Our products and services enable our clients to move
capital, manage risk and invest to create wealth. Our clients represent a
large and important part of the economies we serve. CIB is at the heart of the
Group's shared purpose to drive commerce and prosperity through our unique
diversity.
Page 22
Supplementary financial information continued
We are also committed to promoting sustainable finance in our markets and
channelling capital to where the impact will be greatest. We are delivering on
our ambition to support sustainable economic growth, increasing support and
funding for financial offerings that have a positive impact on our communities
and environment .
Strategic priorities
• Deliver sustainable growth for clients by leveraging our network to
facilitate trade, capital and investment flows across our footprint markets.
• Generate high-quality returns by improving income mix, growing
capital-lite income and driving balance sheet velocity, while maintaining
disciplined risk management.
• Be a digital-first and data-driven bank that delivers enhanced client
experiences.
• Accelerate our sustainable finance offering to our clients through
product innovation and enabling transition to a low-carbon future.
Progress
• Our underlying income performance was driven by our diversified product
suite, expanded client solutions and optimised resource allocation by focusing
on clients whose cross-border needs played directly to our strengths. Our
cross-border income contributed to 61 per cent of total CIB income with
growth across strategic corridors.
• Resilient balance sheet quality with investment-grade net loans and
advances to customers represented 66 per cent of total corporate net loans and
advances to customers (2023: 65 per cent).
• We increased the share of income from our financial institution clients
as a percentage of total CIB income, from 49 per cent in 2023 to 51 per cent
in 2024.
• Active management of pass-through rates helped us to maintain a balance
between pricing and deposit attrition.
• Client Digital Transaction Initiation stood at 68.3 per cent (2023: 64.5
per cent) largely in Cash, Trade and FX. Client experience remained at the
centre of our digital transformation, with our Customer Satisfaction Score at
72 per cent (2023: 61 per cent).
• We are well on our way towards delivering our target of $1 billion
income from our Sustainable Finance franchise by 2025, and have mobilised $121
billion against our $300 billion commitment in sustainable financing by 2030.
Performance highlights
• Underlying profit before tax of $5,581 million increased by 4 per cent
at constant currency (ccy) driven by higher income, partially offset by higher
operating expenses and other impairment charge.
• Underlying operating income of $11,818 million increased by 6 per cent
at ccy primarily driven by strong performance in Global Markets and Global
Banking. Global Markets grew by 15 per cent, supported by double-digit growth
in both flow and episodic income. Global Banking also saw a 15 per cent
increase due to higher loan origination volumes from strong pipeline
execution, coupled with improved Capital Markets activities. Transaction
Services remained flat, as 12 per cent increase in Securities & Prime
Services income, driven by higher fees and deposit balances were offset by
lower margins in Payments and Liquidity, and Trade & Working Capital
products.
• Underlying operating expenses were up by 9 per cent at ccy largely due
to investments and higher performance-related pay, partly offset by
disciplined hiring and control over discretionary spending.
• Credit impairment was a net release of $106 million, benefitting from
client recoveries, partly offset by a $58 million overlay for clients who have
exposure to the Hong Kong's commercial real estate sector. Other impairment
charge primarily related to the write-off of software assets.
• Risk-weighted assets of $157 billion were up $15 billion mainly driven
by asset growth and higher market RWA.
Page 23
Supplementary financial information continued
Wealth & Retail Banking
4Q'24 4Q'23 Change(2) Constant currency change(1,2) 3Q'24 Change(2) Constant currency change(1,2) FY24 FY23 Change(2) Constant currency change(1,2)
$million
$million
%
%
$million
%
%
$million
$million
%
%
Operating income 1,904 1,701 12 12 2,040 (7) (6) 7,816 7,106 10 11
Transaction Services 13 12 8 8 13 - - 50 48 4 6
Trade & Working Capital 13 12 8 8 13 - - 50 48 4 6
Wealth Solutions 561 412 36 36 693 (19) (19) 2,488 1,944 28 29
Investment Products 451 298 51 52 506 (11) (11) 1,825 1,357 34 36
Bancassurance 110 114 (4) (4) 187 (41) (41) 663 587 13 14
CCPL & Other Unsecured Lending 270 259 4 5 281 (4) (4) 1,081 1,068 1 3
Deposits 990 951 4 4 950 4 5 3,774 3,621 4 4
Mortgages & Other Secured Lending 68 57 19 25 100 (32) (30) 395 400 (1) 3
Other 2 10 (80) (63) 3 (33) (40) 28 25 12 32
Operating expenses (1,325) (1,121) (18) (19) (1,108) (20) (20) (4,589) (4,261) (8) (9)
Operating profit before impairment losses and taxation 579 580 - (1) 932 (38) (38) 3,227 2,845 13 14
Credit impairment (185) (131) (41) (41) (177) (5) (5) (644) (354) (82) (84)
Other impairment (80) (4) nm nm (13) nm nm (120) (4) nm nm
Underlying profit/(loss) before taxation 314 445 (29) (31) 742 (58) (58) 2,463 2,487 (1) (1)
Restructuring (78) (27) (189) (179) (41) (90) (81) (170) (60) (183) (169)
Other items(6) - - nm nm - nm nm (100) - nm nm
Reported profit/(loss) before taxation 236 418 (44) (44) 701 (66) (67) 2,193 2,427 (10) (10)
Total assets 122,404 128,768 (5) (1) 125,964 (3) 1 122,404 128,768 (5) (1)
Of which: loans and advances to customers(3) 119,242 126,117 (5) (2) 122,657 (3) 1 119,242 126,117 (5) (2)
Total liabilities 220,501 200,263 10 13 218,857 1 4 220,501 200,263 10 13
Of which: customer accounts(3) 216,476 195,678 11 13 214,402 1 4 216,476 195,678 11 13
Risk-weighted assets 50,525 51,342 (2) nm 53,822 (6) nm 50,525 51,342 (2) nm
Income return on risk-weighted assets (%)(4) 14.8 13.2 160bps nm 15.3 (50)bps nm 14.9 14.0 90bps nm
Underlying return on tangible equity (%)(4) 12.6 17.9 (530)bps nm 28.9 (1,630)bps nm 24.4 25.3 (90)bps nm
Cost-to-income ratio (%)(5) 69.6 65.9 (3.7) (4.1) 54.3 (15.3) (15.4) 58.7 60.0 1.3 1.0
1 Comparisons presented on the basis of the current period's
transactional currency rate, ensuring like-for-like currency rates between the
two periods
2 Variance is better/(worse) other than risk-weighted assets, assets
and liabilities which is increase/(decrease)
3 Loans and advances to customers and customer accounts includes
FVTPL and repurchase agreements
4 Change is the basis points (bps) difference between the two periods
rather than the percentage change
5 Change is the percentage points difference between the two periods
rather than the percentage change
6 Other items 2024 include $100 million charge relating to Korea
equity linked securities (ELS) portfolio
Segment overview
Wealth & Retail Banking (WRB) serves more than 13 million individuals and
small businesses, with a focus on the affluent segment which encompasses
Private Bank, Priority Private, Priority Banking, and Premium. In the mass
retail space, we are focused on emerging affluent clients who will progress in
their wealth journey with us and form the pipeline of future affluent clients.
We are a leading wealth manager in Asia, Africa and the Middle East, as our
deep local presence and international network enables us to capture the strong
structural tailwinds which are driving cross-border wealth flows.
Our comprehensive product propositions span across deposits, payments,
financing, advisory, investments and bancassurance. In particular, our open
product architecture allows us to collaborate and innovate with product
partners to offer best-in-class and first-to-market wealth solutions to our
clients. We also support our small business clients with their trade, working
capital and other banking needs.
WRB is closely integrated with the Group's other client segments; for example,
we offer employee banking services to CIB clients, and we also provide a
source of high-quality liquidity for the Group.
Page 24
Supplementary financial information continued
Strategic priorities
• Solidify our position as a leading international wealth manager and
capture Global Chinese and Global Indian opportunities, by leveraging our
client continuum, global network and expertise in wealth solutions.
• Accelerate our investment in affluent frontline teams, wealth and
digital platforms, and client centres, as well as brand and marketing, to
drive income growth and higher returns.
• Deliver differentiated and advisory-led wealth propositions with
digital-first and personalised experiences, leveraging an open architecture
platform.
• Enable access to sustainable investments by integrating ESG into our
Wealth Solutions propositions.
• Reshape our mass retail business to focus on building a strong pipeline
of future affluent and international banking clients.
• Improve client experience and efficiency via continuous innovation,
digitisation, data analytics and process simplification.
Progress
• Strong momentum in client growth with the addition of 265,000
new-to-bank affluent clients, and Net New Money(1) across Priority Banking and
Private Bank reached $43.6 billion, up by 61 per cent year-on-year.
• Strengthened cross-border and cross-segment collaboration across our
global network to deliver robust growth in international clients (up by 18 per
cent year-on-year), resulting in 325,000 new international clients and a
significant contribution to Assets Under Management.
• Continued to launch differentiated wealth solutions such as our
exclusive Signature Select and Signature CIO funds.
• Digitised and enhanced wealth client journeys with new self-service
capabilities, streamlined processes, and more comprehensive portfolio advisory
capabilities for both clients and frontline teams.
• Developed our relationship teams to be better wealth advisers, with
about 1,100 frontline relationship managers, team leaders and specialists
trained in the Standard Chartered-INSEAD Wealth Academy programmes since
launch.
• Up-tiered 295,000 individual clients through our wealth continuum across
and within personal and affluent segments, by tailoring propositions and
service models to the needs of our clients.
• Recognised for excellence in private banking, digital wealth and other
capabilities, with over 30 industry awards received in 2024.
Performance highlights
• Underlying profit before tax of $2,463 million decreased by 1 per cent
at constant currency (ccy) primarily driven by increased operating expenses,
higher credit and other impairment charge partially offset by higher income.
• Underlying operating income of $7,816 million was up 11 per cent at ccy,
driven primarily by Wealth Solutions, up 29 per cent. This growth was
broad-based across markets and products, driven by continued momentum in
Affluent new-to-bank onboarding and net new money. CCPL & Other Unsecured
Lending income increased by 3 per cent supported by higher volumes from
Partnership-led growth. Deposits income rose by 4 per cent driven by higher
deposit volumes. Mortgage & Other Secured Lending income was up by 3 per
cent benefitting from higher upfront fees due to new sales momentum in Korea
and Hong Kong, along with improving margins due to lower HIBOR.
• Underlying operating expenses increased by 9 per cent in ccy, primarily
driven by inflation and investment in business growth initiatives including
the strategic hiring of Affluent relationship managers.
• Credit impairment charge increased $290 million to $644 million mainly
from the higher interest rate environment impacting repayments on credit cards
and personal loans, the growth and maturity of the digital partnership
portfolios in China and Indonesia as well as $21 million overlay relating to
Korea eCommerce platforms. Other impairment charge primarily related to the
write-off of software assets.
1 Net New Money is shown at YTD constant currency FX rates
Page 25
Supplementary financial information continued
Ventures
4Q'24 4Q'23 Change(2) Constant currency change(1,2) 3Q'24 Change(2) Constant currency change(1,2) FY24 FY23 Change(2) Constant currency change(1,2)
$million
$million
%
%
$million
%
%
$million
$million
%
%
Operating income 60 32 88 82 43 40 43 183 156 17 16
Of which: SCV 19 6 nm nm 4 nm 110 41 68 (40) (41)
Of which: Digital Banks 41 26 58 44 39 5 22 142 88 61 60
Wealth Solutions - - nm nm 1 (100) nm 1 - nm nm
CCPL & Other Unsecured Lending 34 29 17 17 31 10 6 120 93 29 28
Deposits (6) (18) 67 67 (5) (20) (20) (29) (52) 44 44
Treasury (1) 10 (110) (110) (1) - - 1 30 (97) (97)
Other 33 11 nm 175 17 94 106 90 85 6 5
Operating expenses (115) (109) (6) (5) (119) 3 3 (464) (429) (8) (8)
Operating profit before impairment losses and taxation (55) (77) 29 29 (76) 28 28 (281) (273) (3) (3)
Credit impairment (15) (32) 53 53 (16) 6 6 (74) (85) 13 14
Other impairment (16) (17) 6 6 (2) nm nm (18) (26) 31 31
Profit from associates and joint ventures (6) (7) 14 14 (5) (20) (20) (17) (24) 29 25
Underlying profit/(loss) before taxation (92) (133) 31 31 (99) 7 6 (390) (408) 4 4
Restructuring (3) (3) - - 1 nm nm (3) (4) 25 -
Reported profit/(loss) before taxation (95) (136) 30 30 (98) 3 4 (393) (412) 5 4
Total assets 6,399 4,009 60 69 6,045 6 12 6,399 4,009 60 69
Of which: loans and advances to customers(3) 1,388 1,035 34 34 1,230 13 15 1,388 1,035 34 34
Total liabilities 5,277 3,096 70 72 4,972 6 10 5,277 3,096 70 72
Of which: customer accounts(3) 5,028 2,825 78 80 4,702 7 11 5,028 2,825 78 80
Risk-weighted assets 2,406 1,923 25 nm 2,195 10 nm 2,406 1,923 25 nm
Income return on risk-weighted assets (%)(4) 10.5 7.9 260bps nm 7.9 260bps nm 8.8 10.3 (150)bps nm
Underlying return on tangible equity (%)(4) nm nm nm nm nm nm nm nm nm nm nm
Cost-to-income ratio (%)(5) nm nm nm nm nm nm nm nm nm nm nm
1 Comparisons presented on the basis of the current period's
transactional currency rate, ensuring like-for-like currency rates between the
two periods
2 Variance is better/(worse) other than risk-weighted assets, assets
and liabilities which is increase/(decrease)
3 Loans and advances to customers and customer accounts includes FVTPL and
repurchase agreements
4 Change is the basis points (bps) difference between the two periods
rather than the percentage change
5 Change is the percentage points difference between the two periods
rather than the percentage change
Segment overview
Formed in 2022, the Ventures client segment is a consolidation of SC Ventures
and its related entities as well
as the Group's two majority-owned digital banks Mox in Hong Kong and Trust in
Singapore
• SC Ventures is the platform and catalyst for the Group to promote
innovation, invest in disruptive financial technology and explore alternative
business models. It represents a diverse portfolio of almost 30 ventures
and more than 30 investments.
• Mox, a cloud-native, mobile only digital bank, was launched in Hong Kong
as a joint venture with HKT, PCCW
and Trip.com in September 2020.
• Trust Bank is Singapore's first digitally native bank, launched in
partnership with FairPrice Group in September 2022. It has become one of the
world's fastest-growing digital banks, rapidly expanding to 974,000 customers
in Singapore by the end of 2024 and building a wide range of innovative
products and services.
Page 26
Supplementary financial information continued
Strategic priorities
• SC Ventures' focus is on building and scaling new business models -
across the three themes of Digital Banking & Lifestyle, Trade & Supply
Chains and Digital Assets, enabled by artificial intelligence,
Web3/Blockchain, ESG and Quantum. We do this by connecting ecosystems,
partners and clients to create value and new sources of revenues, providing
optionality for the Bank. We advance our fintech agenda by identifying,
partnering and making minority investments in companies that provide
technology capabilities, which can be integrated into the Bank and Ventures.
Our focus is on innovative, fast growing, technology-focused companies that
can accelerate transformation in the financial services sector.
• Mox aims to become the leading digital bank globally. Its vision is to
set the global benchmark for digital banking, focusing on cards, digital
lending, deposits and wealth management. Mox plans to enhance its offering
with insurance services and a broader range of digital financial solutions to
cater to customer needs in a competitive market.
• Trust Bank aims to establish itself as one of the main retail banks in
Singapore, creating new standards of customer experience. Key near-term
priorities are to continue to deepen engagement with existing customers and to
launch a wealth management proposition.
Progress
• In 2024, SC Ventures maintained positive momentum, further enhancing its
business performance. It launched four new ventures, raised funds amid a
challenging environment, and expanded its geographical reach. As a result, the
SC Ventures customer base grew by 13 per cent year-on-year to reach 660,000.
SC Ventures' presence in the Middle East expanded its network of partners and
stakeholders in the region, while our Singapore-based digital infrastructure
platform, Olea Global, secured a $100 million warehouse financing facility
from HSBC and Manulife.
• SC Ventures' portfolio of compliant and bank-grade platforms continues
to prove our commitment to building infrastructure that will enable
institutional adoption of digital assets. In 2024, Zodia Custody's client base
significantly expanded, and the digital asset custodian is now backed by four
major financial institutions: Standard Chartered, Northern Trust, SBI
Holdings, and NAB. Libeara is powering the SGD Delta Fund (managed by
Fundbridge Capital), which received Moody's first ever rating of a tokenised
bond.
• In 2024, Mox had around 650,000 customers, penetrating over 10 per cent
of Hong Kong's total bankable population. Mox continued to achieve strong
performance, supported by an engaged customer base with an average 3.1x
products and average log in of 15 times per active customer every month. Mox
delivered 15 per cent year-on-year growth in revenue and 57 per cent
year-on-year growth in deposits. Mox Card is a runaway success, with more than
100 million transactions to date. In 2024, Mox was the first digital bank in
Hong Kong to offer Asia Miles as part of its customer value proposition and
has distributed a total of 500 million Asia Miles to date. By the first half
of 2024, Mox's market share had reached 27 per cent (was ranked #1) and 26 per
cent (was ranked #2) in lending and deposits respectively, among all Hong Kong
digital banks.
• Mox was recognised for its excellence by various global named agencies,
such as the Best Digital Bank in Hong Kong by The Asian Banker, Best Digital
Bank for CX in Hong Kong and in Asia Pacific by The Digital Banker Digital CX
Awards, Virtual Bank of the Year - Hong Kong by Asian Banking & Finance.
Besides, Mox has established a strong connection with Hong Kong customers
since its launch - the bank's app is currently the highest-rated digital
banking app in Hong Kong, achieving a score of 4.8 out of 5 in the Apple App
Store
• Trust Bank continued its rapid growth during 2024, with customer numbers
reaching 974,000, equivalent to an
18 per cent share of the adult population in Singapore. Customer referrals
remain the main source of this growth, keeping customer acquisition costs low.
Alongside this customer growth, Trust Bank significantly expanded its customer
proposition during the year, launching several innovative products including
split purchase and balance transfer loans, a cashback credit card and a
proposition for mass affluent customers called Trust+. Customer engagement
levels remain high with credit card customers making an average of 21
transactions each month.
The resulting financial progress has been strong, with deposit balances
doubling to $2.8 billion and customer lending balances increasing 149 per cent
to $0.6 billion. 2024 revenue increased 160 per cent compared with
2023 while costs rose only 5 per cent. Loan impairments remained well
controlled.
• During the year, Trust Bank received extensive industry awards and
recognition, including the best digital bank in Singapore by The Asian Banker
and was named the best mobile banking app globally by The Digital Banker. It
remains a top-rated bank in Singapore on the Apple App Store. Building on the
success of Trust+, Trust Bank is building its first investment solutions
product called TrustInvest, which it plans to launch in the first quarter of
2025
Performance highlights
• Underlying loss before tax decreased by $18 million to $390 million
reflecting the Group's continued commitment to investing in transformational
digital initiatives. Income rose by 16 per cent at ccy to $183 million, driven
primarily by a 60 per cent growth in the Digital Banks. This growth was
fuelled by strong growth in customer numbers and volumes in both digital banks
- Mox and Trust.
• Operating expenses increased by 8 per cent due to continued investment
in new and existing ventures.
• Credit impairment decreased from $85 million to $74 million, mainly due
to delinquency rates improving in Mox.
• Risk-weighted assets of $2.4 billion have increased $0.5 billion mainly
due to continued investment in new and existing ventures and minority
interests.
Page 27
Supplementary financial information continued
Central & other items
4Q'24 4Q'23 Change(2) Constant currency change(1,2) 3Q'24 Change(2) Constant currency change(1,2) FY24 FY23 Change(2) Constant currency change(1,2)
$million
$million
%
%
$million
%
%
$million
$million
%
%
Operating income (70) (290) 76 77 (66) (6) (2) (121) (1,102) 89 89
Treasury (33) (245) 87 88 (1) nm nm (24) (932) 97 97
Other (37) (45) 18 13 (65) 43 48 (97) (170) 43 41
Operating expenses (200) (210) 5 11 (138) (45) (74) (704) (819) 14 15
Operating loss before impairment losses and taxation (270) (500) 46 47 (204) (32) (49) (825) (1,921) 57 57
Credit impairment 9 (4) nm nm 5 80 150 55 34 62 67
Other impairment (108) (22) nm nm (20) nm nm (140) (68) (106) (106)
Profit from associates and joint ventures (21) 4 nm nm 18 nm nm 67 118 (43) (42)
Underlying loss before taxation (390) (522) 25 27 (201) (94) (118) (843) (1,837) 54 54
Restructuring (35) 19 nm nm (15) (133) nm (89) 18 nm nm
Goodwill impairment(4) - (153) 100 100 - nm nm - (850) 100 100
Other items(3) (44) - nm nm 1 nm nm (232) - nm nm
Reported loss before taxation (469) (656) 29 29 (215) (118) (164) (1,164) (2,669) 56 57
Total assets 235,223 287,009 (18) (16) 260,807 (10) (7) 235,223 287,009 (18) (16)
Of which: loans and advances to customers(5) 21,319 28,939 (26) (24) 26,100 (18) (14) 21,319 28,939 (26) (24)
Total liabilities 96,124 104,164 (8) (7) 107,253 (10) (10) 96,124 104,164 (8) (7)
Of which: customer accounts(5) 4,754 7,908 (40) (39) 5,647 (16) (14) 4,754 7,908 (40) (39)
Risk-weighted assets 37,266 48,907 (24) nm 39,629 (6) nm 37,266 48,907 (24) nm
Income return on risk-weighted assets (%)(6) (0.7) (2.4) 170bps nm (0.7) - nm (0.3) (2.2) 190bps nm
Underlying return on tangible equity (%)(6) (21.7) (18.8) (290)bps nm (27.7) 600bps nm (20.9) (27.0) 610bps nm
Cost-to-income ratio (%) (excluding nm nm nm nm nm nm nm nm nm nm nm
UK bank levy)(7)
1 Comparisons presented on the basis of the current period's
transactional currency rate, ensuring like-for-like currency rates between the
two periods
2 Variance is better/(worse) other than risk-weighted assets, assets
and liabilities which is increase/(decrease)
3 Other items FY24 includes $172 million primarily relating to
recycling of FX translation losses from reserves into P&L on the sale of
Zimbabwe, $26 million loss on sale of Angola, $19 million loss on Sierra Leone
Partial exit and $15 million loss on the Aviation business disposal
4 Goodwill and other impairment include $850 million impairment
charge relating to the Group's investment in its associate China Bohai Bank
(Bohai)
5 Loans and advances to customers and customer accounts includes
FVTPL and repurchase agreements
6 Change is the basis points (bps) difference between the two periods
rather than the percentage change
7 Change is the percentage points difference between the two periods
rather than the percentage change
Performance highlights
• Underlying loss before tax of $843 million improved by 54 per
cent at constant currency compared to prior year. This improvement was driven
by reduction in operating losses and lower operating expenses, partially
offset by higher other impairment due to write-off of software assets and
lower profit from associates and joint ventures
• Underlying operating loss reduced by 89 percent year-on-year
to $121 million. Treasury income increased by 97 per cent, driven primarily by
the roll-off of short-term hedges, improved income from repricing of Treasury
assets, and translation gains from the revaluation of FX positions in Egypt.
Other income rose by 41 percent, largely due to hyperinflationary accounting
adjustments in Ghana
Page 28
Supplementary financial information continued
Underlying performance by key market
2024
Hong Kong Korea China Taiwan Singapore India UAE UK US Other Group
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
Operating income 4,764 1,095 1,321 577 2,573 1,328 836 305 1,289 5,608 19,696
Operating expenses (2,076) (788) (903) (345) (1,293) (914) (439) (1,000) (698) (3,334) (11,790)
Operating profit/(loss) 2,688 307 418 232 1,280 414 397 (695) 591 2,274 7,906
before impairment losses
and taxation
Credit impairment (266) (54) (152) (38) (72) (34) 26 11 (1) 23 (557)
Other impairment (114) (1) (28) (11) (73) (72) (28) (23) (26) (212) (588)
Profit from associates and - - 67 - - - - (7) - (10) 50
joint ventures
Underlying profit/(loss) 2,308 252 305 183 1,135 308 395 (714) 564 2,075 6,811
before taxation
Total assets employed 204,042 47,865 42,811 22,091 110,524 35,655 28,327 170,713 72,205 115,455 849,688
Of which: loans and 87,891 26,749 15,812 11,860 61,168 13,503 8,207 35,283 29,148 49,936 339,557
advances to customers(1)
Total liabilities employed 194,658 39,463 33,367 18,863 116,660 27,666 17,759 127,802 57,138 165,028 798,404
Of which: customer accounts(1) 161,961 28,703 27,853 17,252 89,269 18,601 13,845 83,036 23,579 59,164 523,263
2023
Hong Kong Korea China Taiwan Singapore India UAE UK US Other Group
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
Operating income 4,167 1,074 1,158 558 2,455 1,206 794 102 870 4,994 17,378
Operating expenses (1,927) (731) (894) (331) (1,214) (865) (392) (870) (634) (3,278) (11,136)
Operating profit/(loss) 2,240 343 264 227 1,241 341 402 (768) 236 1,716 6,242
before impairment losses
and taxation
Credit impairment (372) (48) (113) (42) (48) (31) 24 14 12 76 (528)
Other impairment (17) 1 (5) (5) (14) (11) (5) (15) (5) (54) (130)
Profit from associates and - - 114 - - - - - - (20) 94
joint ventures
Underlying profit/(loss) 1,851 296 260 180 1,179 299 421 (769) 243 1,718 5,678
before taxation
Total assets employed 190,484 56,638 41,508 21,638 102,724 33,781 20,376 149,982 88,113 117,600 822,844
Of which: loans and advances to customers(1) 87,590 33,443 15,882 11,634 62,030 13,832 8,495 31,067 27,434 54,079 345,486
Total liabilities employed 183,112 46,666 38,252 20,365 109,825 26,532 17,214 92,168 72,583 165,774 772,491
Of which: customer accounts(1) 155,446 37,032 31,211 18,621 86,282 18,709 13,924 72,610 40,846 59,941 534,622
1 Loans and advances to customers and customer accounts includes
FVTPL and repurchase agreements
Page 29
Supplementary financial information continued
4Q'24
Hong Kong Korea China Taiwan Singapore India UAE UK US Other Group
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
Operating income 1,205 315 303 129 592 322 189 104 345 1,330 4,834
Operating expenses (570) (267) (245) (94) (334) (257) (118) (311) (173) (908) (3,277)
Operating profit/(loss) 635 48 58 35 258 65 71 (207) 172 422 1,557
before impairment losses
and taxation
Credit impairment (92) (7) (29) (11) (42) (12) 9 11 (2) 45 (130)
Other impairment (62) - (12) (6) (43) (43) (9) (19) (12) (147) (353)
Profit from associates - - (20) - - - - (1) - (6) (27)
and joint ventures
Underlying profit/(loss) 481 41 (3) 18 173 10 71 (216) 158 314 1,047
before taxation
Total assets employed 204,042 47,865 42,811 22,091 110,524 35,655 28,327 170,713 72,205 115,455 849,688
Of which: loans and advances to customers(1) 87,891 26,749 15,812 11,860 61,168 13,503 8,207 35,283 29,148 49,936 339,557
Total liabilities employed 194,658 39,463 33,367 18,863 116,660 27,666 17,759 127,802 57,138 165,028 798,404
Of which: customer accounts(1) 161,961 28,703 27,853 17,252 89,269 18,601 13,845 83,036 23,579 59,164 523,263
4Q'23
Hong Kong Korea China Taiwan Singapore India UAE UK US Other Group
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
Operating income 1,008 217 275 125 557 269 182 (103) 206 1,288 4,024
Operating expenses (489) (192) (234) (84) (312) (203) (93) (218) (149) (888) (2,862)
Operating profit/(loss) 519 25 41 41 245 66 89 (321) 57 400 1,162
before impairment losses
and taxation
Credit impairment (60) (3) (33) (9) (26) (18) 3 7 2 75 (62)
Other impairment (16) 1 (4) (5) (11) (10) (5) (15) (9) 33 (41)
Profit from associates and - - (1) - - - - - - (2) (3)
joint ventures
Underlying profit/(loss) 443 23 3 27 208 38 87 (329) 50 506 1,056
before taxation
Total assets employed 190,484 56,638 41,508 21,638 102,724 33,781 20,376 149,982 88,113 117,600 822,844
Of which: loans and advances to customers(1) 87,590 33,443 15,882 11,634 62,030 13,832 8,495 31,067 27,434 54,079 345,486
Total liabilities employed 183,112 46,666 38,252 20,365 109,825 26,532 17,214 92,168 72,583 165,774 772,491
Of which: customer accounts(1) 155,446 37,032 31,211 18,621 86,282 18,709 13,924 72,610 40,846 59,941 534,622
1 Loans and advances to customers and customer accounts includes
FVTPL and repurchase agreements
Page 30
Supplementary financial information continued
Quarterly underlying operating income by product
4Q'24 3Q'24 2Q'24 1Q'24 4Q'23 3Q'23 2Q'23 1Q'23
$million
$million
$million
$million
$million
$million
$million
$million
Transaction Services 1,679 1,585 1,605 1,615 1,659 1,667 1,620 1,572
Payments and Liquidity 1,193 1,112 1,139 1,161 1,207 1,196 1,148 1,094
Securities & Prime Services 161 156 153 141 140 138 131 141
Trade & Working Capital 325 317 313 313 312 333 341 337
Global Banking 500 475 488 472 400 447 447 411
Lending & Financial Solutions 434 407 422 414 358 393 396 353
Capital Markets & Advisory 66 68 66 58 42 54 51 58
Global Markets 773 840 796 1,041 534 716 877 922
Macro Trading 654 683 631 884 463 595 776 786
Credit Trading 138 174 165 167 92 122 116 121
Valuation & Other Adj (19) (17) - (10) (21) (1) (15) 15
Wealth Solutions 562 694 618 616 412 526 495 511
Investment Products 452 507 444 424 298 364 343 352
Bancassurance 110 187 174 192 114 162 152 159
CCPL & Other Unsecured Lending 304 312 298 287 288 297 286 290
Deposits 984 946 908 908 933 953 881 803
Mortgages & Other Secured Lending 68 100 124 103 57 69 113 161
Treasury (34) (2) (30) 43 (235) (274) (160) (233)
Other (2) (46) (1) 67 (24) 2 (4) (41)
Total underlying operating income 4,834 4,904 4,806 5,152 4,024 4,403 4,555 4,396
Earnings per ordinary share
Q4'24 Q4'23 Change Q3'24 Change FY'24 FY'23 Change
$million
$million
%
$million
%
$million
$million
%
Profit for the period attributable to equity holders 526 938 (44) 1,147 (54) 4,042 3,462 nm
Non-controlling interest (4) (2) (100) 3 nm 8 7 nm
Dividend payable on preference shares and AT1 classified as equity (29) (29) - (219) 87 (457) (452) nm
Profit for the period attributable to ordinary shareholders 493 907 (46) 931 (47) 3,593 3,017 nm
Items normalised(1):
Restructuring 200 63 nm 91 120 441 14 nm
Goodwill and other impairment - 153 nm - nm - 850 nm
DVA 3 (35) nm (5) nm 24 (17) nm
Net losses / (gains) on sale of Businesses 44 (262) nm (1) nm 232 (262) nm
Other items - - nm - nm 100 - nm
Tax on normalised items (36) (17) (112) (11) nm (114) (21) nm
Underlying profit attributable to ordinary shareholders 704 809 (13) 1,005 (30) 4,276 3,581 nm
Basic - Weighted average number of shares (millions) 2,436 2,664 nm 2,527 nm 2,543 2,778 nm
Diluted - Weighted average number of shares (millions) 2,509 2,723 nm 2,595 nm 2,610 2,841 nm
Basic earnings per ordinary share (cents) 20.2 34.0 (13.8) 36.8 (16.6) 141.3 108.6 32.7
Diluted earnings per ordinary share (cents) 19.6 33.3 (13.7) 35.9 (16.3) 137.7 106.2 31.5
Underlying basic earnings per ordinary share (cents) 28.9 30.4 (1.5) 39.8 (10.9) 168.1 128.9 39.2
Underlying diluted earnings per ordinary share (cents) 28.1 29.7 (1.6) 38.7 (10.6) 163.8 126.0 37.8
1 Refer Profit before taxation (PBT) table in underlying versus
reported reconciliation
Page 31
Supplementary financial information continued
Return on Tangible Equity
Q4'24 Q4'23 Change Q3'24 Change YTD'24 YTD'23 Change
$million
$million
%
$million
%
$million
$million
%
Average parent company Shareholders' Equity 44,824 43,456 3 44,836 - 44,478 43,549 2
Less Preference share premium (1,494) (1,494) - (1,494) - (1,494) (1,494) -
Less Average intangible assets (6,035) (6,106) 1 (6,191) 3 (6,108) (5,957) (3)
Average Ordinary Shareholders' Tangible Equity 37,295 35,856 4 37,151 - 36,876 36,098 2
Profit for the period attributable to equity holders 526 938 (44) 1,147 (54) 4,042 3,462 17
Non-controlling interests (4) (2) (100) 3 nm 8 7 14
Dividend payable on preference shares and AT1 classified as equity (29) (29) - (219) 87 (457) (452) (1)
Profit/(loss) for the period attributable to ordinary shareholders 493 907 (46) 931 (47) 3,593 3,017 19
Items normalised(1):
Restructuring 200 63 nm 91 120 441 14 nm
Goodwill and Other impairment - 153 nm - nm - 850 nm
Net losses / (gains) on sale of Businesses 44 (262) nm (1) nm 232 (262) nm
Ventures FVOCI unrealised gains net of tax 51 37 38 3 nm 39 69 (43)
DVA 3 (35) nm (5) nm 24 (17) nm
Other items - - nm - nm 100 - nm
Tax on normalised items (36) (17) (112) (11) nm (114) (21) nm
Underlying profit for the period attributable to ordinary shareholders 755 846 (11) 1,008 (25) 4,315 3,650 18
Underlying return on tangible equity 8.1% 9.4% (130)bps 10.8% (270)bps 11.7% 10.1% 160bps
Reported return on tangible equity 5.3% 10.0% (470)bps 10.0% (470)bps 9.7% 8.4% 130bps
1 Refer Profit before taxation (PBT) table in underlying versus
reported reconciliation
Net Tangible Asset Value per Share
31.12.24 31.12.23 Change 30.09.24 Change
$million
$million
%
$million
%
Parent company shareholders' equity 44,388 44,445 - 45,259 (2)
Less Preference share premium (1,494) (1,494) - (1,494) -
Less Intangible assets (5,791) (6,214) 7 (6,279) 8
Net shareholders tangible equity 37,103 36,737 1 37,486 (1)
Ordinary shares in issue, excluding own shares (millions) 2,408 2,637 (9) 2,484 (3)
Net Tangible Asset Value per share (cents)(1) 1,541 1,393 148 1,509 32
1 Change is cents difference between the two periods rather than
percentage change
Page 32
Underlying versus reported results reconciliations
Reconciliations between underlying and reported results are set out in the
tables below
Operating income by client segment
2024 2023
Corporate & Investment Banking Wealth & Retail Banking Ventures Central & other items Total Corporate & Investment Banking Wealth & Retail Banking Ventures Central & other items Total
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
Underlying versus reported:
Underlying operating income 11,818 7,816 183 (121) 19,696 11,218 7,106 156 (1,102) 17,378
Restructuring 69 23 - 11 103 291 45 - 26 362
DVA (24) - - - (24) 17 - - - 17
Other items¹ - - - (232) (232) 262 - - - 262
Reported operating income 11,863 7,839 183 (342) 19,543 11,788 7,151 156 (1,076) 18,019
Additional segmental income:
Net interest income 2,090 5,175 100 (999) 6,366 4,541 4,970 81 (1,823) 7,769
Net fees and commission income 1,938 1,855 52 (111) 3,734 1,753 1,538 43 (82) 3,252
Net trading and other income 7,835 809 31 768 9,443 5,494 643 32 829 6,998
Reported operating income 11,863 7,839 183 (342) 19,543 11,788 7,151 156 (1,076) 18,019
1 Other items 2024 includes $172 million primarily relating to
recycling of FX translation losses from reserves into P&L on the sale of
Zimbabwe, $26 million loss on sale of Angola,
$19 million loss on Sierra Leone Partial exit and $15 million loss on the
Aviation business disposal
Net interest income and Non NII
2024 2023
Underlying Restructuring Adjustment for Trading book funding cost and Others Reported Underlying Restructuring Adjustment Reported
$million
$million
$million
$million
$million
$million
for Trading book funding cost and Others
$million
$million
Net interest income 10,446 16 (4,096) 6,366 9,557 (10) (1,778) 7,769
Non NII 9,250 (169) 4,096 13,177 7,821 651 1,778 10,250
Total income 19,696 (153) - 19,543 17,378 641 - 18,019
Profit before taxation (PBT)
2024
Underlying Restructuring³ Net loss on businesses disposed of/ held for sale¹ Goodwill impairment Other items² DVA Reported
$million
$million
$million
$million
$million
$million
$million
Operating income 19,696 103 (232) - - (24) 19,543
Operating expenses (11,790) (612) - - (100) - (12,502)
Operating profit/(loss) before impairment losses and taxation 7,906 (509) (232) - (100) (24) 7,041
Credit impairment (557) 10 - - - - (547)
Other impairment (588) - - - - - (588)
Profit from associates and joint ventures 50 58 - - - - 108
Profit/(loss) before taxation 6,811 (441) (232) - (100) (24) 6,014
1 Net loss on businesses disposed of/ held for sale 2024 includes
$172 million primarily relating to recycling of FX translation losses from
reserves into P&L on the sale of Zimbabwe,
$26 million loss on sale of Angola, $19 million loss on Sierra Leone Partial
exit and $15 million loss on the Aviation business disposal
2 Other items 2024 include $100 million charge relating to Korea
equity linked securities (ELS) portfolio
3 Restructuring Operating expenses 2024 includes $156m of Fit For
Growth costs that are primarily severance costs, costs of staff working on FFG
initiatives and Legal and
professional fees
Page 33
Underlying versus reported results reconciliations continued
2023
Underlying Restructuring Net gain on businesses disposed of/ held for sale Goodwill impairment(1) Other items DVA Reported
$million
$million
$million
$million
$million
$million
$million
Operating income 17,378 362 262 - - 17 18,019
Operating expenses (11,136) (415) - - - - (11,551)
Operating profit/(loss) before impairment losses and taxation 6,242 (53) 262 - - 17 6,468
Credit impairment (528) 20 - - - - (508)
Other impairment (130) (28) - (850) - - (1,008)
Profit from associates and joint ventures 94 47 - - - - 141
Profit/(loss) before taxation 5,678 (14) 262 (850) - 17 5,093
1 Goodwill and other impairment include $850 million impairment
charge relating to the Group's investment in its associate China Bohai Bank
(Bohai)
Profit before taxation (PBT) by client segment
2024 2023
Corporate & Investment Banking Wealth & Retail Banking Ventures Central & other items Total Corporate & Investment Banking Wealth & Retail Banking Ventures Central & other items Total
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
Operating income 11,818 7,816 183 (121) 19,696 11,218 7,106 156 (1,102) 17,378
External 10,363 3,328 184 5,821 19,696 8,543 3,902 157 4,776 17,378
Inter-segment 1,455 4,488 (1) (5,942) - 2,675 3,204 (1) (5,878) -
Operating expenses (6,033) (4,589) (464) (704) (11,790) (5,627) (4,261) (429) (819) (11,136)
Operating profit/(loss) before impairment losses and taxation 5,785 3,227 (281) (825) 7,906 5,591 2,845 (273) (1,921) 6,242
Credit impairment 106 (644) (74) 55 (557) (123) (354) (85) 34 (528)
Other impairment (310) (120) (18) (140) (588) (32) (4) (26) (68) (130)
Profit from associates and joint ventures - - (17) 67 50 - - (24) 118 94
Underlying profit/(loss) before taxation 5,581 2,463 (390) (843) 6,811 5,436 2,487 (408) (1,837) 5,678
Restructuring (179) (170) (3) (89) (441) 32 (60) (4) 18 (14)
Goodwill and other impairment⁴ - - - - - - - - (850) (850)
DVA (24) - - - (24) 17 - - - 17
Other items³ - (100) - (232) (332) 262 - - - 262
Reported profit/(loss) before taxation 5,378 2,193 (393) (1,164) 6,014 5,747 2,427 (412) (2,669) 5,093
Total assets 485,662 122,404 6,399 235,223 849,688 403,058 128,768 4,009 287,009 822,844
Of which: loans and advances to customers 197,608 119,242 1,388 21,319 339,557 189,395 126,117 1,035 28,939 345,486
loans and advances to customers 139,089 119,236 1,388 21,319 281,032 130,897 126,104 1,035 28,939 286,975
loans held at fair value through profit or loss (FVTPL)(1) 58,519 6 - - 58,525 58,498 13 - - 58,511
Total liabilities 476,502 220,501 5,277 96,124 798,404 464,968 200,263 3,096 104,164 772,491
Of which: customer accounts(2) 297,005 216,476 5,028 4,754 523,263 328,211 195,678 2,825 7,908 534,622
1 Loans held at FVTPL includes $51,441 million (2023: $51,299
million) of reverse repurchase agreements
2 Customer accounts includes $21,772 million (2023: $17,248 million)
of FVTPL and $37,002 million (2023: $47,956 million) of reverse repurchase
agreements
3 Other items 2024 includes $100 million charge relating to Korea equity
linked securities (ELS) portfolio, $172 million primarily relating to
recycling of FX translation losses from reserves into P&L on the sale of
Zimbabwe, $26 million loss on sale of Angola, $19 million loss on Sierra Leone
Partial exit and $15 million loss on the Aviation business disposal
4 Goodwill and other impairment include $850 million impairment
charge relating to the Group's investment in its associate China Bohai Bank
(Bohai)
Page 34
Underlying versus reported results reconciliations continued
Return on tangible equity (RoTE)
2024 2023
$million
$million
Average parent company shareholders' equity 44,478 43,549
Less Preference share premium (1,494) (1,494)
Less Average intangible assets (6,108) (5,957)
Average ordinary shareholders' tangible equity 36,876 36,098
Profit for the period attributable to equity holders 4,042 3,462
Non-controlling interests 8 7
Dividend payable on preference shares and AT1 classified as equity (457) (452)
Profit for the period attributable to ordinary shareholders 3,593 3,017
Items normalised:
Restructuring 441 14
Goodwill & other impairment(1) - 850
Net losses / (gains) on sale of businesses 232 (262)
Ventures FVOCI unrealised gains net of tax 39 69
DVA 24 (17)
Other items(2) 100 -
Tax on normalised items (114) (21)
Underlying profit for the period attributable to ordinary shareholders 4,315 3,650
Underlying return on tangible equity 11.7% 10.1%
Reported return on tangible equity 9.7% 8.4%
1 Goodwill and other impairment include nil (FY'23: $850 million)
impairment charge relating to the Group's investment in its associate China
Bohai Bank (Bohai)
2 Charge relating to Korea ELS
. 2024 2023
Corporate & Investment Banking Wealth & Retail Banking Ventures Central & other items Total Corporate & Investment Banking Wealth & Retail Banking Ventures Central & other items Total
%
%
%
%
%
%
%
%
%
%
Underlying RoTE 19.0 24.4 nm (20.9) 11.7 19.5 25.3 nm (27.0) 10.1
Restructuring
Of which: Income 0.3 0.3 - 0.2 0.3 1.4 0.6 - 0.3 1.0
Of which: Expenses (1.0) (2.5) nm (2.1) (1.7) (1.3) (1.4) nm (0.6) (1.1)
Of which: Credit impairment - - - - - 0.1 - - 0.1 0.1
Of which: Other impairment - - - (0.1) - (0.1) - - (0.2) (0.1)
Of which: Profit from associates - - - 0.8 0.2 - - - 0.6 0.1
and joint ventures
Net gain/(loss) on businesses - - - (3.3) (0.6) 1.3 - - - 0.7
disposed / held for sale
Goodwill and other impairment¹ - - - - - - - - (11.1) (2.3)
Ventures FVOCI Unrealised gains/(losses) net of Taxes - - nm - (0.1) - - nm - (0.2)
DVA (0.1) - - - (0.1) 0.1 - nm - -
Other items - (1.3) - - (0.3) - - nm - -
Tax on normalised items 0.2 0.8 nm (0.1) 0.3 (0.4) 0.2 nm 1.1 0.1
Reported RoTE 18.4 21.7 nm (25.5) 9.7 20.6 24.7 nm (36.8) 8.4
1 Goodwill and other impairment include $850 million impairment
charge relating to the Group's investment in its associate China Bohai Bank
(Bohai)
Page 35
Underlying versus reported results reconciliations continued
Net charge-off ratio
2024 2023
Credit impairment (charge)/ release for the year/ period Net average exposure Net charge-off Ratio Credit impairment (charge)/ release for the year/ period Net average exposure Net charge-off Ratio
$million
$million
%
$million
$million
%
Stage 1 22 314,092 (0.01) 42 320,649 (0.01)
Stage 2 (368) 10,176 3.62 (262) 11,674 2.24
Stage 3 (244) 2,550 9.57 (386) 3,117 12.38
Total exposure (590) 326,818 0.18 (606) 335,440 0.18
Earnings per ordinary share (EPS)
2024
Underlying Restructuring Other items(2) Net Gain on Sale of Businesses Goodwill & other impairment DVA Tax on normalised items Reported
$ million
$ million
$ million
$ million
$ million
$ million
$ million
$ million
Profit/(loss) for the year attributable to ordinary shareholders 4,276 (441) (100) (232) - (24) 114 3,593
Basic - Weighted average number of shares (millions) 2,543 2,543
Basic earnings per ordinary share (cents) 168.1 141.3
2023
Underlying Restructuring Other items Net Gain on Sale of Businesses Goodwill & other impairment(1) DVA Tax on normalised items Reported
$ million
$ million
$ million
$ million
$ million
$ million
$ million
$ million
Profit/(loss) for the year attributable to ordinary shareholders 3,581 (14) - 262 (850) 17 21 3,017
Basic - Weighted average number of shares (millions) 2,778 2,778
Basic earnings per ordinary share (cents) 128.9 108.6
1 Goodwill and other impairment include nil (FY'23: $850 million)
impairment charge relating to the Group's investment in its associate China
Bohai Bank (Bohai)
2 Charge relating to Korea ELS
Page 36
Group Chief Risk Officer's review
"Managing our risks and focusing on business resilience and strategy, amidst persistent and evolving macroeconomic and geopolitical risks."
The Group's strong performance in 2024 is underpinned by our commitment to
effective risk management amid complex geopolitical and macroeconomic
challenges across many of our markets. The first half of the year saw
sustained inflation levels, high interest rates and uncertainties around the
pace of rate cuts, abated by the Fed's gradual rate reductions in the second
half of 2024, with many central banks following suit. Political developments
remained a key focus, with many national elections taking place globally and
civil unrest in several key markets requiring close monitoring. We proactively
considered the potential downside impact in our credit impairment outlook. In
the Middle East, heightened tensions and the risk of a broader regional
conflict prompted us to strengthen crisis management measures and assess
spillover risks. The Group continues to have limited direct exposure to
Ukraine and to the countries in the Middle East which are currently most
impacted by conflicts. In China, the improving outlook in 2025 following
rounds of government stimulus measures in 2024 has helped stabilise China's
real estate sector. Nonetheless, we remain watchful of China's policy response
to boost trade and domestic consumption, as well as the persistent challenges
in the property sector in terms of asset devaluation and destocking process by
the major developers.
We remained vigilant in managing persistent and evolving geopolitical and
macroeconomic risks while keeping our focus to the Group's strategy. This
included monitoring volatility in commodity markets and assessing both direct
and second order impacts across our segments and vulnerable sectors. Further
details on the Topical and Emerging Risks which we are monitoring are detailed
in the annual report.
Corporate & Investment Banking (CIB)
Our CIB credit portfolio remained resilient with overall good asset quality as
evidenced by our largely investment grade corporate portfolio (31 December
2024: 74 per cent, 31 December 2023: 73 per cent). In consideration of the
macroeconomic challenges, portfolio and thematic reviews were conducted
throughout 2024. These included: (i) stresses on extreme movements in
commodity prices; (ii) a global commercial real estate (CRE) stress test,
including a review of indirect exposures where the Group may be exposed to;
and (iii) thematic reviews of select geographies/portfolios. Our proactive
risk management helped us to identify vulnerable industry sectors and clients
which could potentially come under stress. The outcomes from these reviews
include closer monitoring of impacted industries and clients, placement of
accounts on Early Alert, credit grade adjustment or taking proactive limit or
exposure reduction actions, as appropriate.
Wealth & Retail Banking (WRB)
The WRB credit portfolio continued to demonstrate resilience amid the economic
uncertainties and geopolitical challenges in 2024. Slowing economic growth in
China and other challenges persisted in our larger markets (Hong Kong, Korea
and Singapore), as prolonged higher interest rates maintained pressure on our
retail customers' debt servicing capacity and translated into higher
delinquencies and impairments. Across our consumer credit portfolios, we
monitored customer affordability, proactively adjusted our origination
criteria and refined our portfolio management and collections strategies. The
WRB strategy was refreshed to pivot our product offerings across our markets
to focus on affluent segments. While credit impairment increased in 2024, we
expect improvement in credit performance in 2025 as the impact of credit
actions taken and pivot to affluent segments materialise across the
portfolios. We will continue to monitor changes in the macroeconomic
environment, including disruptions caused by increasing market and rates
volatility, regional conflicts and rising geopolitical and trade tensions,
through scenario analyses and portfolio reviews.
Treasury Risk
Our liquidity and capital risks are managed to ensure a strong and resilient
balance sheet that supports sustainable growth. Funding markets and liquidity
conditions have generally been stable in 2024 compared to 2023. We continue to
have a clear focus on Treasury risks including capital, liquidity and Interest
Rate Risk in the Banking Book and enhance the Treasury Risk framework as
required. We maintained a resilient liquidity position across the Group and
major legal entities throughout 2024 with Group liquidity coverage ratio (LCR)
at 138 per cent (31 December 2023: 145.4 per cent), a surplus to both Risk
Appetite and regulatory requirements. Common Equity Tier 1 (CET1) ratio was
14.2 per cent as of December 2024 (31 December 2023: 14.1 per cent) while
Leverage ratio was 4.8 per cent (31 December 2023: 4.7 per cent).
An update on our risk management approach
Our Enterprise Risk Management Framework (ERMF) sets out the principles and
minimum requirements for risk management and governance across the Group. 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).
The ERMF enables the Group to manage enterprise-wide risks, with the objective
of maximising risk-adjusted returns while remaining within our Risk Appetite
(RA).
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.
Principal Risk Types and Risk Appetite
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 Risk Type Frameworks which are approved by the GCRO.
Page 37
Group Chief Risk Officer's review
The table below details the Group's current PRTs and their corresponding RA
statements.
Principal Risk Type 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 loss resulting from activities undertaken by the Group in The Group should control its financial markets activities to ensure that
financial markets. market and counterparty credit risk losses do not cause material damage to the
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 does not cause material damage to the Group's franchise. In addition,
the Group should ensure its pension plans are adequately funded.
Operational and Technology Risk Potential for loss resulting from inadequate or failed internal processes, The Group aims to control operational and technology risks to ensure that
technology events, human error, or from the impact of external events operational losses (financial or reputational), including any related to the
(including legal risks). conduct of business matters, do not cause material damage to the Group's
franchise.
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 Bank 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.
Financial Crime Risk(2) 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, stakeholders or to the integrity of the markets we operate in through regulatory non-compliance; recognising that while incidents are unwanted, they
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.
2 Fraud forms part of the Financial Crime RA Statement but, in line
with market practice, does not apply a zero-tolerance approach
As of November 2024, the Climate Risk RA statement was integrated into the
ESGR PRT.
Topical and Emerging Risks (TERs)
Topical Risks refer to themes that may have emerged but are still evolving
rapidly and unpredictably. Emerging Risks refer to unpredictable and
uncontrollable outcomes from certain events which may have the potential to
adversely impact our business.
As part of our ongoing risk identification process, we have updated the
Group's TERs from those disclosed in the 2024 Half-Year Report. These remain
relevant with nuances in their evolution noted where pertinent. Below is a
summary of the TERs, and the actions we are taking to mitigate them based on
our current knowledge and assumptions. This reflects the latest internal
assessment by senior management.
The TER list is not exhaustive and there may be additional risks which could
have an adverse effect on the Group. There are some horizon risks that,
although not highly likely at present, could become threats in the future and
thus we are monitoring them. These include future pandemics and the world's
preparedness for them, and potential cross-border conflicts. Our mitigation
approach for these risks may not eliminate them but demonstrates the Group's
awareness and attempt to reduce or manage their impact. As certain risks
develop and materialise over time, we will take appropriate steps to mitigate
them based on their materiality to the Group.
Page 38
Group Chief Risk Officer's review
Macroeconomic and geopolitical considerations
There is a complex interconnectedness between risks due to the direct
influence of geopolitics on macroeconomics, as well as the global or
concentrated nature of key supply chains for energy, food, semi-conductors and
critical minerals.
The Group is exposed to these risks directly through investments,
infrastructure and employees, and also indirectly through its clients. While
the primary impact is financial, there may be other ramifications such as
reputational, compliance or operational considerations.
Expanding array of global tensions and transition of the international order
The international order is undergoing a transition, with a shift towards a
multi-aligned global system resulting in more transactional and less
predictable interactions between global powers. This can give rise to new and
more fluid political and economic alliances, accelerated by the increasing
number of conflicts, specifically those in Ukraine and the Middle East.
While the Group has limited direct exposure to the countries which are
currently involved in conflicts, it may be impacted by second order effects on
its clients and markets such as agricultural commodities, oil and gas. The
threat of escalation to the wider Middle East region remains present, despite
a Gaza ceasefire agreement being reached in January 2025, and could affect
markets in the Group's footprint. Regional volatility has increased following
the collapse of the Assad regime in Syria.
The positioning of 'middle powers' is complex and evolving, and there is a
rise in 'mini-lateral' groupings of countries that are ideologically or
geographically aligned. The negotiating power of exporters of key resources
has grown and can shape global markets.
Expanding power blocs such as BRICS may coalesce and become more effective at
exercising their increased collective influence, such as establishing parallel
financial infrastructures (payment system, development bank, credit rating
agency) to support their trade. Other coalitions between more actively
anti-Western regimes such as Russia, North Korea, Syria and Iran could prove
more volatile in their attempts to shift the axis of power.
The 2024 global election cycle culminated with the US elections in November.
Donald Trump's victory signals forthcoming changes to relationships with
traditional allies such as Europe, given the focus on NATO spending and trade
surpluses. Tariffs may also be implemented in response to non-economic issues
such as immigration.
There have also been notable shifts in government composition in France, UK,
South Africa, Bangladesh and Sri Lanka, as well as political crises in Canada,
South Korea and Germany. Amid changes in governments, there is a growing
worldwide trend for short-term populist measures that are outweighing
longer-term political necessities, such as addressing climate change or
demographic transitions.
Relations between the West, led by the US and the EU, and China are in a state
of flux. Tariffs, embargos, sanctions, and restrictions on technology exports
and investments are expected to increase in pursuit of both economic and
security goals.
The malicious use of AI enabled disinformation could continue to cause
disruption and undermine trust in the political process. This, combined with
already fractured societies and persistent inequality, may lead to heightened
societal tensions. Terrorism and cyber warfare are also ongoing threats, with
unpredictability exacerbated by the wider range of ideologies at play. Cyber
attacks can disrupt infrastructure and institutions in rival countries.
A more complex and less integrated global political and economic landscape
could challenge cross-border business models but also provide new business
opportunities.
Uncertain interest rate trajectory and credit downturn
Although rate cuts have been enacted by all major central banks, with further
cuts signalled, the scale and pace of cuts are still highly uncertain.
Structurally higher deficits, continued supply disruptions, military spending
and other inflationary pressures, such as additional tariffs, may keep rates
higher.
A 'higher-for-longer' rate environment would continue to stretch companies and
sovereigns alike, with the global corporate default rate remaining well above
the post-financial crisis average in 2024. Stress has continued in the global
commercial real estate sector and may extend to fixed-rate mortgages. In
contrast, aggressive cuts could renew inflation.
Despite this, markets have remained surprisingly resilient to adverse
geopolitical conditions and inflation forecasts. The conflicts in the Middle
East and Russia have not had a material impact on commodity prices and the
wider global economy. However, oil price volatility could re-emerge should the
US strengthen sanctions enforcement. While credit spreads remain below those
observed at the outbreak of the Russia-Ukraine conflict, volatility and abrupt
changes in sentiment remain a risk.
Economic challenges in China
China's growth rate looks unlikely to return to pre-pandemic levels. Although
preliminary figures reported 2024 growth at 5 per cent, the IMF forecast is
for a drop to 4.5 per cent in 2025. As a result of the subdued growth rate,
China announced a co-ordinated package of stimulus measures in the second half
of 2024 to boost the economy with a focus on the stressed real estate and
local government sectors.
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Group Chief Risk Officer's review
Competition with the US and the EU is intense, particularly around modern
technologies. Areas such as electric vehicles and AI are key battlegrounds.
China's industrial overcapacity leads to increased search for export markets;
electric vehicles and steel are prime examples. This is stoking trade-related
frictions and provoking economic counter measures such as tariffs announced by
the US and the EU, with the new Trump administration's plans to impose further
trade barriers on China also looming.
To combat this China has sought agreements with other nations, such as the
Association of Southeast Asia Nations (ASEAN)-China Free Trade Agreement. As
well as strengthening economic ties, they allow Chinese companies to establish
manufacturing overseas, potentially circumventing the worst of the
restrictions.
China is also urging partners to increase the use of renminbi (RMB) in trade.
In the first half of 2024, RMB's share of global payments was 4.7 per cent,
over double that of a year earlier, making it the fourth most used currency
for global payments by value.
Given China's importance to global trade, a prolonged slowdown would have
wider implications across the supply chain, especially for its trading
partners, as well as for countries which rely on it for investment, such as
those in Africa. However, opportunities arise from the diversification of
intra-Asia trade and other global trade routes, and growth acceleration in
South Asia, especially India.
Sovereign risk
While a number of markets remain in debt distress, emerging markets have
proven resilient in 2024. Despite continued higher rates, the last notable
request for debt relief was made in early 2023. Progress has also been
observed with Zambia and Sri Lanka's debt exchanges.
However, bond issuance remains high, with global government debt set to exceed
$100 trillion in 2024, and potentially reach 100 per cent of global GDP by
2030. Markets are likely to find it difficult to reduce debt levels due to the
prevailing political backdrop, weak GDP growth, demographic pressures and
pressure to increase national security and defence.
While markets have remained opened for all categories of sovereign issuers,
refinancing costs have been rising, and interest payments are an increasing
burden on both emerging and developed markets. Emerging markets in particular
will continue to be affected by US dollar strengthening, which has intensified
since the US election. This would impact through multiple avenues, namely
higher import prices, lower flexibility in monetary policy and making
refinancing existing debt or accessing hard currency liquidity more
challenging.
Some countries also face a heightened risk of failing to manage societal
demands and increasing political vulnerability, as evidenced by France's
recent downgrade. Food and security challenges exacerbated by armed conflict
and climate change also have the potential to drive social unrest.
Debt moratoria and refinancing initiatives for some emerging markets are
complicated by a larger number of financiers, with much financing done on a
bilateral basis outside of the Paris Club. While the Global Sovereign Debt
Roundtable has made some progress on coordinating approaches between the Paris
Club and other lenders, their interests do not always match. This can lead to
delays in negotiations on debt resolutions for developing nations.
Supply chain issues and key material shortages
While the initial disruption caused by the Russia-Ukraine and Middle East
conflicts have somewhat abated, they highlighted the continued vulnerability
of global supply lines.
There is growing political awareness around the need for key component and
resource security at national level. Countries are enacting rules to 'de-risk'
by reducing reliance on rivals or concentrated suppliers (for example,
semi-conductors) and look to either re-industrialise or make use of
near-shoring and friend-shoring production.
Countries' increased willingness to impose trade barriers to influence trading
behaviour may disrupt exporters, strain relations with trade partners and add
to inflationary pressures. A recent example is the EU probe into unfair
commercial practices in the provision of renewable energy equipment,
particularly subsidies related to offshore wind and solar energy.
The growing need for minerals and rare earth elements to power green energy
technologies can be leveraged to achieve economic or political aims by
restricting access. This can bolster the negotiating influence of the main
refiners and producers, such as China, Indonesia and some African nations,
while prompting some nations to slow down their green transition plans.
Actions have already been taken in Western nations to de-risk through
initiatives such as the Minerals Security Partnership.
How these risks are mitigated
• We remain vigilant in monitoring risk and assessing impacts from
geopolitical and macroeconomic risks to portfolio concentrations
• We explored the implications of a second Trump administration,
evaluating policy direction under different scenarios, the potential outcomes
and challenges associated with each
• We maintain a diversified portfolio across products and geographies,
with specific risk appetite metrics to monitor concentrations
• We are performing targeted portfolio analyses to identify clients that
may be impacted by a new wave of tariffs.
• Mitigations in our Wealth & Retail Banking segment include building
a resilient revenue base and maintaining close relations with clients for the
awareness of early alerts.
Page 40
Group Chief Risk Officer's review
• Increased scrutiny is applied when onboarding clients in sensitive
industries and in ensuring compliance with sanctions.
• We utilise Credit Risk mitigation measures including collateral and
credit insurance.
• We conduct portfolio reviews as well as macroeconomic, thematic and
event-driven stress tests at Group, country and business level, with regular
reviews of vulnerable sectors, and undertake mitigating actions.
• We have a dedicated country risk team that closely monitors sovereign
risk.
• We run a series of daily market risk stress scenarios to assess the
impact of unlikely but plausible market shocks.
• We run a suite of management scenarios with differing severities to
assess their impact on key risk appetite metrics.
• We regularly review our third-party arrangements to improve operational
resilience.
ESG considerations
ESG risk
Higher frequencies of extreme weather events are observed each year and the
cost of managing the climate impacts is increasing, with the burden
disproportionately borne by developing markets, where we have a large
footprint. Alongside climate, other environmental risks pose incremental
challenges to food, health systems and energy security; for example,
biodiversity loss, pollution, and depletion of water.
Modern slavery and human rights concerns are increasingly in focus with the
scope expanding beyond direct operations to extended supply chains and
vendors.
ESG regulation continues to develop across the world, often with differing
taxonomies and disclosure requirements. This increased regulation is also
generating stakeholder scrutiny on greenwashing risk, with ESG litigation
being brought against corporations and governments in multiple markets.
However, a succession of political, social and economic disruptions in recent
years have diverted attention and resources away from longer-term action on
climate and sustainable development as competing spending demands are made of
stretched budgets. This will be further exacerbated by the new Trump
administration, which has rolled back green energy policies, and withdrawn the
US from the Paris Agreement.
For companies and governments, the trade-off between pragmatism and
environmentalism has crystallised with several delaying or rolling back
targets. For example, there has been a significant reduction in the number of
ESG-focused funds launched in 2024, and there has been a lack of progress at
the recent COP meeting. Several US and Canadian banks have withdrawn from the
Net-Zero Banking Alliance. A slower transition to low carbon business models
may impact progress towards the Group's net zero targets and product roadmap.
How these risks are mitigated
• Climate Risk considerations are embedded across all relevant Principal
Risk Types. This includes client-level Climate Risk assessments, including
setting adequate mitigants or controls as part of decision making and
portfolio management activities.
• We embed our values through our Position Statements for sensitive
sectors and a list of prohibited activities. We also maintain ESG and
Reputational Risk standards to identify, assess and manage these risks when
providing financial services to clients.
• The management of greenwashing risks has been integrated into our ESG
and Reputational Risk Framework, Reputational Risk policy, Sustainable Finance
product greenwashing standard, and Corporate Affairs, Brand and Marketing
standards for communications and segment campaigns.
• Detailed portfolio reviews and stress tests are conducted to test
resilience to climate-related physical and transition risks and enhance
modelling capabilities to understand the financial risks and opportunities
from climate change.
• We assess our relevant corporate clients and suppliers against various
international human rights principles, as well as through our social
safeguards.
New business structures, channels and competition
Competition arising from technological developments and non-bank lending
Traditional banking faces challenges in its external competitive environment
from a range of fintechs and private credit players, which disintermediate and
cause disruption to traditional lenders as well as public markets. There are
also 'digital enterprise' business models, which integrate financial services
with emerging technologies like AI, big data analytics and cloud computing
fostering financial disintermediation.
The rapid adoption of AI in particular raises a number of challenges. There
has been a large increase of AI use in frauds and scams, and there are
potential societal and economic impacts of the technology being used to
replace jobs across most sectors. However, with AI tools and models being
embedded into everyday life it is likely to become a foundational technology.
Leveraging the benefits of augmented AI while managing these risks will be a
core part of the Group's business model.
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Group Chief Risk Officer's review
While there are challenges, banks themselves also have an opportunity to
defend or leverage their competitive advantage by harnessing new technologies,
partnerships or new asset classes.
In the longer term, increased adoption of stable coins and digital currencies
could similarly create alternative deposit channels and bank
disintermediation.
The rapid adoption of new technologies, partnership models or digital assets
by banks brings a range of inherent risks, requiring clear operating models
and risk frameworks. It is essential to upskill our people to develop in-house
expertise and capabilities to manage associated risks, including model risks
or managing external third parties which deliver these technologies. We must
ensure that the people, process and technology agendas are viewed holistically
to ensure the most effective and efficient implementation of new
infrastructure.
Cyber security and data challenges
The Group's digital footprint is expanding. This increases inherent cyber risk
as more services and products are digitised, outsourced and made more
accessible. Highly interconnected and extended enterprises drive efficiencies
but can expand the opportunities available for malicious actors to gain entry
or access to corporate assets. This includes infrastructure such as cloud and
third-party enabled services.
The risk of cyber incidents is amplified by highly organised and resourced
threat actors including organised crime and nation states, with malicious
activity made easier through the commoditisation or 'as a service' access to
malicious tools and technologies. Emerging technology such as AI is enabling
novel or augmented attack types, and cross-border tensions further drive the
arms race to develop more capable and innovative cyber capabilities, both
offensive and defensive.
Geopolitical dynamics are leading to progressively fragmented and divergent
regulatory frameworks through which the Group must navigate. There are growing
data sovereignty requirements to localise data, systems and operations, with
data increasingly recognised as being at the centre of global trade.
How these risks are mitigated
• We monitor emerging technology trends, business models and opportunities
relevant to the banking sector.
• We invest in our capabilities to prepare for and protect against
disruption and new risks.
• We have established enhanced governance for novel areas, such as the
Digital Asset Risk Committee and the Responsible AI Council.
• We manage data risks through our Compliance Risk Type Framework and
information security risks through our Information and Cyber Security (ICS)
Risk Type Framework. We maintain a dedicated Group Data Conduct Policy with
globally applicable standards. These standards undergo regular review to
ensure alignment with changing regulations and industry best practice.
• We augment our data risk management capabilities and controls, including
through programmes to enhance data quality and compliance with Basel Committee
of Banking Supervision 239 requirements and to address evolving legal and
regulatory requirements relating to privacy and personal data protection,
cross-border data transfers and the use of AI, with progress tracked at
executive level risk governance committees.
• Risks embedded in key software programmes are continuously reassessed
together with enhancements made in testing stages of new systems before they
go live.
• The Group has implemented a 'defence-in-depth' ICS control environment
strategy to protect, detect and respond to known and emerging ICS threats.
• New risks arising from partnerships, alliances, digital assets and
generative technologies are identified through the New Initiatives Risk
Assessment and Third-Party Risk Management Policy and Standards.
• Work is already under way to gauge the potential benefits and threats of
nascent technologies such as quantum computing.
Regulatory considerations
Regulatory evolution and fragmentation
The regulatory framework for banks is expanding, becoming more complex and
remains subject to continual evolution. Another outcome of the new Trump
administration may be a relaxation of US regulation, and potentially a
challenge to its adoption of Basel 3.1 rules. The UK has postponed its
implementation of Basel 3.1 twice, with the current deadline being 2027.
Aside from changes in prudential, financial markets, climate and data
regulations, we anticipate a rise in consultations and regulations relating to
the use of AI, and particularly around its ethical application in
decision-making.
Jurisdictional risk arises from internationally diverging regulations, with
differing pace and scale of regulatory adoption, conflicting rules,
extraterritorial and localisation requirements around data, staff, capital and
revenues. Data sovereignty and ESG regulation are prime examples of
jurisdictional risk.
This makes it challenging for multinational groups to manage cross-border
activities, as well as adding complexity and cost. Such fragmented regulatory
changes can also create frictions in the market as a whole.
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Group Chief Risk Officer's review
How these risks are mitigated
• We actively monitor regulatory developments, including those related to
sustainable finance, ESG, digital assets and AI and respond to consultations
either bilaterally or through well-established industry bodies.
• We track evolving country-specific requirements, and actively
collaborate with regulators to support important initiatives.
• We help shape regulation, particularly in new areas like AI and Central
Bank Digital Currencies, through thought leadership, and actively engaging
with policymakers and central banks.
Demographic considerations
Skills of the future
Evolving client expectations and the rapid development of technologies such as
AI are transforming the workplace, and further accelerating changes to how
people deliver outcomes, connect and collaborate. The skills needed to grow
businesses and sustain careers are being disrupted as a result, with a balance
of both technical and human skills becoming increasingly critical.
Workforce expectations also continue to evolve. 'What' work people do and
'how' they get to deliver it have become differentiators in attracting
future-focused talent. There is greater desire to do work aligned to
individual purpose and to have increasing expectations from employers to
invest in skills and careers. These trends are even more distinct among
Millennials and Gen Z who make up an ever-increasing proportion of the global
talent pool, and as digital natives possess the attributes needed to pursue
our strategy.
To sustainably attract, grow and retain the relevant skills and talent, we
must continue to invest in building future-focused skills as well as further
strengthen our Employee Value Proposition (EVP) and brand promise.
Demographic and migration trends
Divergent demographic trends across developed and emerging markets create
contrasting challenges. Developed markets' state budgets will be increasingly
strained by ageing and shrinking populations, while political stances reduce
the ability to fill skills gaps through immigration. Conversely, emerging
markets are experiencing fast-growing, younger workforces. While it is an
opportunity to develop talent, population growth will put pressure on key
resources such as food and water, as well as government budgets for education
and health to capitalise on the 'demographic dividend'.
Population displacement is rising amid increased conflict and natural
disasters, a lack of key resources, climate change, and disturbances in public
order. This may increase the fragility of societal structures in vulnerable
centres. The topics of both forced and economic migration are increasingly
influential in political discourse and have been a major focus of the Trump
administration's first weeks in office. Large scale movement, both internally
displaced persons and cross border migration, could cause social unrest, as
well as propagate disease transmission and accelerate the spread of future
pandemics. The threat of terrorist activity has also increased in the latter
half of 2024.
Additionally, net population growth for the 21st century will be in
less-developed countries. Anticipating and proactively planning for these
demographic shifts will be essential in maintaining an efficient global
business model in the coming decades.
How these risks are mitigated
• We are helping colleagues to upskill and reskill, both through classroom
sessions and our online learning platform. We have an internal Talent
Marketplace which enables colleagues to sign up for projects to access diverse
experiences and career opportunities.
• We place emphasis on skills and aspiration to identify the talents to
accelerate, as well as deploy it in areas with the highest impact for our
clients and the business. We are piloting a differentiated learning
proposition for these talents with the highest potential.
• We emphasise frequent two-way feedback through performance and
development conversations to embed a culture of continuous learning and
development.
• Our culture and EVP work is addressing the emerging expectations of our
diverse talent base, particularly around being purpose-led.
• We provide support and resources to all colleagues to help balance
productivity, collaboration and wellbeing, with more than 60 per cent of our
workforce having signed up to work flexibly.
Page 43
Risk review
Loans and advances by client segments (audited)
Amortised cost 2024
Banks Customers Undrawn commitments Financial Guarantees
$million
$million
$million
Corporate & Investment Banking Wealth & Retail Banking Ventures Central & other items Customer 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 balance¹ 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 6.0% 71.0% 46.9% 91.7% 0.0% 63.6% 14.3% 21.4%
financial assets (S3)
- 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 - -
Defaulted (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 44
Risk review continued
Amortised cost 2023
Banks Customers Undrawn commitments Financial Guarantees
$million
$million
$million
Corporate & Investment Banking Wealth & Retail Banking Ventures Central & other items Customer Total
$million
$million
$million
$million
$million
Stage 1 44,384 120,886 123,486 1,015 28,305 273,692 176,654 70,832
- Strong 35,284 84,248 118,193 1,000 27,967 231,408 162,643 47,885
- Satisfactory 9,100 36,638 5,293 15 338 42,284 14,011 22,947
Stage 2 540 7,902 2,304 54 965 11,225 5,733 2,910
- Strong 55 1,145 1,761 34 - 2,940 1,090 830
- Satisfactory 212 5,840 206 7 - 6,053 4,169 1,823
- Higher risk 273 917 337 13 965 2,232 474 257
Of which (stage 2):
- Less than 30 days past due - 78 206 7 - 291 - -
- More than 30 days past due - 10 337 13 - 360 - -
Stage 3, credit-impaired financial assets 77 5,508 1,484 12 224 7,228 3 672
Gross balance¹ 45,001 134,296 127,274 1,081 29,494 292,145 182,390 74,414
Stage 1 (8) (101) (314) (15) - (430) (52) (10)
- Strong (3) (34) (234) (14) - (282) (31) (2)
- Satisfactory (5) (67) (80) (1) - (148) (21) (8)
Stage 2 (10) (257) (141) (21) (1) (420) (39) (14)
- Strong (1) (18) (65) (14) - (97) (5) -
- Satisfactory (2) (179) (22) (3) - (204) (23) (7)
- Higher risk (7) (60) (54) (4) (1) (119) (11) (7)
Of which (stage 2):
- Less than 30 days past due - (2) (22) (3) - (27) - -
- More than 30 days past due - (1) (54) (4) - (59) - -
Stage 3, credit-impaired financial assets (6) (3,533) (760) (12) (15) (4,320) - (112)
Total credit impairment (24) (3,891) (1,215) (48) (16) (5,170) (91) (136)
Net carrying value 44,977 130,405 126,059 1,033 29,478 286,975 - -
Stage 1 0.0% 0.1% 0.3% 1.5% 0.0% 0.2% 0.0% 0.0%
- Strong 0.0% 0.0% 0.2% 1.4% 0.0% 0.1% 0.0% 0.0%
- Satisfactory 0.1% 0.2% 1.5% 6.7% 0.0% 0.4% 0.1% 0.0%
Stage 2 1.9% 3.3% 6.1% 38.9% 0.1% 3.7% 0.7% 0.5%
- Strong 1.8% 1.6% 3.7% 41.2% 0.0% 3.3% 0.5% 0.0%
- Satisfactory 0.9% 3.1% 10.7% 42.9% 0.0% 3.4% 0.6% 0.4%
- Higher risk 2.6% 6.5% 16.0% 30.8% 0.1% 5.3% 2.3% 2.7%
Of which (stage 2):
- Less than 30 days past due 0.0% 2.6% 10.7% 42.9% 0.0% 9.3% 0.0% 0.0%
- More than 30 days past due 0.0% 10.0% 16.0% 30.8% 0.0% 16.4% 0.0% 0.0%
Stage 3, credit-impaired 7.8% 64.1% 51.2% 100.0% 6.7% 59.8% 0.0% 16.7%
financial assets (S3)
- Stage 3 Collateral 2 621 554 - - 1,175 - 34
- Stage 3 Cover ratio (after collateral) 10.4% 75.4% 88.5% 100.0% 6.7% 76.0% 0.0% 21.7%
Cover ratio 0.1% 2.9% 1.0% 4.4% 0.1% 1.8% 0.0% 0.2%
Fair value through profit or loss
Performing 32,813 58,465 13 - - 58,478 - -
- Strong 28,402 38,014 13 - - 38,027 - -
- Satisfactory 4,411 20,388 - - - 20,388 - -
- Higher risk - 63 - - - 63 - -
Defaulted (CG13-14) - 33 - - - 33 - -
Gross balance (FVTPL)2 32,813 58,498 13 - - 58,511 - -
Net carrying value (incl FVTPL) 77,790 188,903 126,072 1,033 29,478 345,486 - -
1 Loans and advances includes reverse repurchase agreements and other
similar secured lending of $13,996 million under Customers and of $1,738
million under Banks, held at amortised cost
2. Loans and advances includes reverse repurchase agreements and other
similar secured lending of $51,299 million under Customers and of $30,548
million under Banks, held at fair value through profit or loss
Page 45
Risk review continued
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 2024.
2024 2023
Stage 1 & 2 Stage 3 Total Stage 1 & 2 Stage 3 Total
$million
$million
$million
$million
$million
$million
Ongoing business portfolio
Corporate & Investment Banking 81 (187) (106) 11 112 123
Wealth & Retail Banking 317 327 644 129 225 354
Ventures 10 64 74 42 43 85
Central & other items (37) (18) (55) (44) 10 (34)
Credit impairment charge/(release) 371 186 557 138 390 528
Restructuring business portfolio
Others 1 (11) (10) 1 (21) (20)
Credit impairment charge/(release) 1 (11) (10) 1 (21) (20)
Total credit impairment charge/(release) 372 175 547 139 369 508
Maximum exposure
Amortised Cost 2024
Maximum on Balance Sheet Exposure (net of credit impairment) Collateral Net On Balance Sheet Exposure Undrawn Commitments (net of credit impairment) Financial Guarantees (net of credit impairment) Net Off Balance Sheet Exposure Total On & Off Balance Sheet Net Exposure
$million
$million
$million
$million
$million
$million
$million
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
Total¹ 37,746 12,357 25,389 23,380 11,462 34,842 60,231
Total Corporate & Investment Banking² 196,823 32,152 164,671 118,106 81,132 199,238 363,909
Total Group³ 420,117 121,993 298,124 193,115 90,602 283,717 581,841
2023
Industry:
Automotive manufacturers 3,564 65 3,499 3,791 538 4,329 7,828
Aviation 1,330 974 356 944 615 1,559 1,915
Steel 1,596 193 1,403 601 358 959 2,362
Coal Mining 29 9 20 51 99 150 170
Aluminium 526 9 517 338 188 526 1,043
Cement 671 47 624 769 259 1,028 1,652
Shipping 5,964 3,557 2,407 2,261 291 2,552 4,959
Commercial Real Estate 7,498 3,383 4,115 1,587 112 1,699 5,814
Oil & Gas 6,278 894 5,384 7,845 6,944 14,789 20,173
Power 5,411 1,231 4,180 3,982 732 4,714 8,894
Total1 32,867 10,362 22,505 22,169 10,136 32,305 54,810
Total Corporate & Investment Banking² 188,903 32,744 156,159 104,437 63,183 167,620 323,779
Total Group³ 423,276 125,760 297,516 182,299 74,278 256,577 554,093
1 Maximum on balance sheet exposure includes FVTPL amount of High
Carbon sector is $749 million (31 December 2023: $125 million)
2 Includes on balance sheet FVTPL amount of $58,519 million (31
December 2023: $58,498 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 $43,593 million (31
December 2023: $44,977 million) and $281,032 million (31 December 2023:
$286,975 million) respectively and loans to banks and loans and advances to
customers held at FVTPL of $36,967 million (31 December 2023: $32,813 million)
and $58, 525 million (31 December 2023: $58,511 million) respectively. Refer
to credit quality table
Page 46
Capital review
Capital ratios
31.12.24 30.09.24 Change(2) 30.06.24 Change(2) 31.12.23 Change(2)
CET1 14.2% 14.2% 0bps 14.6% (40)bps 14.1% 19bps
Tier 1 capital 16.9% 16.8% 10bps 17.3% (40)bps 16.3% 60bps
Total capital 21.5% 21.5% 0bps 22.1% (60)bps 21.2% 30bps
Capital base(1) (audited)
31.12.24 30.09.24 Change(3) 30.06.24 Change(3) 31.12.23 Change(3)
$million
$million
%
$million
%
$million
%
CET1 capital instruments and reserves
Capital instruments and the related share premium accounts 5,201 5,234 (1) 5,264 (1) 5,321 (2)
Of which: share premium accounts 3,989 3,989 - 3,989 - 3,989 -
Retained earnings 24,950 25,081 (1) 27,017 (8) 24,930 -
Accumulated other comprehensive income (and other reserves) 8,724 9,954 (12) 8,274 5 9,171 (5)
Non-controlling interests (amount allowed in consolidated CET1) 235 219 7 236 - 217 8
Independently audited year-end profits 4,072 3,569 14 2,409 69 3,542 15
Foreseeable dividends (923) (629) (47) (478) (93) (768) (20)
CET1 capital before regulatory adjustments 42,259 43,428 (3) 42,722 (1) 42,413 -
CET1 regulatory adjustments - -
Additional value adjustments (prudential valuation adjustments) (624) (635) 2 (678) 8 (730) 15
Intangible assets (net of related tax liability) (5,696) (6,179) 8 (6,006) 5 (6,128) 7
Deferred tax assets that rely on future profitability (excludes those arising (31) (23) (35) (44) 30 (41) 24
from temporary differences)
Fair value reserves related to net losses on cash flow hedges (4) (416) 99 56 (107) (91) 96
Deduction of amounts resulting from the calculation of excess expected loss (702) (711) 1 (653) (8) (754) 7
Net gains on liabilities at fair value resulting from changes in own credit 278 205 36 260 7 (100) 378
risk
Defined-benefit pension fund assets (149) (114) (31) (110) (35) (95) (57)
Fair value gains arising from the institution's own credit risk related to (97) (100) 3 (90) (8) (116) 16
derivative liabilities
Exposure amounts which could qualify for risk weighting of 1250% (44) (30) (47) (39) (13) (44) -
Total regulatory adjustments to CET1 (7,069) (8,003) 12 (7,304) 3 (8,099) 13
CET1 capital 35,190 35,425 (1) 35,418 (1) 34,314 3
Additional Tier 1 capital (AT1) instruments 6,502 6,527 - 6,504 - 5,512 18
AT1 regulatory adjustments (20) (20) - (20) - (20) -
Tier 1 capital 41,672 41,932 (1) 41,902 - 39,806 5
- -
Tier 2 capital instruments 11,449 11,756 (3) 11,697 (2) 11,965 (4)
Tier 2 regulatory adjustments (30) (30) - (30) - (30) -
Tier 2 capital 11,419 11,726 (3) 11,667 (2) 11,935 (4)
Total capital 53,091 53,658 (1) 53,569 (1) 51,741 3
Total risk-weighted assets (unaudited) 247,065 248,924 (1) 241,926 2 244,151 1
1 Capital base is prepared on the regulatory scope of consolidation
2 Change is the percentage point difference between two periods,
rather than percentage change
3 Variance is increase/(decrease) comparing current reporting period
to prior periods
Page 47
Capital review continued
Movement in total capital (audited)
2024 2023
$million
$million
CET1 at 1 January 34,314 34,157
Ordinary shares issued in the period and share premium - -
Share buyback (2,500) (2,000)
Profit for the period 4,072 3,542
Foreseeable dividends deducted from CET1 (923) (768)
Difference between dividends paid and foreseeable dividends (469) (372)
Movement in goodwill and other intangible assets 432 (326)
Foreign currency translation differences (525) (477)
Non-controlling interests 18 28
Movement in eligible other comprehensive income 636 464
Deferred tax assets that rely on future profitability 10 35
Decrease/(increase) in excess expected loss 52 (70)
Additional value adjustments (prudential valuation adjustment) 106 124
IFRS 9 transitional impact on regulatory reserves including day one 2 (106)
Exposure amounts which could qualify for risk weighting - 59
Fair value gains arising from the institution's own Credit Risk related to 19 (26)
derivative liabilities
Others (54) 50
CET1 at 31 December 35,190 34,314
AT1 at 1 January 5,492 6,484
Net issuances (redemptions) 1,015 (1,000)
Foreign currency translation difference and others (25) 8
AT1 at 31 December 6,482 5,492
Tier 2 capital at 1 January 11,935 12,510
Regulatory amortisation 1,189 1,416
Net issuances (redemptions) (1,517) (2,160)
Foreign currency translation difference (191) 146
Tier 2 ineligible minority interest (3) 19
Others 6 4
Tier 2 capital at 31 December 11,419 11,935
Total capital at 31 December 53,091 51,741
The main movements in capital in the period were:
• CET1 capital increased by $0.9 billion as retained profits of $4.1
billion, movement in FVOCI of $0.6 billion and a reduction in regulatory
deductions and other movements of $0.6 billion were partly offset by share
buybacks
of $2.5 billion, distributions paid and foreseeable of $1.4 billion, foreign
currency translation impact of $0.5 billion.
• AT1 capital increased by $1.0 billion following the issuance of $1.0
billion of 7.88 per cent securities and $0.6 billion
of 5.30 per cent securities partly offset by the redemption of $0.6 billion of
5.38 per cent securities.
• Tier 2 capital decreased by $0.5 billion due to the redemption of $1.6
billion of Tier 2 during the year partly offset
by the reversal of regulatory amortisation and foreign currency translation
impact
Page 48
Capital review continued
Risk-weighted assets by business
31.12.24
Credit risk Operational risk Market risk Total risk
$million
$million
$million
$million
Corporate & Investment Banking 112,100 19,987 24,781 156,868
Wealth & Retail Banking 41,002 9,523 - 50,525
Ventures 2,243 142 21 2,406
Central & other items 33,958 (173) 3,481 37,266
Total risk-weighted assets 189,303 29,479 28,283 247,065
30.09.24
Credit risk Operational risk Market risk Total risk
$million
$million
$million
$million
Corporate & Investment Banking 106,460 19,987 26,831 153,278
Wealth & Retail Banking 44,299 9,523 - 53,822
Ventures 2,041 142 12 2,195
Central & other items 36,044 (173) 3,758 39,629
Total risk-weighted assets 188,844 29,479 30,601 248,924
30.06.24
Credit risk Operational risk Market risk Total risk
$million
$million
$million
$million
Corporate & Investment Banking 105,356 19,987 23,790 149,133
Wealth & Retail Banking 42,936 9,523 - 52,459
Ventures 1,981 142 6 2,129
Central & other items 34,731 (173) 3,647 38,205
Total risk-weighted assets 185,004 29,479 27,443 241,926
31.12.23
Credit risk Operational risk Market risk Total risk
$million
$million
$million
$million
Corporate & Investment Banking 102,675 18,083 21,221 141,979
Wealth & Retail Banking 42,559 8,783 - 51,342
Ventures 1,885 35 3 1,923
Central & other items 44,304 960 3,643 48,907
Total risk-weighted assets 191,423 27,861 24,867 244,151
Page 49
Capital review continued
Movement in risk-weighted assets
Credit risk Operational risk Market risk Total risk
$million
$million
$million
Corporate & Investment Banking Wealth & Retail Ventures Central & Other items Total
$million
Banking
$million
$million
$million
$million
At 1 January 2023 110,103 42,091 1,350 43,311 196,855 27,177 20,679 244,711
Assets growth & mix (4,424) 728 535 1,183 (1,978) - - (1,978)
Asset quality (391) 390 - 2,684 2,683 - - 2,683
Risk-weighted assets efficiencies - - - (688) (688) - - (688)
Model Updates (597) (151) - (151) (899) - 500 (399)
Methodology and policy changes - (196) - - (196) - (800) (996)
Acquisitions and disposals (1,630) - - - (1,630) - - (1,630)
Foreign currency translation (386) (303) - (2,035) (2,724) - - (2,724)
Other, Including non-credit risk movements - - - - - 684 4,488 5,172
At 31 December 2023 102,675 42,559 1,885 44,304 191,423 27,861 24,867 244,151
Assets growth & mix 11,412 341 358 (5,803) 6,308 - - 6,308
Asset quality (1,349) 112 - (1,935) (3,172) - - (3,172)
Risk-weighted assets efficiencies - - - - - - - -
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 (2,296) (1,207) - (1,374) (4,877) - - (4,877)
Other, Including non-credit risk movements - (841) - (1,234) (2,075) 1,618 5,116 4,659
At 31 December 2024 112,100 41,002 2,243 33,958 189,303 29,479 28,283 247,065
Movements in risk-weighted assets
RWA increased by $2.9 billion, or 1.2 per cent from 31 December 2023 to $247.1
billion. This was mainly due to
decrease in Credit Risk RWA of $2.1 billion, an increase in Market Risk RWA of
$3.4 billion and Operational Risk
RWA of $1.6 billion.
Corporate & Investment Banking
Credit Risk RWA increased by $9.4 billion, or 9.2 per cent from 31 December
2023 to $112.1 billion mainly due to:
• $11.4 billion increase from changes in asset growth & mix, of which:
- $9.0 billion increase from asset growth
- $3.1 billion increase from derivatives
- $0.8 billion decrease from optimisation actions
• $1.6 billion increase from industry-wide regulatory changes to align IRB
model performance from adjustment to commercial real estate counterparties
• $2.3 billion decrease from foreign currency translation
• $1.3 billion decrease mainly due to an improvement in asset quality
reflecting client upgrades
Wealth & Retail Banking
Credit Risk RWA decreased by $1.6 billion, or 3.7 per cent from 31 December
2023 to $41.0 billion mainly due to:
• $1.2 billion decrease from foreign currency translation
• $0.8 billion decrease from reclassification of credit cards in Asia
• $0.3 billion increase from changes in asset growth & mix
• $0.1 billion increase mainly due to deterioration in asset quality
mainly in Asia
Ventures
Ventures is comprised of Mox Bank Limited, Trust Bank and SC Ventures. Credit
Risk RWA increased by $0.4 billion, or 19 per cent from 31 December 2023 to
$2.2 billion from asset balance growth, mainly from SC Ventures
Page 50
Capital review continued
Central & other items
Central & Other items RWA mainly relate to the Treasury Market's liquidity
portfolio, equity investments and current & deferred tax assets.
Credit Risk RWA decreased by $10.3 billion, or 23.4 per cent from 31 December
2023 to $34.0 billion mainly due to:
• $5.8 billion decrease from changes in asset growth & mix
primarily from optimisation activities
• $1.9 billion decrease due to improvement in asset quality
mainly from sovereign upgrades in Asia and Africa
• $1.4 billion decrease from foreign currency translation
• $1.2 billion decrease due to reporting enhancements
Market Risk
Total Market Risk RWA increased by $3.4 billion, or 13.7 per cent from 31
December 2023 to $28.3 billion primarily
driven by:
• $1.7 billion increase in Standardised Approach (SA) Specific
Interest Rate Risk RWA mainly due to increases in the Trading Book government
bond portfolio
• $2.7 billion increase in Internal Models Approach (IMA) RWA
from increases in VaR and Stressed VaR RWA due mainly to increased interest
rate exposures, offset by a reduction of addons for Risks not in VaR
• $1.3 billion in the first quarter decrease due to a reduction
in the IMA RWA multiplier resulting from fewer back-testing exceptions
Operational Risk
Operational Risk RWA increased by $1.6 billion, or 5.8 per cent from 31
December 2023 to $29.5 billion, mainly due
to a marginal increase in average income as measured over a rolling three-year
time horizon for certain products.
Leverage ratio
31.12.24 30.09.24 Change(3) 30.06.24 Change(3) 31.12.23 Change(3)
$million
$million
%
$million
%
$million
%
Tier 1 capital (end point) 41,672 41,932 (1) 41,902 (1) 39,806 5
Derivative financial instruments 81,472 56,318 45 48,647 67 50,434 62
Derivative cash collateral 11,046 10,612 4 8,099 36 10,337 7
Securities financing transactions (SFTs) 98,801 100,636 (2) 104,981 (6) 97,581 1
Loans and advances and other assets 658,369 704,607 (7) 673,700 (2) 664,492 (1)
Total on-balance sheet assets 849,688 872,173 (3) 835,427 2 822,844 3
Regulatory consolidation adjustments(2) (76,197) (87,268) 13 (82,607) 8 (92,709) 18
Derivatives adjustments - - -
Derivatives netting (63,934) (45,204) (41) (36,580) (75) (39,031) (64)
Adjustments to cash collateral (10,169) (10,091) (1) (6,876) (48) (9,833) (3)
Net written credit protection 2,075 1,842 13 1,316 58 1,359 53
Potential future exposure on derivatives 51,323 50,091 2 45,488 13 42,184 22
Total derivatives adjustments (20,705) (3,362) (516) 3,348 (718) (5,321) (289)
Counterparty risk leverage exposure measure for SFTs 4,198 4,065 3 3,885 8 6,639 (37)
Off-balance sheet items 118,607 121,668 (3) 125,194 (5) 123,572 (4)
Regulatory deductions from Tier 1 capital (7,247) (8,107) 11 (7,474) 3 (7,883) 8
Total exposure measure excluding claims on central banks 868,344 899,169 (3) 877,773 (1) 847,142 3
Leverage ratio excluding claims on central banks (%) 4.8% 4.7% 0.1 4.8% 0.0 4.7% 0.1
Average leverage exposure measure excluding claims on central banks 894,296 887,398 1 870,657 3 853,968 5
Average leverage ratio excluding claims on central banks (%) 4.7% 4.6% 0.1 4.7% - 4.6% 0.1
Countercyclical leverage ratio buffer 0.1% 0.1% - 0.2% (0.1) 0.1% -
G-SII additional leverage ratio buffer 0.4% 0.4% 0.0 0.4% 0.0 0.4% 0.0
1 Variance is increase/(decrease) comparing current reporting period
to prior periods
2 Change is the percentage point difference between two periods,
rather than percentage change
3 Includes adjustment for qualifying central bank claims
Page 51
Financial statements
Consolidated income statement
For the year ended 31 December 2024
Notes 2024 2023
$million
$million
Interest income 27,862 27,227
Interest expense (21,496) (19,458)
Net interest income 3 6,366 7,769
Fees and commission income 4,623 4,067
Fees and commission expense (889) (815)
Net fee and commission income 4 3,734 3,252
Net trading income 5 9,615 6,292
Other operating income 6 (172) 706
Operating income 19,543 18,019
Staff costs (8,510) (8,256)
Premises costs (401) (422)
General administrative expenses (2,465) (1,802)
Depreciation and amortisation (1,126) (1,071)
Operating expenses 7 (12,502) (11,551)
Operating profit before impairment losses and taxation 7,041 6,468
Credit impairment 8 (547) (508)
Goodwill, property, plant and equipment and other impairment 9 (588) (1,008)
Profit from associates and joint ventures 32 108 141
Profit before taxation 6,014 5,093
Taxation 10 (1,972) (1,631)
Profit for the year 4,042 3,462
Profit attributable to:
Non-controlling interests 29 (8) (7)
Parent company shareholders 4,050 3,469
Profit for the year 4,042 3,462
cents cents
Earnings per share:
Basic earnings per ordinary share 12 141.3 108.6
Diluted earnings per ordinary share 12 137.7 106.2
The notes form an integral part of these financial statements and are
available in the Annual Report 2024.
Page 52
Financial statements continued
Consolidated statement of comprehensive income
For the year ended 31 December 2024
Notes 2024 2023
$million
$million
Profit for the year 4,042 3,462
Other comprehensive income
Items that will not be reclassified to income statement: (181) 239
Own credit (losses)/gains on financial liabilities designated at fair value (426) 212
through profit or loss
Equity instruments at fair value through other comprehensive income 71 181
Actuarial gains/(losses) on retirement benefit obligations 30 52 (47)
Revaluation Surplus 25 -
Taxation relating to components of other comprehensive income/(loss) 10 97 (107)
Items that may be reclassified subsequently to income statement: (389) 562
Exchange differences on translation of foreign operations:
Net losses taken to equity (1,423) (734)
Net gains on net investment hedges 14 678 215
Share of other comprehensive income/(loss) from associates and joint ventures 32 9 (7)
Debt instruments at fair value through other comprehensive income
Net valuation gains taken to equity 283 383
Reclassified to income statement 6 237 115
Net impact of expected credit losses (35) (48)
Cash flow hedges:
Net movements in cash flow hedge reserve 14 (101) 767
Taxation relating to components of other comprehensive income 10 (37) (129)
Other comprehensive (loss)/income for the year, net of taxation (570) 801
Total comprehensive income for the year 3,472 4,263
Total comprehensive income attributable to:
Non-controlling interests 29 (22) (38)
Parent company shareholders 3,494 4,301
Total comprehensive income for the year 3,472 4,263
Page 53
Financial statements continued
Consolidated balance sheet
As at 31 December 2024
Notes 2024 2023
$million
$million
Assets
Cash and balances at central banks 13,35 63,447 69,905
Financial assets held at fair value through profit or loss 13 177,517 147,222
Derivative financial instruments 13,14 81,472 50,434
Loans and advances to banks 13,15 43,593 44,977
Loans and advances to customers 13,15 281,032 286,975
Investment securities 13 144,556 161,255
Other assets 20 43,468 47,594
Current tax assets 10 663 484
Prepayments and accrued income 3,207 3,033
Interests in associates and joint ventures 32 1,020 966
Goodwill and intangible assets 17 5,791 6,214
Property, plant and equipment 18 2,425 2,274
Deferred tax assets 10 414 702
Retirement benefit schemes in surplus 30 151 -
Assets classified as held for sale 21 932 809
Total assets 849,688 822,844
Liabilities
Deposits by banks 13 25,400 28,030
Customer accounts 13 464,489 469,418
Repurchase agreements and other similar secured borrowing 13,16 12,132 12,258
Financial liabilities held at fair value through profit or loss 13 85,462 83,096
Derivative financial instruments 13,14 82,064 56,061
Debt securities in issue 13,22 64,609 62,546
Other liabilities 23 44,681 39,221
Current tax liabilities 10 726 811
Accruals and deferred income 6,896 6,975
Subordinated liabilities and other borrowed funds 13,27 10,382 12,036
Deferred tax liabilities 10 567 770
Provisions for liabilities and charges 24 349 299
Retirement benefit schemes in deficit 30 266 183
Liabilities included in disposal groups held for sale 21 381 787
Total liabilities 798,404 772,491
Equity
Share capital and share premium account 28 6,695 6,815
Other reserves 8,724 9,171
Retained earnings 28,969 28,459
Total parent company shareholders' equity 44,388 44,445
Other equity instruments 28 6,502 5,512
Total equity excluding non-controlling interests 50,890 49,957
Non-controlling interests 29 394 396
Total equity 51,284 50,353
Total equity and liabilities 849,688 822,844
The notes form an integral part of these financial statements and are
available in the Annual Report 2024.
These financial statements were approved by the Board of directors and
authorised for issue on 21 February 2025 and signed on its behalf by:
José Viñals Bill Winters Diego De Giorgi
Group Chairman
Group Chief Executive Group Chief Financial Officer
Page 54
Financial statements continued
Consolidated statement of changes in equity
For the year ended 31 December 2024
Ordinary share capital and share premium account Preference share capital and share premium account Capital and merger reserves1 Own credit adjust-ment reserve Fair value through other compre-hensive income reserve - debt Fair value through other compre-hensive income reserve - equity Cash- flow hedge reserve Trans-lation reserve Retained earnings Parent company share-holders' equity Other equity instru-ments Non-controlling interests Total
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
$million
As at 01 January 2023 5,436 1,494 17,338 (63) (1,116) 206 (564) (7,636) 28,067 43,162 6,504 350 50,016
Profit for the year - - - - - - - - 3,469 3,469 - (7) 3,462
Other comprehensive income/(loss)12 - - - 163 426 124 655 (489) (47)2 832 - (31) 801
Distributions - - - - - - - - - - - (26) (26)
Redemption of other equity instruments - - - - - - - - - - (1,000) - (1,000)
Treasury shares net movement - - - - - - - - (189) (189) - - (189)
Share option expense, net of taxation - - - - - - - - 173 173 - - 173
Dividends on ordinary shares - - - - - - - - (568) (568) - - (568)
Dividends on preference shares and AT1 securities - - - - - - - - (452) (452) - - (452)
Share buy-back3,4 (115) - 115 - - - - - (2,000) (2,000) - - (2,000)
Other movements - - - - - - - 125 6 18 85 1106 136
As at 31 December 2023 5,321 1,494 17,453 100 (690) 330 91 (8,113) 28,459 44,445 5,512 396 50,353
Profit for the year - - - - - - - - 4,050 4,050 - (8) 4,042
Other comprehensive (loss)/income12 - - - (377) 442 (26)10 (87) (735) 2272,11 (556) - (14) (570)
Distributions - - - - - - - - - - - (43) (43)
Other equity instruments issued, - - - - - - - - - - 1,56813 - 1,568
net of expenses
Redemption of other equity instruments - - - - - - - - - - (553)14 - (553)
Treasury shares net movement - - - - - - - - (168) (168) - - (168)
Share option expense, net of taxation - - - - - - - - 269 269 - - 269
Dividends on ordinary shares - - - - - - - - (780) (780) - - (780)
Dividends on preference shares and AT1 securities - - - - - - - - (457) (457) - - (457)
Share buy-back8,9 (120) - 120 - - - - - (2,500) (2,500) - - (2,500)
Other movements - - - (1) 7 - - 2105 (131)7 85 (25)14 636 123
As at 31 December 2024 5,201 1,494 17,573 (278) (241) 304 4 (8,638) 28,969 44,388 6,502 394 51,284
1 Includes capital reserve of $5 million, capital redemption reserve of
$457 million and merger reserve of $17,111 million
2 Includes actuarial gain, net of taxation on Group defined benefit
schemes
3 On 16 February 2023, the Group announced the buy-back programme for a
share buy-back of its ordinary shares of $0.50 each. Nominal value of share
purchases was $58 million, and the total consideration paid was $1,000 million
and the buy-back completed on 29 September 2023. The total number of shares
purchased was 116,710,492, representing 4.03 per cent of the ordinary shares
in issue as at the commencement of the buy-back. The nominal value of the
shares was transferred from the share capital to the capital redemption
reserve account
4 On 28 July 2023, the Group announced the buy-back programme for a share
buy-back of its ordinary shares of $0.50 each. Nominal value of share
purchases was $57 million, and the total consideration paid was $1,000 million
and the buy-back completed on 6 November 2023. The total number of shares
purchased was 112,982,802, representing 3.90 per cent of the ordinary shares
in issue as at the commencement of the buy-back. The nominal value of the
shares was transferred from the share capital to the capital redemption
reserve account
5 Movement related to Translation adjustment and AT1 Securities charges
(2023). December 2024 movement includes realisation of translation adjustment
loss from sale of SCB Zimbabwe Limited ($190 million), SCB Angola S.A. ($31
million), SCB Sierra Leone Limited ($25 million) transferred to other
operating income
6 Movements primarily from non-controlling interest pertaining to Mox Bank
Limited ($48 million), Trust Bank Singapore Limited ($34 million) and Zodia
Custody Limited ($28 million) in 2023. Movements in 2024 are primarily from
non-controlling interest pertaining to Mox Bank Limited ($14 million) and
Trust Bank Singapore Limited ($55 million) offset by SCB Angola S.A. ($6
million)
7 Mainly includes movements related to Ghana hyperinflation
8 On 23 February 2024, the Group announced the buyback programme for a
share buyback of its ordinary shares of $0.50 each. Nominal value of share
purchases was $57 million, the total consideration paid was $1,000 million and
the buyback completed on 25 June 2024. The total number of shares purchased
was 113,266,516, representing 4.25 per cent of the ordinary shares in issue at
the beginning of the programme. The nominal value of the shares was
transferred from
the share capital to the capital redemption reserve account.
9 On 30 July 2024, the Group announced the buyback programme for a share
buyback of its ordinary shares of $0.50 each. Nominal value of share purchases
was $63 million, as at December 2024 the buyback is ongoing, with the total
number of shares purchased of 126,262,414 representing 4.95 per cent of the
ordinary shares in issue at the beginning of the programme, the total
consideration was $1,355 million, and a further $145 million relating to
irrevocable obligation to
buy back shares under the buyback programme has been recognised. The nominal
value of the shares was transferred from the share capital to the capital
redemption reserve account.
10 Includes $174 million gain on sale of equity investment transferred
to retained earnings partly offset by $76 million reversal of deferred tax
liability and $72 million mark-to-market gain on equity instrument
11 Includes $174 million gain on sale of equity investment in other
comprehensive income reserve transferred to retained earnings partly offset by
$13 million capital gain tax
12 All the amounts are net of tax
13 Includes $993 million and $575 million (SGD 750 million) fixed rate
resetting perpetual subordinated contingent convertible AT1 securities issued
by Standard Chartered PLC
14 Relates to redemption of AT1 securities of SGD 750 million ($553
million) and realised translation loss ($25 million) reported in other
movements
Note 28 includes a description of each reserve and is available in the Annual
Report 2024.
The notes form an integral part of these financial statements and are
available in the Annual Report 2024.
Page 55
Financial statements continued
Basis of preparation
The consolidated and Company financial statements have been prepared on a
going concern basis and under the historical cost convention, as modified by
the revaluation of cash-settled share-based payments, fair value through other
comprehensive income, and financial assets and liabilities (including
derivatives) at fair value through profit or loss.
The consolidated financial statements are presented in United States dollars
($), being the presentation currency of the Group and functional currency of
the Company, and all values are rounded to the nearest million dollars, except
when otherwise indicated.
Going concern
These financial statements were approved by the Board of directors on 21
February 2025. The directors have made an assessment of the Group's ability to
continue as a going concern. This assessment has been made having considered
the current macroeconomic and geopolitical headwinds, including:
• Review of the Group Strategy and Corporate Plan, including the
annual budget
• An assessment of the actual performance to date, loan book
quality, credit impairment, legal and regulatory matters, compliance matters,
recent regulatory developments
• Consideration of stress testing performed, including the Group
Recovery Plan (RP) which include the application of stressed scenarios. Under
the tests and through the range of scenarios, the results of these exercises
and the RP demonstrate that the Group has sufficient capital and liquidity to
continue as a going concern and meet minimum regulatory capital and liquidity
requirements
• Analysis of the capital position of the Group, including the
capital and leverage ratios, and ICAAP which summarises the Group's capital
and risk assessment processes, assesses its capital requirements and the
adequacy of resources to meet them
• Analysis of the funding and liquidity position of the Group,
including the Internal Liquidity Adequacy Assessment Process (ILAAP), which
considers the Group's liquidity position, its framework and whether sufficient
liquidity resources are being maintained to meet liabilities as they fall due,
was also reviewed. Further, funding and liquidity was considered in the
context of the risk appetite metrics, including the LCR ratio.
• The level of debt in issue, including redemptions and
issuances during the year, debt falling due for repayment in the next 12
months and further planned debt issuances, including the appetite in the
market for the Group's debt
• The Group's portfolio of debt securities held at amortised
cost
• A detailed review of all principal risks as well as topical
and emerging risks
Based on the analysis performed, the directors confirm they are satisfied that
the Group has adequate resources to continue in business for a period of at
least 12 months from 21 February 2025.
For this reason, the Group continues to adopt the going concern basis of
accounting for preparing the financial statements.
Page 56
Other supplementary financial information
Five-year summary1
2024 2023 2022 2021 2020
$million
$million
$million
$million
$million
Operating profit before impairment losses and taxation 7,041 6,468 5,405 3,777 4,374
Impairment losses on loans and advances and other credit risk provisions (547) (508) (836) (254) (2,325)
Other impairment³ (588) (1,008) (425) (372) (98)
Profit before taxation 6,014 5,093 4,286 3,347 1,613
Profit attributable to shareholders 4,050 3,469 2,948 2,315 724
Loans and advances to banks1 43,593 44,977 39,519 44,383 44,347
Loans and advances to customers1 281,032 286,975 310,647 298,468 281,699
Total assets 849,688 822,844 819,922 827,818 789,050
Deposits by banks1 25,400 28,030 28,789 30,041 30,255
Customer accounts1 464,489 469,418 461,677 474,570 439,339
Shareholders' equity 44,388 44,445 43,162 46,011 45,886
Total capital resources2 61,666 62,389 63,731 69,282 67,383
Information per ordinary share
Basic earnings per share 141.3c 108.6c 85.9c 61.3c 10.4c
Underlying earnings per share3 168.1c 128.9c 97.9c 85.8c 36.1c
Dividends per share4 37.0c 27.0c 18.0c 12.0c -
Net asset value per share 1,781.3c 1,629.0c 1,453.3c 1,456.4c 1,409.3c
Net tangible asset value per share 1,541.1c 1,393.0c 1,249.0c 1,277.0c 1,249.0c
Return on assets5 0.5% 0.4% 0.4% 0.3% 0.1%
Ratios
Reported return on ordinary shareholders' equity 8.4% 7.2% 6.0% 4.2% 0.8%
Reported return on ordinary shareholders' 9.7% 8.4% 6.8% 4.8% 0.9%
tangible equity
Underlying return on ordinary shareholders' equity 10.0% 8.7% 6.9% 5.9% 2.6%
Underlying return on ordinary shareholders' 11.7% 10.1% 7.7% 6.8% 3.0%
tangible equity
Reported cost to income ratio (excluding UK Bank Levy) 63.5% 63.5% 66.3% 73.6% 68.1%
Reported cost to income ratio (including UK Bank Levy) 64.0% 64.1% 66.9% 74.3% 70.4%
Underlying cost to income ratio (excluding UK Bank levy) 59.4% 63.4% 65.5% 69.8% 66.4%
Underlying cost to income ratio (including UK Bank levy) 59.9% 64.1% 66.2% 70.5% 68.7%
Capital ratios:
CET 16 14.2% 14.1% 14.0% 14.1% 14.4%
Total capital6 21.5% 21.2% 21.7% 21.3% 21.2%
1 Excludes amounts held at fair value through profit or loss
2 Shareholders' funds, non-controlling interests and subordinated
loan capital
3 Other impairment include nil (2023: $850 million) impairment charge
relating to the Group's investment in its associate China Bohai Bank (Bohai)
4 Dividend paid during the year per share
5 Represents profit attributable to shareholders divided by the total
assets of the Group
6 Unaudited
Page 57
Other supplementary financial information continued
Insured and uninsured deposit
SCB operates and provides services to customers across many countries and
insured deposit is determined on the basis of limits enacted within local
regulations.
2024 2023
Insured deposits Uninsured deposits Total Insured deposits Uninsured deposits Total
$million
$million
Bank deposits Customer accounts Bank deposits Customer accounts Bank deposits Customer accounts Bank deposits Customer accounts
$million
$million
$million
$million
$million
$million
$million
$million
Current accounts 8 15,596 19,844 152,101 187,549 9 15,767 20,969 150,559 187,304
Savings deposits - 31,977 - 86,579 118,556 - 27,376 - 91,425 118,801
Time deposits - 28,417 6,717 170,752 205,886 1 23,517 8,295 176,977 208,790
Other deposits - 104 9,393 37,737 47,234 - 93 6,236 48,907 55,236
Total 8 76,094 35,954 447,169 559,225 10 66,753 35,500 467,868 570,131
UK and non-UK deposits
The following table summarises the split of Bank and Customer deposits into UK
and Non-UK deposits for respective account lines based on the domicile or
residence of the clients.
2024 2023
UK deposits Non-UK deposits Total UK deposits Non-UK deposits Total
$million
$million
Bank deposits Customer accounts Bank deposits Customer accounts Bank deposits Customer accounts Bank deposits Customer accounts
$million
$million
$million
$million
$million
$million
$million
$million
Current accounts 544 7,734 19,308 159,963 187,549 925 7,062 20,053 159,264 187,304
Savings deposits - 145 - 118,411 118,556 - 330 - 118,471 118,801
Time deposits 315 7,731 6,402 191,438 205,886 310 5,412 7,986 195,082 208,790
Other deposits 2,342 12,744 7,051 25,097 47,234 1,683 16,514 4,553 32,486 55,236
Total 3,201 28,354 32,761 494,909 559,225 2,918 29,318 32,592 505,303 570,131
Contractual maturity of Loans, Investment securities and Deposits
2024
Loans and advances to banks Loans and advances to customers Investment securities - Treasury and other eligible Bills Investment securities - Debt securities Investment securities - Equity shares Bank deposits Customer accounts
$million
$million
$million
$million
$million
$million
$million
One year or less 66,448 181,863 41,966 47,959 - 29,678 463,566
Between one and five years 12,122 63,006 41 74,197 - 6,281 57,062
Between five and ten years 1,680 21,139 - 23,319 - 3 849
Between ten years and fifteen years 71 13,236 - 5,876 - - 1,217
More than fifteen years and undated 239 60,313 - 26,743 6,480 - 569
80,560 339,557 42,007 178,094 6,480 35,962 523,263
Amortised cost and FVOCI exposures 43,593 281,032
Of which: Fixed interest rate exposures 35,383 153,575
Of which: Floating interest rate exposures 8,210 127,457
2023
One year or less 72,717 197,125 38,877 59,023 - 31,333 485,908
Between one and five years 3,975 52,532 4 69,075 - 4,174 46,365
Between five and ten years 837 19,184 1 18,804 - 2 567
Between ten years and fifteen years 35 14,084 - 9,276 - - 1,341
More than fifteen years and undated 226 62,561 - 18,155 3,932 - 441
77,790 345,486 38,882 174,333 3,932 35,509 534,622
Amortised cost and FVOCI exposures 44,977 286,975
Of which: Fixed interest rate exposures 38,505 168,697
Of which: Floating interest rate exposures 6,472 118,278
Page 58
Other supplementary financial information continued
Maturity and yield of Debt securities, alternative tier one and other eligible bills held at amortised cost
One year or less Between one and Between five and More than ten years Total
five years
ten years
$million Yield % $million Yield % $million Yield % $million Yield % $million Yield %
Central and other government agencies
- US 1,864 1.53 9,607 1.98 5,187 1.88 4,353 2.76 21,011 2.08
- UK 192 1.70 684 2.07 44 0.88 - - 920 1.93
- Other 3,081 3.20 11,454 3.39 2,932 3.93 25 7.55 17,492 3.46
Other debt securities 1,687 6.21 2,676 6.30 4,620 4.86 6,731 5.41 15,714 5.49
As at 31 December 2024 6,824 3.45 24,421 3.12 12,783 3.42 11,109 4.38 55,137 3.48
One year or less Between one and Between five and More than ten years Total
five years
ten years
$million Yield % $million Yield % $million Yield % $million Yield % $million Yield %
Central and other government agencies
- US 1,861 1.39 9,171 1.61 5,799 1.67 4,524 3.89 21,355 2.09
- UK 39 2.75 85 1.06 101 0.67 - - 225 1.18
- Other 5,045 2.72 9,560 2.80 2,289 3.12 81 4.74 16,975 2.84
Other debt securities 2,487 6.45 2,658 5.37 2,262 5.44 10,973 5.13 18,380 5.38
As at 31 December 2023 9,432 3.44 21,474 2.61 10,451 2.79 15,578 4.77 56,935 3.37
The maturity distributions are presented in the above table on the basis of
contractual maturity dates. The weighted average yield for each range of
maturities is calculated by dividing the annualised interest income for the
year by the book amount of debt securities at that date.
Average balance sheets and yields and volume and price variances
Average balance sheets and yields
The following tables set out the average balances and yields for the Group's
assets and liabilities for the periods ended 31 December 2024 and 31 December
2023 under the revised definition of net interest margin. For the purpose of
these tables, average balances have been determined on the basis of daily
balances, except for certain categories, for which balances have been
determined less frequently. The Group does not believe that the information
presented in these tables would be significantly different had such balances
been determined on a daily basis.
Average assets 2024
Average non-interest earning Average Interest Gross yield interest Gross yield
balance
interest
income
earning
total
$million
earning
$million
balance
balance
balance
%
%
$million
Cash and balances at central banks 9,815 57,294 2,520 4.40 3.76
Gross loans and advances to banks 43,184 44,394 2,368 5.33 2.70
Gross loans and advances to customers 57,614 286,588 16,314 5.69 4.74
Impairment provisions against loans and advances to banks and customers - (5,463) - - -
Investment securities - Treasury and Other Eligible Bills 16,101 26,594 1,495 5.62 3.50
Investment securities - Debt Securities 58,362 129,931 5,165 3.98 2.74
Investment securities - Equity Shares 5,278 - - - -
Property, plant and equipment and intangible assets 6,299 - - - -
Prepayments, accrued income and other assets 123,832 - - - -
Investment associates and joint ventures 1,105 - - - -
Total average assets 321,590 539,338 27,862 5.17 3.24
Page 59
Other supplementary financial information continued
Average assets 2023
Average non-interest earning Average Interest Gross yield interest Gross yield
balance
interest
income
earning
total
$million
earning
$million
balance
balance
balance
%
%
$million
Cash and balances at central banks 10,466 67,634 2,833 4.19 3.63
Gross loans and advances to banks 34,743 44,161 2,095 4.74 2.66
Gross loans and advances to customers 55,235 301,570 15,698 5.20 4.40
Impairment provisions against loans and advances to banks and customers - (5,894) - - -
Investment securities - Treasury and Other Eligible Bills 7,955 32,026 1,596 4.98 3.99
Investment securities - Debt Securities 29,912 133,023 5,005 3.76 3.07
Investment securities - Equity Shares 3,190 - - - -
Property, plant and equipment and intangible assets 8,861 - - - -
Prepayments, accrued income and other assets 126,539 - - - -
Investment associates and joint ventures 1,628 - - - -
Total average assets 278,529 572,520 27,227 4.76 3.20
Average liabilities 2024
Average non-interest bearing Average Interest Rate paid interest Rate paid
balance
interest
expense
bearing
total
$million
bearing
$million
balance
balance
balance
%
%
$million
Deposits by banks 16,834 21,686 806 3.72 2.09
Customer accounts:
Current accounts 41,870 127,624 5,134 4.02 3.03
Savings deposits - 114,641 2,292 2.00 2.00
Time deposits 20,937 187,694 8,340 4.44 4.00
Other deposits 34,954 10,291 510 4.96 1.13
Debt securities in issue 11,958 65,521 3,610 5.51 4.66
Accruals, deferred income and other liabilities 143,771 1,024 60 5.86 0.04
Subordinated liabilities and other borrowed funds - 11,306 744 6.58 6.58
Non-controlling interests 395 - - - -
Shareholders' funds 50,425 - - - -
321,144 539,787 21,496 3.98 2.50
Adjustment for trading book funding cost and others (4,096)
Total average liabilities and shareholders' funds 321,144 539,787 17,400 3.22 2.02
Average liabilities 2023
Average non-interest bearing Average Interest Rate paid Rate paid
balance
interest
expense
interest
total
$million
bearing
$million
bearing
balance
balance
balance
%
$million
%
Deposits by banks 14,238 24,066 796 3.31 2.08
Customer accounts:
Current accounts 41,911 132,537 3,619 2.73 2.07
Savings deposits - 112,046 1,981 1.77 1.77
Time deposits 15,345 186,287 8,204 4.40 4.07
Other deposits 44,211 6,527 488 7.48 0.96
Debt securities in issue 12,259 65,579 3,367 5.13 4.33
Accruals, deferred income and other liabilities 132,442 1,009 52 5.15 0.04
Subordinated liabilities and other borrowed funds - 12,299 951 7.73 7.73
Non-controlling interests 373 - - - -
Shareholders' funds 49,920 - - - -
310,699 540,350 19,458 3.60 2.29
Adjustment for trading book funding cost and others (1,778)
Total average liabilities and shareholders' funds 310,699 540,350 17,680 3.27 2.08
Page 60
Other supplementary financial information continued
Net interest margin
2024 2023
$million
$million
Interest income (reported) 27,862 27,227
Average interest earning assets 539,338 572,520
Gross yield (%) 5.17 4.76
Interest expense (reported) 21,496 19,458
Adjustment for trading book funding cost and others (4,096) (1,778)
Interest expense adjusted for trading book funding cost and others 17,400 17,680
Average interest-bearing liabilities 539,787 540,350
Rate paid (%) 3.22 3.27
Net yield (%) 1.95 1.49
Net interest income adjusted for trading book funding cost and others 10,462 9,547
Net interest margin (%) 1.94 1.67
Volume and price variances
The following table analyses the estimated change in the Group's net interest
income attributable to changes in the average volume of interest-earning
assets and interest-bearing liabilities, and changes in their respective
interest rates for the years presented. Volume and rate variances have been
determined based on movements in average balances and average exchange rates
over the year and changes in interest rates on average interest-earning assets
and average interest-bearing liabilities.
2024 versus 2023 2023 versus 2022
(Decrease)/increase in interest Net increase/ (Decrease)/increase in interest Net increase/
due to:
(decrease) in interest
due to:
(decrease)
$million
in interest
$million
Volume Rate Volume Rate
$million
$million
$million
$million
Interest earning assets
Cash and unrestricted balances at central banks (455) 142 (313) 550 1,518 2,068
Loans and advances to banks 12 261 273 57 1,185 1,242
Loans and advances to customers (845) 1,463 618 (284) 5,814 5,530
Investment securities (362) 420 58 (74) 3,209 3,135
Total interest earning assets (1,650) 2,286 636 249 11,726 11,975
Interest bearing liabilities
Subordinated liabilities and other borrowed funds (65) (144) (209) (208) 589 381
Deposits by banks (88) 100 12 (105) 468 363
Customer accounts:
Current accounts and (69) 1,343 1,274 (458) 3,769 3,311
savings deposits
Time and other deposits 242 483 725 1,601 3,945 5,546
Debt securities in issue (3) 239 236 258 1,940 2,198
Total interest bearing liabilities 17 2,021 2,038 1,088 10,711 11,799
Page 61
Shareholder information
Dividend and Interest Payment Dates
Ordinary Shares Final Dividend
Results and dividend announced 21 February 2025
Ex-dividend date 27 (UK) 26 (HK) March 2025
Record date for dividend 28 March 2025
Last date to amend currency election instructions for cash dividend* 24 April 2025
Dividend payment date 19 May 2025
* In either United States dollars, 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 2025 1 October 2025
81∕4 per cent non-cumulative irredeemable preference shares of £1 each 1 April 2025 1 October 2025
6.409 per cent non-cumulative redeemable preference shares of $5 each 30 January and 30 April 2025 30 July and 30 October 2025
7.014 per cent non-cumulative redeemable preference shares of $5 each 30 January 2025 30 July 2025
Annual General Meeting
The Annual General Meeting (AGM) will be held on Thursday, 8 May 2025 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 2025 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 2024, on or before 31 December 2025. We have also published our UK
Tax Strategy.
Pillar 3 Reporting
In accordance with the Pillar 3 disclosure requirements, the Group will
publish the Pillar 3 Disclosures in respect of the year ended 31 December
2024, on or before 21 February 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 (BACS)
Dividends can be paid straight into your bank or building society account.
Page 62
Shareholder information continued
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/contactus. 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.
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
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 2024 Annual Report, please
contact Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell
Centre, 183 Queen's Road East, Wan Chai, Hong Kong.
二〇二四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 a dispute between any translation and the English version of this
Annual Report, the English text shall prevail.
Electronic communications
If you hold your shares on the UK register and in future you would like to
receive the Annual Report electronically rather than by post, please register
online at: 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.
Page 63
Shareholder information continued
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 the 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.
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 the 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
Page 64
Shareholder information continued
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, amongst 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, 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 repaired using
models, methodologies and data which 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, amongst other things,
limited international coordination on data and methodology standards); and
future uncertainty (due, amongst 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;
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. whilst 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
Page 65
Shareholder information continued
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 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.
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 66
Shareholder information continued
CONTACT INFORMATION
Global headquarters
Standard Chartered Group
1 Basinghall Avenue
London, EC2V 5DD
United Kingdom
telephone: +44 (0)20 7885 8888
facsimile: +44 (0)20 7885 9999
Shareholder enquiries
ShareCare information
website: sc.com/shareholders
helpline: +44 (0)370 702 0138
ShareGift information
website: ShareGift.org
helpline: +44 (0)20 7930 3737
Registrar information
UK
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol, BS99 6ZZ
helpline: +44 (0)370 702 0138
Hong Kong
Computershare Hong Kong Investor Services Limited
17M Floor, Hopewell Centre
183 Queen's Road East
Wan Chai
Hong Kong
website: computershare.com/hk/investors
Chinese translation
Computershare Hong Kong Investor Services Limited
17M Floor, Hopewell Centre
183 Queen's Road East
Wan Chai
Hong Kong
Register for electronic communications
website: investorcentre.co.uk
For further information, please contact:
Manus Costello, Global Head of Investor Relations
+44 (0) 20 7885 0017
LSE Stock code: STAN.LN
HKSE Stock code: 02888
Page 67
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