TIDMSTAN
RNS Number : 2375L
Standard Chartered PLC
29 April 2020
29 April 2020
Standard Chartered PLC - first quarter 2020 results
Standard Chartered PLC (the Group) today releases its results
for the quarter ended 31 March 2020. All figures are presented on
an underlying basis and comparisons are made to the first quarter
in 2019 on a reported currency basis, unless otherwise stated.
"The unique characteristics of the Standard Chartered franchise
are coming through strongly as the impact of COVID-19 evolves. Our
teams around the network are responding very well, staying close to
our clients. While pressure on credit quality has increased
recently, we delivered good underlying income growth of six per
cent in the first quarter and maintained strong cost
discipline.
We try to show every day that we are 'Here for good', as
individuals and collectively, and I am proud of the way my 91,000
colleagues around the world are facing this challenge. Among the
many support initiatives being rolled out across our 59 markets, we
have launched a $50 million global fund with donations from
colleagues and the bank to provide assistance to those affected by
COVID-19 and related economic impacts and have committed up to $1
billion of financing, offered at cost, for companies that are
providing goods and services to help in the fight against the
pandemic. That's in addition to the help we are providing all our
clients as they face ongoing challenges. We won't stop there and
will continue to think of practical and impactful ways to make a
difference.
While sentiment globally is extremely depressed now, the
uniqueness of this franchise and the work we have done since 2015
to secure its foundations gives me confidence that we can come
through the crisis with strength. "
Bill Winters, Group Chief Executive
Selected information concerning 1Q'20 financial performance
-- Income up 13% to $4.3bn; up 15% constant currency (ccy)
o Excluding $358m positive movement in Debit Valuation
Adjustment (DVA), income was up 6% ccy
-- Costs down 2% to $2.4bn; down 1% ccy
o Positive income-to-cost jaws of 6% ex-DVA; cost-to-income
ratio improved 4 percentage points to 59% ex-DVA
-- Net interest margin down 2bps from 4Q'19 to 1.52%
-- Credit impairment rose significantly, driven primarily by the
economic impact of the rapid spread of COVID-19
o Stage 1 and 2 impairment up $388m to $451m
-- Approximately half due to modelled outcome and half due to
management overlay
o Stage 3 impairment increased $490m to $505m; 50% from two
exposures in different markets and sectors
o Gross stage 3 plus credit grade 12 exposures up 2% in 1Q'20 to
$9.2bn; early alerts more than doubled to $11.5bn
-- Return on tangible equity down 100bps to 8.6%
o Pre-provision operating profit up 41% to $2.0bn; up 16% ccy
and ex-DVA
o Underlying profit before tax down 12% to $1.2bn; down 36% ccy
and ex-DVA
o Statutory profit before tax down 29% to $0.9bn, includes $249m
goodwill impairment in India from GDP growth revision
-- Risk-weighted assets of $273bn up $9bn or 3% in 1Q'20; mostly
attributable to the impact of COVID-19
-- The Group remains strongly capitalised and highly liquid,
enabling support for clients and communities through COVID-19
o Common equity tier 1 (CET1) ratio in middle of 13-14%
medium-term target range at 13.4%: down 45bps since 4Q'19
-- 60bps reduction from risk-weighted asset growth; partly
offset by profits and decision to suspend distributions in 2020
-- Permata sale is expected to complete in 2Q'20 and to increase
CET1 by 40bps
o Liquidity coverage ratio resilient in stressed market
conditions; broadly flat QoQ at 142% (4Q'19: 144%)
o $5bn of $45bn committed revolving facilities utilised;
draw-down rate slowed significantly in April
-- Earnings per share down 2.3c or 8% to 25.4c; 40m shares
bought back and cancelled in 1Q'20
Outlook
We expect a gradual recovery from the COVID-19 pandemic, with
major contraction in economic growth rates across most of the world
in the second quarter, before the global economy moves out of
recession in the latter part of 2020, most likely led and driven by
markets in our footprint. The pace at which individual markets
recover will be heavily dependent on the efficacy of government
stimulus initiatives and policies to ease restrictions, as well as
the resilience of the COVID-19 virus itself. We are well prepared
for a protracted period of severe dislocation and will continue to
support our clients and employees and to manage our risk, capital
and liquidity with that view in mind.
We said in February that if income grows more slowly due to
exogenous factors then so must our costs. We are acting to manage
our costs prudently while doing everything we can to protect jobs.
And while the decision to cancel last year's final dividend and not
consider an interim dividend this year was difficult, it was taken
in the light of extraordinary circumstances and will ensure that we
have more capital to support individuals, businesses and the
communities in which we operate through these difficult times.
If we are wrong about the pace of recovery and the global
economy gets back on its feet rapidly - and we are seeing
encouraging early signs of that happening in China - then the
actions we are taking now will make us leaner and fitter to take
advantage of the opportunities that will bring.
Standard Chartered PLC - Statement of results
For the quarter ended 31 March 2020
1Q'20 1Q'19 Change(5)
$million $million %
--------------------------------------------------- -------- -------- ---------
Underlying performance
--------------------------------------------------- -------- -------- ---------
Operating income 4,327 3,813 13
--------------------------------------------------- -------- -------- ---------
Operating expenses (2,358) (2,415) 2
--------------------------------------------------- -------- -------- ---------
Credit impairment (956) (78) nm(6)
--------------------------------------------------- -------- -------- ---------
Other impairment 154 (2) nm(6)
--------------------------------------------------- -------- -------- ---------
Profit from associates and joint ventures 55 66 (17)
--------------------------------------------------- -------- -------- ---------
Profit before taxation 1,222 1,384 (12)
--------------------------------------------------- -------- -------- ---------
Profit attributable to ordinary shareholders
(1) 810 917 (12)
--------------------------------------------------- -------- -------- ---------
Return on ordinary shareholders' tangible
equity (%) 8.6 9.6 (100)bps
--------------------------------------------------- -------- -------- ---------
Cost to income ratio (%) 54.5 63.3 880bps
--------------------------------------------------- -------- -------- ---------
Statutory performance
--------------------------------------------------- -------- -------- ---------
Operating income 4,335 3,918 11
--------------------------------------------------- -------- -------- ---------
Operating expenses (2,368) (2,656) 11
--------------------------------------------------- -------- -------- ---------
Credit impairment (962) (78) (1,133)
--------------------------------------------------- -------- -------- ---------
Goodwill impairment (258) - nm(6)
--------------------------------------------------- -------- -------- ---------
Other impairment 92 (20) 560
--------------------------------------------------- -------- -------- ---------
Profit from associates and joint ventures 47 78 (40)
--------------------------------------------------- -------- -------- ---------
Profit before taxation 886 1,242 (29)
--------------------------------------------------- -------- -------- ---------
Taxation (369) (424) 13
--------------------------------------------------- -------- -------- ---------
Profit for the year 517 818 (37)
--------------------------------------------------- -------- -------- ---------
Profit attributable to parent company shareholders 510 808 (37)
--------------------------------------------------- -------- -------- ---------
Profit attributable to ordinary shareholders
(1) 477 774 (38)
--------------------------------------------------- -------- -------- ---------
Return on ordinary shareholders' tangible
equity (%) 5.1 8.1 (301)bps
--------------------------------------------------- -------- -------- ---------
Cost to income ratio (%) 54.6 67.8 1,316bps
--------------------------------------------------- -------- -------- ---------
Balance sheet and capital
--------------------------------------------------- -------- -------- ---------
Total assets 764,916 708,874 8
--------------------------------------------------- -------- -------- ---------
Total equity 50,004 51,101 (2)
--------------------------------------------------- -------- -------- ---------
Tangible equity attributable to ordinary
shareholders(1) 37,927 38,898 (2)
--------------------------------------------------- -------- -------- ---------
Loans and advances to customers 271,234 265,105 2
--------------------------------------------------- -------- -------- ---------
Customer accounts 422,192 377,974 12
--------------------------------------------------- -------- -------- ---------
Risk-weighted assets 272,653 268,206 2
--------------------------------------------------- -------- -------- ---------
Total capital 53,458 55,862 (4)
--------------------------------------------------- -------- -------- ---------
Net Interest Margin (%) (adjusted) 1.52 1.66 (14)bps
--------------------------------------------------- -------- -------- ---------
Advances-to-deposits ratio (%)(2) 61.9 66.5 (4.6)
--------------------------------------------------- -------- -------- ---------
Liquidity coverage ratio (%) 142 153 (11)
--------------------------------------------------- -------- -------- ---------
Common Equity Tier 1 ratio (%) 13.4 13.9 (0.5)
--------------------------------------------------- -------- -------- ---------
Total capital (%) 19.6 20.8 (1.2)
--------------------------------------------------- -------- -------- ---------
UK leverage ratio (%) 4.9 5.4 (0.5)
--------------------------------------------------- -------- -------- ---------
Information per ordinary share Cents Cents Cents
--------------------------------------------------- -------- -------- ---------
Earnings per share - underlying(3) 25.4 27.7 (2.3)
--------------------------------------------------- -------- -------- ---------
- statutory(3) 15.0 23.4 (8.4)
--------------------------------------------------- -------- -------- ---------
Net asset value per share(4) 1,357 1,339 17
---------
Tangible net asset value per share(4) 1,201 1,185 16
---------
Number of ordinary shares at period end
(m) 3,147 3,310 (5)
--------------------------------------------------- -------- -------- ---------
1 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
2 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 includes customer accounts held
at fair value through profit or loss.
3 Represents the underlying or statutory earnings divided by the
basic weighted average number of shares
4 Calculated on period end net asset value, tangible net asset
value and number of shares
5 Variance is better/(worse) other than assets, liabilities and
risk-weighted assets
6 Not meaningful
Standard Chartered PLC - Table of Contents
Performance highlights 1
Summary of results 2
Group Chief Financial Officer's review 4
Client segment reviews 11
Regional reviews 17
Supplementary information 22
Capital Review 22
Financial Statements 26
Supplementary financial information 31
Shareholder information 38
Forward-looking statements
This document may contain 'forward-looking statements' that are
based on current expectations or beliefs, as well as assumptions
about future events. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as 'may', 'could', 'will', 'expect', 'intend', 'estimate',
'anticipate', 'believe', 'plan', 'seek', 'continue' or other words
of similar meaning.
By their very nature, forward-looking statements are subject to
known and unknown risks and uncertainties and can be affected by
other factors that could cause actual results, and the Group's
plans and objectives, to differ materially from those expressed or
implied in the forward-looking statements. Recipients should not
place reliance on, and are cautioned about relying on, any
forward-looking statements. There are several factors which could
cause actual results to differ materially from those expressed or
implied in forward-looking statements. The factors that could cause
actual results to differ materially from those described in the
forward-looking statements include (but are not limited to) changes
in global, political, economic, business, competitive, market and
regulatory forces or conditions, future exchange and interest
rates, changes in tax rates, future business combinations or
dispositions and other factors specific to the Group. Any
forward-looking statement contained in this document is based on
past or current trends and/or activities of the Group and should
not be taken as a representation that such trends or activities
will continue in the future.
No statement in this document is intended to be a profit
forecast or to imply that the earnings of the Group for the current
year or future years will necessarily match or exceed the
historical or published earnings of the Group. Each forward-looking
statement speaks only as of the date of the particular statement.
Except as required by any applicable laws or regulations, the Group
expressly disclaims any obligation to revise or update any
forward-looking statement contained within this document,
regardless of whether those statements are affected as a result of
new information, future events or otherwise.
Please refer to the Company's latest Annual Report for a
discussion of certain of the risks and 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.
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.
This information will be available on the Group's website at
www.sc.com
Standard Chartered PLC - Group Chief Financial Officer's
review
'Our actions over recent years to secure our foundations have
prepared us well to manage our way through this crisis'
Summary of financial performance
Constant
currency
change
1Q'20 1Q'19 Change (1) 4Q'19 Change
$million $million % % $million %
--------------------------------- -------- -------- ------ --------- -------- ------
Net interest income 1,842 1,920 (4) 1,899 (3)
--------------------------------- -------- -------- ------ --------- -------- ------
Other income 2,485 1,893 31 1,698 46
--------------------------------- -------- -------- ------ --------- -------- ------
Underlying operating income 4,327 3,813 13 15 3,597 20
--------------------------------- -------- -------- ------ --------- -------- ------
Other operating expenses (2,358) (2,415) 2 1 (2,592) 9
--------------------------------- -------- -------- ------ --------- -------- ------
UK bank levy - - nm(2) (347) 100
--------------------------------- -------- -------- ------ --------- -------- ------
Underlying operating expenses (2,358) (2,415) 2 1 (2,939) 20
--------------------------------- -------- -------- ------ --------- -------- ------
Underlying operating profit
before impairment and taxation 1,969 1,398 41 42 658 199
--------------------------------- -------- -------- ------ --------- -------- ------
Credit impairment (956) (78) nm(2) (373) (156)
--------------------------------- -------- -------- ------ --------- -------- ------
Other impairment 154 (2) nm(2) (12) nm(2)
--------------------------------- -------- -------- ------ --------- -------- ------
Profit from associates and
joint ventures 55 66 (17) 52 6
--------------------------------- -------- -------- ------ --------- -------- ------
Underlying profit before
taxation 1,222 1,384 (12) (11) 325 nm(2)
--------------------------------- -------- -------- ------ --------- -------- ------
Provision for regulatory
matters 14 (186) 108 - nm(2)
--------------------------------- -------- -------- ------ --------- -------- ------
Restructuring (92) 32 nm(2) (117) 21
--------------------------------- -------- -------- ------ --------- -------- ------
Other items (258) 12 nm (2) (14) nm (2)
--------------------------------- -------- -------- ------ --------- -------- ------
Statutory profit before taxation 886 1,242 (29) (28) 194 nm(2)
--------------------------------- -------- -------- ------ --------- -------- ------
Taxation (369) (424) 13 (122) nm(2)
--------------------------------- -------- -------- ------ --------- -------- ------
Profit for the period 517 818 (37) (37) 72 nm(2)
--------------------------------- -------- -------- ------ --------- -------- ------
Net interest margin (%) 1.52 1.66 1.54
--------------------------------- -------- -------- ------ --------- -------- ------
Underlying return on tangible
equity (%) 8.6 9.6 (0.1)
--------------------------------- -------- -------- ------ --------- -------- ------
Underlying earnings per share
(cents) 25.4 27.7 (0.4)
--------------------------------- -------- -------- ------ --------- -------- ------
Statutory return on tangible
equity (%) 5.1 8.1 (1.3)
--------------------------------- -------- -------- ------ --------- -------- ------
Statutory earnings/(loss)
per share (cents) 15.0 23.4 (3.9)
--------------------------------- -------- -------- ------ --------- -------- ------
1 Comparisons presented on the basis of the current period's
functional currency rate, ensuring like-for-like currency rates
between the two periods
2 Not meaningful
Strong business momentum in the opening weeks of the year
continued well into the first quarter, with almost all of the
Group's products generating positive income growth overall despite
the rapid spread of COVID-19 that impacted the Group's results
mainly in March. Pre-provision operating profit improved
significantly with income excluding the impact of a $358 million
positive movement in the debit valuation adjustment (DVA) growing
at a faster rate than costs. Underlying profit fell due to
substantially higher credit impairment driven in part by the
deteriorating macroeconomic outlook.
It is not possible to reliably quantify the impact of the spread
of COVID-19 on the Group's future financial performance, but the
consequences for the global economy are likely to lead to further
impairments and could affect income, risk-weighted assets and
possibly costs. The Group is monitoring the situation carefully and
is committed to deploying its strong capital and liquidity to
support its clients and the communities it operates in through the
crisis.
All commentary that follows is on an underlying basis and
comparisons are made to the equivalent period in 2019 on a reported
currency basis, unless otherwise stated.
-- Operating income grew 13 per cent including a $358 million
positive movement in the DVA. Income was up 6 per cent on a
constant currency basis and excluding DVA
-- Net interest income decreased 4 per cent with increased
volumes more than offset by a 14 basis point decrease in net
interest margin. The decisions by the US Federal Reserve in March
to drop its benchmark interest rate in total by 150 basis points
along with actions undertaken by other central banks is estimated
to have an impact of a further $600 million for the Group's income
in 2020
-- Other income increased 31 per cent, or 12 per cent excluding
the positive impact of movements in DVA, with a particularly strong
underlying performance in Financial Markets
-- Operating expenses were 2 per cent lower and 1 per cent lower
on a constant currency basis, with tight control of costs
generating positive income-to-cost jaws of 16 per cent on a
reported basis, or 6 per cent on a constant currency basis
excluding DVA. The cost-to-income ratio improved 4 percentage
points to 59 per cent excluding DVA
-- Given the substantial economic uncertainties arising from the
spread of COVID-19 and the significantly lower interest rate
environment the Group is targeting total costs excluding the UK
bank levy below $10 billion for full-year 2020 by implementing
measures including accruing lower variable compensation, reducing
and re-prioritising discretionary investment spend and pausing new
hiring
-- Credit impairment increased by $878 million to $956 million.
Stage 1 and 2 impairments increased by $388 million, of which
around half was attributable to modelled outcomes with the rest due
to a management overlay to reflect deterioration in the
macroeconomic outlook not captured in the modelled outcome.
Impairments of stage 3 assets increased $490 million with just
under half the increase related to two Corporate &
Institutional Banking clients in unconnected sectors
-- Other impairment was a $154 million credit, primarily driven
by a reversal of previously impaired assets partially offset by
impairment charges relating to aircraft
-- Profit from associates and joint ventures was down 17 per
cent to $55 million due to the impact of the spread of COVID-19 on
the performance of China Bohai Bank
-- Underlying profit before tax decreased 12 per cent. Charges
relating to restructuring, provisions for regulatory matters and
other items increased $194 million to $336 million, primarily
relating to $249 million goodwill impairment in India due to a
lower GDP growth outlook
-- Taxation was $369 million on a statutory basis with an
underlying effective tax rate of 30 per cent flat to prior year
-- Underlying return on tangible equity declined by 100 basis
points to 8.6 per cent, with the impact of reduced profits partly
offset by lower tangible equity reflecting the share buy-back
programmes completed since 1Q'19
Operating income by product
1Q'20 1Q'19(1) Change 4Q'19(1) Change
$million $million % $million %
------------------------------------- -------- -------- ------ -------- ------
Transaction Banking 884 960 (8) 919 (4)
------------------------------------- -------- -------- ------ -------- ------
Trade 260 277 (6) 259 -
------------------------------------- -------- -------- ------ -------- ------
Cash Management 540 600 (10) 575 (6)
------------------------------------- -------- -------- ------ -------- ------
Securities Services 84 83 1 85 (1)
------------------------------------- -------- -------- ------ -------- ------
Financial Markets 1,194 748 60 631 89
------------------------------------- -------- -------- ------ -------- ------
Foreign Exchange 415 298 39 264 57
------------------------------------- -------- -------- ------ -------- ------
Rates 378 221 71 163 132
------------------------------------- -------- -------- ------ -------- ------
Commodities 44 45 (2) 37 19
------------------------------------- -------- -------- ------ -------- ------
Credit and Capital Markets 26 140 (81) 125 (79)
------------------------------------- -------- -------- ------ -------- ------
Capital Structuring Distribution
Group 61 82 (26) 86 (29)
------------------------------------- -------- -------- ------ -------- ------
DVA 305 (53) nm (2) (72) nm (2)
------------------------------------- -------- -------- ------ -------- ------
Other Financial Markets (35) 15 nm (2) 28 nm (2)
------------------------------------- -------- -------- ------ -------- ------
Corporate Finance 278 262 6 328 (15)
------------------------------------- -------- -------- ------ -------- ------
Lending and Portfolio Management 195 187 4 201 (3)
------------------------------------- -------- -------- ------ -------- ------
Wealth Management 530 465 14 415 28
------------------------------------- -------- -------- ------ -------- ------
Retail Products 946 951 (1) 960 (1)
------------------------------------- -------- -------- ------ -------- ------
CCPL and other unsecured lending 304 305 - 311 (2)
------------------------------------- -------- -------- ------ -------- ------
Deposits 472 494 (4) 484 (2)
------------------------------------- -------- -------- ------ -------- ------
Mortgage and Auto 136 129 5 130 5
------------------------------------- -------- -------- ------ -------- ------
Other Retail Products 34 23 48 35 (3)
------------------------------------- -------- -------- ------ -------- ------
Treasury 325 308 6 196 66
------------------------------------- -------- -------- ------ -------- ------
Other (25) (68) 63 (53) 53
------------------------------------- -------- -------- ------ -------- ------
Total underlying operating income 4,327 3,813 13 3,597 20
------------------------------------- -------- -------- ------ -------- ------
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across products. Prior periods have
been restated
2 Not meaningful
Transaction Banking income was down 8 per cent, from a 10 per
cent decline in Cash Management with strong liability growth more
than offset by declining margins reflecting a reduced interest rate
environment. Trade declined 6 per cent from lower balances while
Securities Services income grew 1 per cent.
Financial Markets income grew 60 per cent or 11 per cent
excluding DVA, benefiting from heightened market volatility, wider
spreads and increased hedging and investment activity by clients.
There was strong double-digit growth in Rates and Foreign Exchange
partly offset by declines in Credit and Capital Markets and in the
Capital Structuring Distribution Group.
Corporate Finance income grew 6 per cent reflecting completion
of prior year pipeline activity and increased balances from
drawdowns on revolving credit facilities.
Lending and Portfolio Management income was up 4 per cent with
improved margins and increased volumes in Corporate Lending .
Wealth Management income grew 14 per cent with online sales more
than offsetting lower branch sales from reduced branch walk-ins due
to COVID-19 related social distancing, with particularly strong
performance in FX and fixed income sales .
Retail Products income was down 1 per cent on a reported basis
and up 1 per cent on a constant currency basis with a 4 per cent
decline in Deposits from lower margins partly offset by a 5 per
cent increase in Mortgages and Auto benefiting from increased
volumes and margins .
Treasury income grew 6 per cent with increased Treasury Markets
realisation gains from the sale of longer-dated securities as bond
yields fell partly offset by a $38 million unfavourable movement in
hedge ineffectiveness and reduced interest income on deployed
assets within Treasury Markets.
Profit before tax by client segment and geographic region
1Q'20 1Q'19(1) Change 4Q'19(1) Change
$million $million % $million %
---------------------------------- -------- -------- ------ -------- ------
Corporate & Institutional Banking 656 680 (4) 371 77
---------------------------------- -------- -------- ------ -------- ------
Retail Banking 233 290 (20) 169 38
---------------------------------- -------- -------- ------ -------- ------
Commercial Banking 102 187 (45) 46 122
---------------------------------- -------- -------- ------ -------- ------
Private Banking 37 72 (49) (3) nm(2)
---------------------------------- -------- -------- ------ -------- ------
Central & other items (segment) 194 155 25 (258) 175
---------------------------------- -------- -------- ------ -------- ------
Underlying profit before taxation 1,222 1,384 (12) 325 nm(2)
---------------------------------- -------- -------- ------ -------- ------
Greater China & North Asia 650 657 (1) 493 32
---------------------------------- -------- -------- ------ -------- ------
ASEAN & South Asia 367 389 (6) 23 nm(2)
---------------------------------- -------- -------- ------ -------- ------
Africa & Middle East 47 279 (83) 96 (51)
---------------------------------- -------- -------- ------ -------- ------
Europe & Americas 101 (32) nm(2) 82 23
---------------------------------- -------- -------- ------ -------- ------
Central & other items (region) 57 91 (37) (369) 115
---------------------------------- -------- -------- ------ -------- ------
Underlying profit before taxation 1,222 1,384 (12) 325 nm(2)
---------------------------------- -------- -------- ------ -------- ------
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across client segments. Prior periods
have been restated
2 Not meaningful
Corporate & Institutional Banking remains the largest
contributor to the overall Group's profit before tax from a client
segment perspective. Its profit fell 4 per cent, with strong
performance in Financial Markets and the benefit of a $358 million
positive movement in DVA offset by increased impairments. Retail
Banking profit declined 20 per cent with income growth offset by
impairments including the management overlay. Commercial Banking
profit reduced 45 per cent due to increased impairments, while a
non-repeat of a prior-year impairment release meant Private Banking
profit was down 49 per cent. Profit in Central & other items
improved 25 per cent due to higher Treasury Markets income.
Greater China & North Asia remains the largest regional
contributor to the overall Group's profit before tax, with profit
down just 1 per cent despite being the region most impacted by the
effect of COVID-19 in the first quarter. Increased impairments were
the primary drivers of the 6 per cent lower profit in ASEAN &
South Asia and the 83 per cent profit decline in Africa &
Middle East . Europe & Americas generated $101 million in
profit, up from a $(32) million loss in the same period last year,
including a $190 million positive movement in DVA. There was a 37
per cent reduction in profit in Central & other items mainly
due to lower returns paid to Treasury on the equity provided to the
regions from a falling interest rate environment.
Adjusted net interest income and margin
1Q'20 1Q'19 Change(1) 4Q'19 Change(1)
$million $million % $million %
------------------------------------- -------- -------- --------- -------- ---------
Adjusted net interest income (2) 1,931 1,993 (3) 1,978 (2)
------------------------------------- -------- -------- --------- -------- ---------
Average interest-earning assets 510,672 487,424 5 508,001 1
------------------------------------- -------- -------- --------- -------- ---------
Average interest-bearing liabilities 464,549 436,862 6 457,413 2
------------------------------------- -------- -------- --------- -------- ---------
Gross yield (%) (3) 2.95 3.45 (50) 3.19 (24)
------------------------------------- -------- -------- --------- -------- ---------
Rate paid (%) (3) 1.57 1.99 (42) 1.83 (26)
------------------------------------- -------- -------- --------- -------- ---------
Net yield (%) (3) 1.38 1.46 (8) 1.36 2
------------------------------------- -------- -------- --------- -------- ---------
Net interest margin (%) (3.4) 1.52 1.66 (14) 1.54 (2)
------------------------------------- -------- -------- --------- -------- ---------
1 Variance is increase/(decrease) other than adjusted net interest
income which is better/(worse)
2 Adjusted net interest income is statutory net interest income less
funding costs for the trading book
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
The Group in 2019 changed its accounting policy for net interest
income and the basis of preparation of its net interest margin to
better reflect the underlying performance of its banking book. See
notes to the financial statements in the 2019 Annual Report for
further details.
Adjusted net interest income was down 2 per cent versus the
prior quarter with an increase in interest-earning assets offset by
lower day count and a 2 basis points reduction in net interest
margin which averaged 152 basis points for the quarter:
-- Average interest-earning assets increased 1 per cent in the
quarter driven by an increase in Treasury Market assets. Gross
yields declined 24 basis points compared to the average in the
prior quarter and predominantly reflected the flow-through of
declining interest rates in the second half of 2019 and those that
occurred in the quarter
-- Average interest-bearing liabilities increased 2 per cent
driven by growth in customer accounts. The rate paid on liabilities
decreased 26 basis points compared to the average in the prior
quarter reflecting interest rate movements
The decisions by the US Federal Reserve in March to drop its
benchmark interest rate in total by 150 basis points along with
actions undertaken by other central banks is estimated to have an
impact of a further $600 million for the Group's income in
2020.
Credit risk summary
Income Statement
1Q'20 1Q'19 Change(1) 4Q'19 Change(1)
$million $million % $million %
-------------------------- --------- -------- --------- -------- ---------
Total credit impairment 956 78 1,126 373 156
-------------------------- --------- -------- --------- -------- ---------
Of which stage 1 and 2 451 63 616 127 255
-------------------------- --------- -------- --------- -------- ---------
Of which stage 3 505 15 3,267 246 105
1 Variance is increase/(decrease) comparing current reporting period
to prior reporting periods
Balance sheet
31.03.19
31.03.20 31.12.19 Change(1) (4,5) Change(1)
$million $million % $million %
------------------------------------ -------- -------- --------- -------- ---------
Gross loans and advances to
customers(2) 277,444 274,306 1 271,555 2
------------------------------------- -------- -------- --------- -------- ---------
Of which stage 1 and 2 269,675 266,908 1 263,082 3
------------------------------------- -------- -------- --------- -------- ---------
Of which stage 3 7,769 7,398 5 8,473 (8)
------------------------------------- -------- -------- --------- -------- ---------
Expected credit loss provisions (6,210) (5,783) 7 (6,450) (4)
------------------------------------- -------- -------- --------- -------- ---------
Of which stage 1 and 2 (1,129) (779) 45 (804) 40
------------------------------------- -------- -------- --------- -------- ---------
Of which stage 3 (5,081) (5,004) 2 (5,646) (10)
------------------------------------- -------- -------- --------- -------- ---------
Net loans and advances to
customers 271,234 268,523 1 265,105 2
------------------------------------- -------- -------- --------- -------- ---------
Of which stage 1 and 2 268,546 266,129 1 262,278 2
------------------------------------- -------- -------- --------- -------- ---------
Of which stage 3 2,688 2,394 12 2,827 (5)
------------------------------------- -------- -------- --------- -------- ---------
Cover ratio of stage 3 before/after (3) / (2) /
collateral (%)(3) 65 / 85 68 / 85 0 67 / 86 (1)
------------------------------------- -------- -------- --------- -------- ---------
Credit grade 12 accounts ($million) 1,453 1,605 (9) 1,376 6
------------------------------------- -------- -------- --------- -------- ---------
Early alerts ($million) 11,461 5,271 117 4,258 169
------------------------------------- -------- -------- --------- -------- ---------
Investment grade corporate
exposures (%)(3) 62 61 1 62 -
------------------------------------- -------- -------- --------- -------- ---------
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 $2,903 million at 31 March 2020,
$1,469 million at 31 December 2019 and $5,122 million at 31 March
2019
3 Change is the percentage points difference between the two points
rather than the percentage change
4 Q1 2019 Stage 3 balances, provisions and cover ratios have been
restated to include interest due but unpaid together with equivalent
credit impairment charge
5 Stage 3 Gross Loans and Advances to Banks of $97m is not included
in the table above
The Group in 2019 changed its accounting policy to report
interest in suspense for stage 3 exposures. This results in an
increase in gross stage 3 exposures and provisions, with no change
to net stage 3 assets. Prior period balances have been restated.
See notes to the financial statements in the 2019 Annual Report for
further details.
Asset quality deteriorated in the quarter reflecting primarily
the impact of COVID-19. The rapid spread of COVID-19 has resulted
in significantly reduced economic forecasts and increased
geopolitical uncertainty. The Group remains vigilant in the light
of the developing situation, and reviews and stress tests of its
portfolio are carried out regularly to help identify then mitigate
any risks that may arise.
Credit impairment increased by $878 million compared to 1Q'19
and by $583 million compared to 4Q'19.
Stage 1 and 2 impairments increased by $388 million, of which
around half was attributable to modelled outcomes and half was due
to a management overlay to reflect deterioration in the
macroeconomic outlook not captured in the modelled outcome.
Stage 3 impairments increased in every client segment with
approximately half of the increase due to two Corporate &
Institutional Banking clients in unrelated markets and sectors.
Gross stage 3 loans and advances to customers of $7.8 billion
were up 5 per cent compared with 31 December 2019 primarily due to
increased inflows in Corporate & Institutional Banking. These
credit-impaired loans represented 2.8 per cent of gross loans and
advances, an increase of 10 basis points compared with 31 December
2019.
The stage 3 cover ratio reduced to 65 per cent from 68 per cent
as at 31 December 2019 as new downgrades incurred lower levels of
provisions but are partially covered by collateral. The cover ratio
after collateral was flat at 85 per cent.
Credit grade 12 balances decreased 9 per cent since 31 December
2019 with new inflows including the impact of sovereign downgrades
more than offset by outflows to stage 3 and repayments.
Early alert accounts more than doubled to $11.5 billion compared
to 31 December 2019 with all exposures in the Aviation sector put
on either purely precautionary or non-purely precautionary early
alert, and a particular focus on exposures in the Oil & Gas,
Metals & Mining, Commodity Traders and Automobiles &
Components sectors.
The proportion of investment grade corporate exposures has
remained broadly stable at 62 per cent.
Restructuring and other
items
1Q'20 1Q'19
---------------------------------------- ----------------------------------------
Provision Provision
for regulatory Other for regulatory Other
matters Restructuring items matters Restructuring items
$million $million $million $million $million $million
------------------------ --------------- ------------- -------- --------------- ------------- --------
Operating income - 8 - - 105 -
------------------------ --------------- ------------- -------- --------------- ------------- --------
Operating expenses 14 (24) - (186) (55) -
------------------------ --------------- ------------- -------- --------------- ------------- --------
Credit impairment - (6) - - - -
------------------------ --------------- ------------- -------- --------------- ------------- --------
Goodwill Impairment - - (258) - - -
------------------------ --------------- ------------- -------- --------------- ------------- --------
Other impairment - (62) - - (18) -
------------------------ --------------- ------------- -------- --------------- ------------- --------
Profit from associates
and joint ventures - (8) - - - 12
------------------------ --------------- ------------- -------- --------------- ------------- --------
Profit/(loss) before
taxation 14 (92) (258) (186) 32 12
------------------------ --------------- ------------- -------- --------------- ------------- --------
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 $92 million primarily reflect
impairments from the Group's discontinued ship leasing and
principal finance businesses. Other items of $258 million relates
mainly to goodwill impairment on the Group's subsidiary in India
due to a lower economic growth forecast and increases to the
discount rate.
Balance sheet and liquidity
31.03.20 31.12.19 Change(1) 31.03.19 Change(1)
$million $million % $million %
----------------------------------- -------- -------- --------- -------- ---------
Assets
----------------------------------- -------- -------- --------- -------- ---------
Loans and advances to banks 61,323 53,549 15 59,873 2
----------------------------------- -------- -------- --------- -------- ---------
Loans and advances to customers 271,234 268,523 1 265,105 2
----------------------------------- -------- -------- --------- -------- ---------
Other assets 432,359 398,326 9 383,896 13
----------------------------------- -------- -------- --------- -------- ---------
Total assets 764,916 720,398 6 708,874 8
----------------------------------- -------- -------- --------- -------- ---------
Liabilities
----------------------------------- -------- -------- --------- -------- ---------
Deposits by banks 25,519 28,562 (11) 32,434 (21)
----------------------------------- -------- -------- --------- -------- ---------
Customer accounts 422,192 405,357 4 377,974 12
----------------------------------- -------- -------- --------- -------- ---------
Other liabilities 267,201 235,818 13 247,365 8
----------------------------------- -------- -------- --------- -------- ---------
Total liabilities 714,912 669,737 7 657,773 9
----------------------------------- -------- -------- --------- -------- ---------
Equity 50,004 50,661 (1) 51,101 (2)
----------------------------------- -------- -------- --------- -------- ---------
Total equity and liabilities 764,916 720,398 6 708,874 8
----------------------------------- -------- -------- --------- -------- ---------
Advances-to-deposits ratio (%) (2) 61.9% 64.2% 66.5%
----------------------------------- -------- -------- --------- -------- ---------
Liquidity coverage ratio (%) 142% 144% 153%
----------------------------------- -------- -------- --------- -------- ---------
1 Variance is increase/(decrease)comparing current reporting period
to prior reporting periods
2 The Group now excludes $9,947 million held with central banks
(31.12.19: $9,109 million, 31.03.19: $10,077 million) that has been
confirmed as repayable at the point of stress
The Group's balance sheet remains strong, liquid and well
diversified.
-- Loans and advances to customers increased 1 per cent since 31
December 2019 to $271 billion driven mainly by growth in Corporate
Lending and Corporate Finance partly offset by reduced Trade
balances. The increase in Corporate Lending and Corporate Finance
reflects increased draw-downs on revolving credit facilities due to
the effects of the emerging COVID-19 crisis in March. The weekly
rate of new draw-downs subsequently reduced to around zero by the
middle of April
-- Customer accounts of $422 billion increased 4 per cent since
31 December 2019 with an increase in operating account balances
within Cash Management and Retail Banking current accounts partly
offset by a reduction in Retail Banking time deposits
-- Other assets increased 9 per cent since 31 December 2019
driven by increased derivative assets and reverse repurchase
agreements to support the strong growth in Financial Markets. Other
liabilities increased 13 per cent from increased trading book
liabilities and derivative liabilities
The advances-to-deposits ratio reduced slightly to 61.9 per cent
from 64.2 per cent at 31 December 2019. The liquidity coverage
ratio (LCR) was resilient, decreasing slightly from 144 per cent to
142 per cent in extremely challenging market conditions and remains
well above the minimum regulatory requirement of 100 per cent. The
Group was able to issue $2 billion senior unsecured debt in March
which boosted LCR by 2 basis points and demonstrated its ability to
access markets during stressed conditions.
Risk-weighted assets
31.03.20 31.12.19 Change(1) 31.03.19 Change(1)
$million $million % $million %
--------- --------- ---------- --------- ---------
By risk type
----------------------- --------- --------- ---------- --------- ---------
Credit risk 223,003 215,664 3 219,117 2
----------------------- --------- --------- ---------- --------- ---------
Operational risk 27,803 27,620 1 27,620 1
----------------------- --------- --------- ---------- --------- ---------
Market risk 21,847 20,806 5 21,469 2
----------------------- --------- --------- ---------- --------- ---------
Total RWAs 272,653 264,090 3 268,206 2
----------------------- --------- --------- ---------- --------- ---------
1 Variance is increase/(decrease) comparing current reporting period
to prior reporting periods
Total risk-weighted assets (RWA) increased 3 per cent or $9
billion since 31 December 2019 to $273 billion mostly as a result
of the impact of economic disruption related to COVID-19
-- Credit Risk RWA increased $7 billion to $223 billion
reflecting the impact of economic disruption related to COVID-19 on
asset growth and credit migration. Asset growth increased RWAs by
$9 billion primarily from increased draw-downs on revolving credit
facilities and mark-to-market movements on derivatives. Negative
credit migration increased RWA by $2 billion but was more than
offset by foreign currency translation reducing RWAs by $5
billion
-- Operational Risk RWA increased 1 per cent primarily due to an
increase in average income as measured over a rolling three-year
time horizon, with higher 2019 income replacing lower 2016
income
-- Market Risk RWA increased by $1 billion to $22 billion due to
higher levels of Financial Markets activity with increased value at
risk from historically high levels of market volatility partly
offset by regulatory mitigation for back-testing exceptions
The ongoing execution of organic and inorganic RWA optimisation
initiatives supports the expectation that income growth should
exceed RWA growth in the medium-term despite potential short-term
headwinds during the COVID-19 pandemic.
Capital base and ratios
31.03.20 31.12.19 Change(1) 31.03.19 Change(1)
$million $million % $million %
---------------------------------------- -------- -------- --------- --------
CET1 capital 36,467 36,513 - 37,184 (2)
---------------------------------------- -------- -------- --------- --------
Additional Tier 1 capital (AT1) 4,620 7,164 (36) 6,612 (30)
---------------------------------------- -------- -------- --------- -------- ---------
Tier 1 capital 41,087 43,677 (6) 43,796 (6)
---------------------------------------- -------- -------- --------- --------
Tier 2 capital 12,371 12,288 1 12,066 3
---------------------------------------- -------- -------- --------- -------- ---------
Total capital 53,458 55,965 (4) 55,862 (4)
---------------------------------------- -------- -------- --------- -------- ---------
CET1 capital ratio end point (%)(2) 13.4 13.8 (0.4) 13.9 (0.5)
---------------------------------------- -------- -------- --------- --------
Total capital ratio transitional (%)(2) 19.6 21.2 (1.6) 20.8 (1.2)
---------------------------------------- -------- -------- --------- --------
UK leverage ratio (%)(2) 4.9 5.2 (0.3) 5.4 (0.5)
---------------------------------------- -------- -------- --------- -------- ---------
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 announced on 31 March that in response to a request
from the Prudential Regulation Authority and as a consequence of
the unprecedented challenges facing the world due to the COVID-19
pandemic, the board had decided after careful consideration to
withdraw the recommendation to pay a final dividend for 2019 of 20
cents per ordinary share and to suspend the buy-back programme
announced on 28 February 2020. Furthermore, no interim dividend on
ordinary shares will be accrued, recommended or paid in 2020. The
board's recommendation regarding a final dividend in 2020 will take
into account the financial performance of the Group for the full
year and the medium-term outlook at that time.
The board fully recognises the importance of dividends to the
Group's owners. However, suspending ordinary shareholder
distributions will allow the Group to maximise its support for
individuals, businesses and the communities in which it operates
whilst at the same time preserving strong capital ratios and
investing to transform the business for the long term.
The Group is well capitalised with low leverage and high levels
of loss-absorbing capacity. Its capital and liquidity metrics
remain well above regulatory thresholds.
The Group had through the buy-back programme announced on 28
February 2020 spent $242 million purchasing 40 million ordinary
shares of $0.50 each, representing a volume-weighted average price
per share of GBP4.76. These shares were subsequently cancelled,
reducing the total issued share capital by 1.3 per cent.
The Group on 20 April 2020 announced a revision to the purchase
price to be paid for its stake in PT Bank Permata Tbk, subject to
the transaction closing earlier than originally expected on or
before 30 June 2020. Completion of the sale on the revised terms
would generate an increase in the Group's common equity tier 1
(CET1) ratio of approximately 40 basis points.
The Group's CET1 ratio of 13.4 per cent was 45 basis points
lower than as at 31 December 2019, over three percentage points
above the Group's latest regulatory minimum of 10.0 per cent and
still within its 13-14 per cent medium-term target range. Around 60
basis points of the reduction in the CET1 ratio is the impact on
credit RWAs from asset growth and negative credit migration. FX
translation reduced both reserves and RWAs and caused a net 10
basis point decline in the CET1 ratio. The $242 million share
buy-back also reduced the CET1 ratio by 10 basis points. The
aggregate of these movements was partly offset by an aggregate 40
basis point impact from profit accretion in the first quarter and
the cancellation of the 2019 final dividend.
The Group's UK leverage ratio of 4.9 per cent was down 30 basis
points compared with 31 December 2019 as a result of lower Tier 1
capital following the call of $2 billion Additional Tier 1
securities as well as growth in the leverage exposure measure. The
Group's leverage ratio remains significantly above its minimum
requirement of 3.7 per cent.
The UK Financial Policy Committee and the Hong Kong Monetary
Authority both announced changes to the respective counter-cyclical
buffer rates in response to the economic impact of COVID-19. In the
period, the UK counter-cyclical rate decreased from 1 per cent to 0
per cent and in Hong Kong the rate reduced from 2 per cent to 1 per
cent. Changes to these and other counter-cyclical buffer rates
reduced the Group's minimum CET1 requirement from 10.2% to 10.0%.
The Group continues to target a CET1 ratio of 13-14 per cent in the
medium-term.
Outlook
We expect a gradual recovery from the COVID-19 pandemic, with
major contraction in economic growth rates across most of the world
in the second quarter, before the global economy moves out of
recession in the latter part of 2020, most likely led and driven by
markets in our footprint. The pace at which individual markets
recover will be heavily dependent on the efficacy of government
stimulus initiatives and policies to ease restrictions, as well as
the resilience of the COVID-19 virus itself. We are well prepared
for a protracted period of severe dislocation and will continue to
support our clients and employees and to manage our risk, capital
and liquidity with that view in mind.
We said in February that if income grows more slowly due to
exogenous factors then so must our costs. We are acting to manage
our costs prudently while doing everything we can to protect jobs.
And while the decision to cancel last year's final dividend and not
consider an interim dividend this year was difficult, it was taken
in the light of extraordinary circumstances and will ensure that we
have more capital to support individuals, businesses and the
communities in which we operate through these difficult times.
If we are wrong about the pace of recovery and the global
economy gets back on its feet rapidly - and we are seeing
encouraging early signs of that happening in China - then the
actions we are taking now will make us leaner and fitter to take
advantage of the opportunities that will bring.
Andy Halford
Group Chief Financial Officer
29 April 2020
For further information, please contact:
Mark Stride, Head of Investor Relations +44 (0) 20 7885 8596
Julie Gibson, Head of Media Relations +44 (0) 20 7885 2434
Underlying performance by client segment
1Q'20
--------------------------------------------------------------------
Central
Corporate &
& Institutional Retail Commercial Private other
Banking Banking Banking Banking items Total
$million $million $million $million $million $million
------------------------------- ---------------- -------- ---------- -------- -------- --------
Operating income 2,154 1,321 390 162 300 4,327
------------------------------- ---------------- -------- ---------- -------- -------- --------
External 2,171 1,091 376 116 573 4,327
------------------------------- ---------------- -------- ---------- -------- -------- --------
Inter-segment (17) 230 14 46 (273) -
------------------------------- ---------------- -------- ---------- -------- -------- --------
Operating expenses (981) (891) (209) (124) (153) (2,358)
------------------------------- ---------------- -------- ---------- -------- -------- --------
Operating profit before
impairment losses and
taxation 1,173 430 181 38 147 1,969
------------------------------- ---------------- -------- ---------- -------- -------- --------
Credit impairment (670) (197) (79) (1) (9) (956)
------------------------------- ---------------- -------- ---------- -------- -------- --------
Other impairment 153 - - - 1 154
------------------------------- ---------------- -------- ---------- -------- -------- --------
Profit from associates
and joint ventures - - - - 55 55
------------------------------- ---------------- -------- ---------- -------- -------- --------
Underlying profit before
taxation 656 233 102 37 194 1,222
------------------------------- ---------------- -------- ---------- -------- -------- --------
Provision for regulatory
matters - - - - 14 14
------------------------------- ---------------- -------- ---------- -------- -------- --------
Restructuring (62) (3) (14) (2) (11) (92)
------------------------------- ---------------- -------- ---------- -------- -------- --------
Goodwill impairment - - - - (258) (258)
------------------------------- ---------------- -------- ---------- -------- -------- --------
Statutory profit/(loss)
before taxation 594 230 88 35 (61) 886
------------------------------- ---------------- -------- ---------- -------- -------- --------
Total assets 363,077 105,895 33,316 14,006 248,622 764,916
------------------------------- ---------------- -------- ---------- -------- -------- --------
Of which: loans and
advances to customers
including FVTPL 162,303 103,831 28,599 13,848 13,037 321,618
------------------------------- ---------------- -------- ---------- -------- -------- --------
loans and advances
to customers 113,799 103,623 26,945 13,848 13,019 271,234
------------------------------- ---------------- -------- ---------- -------- -------- --------
loans held at fair
value through profit
or loss 48,504 208 1,654 - 18 50,384
------------------------------- ---------------- -------- ---------- -------- -------- --------
Total liabilities 438,347 145,414 41,449 18,205 71,497 714,912
------------------------------- ---------------- -------- ---------- -------- -------- --------
Of which: customer accounts 276,223 142,025 38,063 18,095 8,244 482,650
------------------------------- ---------------- -------- ---------- -------- -------- --------
1Q'19(1)
--------------------------------------------------------------------
Central
Corporate &
& Institutional Retail Commercial Private other
Banking Banking Banking Banking items Total
$million $million $million $million $million $million
------------------------------- ---------------- -------- ---------- -------- -------- --------
Operating income 1,758 1,269 399 149 238 3,813
------------------------------- ---------------- -------- ---------- -------- -------- --------
External 1,802 1,052 431 74 454 3,813
------------------------------- ---------------- -------- ---------- -------- -------- --------
Inter-segment (44) 217 (32) 75 (216) -
------------------------------- ---------------- -------- ---------- -------- -------- --------
Operating expenses (1,032) (897) (218) (124) (144) (2,415)
------------------------------- ---------------- -------- ---------- -------- -------- --------
Operating profit before
impairment losses and
taxation 726 372 181 25 94 1,398
------------------------------- ---------------- -------- ---------- -------- -------- --------
Credit impairment (43) (82) 6 47 (6) (78)
------------------------------- ---------------- -------- ---------- -------- -------- --------
Other impairment (3) - - - 1 (2)
------------------------------- ---------------- -------- ---------- -------- -------- --------
Profit from associates
and joint ventures - - - - 66 66
------------------------------- ---------------- -------- ---------- -------- -------- --------
Underlying profit before
taxation 680 290 187 72 155 1,384
------------------------------- ---------------- -------- ---------- -------- -------- --------
Provision for regulatory
matters - - - - (186) (186)
------------------------------- ---------------- -------- ---------- -------- -------- --------
Restructuring 44 - 1 (2) (11) 32
------------------------------- ---------------- -------- ---------- -------- -------- --------
Share of profits of PT
Bank Permata Tbk joint
venture - - - - 12 12
------------------------------- ---------------- -------- ---------- -------- -------- --------
Statutory profit/(loss)
before taxation 724 290 188 70 (30) 1,242
------------------------------- ---------------- -------- ---------- -------- -------- --------
Total assets 326,863 103,395 35,432 14,792 228,392 708,874
------------------------------- ---------------- -------- ---------- -------- -------- --------
Of which: loans and
advances to customers
including FVTPL 154,157 101,377 31,011 14,691 12,601 313,837
------------------------------- ---------------- -------- ---------- -------- -------- --------
loans and advances
to customers 106,439 101,034 30,348 14,691 12,593 265,105
------------------------------- ---------------- -------- ---------- -------- -------- --------
loans held at fair
value through profit
or loss 47,718 343 663 - 8 48,732
------------------------------- ---------------- -------- ---------- -------- -------- --------
Total liabilities 381,080 142,978 38,099 19,360 76,256 657,773
------------------------------- ---------------- -------- ---------- -------- -------- --------
Of which: customer accounts 231,575 139,704 35,430 19,179 6,985 432,873
------------------------------- ---------------- -------- ---------- -------- -------- --------
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across client segments. Prior
periods have been restated
Corporate & Institutional Banking
1Q'20 1Q'19 Change 4Q'19 Change
(1) (2) (1) (2)
$million $million % $million %
--------------------------- -------- -------- ------- -------- ------
Operating income 2,154 1,758 23 1,692 27
Transaction Banking 673 734 (8) 703 (4)
--------------------------- -------- -------- ------- -------- ------
Trade 164 173 (5) 165 (1)
--------------------------- -------- -------- ------- -------- ------
Cash Management 425 478 (11) 454 (6)
--------------------------- -------- -------- ------- -------- ------
Securities Services 84 83 1 84 -
--------------------------- -------- -------- ------- -------- ------
Financial Markets 1,100 656 68 559 97
--------------------------- -------- -------- ------- -------- ------
Foreign Exchange 362 247 47 223 62
--------------------------- -------- -------- ------- -------- ------
Rates 367 210 75 158 132
--------------------------- -------- -------- ------- -------- ------
Commodities 35 36 (3) 31 13
--------------------------- -------- -------- ------- -------- ------
Credit and Capital
Markets 15 133 (89) 121 (88)
--------------------------- -------- -------- ------- -------- ------
Capital Structuring
Distribution Group 57 75 (24) 75 (24)
--------------------------- -------- -------- ------- -------- ------
DVA 305 (53) nm (4) (72) nm (4)
--------------------------- -------- -------- ------- -------- ------
Other Financial
Markets (41) 8 nm (4) 23 nm (4)
--------------------------- -------- -------- ------- -------- ------
Corporate Finance 251 238 5 306 (18)
--------------------------- -------- -------- ------- -------- ------
Lending and Portfolio
Management 136 127 7 132 3
--------------------------- -------- -------- ------- -------- ------
Other (6) 3 nm (4) (8) 25
--------------------------- -------- -------- ------- -------- ------
Operating expenses (981) (1,032) 5 (1,110) 12
--------------------------- -------- -------- ------- -------- ------
Operating profit before
impairment losses
and taxation 1,173 726 62 582 102
--------------------------- -------- -------- ------- -------- ------
Credit impairment (670) (43) nm (4) (206) nm (4)
--------------------------- -------- -------- ------- -------- ------
Other impairment 153 (3) nm (4) (5) nm (4)
--------------------------- -------- -------- ------- -------- ------
Underlying profit
before taxation 656 680 (4) 371 77
--------------------------- -------- -------- ------- -------- ------
Restructuring (62) 44 nm (4) (28) (121)
--------------------------- -------- -------- ------- -------- ------
Statutory profit before
taxation 594 724 (18) 343 73
--------------------------- -------- -------- ------- -------- ------
Total assets 363,077 326,863 11 326,565 11
--------------------------- -------- -------- ------- -------- ------
Of which: loans and
advances to customers
including FVTPL 162,303 154,157 5 153,298 6
--------------------------- -------- -------- ------- -------- ------
Total liabilities 438,347 381,080 15 387,561 13
--------------------------- -------- -------- ------- -------- ------
Of which: customer
accounts 276,223 231,575 19 243,269 14
--------------------------- -------- -------- ------- -------- ------
Risk-weighted assets 137,197 130,924 5 129,084 6
--------------------------- -------- -------- ------- -------- ------
Underlying return
on risk-weighted assets
(%)(3) 2.0 2.1 (10)bps 1.1 90bps
--------------------------- -------- -------- ------- -------- ------
Underlying return
on tangible equity
(%)(3) 9.7 10.6 (90)bps 5.6 410bps
--------------------------- -------- -------- ------- -------- ------
Cost to income ratio
(%)(5) 45.5 58.7 13.2 65.6 20.1
--------------------------- -------- -------- ------- -------- ------
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across client segments. Prior
periods have been restated
2 Variance is better/(worse) other than risk weighted assets,
assets and liabilities which is increase/(decrease)
3 Change is the basis points (bps) difference between the two
periods rather than the percentage change
4 Not meaningful
5 Change is the percentage points difference between the two
periods rather than the percentage change
Retail Banking
------------ -------- --------
1Q'20 1Q'19 Change 4Q'19 Change
(1) (2) (1) (2)
$million $million % $million %
---------------------------------------------------- ------------ -------- -------- -------- ------
Operating income 1,321 1,269 4 1,260 5
Transaction Banking 5 4 25 5 -
---------------------------------------------------- ------------ -------- -------- -------- ------
Trade 5 4 25 5 -
---------------------------------------------------- ------------ -------- -------- -------- ------
Wealth Management 414 370 12 341 21
---------------------------------------------------- ------------ -------- -------- -------- ------
Retail Products 898 895 - 906 (1)
---------------------------------------------------- ------------ -------- -------- -------- ------
CCPL and other unsecured
lending 304 305 - 311 (2)
---------------------------------------------------- ------------ -------- -------- -------- ------
Deposits 431 446 (3) 440 (2)
---------------------------------------------------- ------------ -------- -------- -------- ------
Mortgage and Auto 129 121 7 119 8
---------------------------------------------------- ------------ -------- -------- -------- ------
Other Retail Products 34 23 48 36 (6)
---------------------------------------------------- ------------ -------- -------- -------- ------
Other 4 - nm (4) 8 (50)
---------------------------------------------------- ------------ -------- -------- -------- ------
Operating expenses (891) (897) 1 (993) 10
---------------------------------------------------- ------------ -------- -------- -------- ------
Operating profit before impairment
losses and taxation 430 372 16 267 61
---------------------------------------------------- ------------ -------- -------- -------- ------
Credit impairment (197) (82) (140) (100) (97)
---------------------------------------------------- ------------ -------- -------- -------- ------
Other impairment - - nm (4) 2 (100)
---------------------------------------------------- ------------ -------- -------- -------- ------
Underlying profit before taxation 233 290 (20) 169 38
Restructuring (3) - nm (4) (54) 94
---------------------------------------------------- ------------ -------- -------- -------- ------
Statutory profit before taxation 230 290 (21) 115 100
---------------------------------------------------- ------------ -------- -------- -------- ------
Total assets 105,895 103,395 2 109,368 (3)
---------------------------------------------------- ------------ -------- -------- -------- ------
Of which: loans and advances
to customers including FVTPL 103,831 101,377 2 107,137 (3)
---------------------------------------------------- ------------ -------- -------- -------- ------
Total liabilities 145,414 142,978 2 148,413 (2)
---------------------------------------------------- ------------ -------- -------- -------- ------
Of which: customer accounts 142,025 139,704 2 144,760 (2)
---------------------------------------------------- ------------ -------- -------- -------- ------
Risk-weighted assets 44,002 42,124 4 44,508 (1)
---------------------------------------------------- ------------ -------- -------- -------- ------
Underlying return on risk-weighted
assets (%) (3) 2.1 2.8 (70)bps 1.5 60bps
---------------------------------------------------- ------------ -------- -------- -------- ------
Underlying return on tangible
equity (%) (3) 10.4 13.7 (330)bps 7.5 290bps
---------------------------------------------------- ------------ -------- -------- -------- ------
Cost to income ratio (%)(5) 67.4 70.7 3.3 78.8 11.4
---------------------------------------------------- ------------ -------- -------- -------- ------
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across client segments. Prior
periods have been restated
2 Variance is better/(worse) other than risk weighted assets,
assets and liabilities which is increase/(decrease)
3 Change is the basis points (bps) difference between the two
periods rather than the percentage change
4 Not meaningful
5 Change is the percentage points difference
between the two periods rather than the
percentage change
Commercial Banking
--------- -------- --------
1Q'20 1Q'19 Change 4Q'19 Change
(1) (2) (1) (2)
$million $million % $million %
------------------------------------------------ --------- -------- -------- -------- ------
Operating income 390 399 (2) 375 4
Transaction Banking 206 222 (7) 211 (2)
------------------------------------------------ --------- -------- -------- -------- ------
Trade 91 100 (9) 89 2
------------------------------------------------ --------- -------- -------- -------- ------
Cash Management 115 122 (6) 121 (5)
------------------------------------------------ --------- -------- -------- -------- ------
Securities Services - - nm (4) 1 (100)
------------------------------------------------ --------- -------- -------- -------- ------
Financial Markets 94 92 2 72 31
------------------------------------------------ --------- -------- -------- -------- ------
Foreign Exchange 53 51 4 41 29
------------------------------------------------ --------- -------- -------- -------- ------
Rates 11 11 - 5 120
------------------------------------------------ --------- -------- -------- -------- ------
Commodities 9 9 - 6 50
------------------------------------------------ --------- -------- -------- -------- ------
Credit and Capital Markets 11 7 57 4 175
------------------------------------------------ --------- -------- -------- -------- ------
Capital Structuring Distribution
Group 4 7 (43) 11 (64)
------------------------------------------------ --------- -------- -------- -------- ------
Other Financial Markets 6 7 (14) 5 20
------------------------------------------------ --------- -------- -------- -------- ------
Corporate Finance 27 24 13 22 23
------------------------------------------------ --------- -------- -------- -------- ------
Lending and Portfolio Management 59 60 (2) 69 (14)
------------------------------------------------ --------- -------- -------- -------- ------
Wealth Management - 1 (100) - nm (4)
------------------------------------------------ --------- -------- -------- -------- ------
Retail Products 2 1 100 1 100
------------------------------------------------
Deposits 2 1 100 1 100
------------------------------------------------ -------- --------
Other 2 (1) nm (4) - nm (4)
------------------------------------------------ --------- -------- -------- -------- ------
Operating expenses (209) (218) 4 (264) 21
------------------------------------------------ --------- -------- -------- -------- ------
Operating profit before impairment
losses and taxation 181 181 - 111 63
------------------------------------------------ --------- -------- -------- -------- ------
Credit impairment (79) 6 nm (4) (65) (22)
------------------------------------------------ --------- -------- -------- -------- ------
Underlying profit before taxation 102 187 (45) 46 122
------------------------------------------------ --------- -------- -------- -------- ------
Restructuring (14) 1 nm (4) (11) (27)
------------------------------------------------ --------- -------- -------- -------- ------
Statutory profit before taxation 88 188 (53) 35 151
------------------------------------------------ --------- -------- -------- -------- ------
Total assets 33,316 35,432 (6) 33,978 (2)
------------------------------------------------ --------- -------- -------- -------- ------
Of which: loans and advances
to customers including FVTPL 28,599 31,011 (8) 29,420 (3)
------------------------------------------------ --------- -------- -------- -------- ------
Total liabilities 41,449 38,099 9 41,628 -
------------------------------------------------ --------- -------- -------- -------- ------
Of which: customer accounts 38,063 35,430 7 38,847 (2)
------------------------------------------------ --------- -------- -------- -------- ------
Risk-weighted assets 31,860 34,810 (8) 30,976 3
------------------------------------------------ --------- -------- -------- -------- ------
Underlying return on risk-weighted
assets (%) (3) 1.3 2.2 (90)bps 0.6 70bps
------------------------------------------------ --------- -------- -------- -------- ------
Underlying return on tangible
equity (%) (3) 6.5 10.8 (430)bps 2.9 360bps
------------------------------------------------ --------- -------- -------- -------- ------
Cost to income ratio (%)(5) 53.6 54.6 1.0 70.4 16.8
------------------------------------------------ --------- -------- -------- -------- ------
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across client segments. Prior
periods have been restated
2 Variance is better/(worse) other than risk weighted assets,
assets and liabilities which is increase/(decrease)
3 Change is the basis points (bps) difference between the two
periods rather than the percentage change
4 Not meaningful
5 Change is the percentage points difference between the two
periods rather than the percentage change
Private Banking
-------- -------- ----------
1Q'20 1Q'19 Change 4Q'19 Change
(1) (1)
$million $million % $million %
----------------------------------- -------- -------- ---------- -------- --------
Operating income 162 149 9 126 29
Wealth Management 116 94 23 74 57
----------------------------------- -------- -------- ---------- -------- --------
Retail Products 46 55 (16) 53 (13)
-----------------------------------
Deposits 39 47 (17) 43 (9)
----------------------------------- -------- -------- ---------- -------- --------
Mortgage and Auto 7 8 (13) 11 (36)
----------------------------------- -------- -------- ---------- -------- --------
Other Retail Products - - nm (3) (1) 100
----------------------------------- -------- -------- ---------- -------- --------
Other - - nm (3) (1) 100
----------------------------------- -------- -------- ---------- -------- --------
Operating expenses (124) (124) - (127) 2
----------------------------------- -------- -------- ---------- -------- --------
Operating profit/(loss) before
impairment losses and taxation 38 25 52 (1) nm (3)
----------------------------------- -------- -------- ---------- -------- --------
Credit impairment (1) 47 (102) (2) 50
----------------------------------- -------- -------- ---------- -------- --------
Underlying profit/(loss) before
taxation 37 72 (49) (3) nm (3)
Restructuring (2) (2) - (6) 67
Statutory profit/(loss) before
taxation 35 70 (50) (9) nm (3)
----------------------------------- -------- -------- --------
Total assets 14,006 14,792 (5) 14,922 (6)
----------------------------------- -------- -------- ---------- -------- --------
Of which: loans and advances
to customers including FVTPL 13,848 14,691 (6) 14,821 (7)
----------------------------------- -------- -------- ---------- -------- --------
Total liabilities 18,205 19,360 (6) 18,480 (1)
----------------------------------- -------- -------- ---------- -------- --------
Of which: customer accounts 18,095 19,179 (6) 18,424 (2)
----------------------------------- -------- -------- ---------- -------- --------
Risk-weighted assets 6,529 6,398 2 6,409 2
----------------------------------- -------- -------- ---------- -------- --------
Underlying return on risk-weighted
assets (%) (2) 2.2 4.7 (250)bps (0.2) 240bps
----------------------------------- -------- -------- ---------- -------- --------
Underlying return on tangible
equity (%) (2) 10.9 23.5 (1,260)bps (0.8) 1,170bps
----------------------------------- -------- -------- ---------- -------- --------
Cost to income ratio (%)(4) 76.5 83.2 6.7 100.8 24.3
----------------------------------- -------- -------- ---------- -------- --------
1 Variance is better/(worse) other than risk weighted assets,
assets and liabilities which is increase/(decrease)
2 Change is the basis points (bps) difference between the two
periods rather than the percentage change
3 Not meaningful
4 Change is the percentage points difference
between the two periods rather than the
percentage change
Central & other items (segment)
--------- -------- ------
1Q'20 1Q'19 Change 4Q'19 Change
(1) (1)
$million $million % $million %
------------------------------------------------ --------- -------- ------ -------- --------
Operating income 300 238 26 144 108
Treasury 325 308 6 196 66
------------------------------------------------ --------- -------- ------ -------- --------
Other (25) (70) 64 (52) 52
------------------------------------------------ --------- -------- ------ -------- --------
Operating expenses (153) (144) (6) (445) 66
------------------------------------------------ --------- -------- ------ -------- --------
Operating profit/(loss) before
impairment losses and taxation 147 94 56 (301) 149
------------------------------------------------ --------- -------- ------ -------- --------
Credit impairment (9) (6) (50) - nm (3)
------------------------------------------------ --------- -------- ------ -------- --------
Other impairment 1 1 - (9) 111
------------------------------------------------ --------- -------- ------ -------- --------
Profit from associates and
joint ventures 55 66 (17) 52 6
------------------------------------------------ --------- -------- ------ -------- --------
Underlying profit/(loss) before
taxation 194 155 25 (258) 175
------------------------------------------------ --------- -------- ------ -------- --------
Provision for regulatory matters 14 (186) 108 - nm (3)
------------------------------------------------ --------- -------- ------ -------- --------
Restructuring (11) (11) - (18) 39
------------------------------------------------ --------- -------- ------ -------- --------
Goodwill impairment (258) - nm (3) (27) nm (3)
------------------------------------------------ --------- -------- ------ -------- --------
Share of profits of PT Bank
Permata Tbk joint venture - 12 (100) 13 (100)
------------------------------------------------ --------- -------- ------ -------- --------
Statutory profit/(loss) before
taxation (61) (30) (103) (290) 79
------------------------------------------------ --------- -------- ------ -------- --------
Total assets 248,622 228,392 9 235,565 6
------------------------------------------------ --------- -------- ------ -------- --------
Of which: loans and advances
to customers including FVTPL 13,037 12,601 3 10,078 29
------------------------------------------------ --------- -------- ------ -------- --------
Total liabilities 71,497 76,256 (6) 73,655 (3)
------------------------------------------------ --------- -------- ------ -------- --------
Of which: customer accounts 8,244 6,985 18 7,433 11
------------------------------------------------ --------- -------- ------ -------- --------
Risk-weighted assets 53,065 53,950 (2) 53,113 -
------------------------------------------------ --------- -------- ------ -------- --------
Underlying return on risk-weighted
assets (%) (2) 1.5 1.2 30bps (1.9) 340bps
------------------------------------------------ --------- -------- ------ -------- --------
Underlying return on tangible
equity (%) (2) 4.5 1.7 280bps (23.7) 2,820bps
------------------------------------------------ --------- -------- ------ -------- --------
Cost to income ratio (%) (excluding
UK bank levy) 51.0 60.5 9.5 68.1 17.1
------------------------------------------------ --------- -------- ------ -------- --------
1 Variance is better/(worse) other than risk weighted assets,
assets and liabilities which is increase/(decrease)
2 Change is the basis points (bps) difference between the two
periods rather than the percentage change
3 Not meaningful
4 Change is the percentage points difference
between the two periods rather than the percentage
change
Underlying performance by region
1Q'20
-----------------------------------------------------------
Greater ASEAN Africa Central
China & & Europe &
& North South Middle & other
Asia Asia East Americas items Total
$million $million $million $million $million $million
------------------------------- -------- -------- -------- --------- -------- --------
Operating income 1,696 1,277 661 546 147 4,327
------------------------------- -------- -------- -------- --------- -------- --------
Operating expenses (900) (625) (403) (343) (87) (2,358)
------------------------------- -------- -------- -------- --------- -------- --------
Operating profit before
impairment losses and
taxation 796 652 258 203 60 1,969
------------------------------- -------- -------- -------- --------- -------- --------
Credit impairment (198) (451) (211) (102) 6 (956)
------------------------------- -------- -------- -------- --------- -------- --------
Other impairment (1) 166 - - (11) 154
------------------------------- -------- -------- -------- --------- -------- --------
Profit from associates
and joint ventures 53 - - - 2 55
------------------------------- -------- -------- -------- --------- -------- --------
Underlying profit before
taxation 650 367 47 101 57 1,222
------------------------------- -------- -------- -------- --------- -------- --------
Provision for regulatory
matters - - - - 14 14
------------------------------- -------- -------- -------- --------- -------- --------
Restructuring (50) - (7) (14) (21) (92)
------------------------------- -------- -------- -------- --------- -------- --------
Goodwill impairment - - - - (258) (258)
------------------------------- -------- -------- -------- --------- -------- --------
Statutory profit/(loss)
before taxation 600 367 40 87 (208) 886
------------------------------- -------- -------- -------- --------- -------- --------
Total assets 296,189 160,502 63,555 233,572 11,098 764,916
-------------------------------
Of which: loans and
advances to customers
including FVTPL 139,571 83,022 32,338 66,687 - 321,618
------------------------------- -------- -------- -------- --------- -------- --------
loans and advances
to customers 132,605 79,545 30,344 28,740 - 271,234
-------------------------------
loans held at fair
value through profit
or loss 6,966 3,477 1,994 37,947 - 50,384
------------------------------- -------- -------- -------- --------- -------- --------
Total liabilities 256,034 141,713 37,875 238,508 40,782 714,912
-------------------------------
Of which: customer accounts 207,311 104,933 30,059 140,347 - 482,650
------------------------------- -------- -------- -------- --------- -------- --------
1Q'19
---------------------------------------------------------------
Greater ASEAN Africa Central
China & & Europe &
& North South Middle & other
Asia Asia East Americas items Total
$million $million $million $million $million $million
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Operating income 1,527 1,046 708 359 173 3,813
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Operating expenses (905) (641) (423) (363) (83) (2,415)
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Operating profit/(loss)
before impairment losses
and taxation 622 405 285 (4) 90 1,398
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Credit impairment (30) (16) (6) (28) 2 (78)
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Other impairment - - - - (2) (2)
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Profit from associates
and joint ventures 65 - - - 1 66
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Underlying profit/(loss)
before taxation 657 389 279 (32) 91 1,384
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Provision for regulatory
matters - - - - (186) (186)
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Restructuring (12) (6) (1) (4) 55 32
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Share of profits of PT
Bank Permata Tbk joint
venture - 12 - - - 12
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Statutory profit/(loss)
before taxation 645 395 278 (36) (40) 1,242
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Total assets 271,407 154,041 59,749 211,406 12,271 708,874
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Of which: loans and
advances to customers
including FVTPL 134,803 85,395 31,344 62,295 - 313,837
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Total liabilities 232,395 132,198 37,969 220,046 35,165 657,773
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Of which: customer accounts 186,819 100,257 30,944 114,853 - 432,873
-------------------------------------- -------- -------- ----------- --------- -------- ---------
Greater China & North Asia
-------- --------------------- ---------
1Q'20 1Q'19 Change 4Q'19 Change
(1) (1)
$million $million % $million %
-------------------------------------- -------- --------------------- --------- -------- --------
Operating income 1,696 1,527 11 1,497 13
-------------------------------------- -------- --------------------- --------- -------- --------
Operating expenses (900) (905) 1 (1,001) 10
-------------------------------------- -------- --------------------- --------- -------- --------
Operating profit before impairment
losses and taxation 796 622 28 496 60
-------------------------------------- -------- --------------------- --------- -------- --------
Credit impairment (198) (30) nm (2) (54) nm (2)
-------------------------------------- -------- --------------------- --------- -------- --------
Other impairment (1) - nm (2) - nm (2)
-------------------------------------- -------- --------------------- --------- -------- --------
Profit from associates and
joint ventures 53 65 (18) 51 4
-------------------------------------- -------- --------------------- --------- -------- --------
Underlying profit before taxation 650 657 (1) 493 32
Restructuring (50) (12) nm (2) (84) 40
-------------------------------------- -------- --------------------- --------- -------- --------
Statutory profit before taxation 600 645 (7) 409 47
-------------------------------------- -------- --------------------- --------- -------- --------
Total assets 296,189 271,407 9 277,704 7
-------------------------------------- -------- --------------------- --------- -------- --------
Of which: loans and advances
to customers including FVTPL 139,571 134,803 4 139,977 -
-------------------------------------- -------- --------------------- --------- -------- --------
Total liabilities 256,034 232,395 10 249,004 3
-------------------------------------- -------- --------------------- --------- -------- --------
Of which: customer accounts 207,311 186,819 11 204,286 1
-------------------------------------- -------- --------------------- --------- -------- --------
Risk-weighted assets 88,654 82,669 7 85,695 3
-------------------------------------- -------- --------------------- --------- -------- --------
Cost to income ratio (%) 53.1 59.3 6.2 66.9 13.8
-------------------------------------- -------- --------------------- --------- -------- --------
1 Variance is better/(worse) other than assets and liabilities
which is increase/(decrease)
2 Not meaningful
3 Change is the percentage points difference between the two periods
rather than the percentage change
ASEAN & South Asia
-------- --------------------- ---------
1Q'20 1Q'19 Change 4Q'19 Change
(1) (1)
$million $million % $million %
-------------------------------------- -------- --------------------- --------- -------- --------
Operating income 1,277 1,046 22 992 29
-------------------------------------- -------- --------------------- --------- -------- --------
Operating expenses (625) (641) 2 (718) 13
-------------------------------------- -------- --------------------- --------- -------- --------
Operating profit before impairment
losses and taxation 652 405 61 274 138
-------------------------------------- -------- --------------------- --------- -------- --------
Credit impairment (451) (16) nm (2) (250) (80)
-------------------------------------- -------- --------------------- --------- -------- --------
Other impairment 166 - nm (2) (1) nm (2)
-------------------------------------- -------- --------------------- --------- -------- --------
Underlying profit before taxation 367 389 (6) 23 nm (2)
-------------------------------------- -------- --------------------- --------- -------- --------
Restructuring - (6) 100 (19) 100
-------------------------------------- -------- --------------------- --------- -------- --------
Share of profits of PT Bank
Permata Tbk joint venture - 12 (100) 13 (100)
-------------------------------------- -------- --------------------- --------- -------- --------
Statutory profit before taxation 367 395 (7) 17 nm (2)
-------------------------------------- -------- --------------------- --------- -------- --------
Total assets 160,502 154,041 4 149,785 7
-------------------------------------- -------- --------------------- --------- -------- --------
Of which: loans and advances
to customers including FVTPL 83,022 85,395 (3) 80,885 3
-------------------------------------- -------- --------------------- --------- -------- --------
Total liabilities 141,713 132,198 7 126,213 12
-------------------------------------- -------- --------------------- --------- -------- --------
Of which: customer accounts 104,933 100,257 5 97,459 8
-------------------------------------- -------- --------------------- --------- -------- --------
Risk-weighted assets 89,100 92,780 (4) 88,942 -
-------------------------------------- -------- --------------------- --------- -------- --------
Cost to income ratio (%) 48.9 61.3 12.4 72.4 23.5
-------------------------------------- -------- --------------------- --------- -------- --------
1 Variance is better/(worse) other than assets and liabilities
which is increase/(decrease)
2 Not meaningful
3 Change is the percentage points difference between the two
periods rather than the percentage change
Africa & Middle East
-------- --------------------- ---------
1Q'20 1Q'19 Change 4Q'19 Change
(1) (1)
$million $million % $million %
-------------------------------------- -------- --------------------- --------- -------- --------
Operating income 661 708 (7) 605 9
-------------------------------------- -------- --------------------- --------- -------- --------
Operating expenses (403) (423) 5 (454) 11
-------------------------------------- -------- --------------------- --------- -------- --------
Operating profit before impairment
losses and taxation 258 285 (9) 151 71
-------------------------------------- -------- --------------------- --------- -------- --------
Credit impairment (211) (6) nm (2) (56) nm (2)
-------------------------------------- -------- --------------------- --------- -------- --------
Other impairment - - nm (2) 1 (100)
-------------------------------------- -------- --------------------- --------- -------- --------
Underlying profit before taxation 47 279 (83) 96 (51)
Restructuring (7) (1) nm (2) (11) 36
-------------------------------------- -------- --------------------- --------- -------- --------
Statutory profit before taxation 40 278 (86) 85 (53)
-------------------------------------- -------- --------------------- --------- -------- --------
Total assets 63,555 59,749 6 59,828 6
-------------------------------------- -------- --------------------- --------- -------- --------
Of which: loans and advances
to customers including FVTPL 32,338 31,344 3 31,487 3
-------------------------------------- -------- --------------------- --------- -------- --------
Total liabilities 37,875 37,969 - 36,144 5
-------------------------------------- -------- --------------------- --------- -------- --------
Of which: customer accounts 30,059 30,944 (3) 29,280 3
-------------------------------------- -------- --------------------- --------- -------- --------
Risk-weighted assets 51,414 54,837 (6) 49,244 4
-------------------------------------- -------- --------------------- --------- -------- --------
Cost to income ratio (%) 61.0 59.7 (1.3) 75.0 14.0
-------------------------------------- -------- --------------------- --------- -------- --------
1 Variance is better/(worse) other than assets and liabilities
which is increase/(decrease)
2 Not meaningful
3 Change is the percentage points difference between the two
periods rather than the percentage change
Europe & Americas
-------- --------------------- ---------
1Q'20 1Q'19 Change 4Q'19 Change
(1) (1)
$million $million % $million %
-------------------------------------- -------- --------------------- --------- -------- --------
Operating income 546 359 52 464 18
-------------------------------------- -------- --------------------- --------- -------- --------
Operating expenses (343) (363) 6 (365) 6
-------------------------------------- -------- --------------------- --------- -------- --------
Operating profit/(loss) before
impairment losses and taxation 203 (4) nm (2) 99 105
-------------------------------------- -------- --------------------- --------- -------- --------
Credit impairment (102) (28) nm (2) (17) nm (2)
-------------------------------------- -------- --------------------- --------- -------- --------
Underlying profit/(loss) before
taxation 101 (32) nm (2) 82 23
-------------------------------------- -------- --------------------- --------- -------- --------
Restructuring (14) (4) nm (2) (13) (8)
-------------------------------------- -------- --------------------- --------- -------- --------
Statutory profit/(loss) before
taxation 87 (36) nm (2) 69 26
-------------------------------------- -------- --------------------- --------- -------- --------
Total assets 233,572 211,406 10 220,579 6
-------------------------------------- -------- --------------------- --------- -------- --------
Of which: loans and advances
to customers including FVTPL 66,687 62,295 7 62,405 7
-------------------------------------- -------- --------------------- --------- -------- --------
Total liabilities 238,508 220,046 8 218,794 9
-------------------------------------- -------- --------------------- --------- -------- --------
Of which: customer accounts 140,347 114,853 22 121,708 15
-------------------------------------- -------- --------------------- --------- -------- --------
Risk-weighted assets 45,944 40,627 13 43,945 5
-------------------------------------- -------- --------------------- --------- -------- --------
Cost to income ratio (%) 62.8 101.1 38.3 78.7 15.9
-------------------------------------- -------- --------------------- --------- -------- --------
1 Variance is better/(worse) other than assets and liabilities
which is increase/(decrease)
2 Not meaningful
3 Change is the percentage points difference between the two
periods rather than the percentage change
Central & other items (region)
-------- --------------------- ---------
1Q'20 1Q'19 Change 4Q'19 Change
(1) (1)
$million $million % $million %
-------------------------------------- -------- --------------------- --------- -------- --------
Operating income 147 173 (15) 39 nm (2)
-------------------------------------- -------- --------------------- --------- -------- --------
Operating expenses (87) (83) (5) (401) 78
-------------------------------------- -------- --------------------- --------- -------- --------
Operating profit/(loss) before
impairment losses and taxation 60 90 (33) (362) 117
-------------------------------------- -------- --------------------- --------- -------- --------
Credit impairment 6 2 200 4 50
-------------------------------------- -------- --------------------- --------- -------- --------
Other impairment (11) (2) nm (2) (12) 8
-------------------------------------- -------- --------------------- --------- -------- --------
Profit from associates and
joint ventures 2 1 100 1 100
-------------------------------------- -------- --------------------- --------- -------- --------
Underlying profit/(loss) before
taxation 57 91 (37) (369) 115
-------------------------------------- -------- --------------------- --------- -------- --------
Provision for regulatory matters 14 (186) 108 - nm (2)
-------------------------------------- -------- --------------------- --------- -------- --------
Restructuring (21) 55 (138) 10 nm (2)
-------------------------------------- -------- --------------------- --------- -------- --------
Goodwill impairment (258) - nm (2) (27) nm (2)
-------------------------------------- -------- --------------------- --------- -------- --------
Statutory profit/(loss) before
taxation (208) (40) nm (2) (386) 46
-------------------------------------- -------- --------------------- --------- -------- --------
Total assets 11,098 12,271 (10) 12,502 (11)
-------------------------------------- -------- --------------------- --------- -------- --------
Total liabilities 40,782 35,165 16 39,582 3
-------------------------------------- -------- --------------------- --------- -------- --------
Risk-weighted assets (2,459) (2,707) 9 (3,736) 34
-------------------------------------- -------- --------------------- --------- -------- --------
Cost to income ratio (%) (excluding
UK bank levy) 59.2 48.0 (11.2) 138.5 79.3
-------------------------------------- -------- --------------------- --------- -------- --------
1 Variance is better/(worse) other than assets and liabilities
which is increase/(decrease)
2 Not meaningful
3 Change is the percentage points difference between the two
periods rather than the percentage change
Underlying performance by key market
1Q'20
------------------------------------------------------------------------------------------
Hong
Kong Korea China Singapore India Indonesia UAE UK US
$million $million $million $million $million $million $million $million $million
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Operating income 957 322 275 375 409 144 159 330 171
Operating expenses (482) (172) (161) (239) (163) (44) (103) (166) (140)
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Operating profit before
impairment losses and
taxation 475 150 114 136 246 100 56 164 31
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Credit impairment (96) (11) (83) (287) (95) (14) (116) (75) (27)
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Other impairment (1) - - - - - - - -
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Profit from associates
and joint ventures - - 53 - - - - - -
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Underlying profit/(loss)
before taxation 378 139 84 (151) 151 86 (60) 89 4
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Total assets employed 167,075 58,127 36,293 90,950 31,807 5,152 22,432 148,466 73,973
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Of which: loans and
advances to customers
including FVTPL 75,306 34,550 16,230 47,018 16,606 2,398 10,731 41,134 21,456
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Total liabilities employed 149,659 50,560 29,270 90,360 21,853 3,468 14,626 158,123 70,635
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Of which: customer
accounts 122,450 40,874 22,355 67,170 14,520 2,010 11,793 94,480 40,637
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Cost to income ratio
(%) 50.4 53.4 58.5 63.7 39.9 30.6 64.8 50.3 81.9
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
4Q'19
------------------------------------------------------------------------------------------
Hong
Kong Korea China Singapore India Indonesia UAE UK US
$million $million $million $million $million $million $million $million $million
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Operating income 943 220 206 347 275 57 140 214 200
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Operating expenses (510) (190) (171) (260) (175) (47) (102) (136) (141)
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Operating profit before
impairment losses and
taxation 433 30 35 87 100 10 38 78 59
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Credit impairment (53) (3) (14) (47) (181) (7) (32) 2 (19)
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Other impairment - 1 - - - - - - -
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Profit from associates
and joint ventures - - 50 - - - - - -
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Underlying profit/(loss)
before taxation 380 28 71 40 (81) 3 6 80 40
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Total assets employed 159,725 54,408 30,293 85,155 28,163 4,795 20,301 150,103 60,373
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Of which: loans and
advances to customers
including FVTPL 77,277 34,469 14,772 45,951 15,674 2,098 10,406 42,179 17,038
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Total liabilities employed 149,703 47,420 27,005 80,006 18,437 3,188 12,905 142,804 66,357
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Of which: customer
accounts 123,330 38,533 21,797 60,821 13,800 2,320 10,078 82,036 34,733
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Cost to income ratio
(%) 54.1 86.4 83.0 74.9 63.6 82.5 72.9 63.6 70.5
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
1Q'19
------------------------------------------------------------------------------------------
Hong
Kong Korea China Singapore India Indonesia UAE UK US
$million $million $million $million $million $million $million $million $million
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Operating income 927 247 220 408 255 77 174 128 183
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Operating expenses (460) (198) (163) (231) (163) (41) (104) (168) (150)
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Operating profit/(loss)
before impairment losses
and taxation 467 49 57 177 92 36 70 (40) 33
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Credit impairment (12) 7 (23) 34 (26) (11) (6) 12 (40)
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Profit from associates
and joint ventures - - 65 - - - - - -
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Underlying profit/(loss)
before taxation 455 56 99 211 66 25 64 (28) (7)
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Total assets employed 155,111 50,810 31,253 83,504 32,093 5,258 20,847 151,547 51,013
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Of which: loans and
advances to customers
including FVTPL 74,750 32,963 14,894 48,321 16,708 2,348 11,008 43,782 16,999
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Total liabilities employed 134,502 44,726 26,578 81,142 22,573 3,289 13,816 165,822 46,973
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Of which: customer
accounts 111,919 36,409 17,953 60,464 16,999 2,045 10,572 93,395 18,280
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Cost to income ratio
(%) 49.6 80.2 74.1 56.6 63.9 53.2 59.8 131.3 82.0
-------------------------- -------- -------- -------- --------- -------- --------- -------- -------- --------
Quarterly underlying operating income by product
2Q'18 3Q'18 4Q'18 1Q'19(1) 2Q'19(1) 3Q'19(1) 4Q'19(1) 1Q'20
$million $million $million $million $million $million $million $million
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Transaction Banking 924 936 942 960 988 975 919 884
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Trade 285 277 257 277 282 282 259 260
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Cash Management 553 577 604 600 619 605 575 540
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Securities Services 86 82 81 83 87 88 85 84
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Financial Markets 677 631 580 748 747 789 631 1,194
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Foreign Exchange 280 239 232 298 304 261 264 415
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Rates(2) 121 194 63 221 136 176 163 378
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Commodities 53 38 50 45 44 39 37 44
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Credit and Capital
Markets(2) 87 48 83 140 145 167 125 26
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Capital Structuring
Distribution
Group 92 71 91 82 74 87 86 61
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
DVA 4 3 46 (53) 11 14 (72) 305
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Other Financial
Markets 40 38 15 15 33 45 28 (35)
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Corporate Finance(3) 273 268 370 262 272 281 328 278
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Lending and Portfolio
Management 202 179 181 187 197 201 201 195
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Wealth Management 452 465 343 465 511 488 415 530
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Retail Products 953 929 925 951 976 975 960 946
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
CCPL and other
unsecured
lending 345 320 294 305 320 315 311 304
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Deposits 431 476 481 494 501 510 484 472
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Mortgage and Auto 156 114 127 129 129 123 130 136
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Other Retail Products 21 19 23 23 26 27 35 34
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Treasury 338 342 253 308 251 335 196 325
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Other (43) (26) 1 (68) (59) (66) (53) (25)
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Total underlying operating
income 3,776 3,724 3,595 3,813 3,883 3,978 3,597 4,327
-------------------------- -------- -------- -------- -------- -------- -------- -------- --------
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across products. Prior periods
have been restated from 1Q'19
2 Following a reorganisation of certain product teams within Financial
Markets, $46 million of income that was in H1 2018 reported within
Credit and Capital Markets has been transferred to Rates during
Q3 2018. Prior periods have not been restated.
3 In Dec 2018 it was decided to discontinue the ship operating
lease business any future profits and losses will be reported
as restructuring. Prior periods have not been restated.
Capital ratios
1Q'20 4Q'19 1Q'19
-------------------------------------------------------- ------------------ -------- --------------------
CET1 13.4% 13.8% 13.9%
-------------------------------------------------------- ------------------ -------- --------------------
Tier 1 capital 15.1% 16.5% 16.3%
-------------------------------------------------------- ------------------ -------- --------------------
Total capital 19.6% 21.2% 20.8%
-------------------------------------------------------- ------------------ -------- --------------------
CRD IV Capital base(1)
1Q'20 4Q'19 1Q'19
$million $million $million
-------------------------------------------------------- ------------------ -------- --------------------
CET1 instruments and reserves
-------------------------------------------------------- ------------------ -------- --------------------
Capital instruments and the related share
premium accounts 5,564 5,584 5,627
-------------------------------------------------------- ------------------ -------- --------------------
Of which: share premium accounts 3,989 3,989 3,975
-------------------------------------------------------- ------------------ -------- --------------------
Retained earnings 26,045 24,044 26,312
-------------------------------------------------------- ------------------ -------- --------------------
Accumulated other comprehensive income (and
other reserves) 10,781 11,685 11,867
-------------------------------------------------------- ------------------ -------- --------------------
Non-controlling interests (amount allowed
in consolidated CET1) 483 723 678
-------------------------------------------------------- ------------------ -------- --------------------
Independently reviewed interim and year-end
profits 510 2,301 809
-------------------------------------------------------- ------------------ -------- --------------------
Foreseeable dividends net of scrip (283) (871) (910)
-------------------------------------------------------- ------------------ -------- --------------------
CET1 capital before regulatory adjustments 43,100 43,466 44,383
-------------------------------------------------------- ------------------ -------- --------------------
CET1 regulatory adjustments
-------------------------------------------------------- ------------------ -------- --------------------
Additional value adjustments (prudential
valuation adjustments) (604) (615) (623)
-------------------------------------------------------- ------------------ -------- --------------------
Intangible assets (net of related tax liability) (4,899) (5,318) (5,200)
-------------------------------------------------------- ------------------ -------- --------------------
Deferred tax assets that rely on future
profitability (excludes those arising from
temporary differences) (133) (129) (107)
-------------------------------------------------------- ------------------ -------- --------------------
Fair value reserves related to net losses
on cash flow hedges 130 59 17
-------------------------------------------------------- ------------------ -------- --------------------
Deduction of amounts resulting from the
calculation of excess expected loss (573) (822) (899)
-------------------------------------------------------- ------------------ -------- --------------------
Net gains on liabilities at fair value resulting
from changes in own Credit Risk (150) (2) (186)
-------------------------------------------------------- ------------------ -------- --------------------
Defined-benefit pension fund assets (55) (26) (35)
-------------------------------------------------------- ------------------ -------- --------------------
Fair value gains arising from the institution's
own Credit Risk related to derivative liabilities (298) (38) (80)
-------------------------------------------------------- ------------------ -------- --------------------
Exposure amounts which could qualify for
risk weighting of 1250% (51) (62) (86)
of which: securitisation positions (34) (57) (79)
of which: free deliveries (17) (5) (7)
-------------------------------------------------------- ------------------ -------- --------------------
Total regulatory adjustments to CET1 (6,633) (6,953) (7,199)
-------------------------------------------------------- ------------------ -------- --------------------
CET1 capital 36,467 36,513 37,184
-------------------------------------------------------- ------------------ -------- --------------------
AT1 capital instruments 4,640 7,184 6,632
-------------------------------------------------------- ------------------ -------- --------------------
AT1 regulatory adjustments (20) (20) (20)
-------------------------------------------------------- ------------------ -------- --------------------
Tier 1 capital 41,087 43,677 43,796
-------------------------------------------------------- ------------------ -------- --------------------
Tier 2 capital instruments 12,401 12,318 12,096
-------------------------------------------------------- ------------------ -------- --------------------
Tier 2 regulatory adjustments (30) (30) (30)
-------------------------------------------------------- ------------------ -------- --------------------
Tier 2 capital 12,371 12,288 12,066
-------------------------------------------------------- ------------------ -------- --------------------
Total capital 53,458 55,965 55,862
-------------------------------------------------------- ------------------ -------- --------------------
Total risk-weighted assets (unaudited) 272,653 264,090 268,206
-------------------------------------------------------- ------------------ -------- --------------------
1 CRD IV capital is prepared on the regulatory scope of consolidation
Movement in total capital
1Q'20 4Q'19
$million $million
------------------------------------------------------------------ ------------------ --------
CET1 at 1 January 36,513 36,717
------------------------------------------------------------------ ------------------ --------
Ordinary shares issued in the period and share
premium - 25
------------------------------------------------------------------ ------------------ --------
Share buy-back(1) (231) (1,006)
------------------------------------------------------------------ ------------------ --------
Profit for the period 510 2,301
------------------------------------------------------------------ ------------------ --------
Foreseeable dividends net of scrip deducted from
CET1 (283) (871)
------------------------------------------------------------------ ------------------ --------
Difference between dividends paid and foreseeable
dividends(3) 838 (641)
------------------------------------------------------------------ ------------------ --------
Movement in goodwill and other intangible assets 419 (172)
------------------------------------------------------------------ ------------------ --------
Foreign currency translation differences (926) (180)
------------------------------------------------------------------ ------------------ --------
Non-controlling interests (240) 37
------------------------------------------------------------------ ------------------ --------
Movement in eligible other comprehensive income (306) 284
------------------------------------------------------------------ ------------------ --------
Deferred tax assets that rely on future profitability (4) (14)
------------------------------------------------------------------ ------------------ --------
Decrease/(increase) in excess expected loss 249 53
------------------------------------------------------------------ ------------------ --------
Additional value adjustments (prudential valuation
adjustment) 11 (51)
------------------------------------------------------------------ ------------------ --------
IFRS 9 day one transitional impact on regulatory
reserves (63) (43)
------------------------------------------------------------------ ------------------ --------
Exposure amounts which could qualify for risk
weighting 11 61
------------------------------------------------------------------ ------------------ --------
Other(2) (31) 13
------------------------------------------------------------------ ------------------ --------
CET1 at 31 March/31 December 36,467 36,513
------------------------------------------------------------------ ------------------ --------
AT1 at 1 January 7,164 6,684
------------------------------------------------------------------ ------------------ --------
Issuances net of redemptions (1,987) 552
------------------------------------------------------------------ ------------------ --------
Foreign currency translation difference (15) 9
------------------------------------------------------------------ ------------------ --------
Excess on AT1 grandfathered limit (ineligible) (542) (81)
------------------------------------------------------------------ ------------------ --------
AT1 at 31 March/31 December 4,620 7,164
------------------------------------------------------------------ ------------------ --------
Tier 2 capital at 1 January 12,288 12,295
------------------------------------------------------------------ ------------------ --------
Regulatory amortisation (298) -1,111
------------------------------------------------------------------ ------------------ --------
Issuances net of redemptions - 1,000
------------------------------------------------------------------ ------------------ --------
Foreign currency translation difference (146) (12)
------------------------------------------------------------------ ------------------ --------
Tier 2 ineligible minority interest (17) 31
------------------------------------------------------------------ ------------------ --------
Recognition of ineligible AT1 542 81
------------------------------------------------------------------ ------------------ --------
Other 2 4
------------------------------------------------------------------ ------------------ --------
Tier 2 capital at 31 March/31 December 12,371 12,288
------------------------------------------------------------------ ------------------ --------
Total capital at 31 March/31 December 53,458 55,965
------------------------------------------------------------------ ------------------ --------
1 $231 million share buy-back including expenses completed before
the announcement of suspension of the programme (2019 share buy-back
programme:$1,006 million)
2 Mainly includes defined benefit pension fund
assets
3 Of which in 1Q'20 $638 million relates to cancelled
final ordinary dividend for 2019
Risk-weighted assets by business
31.03.2020
-----------------------------------------------
Credit Operational Market
Risk Risk Risk Total risk
$million $million $million $million
---------------------------------- --------- ----------- -------- -------------
Corporate & Institutional Banking 102,316 13,153 21,728 137,197
---------------------------------- --------- ----------- -------- -------------
Retail Banking 36,427 7,575 - 44,002
---------------------------------- --------- ----------- -------- -------------
Commercial Banking 29,050 2,810 - 31,860
---------------------------------- --------- ----------- -------- -------------
Private Banking 5,766 763 - 6,529
---------------------------------- --------- ----------- -------- -------------
Central & other items 49,444 3,502 119 53,065
---------------------------------- --------- ----------- -------- -------------
Total risk-weighted assets 223,003 27,803 21,847 272,653
---------------------------------- --------- ----------- -------- -------------
31.12.2019
-----------------------------------------------
Credit Operational Market
Risk (1) Risk Risk Total risk(1)
$million $million $million $million
---------------------------------- --------- ----------- -------- -------------
Corporate & Institutional Banking 95,261 13,261 20,562 129,084
---------------------------------- --------- ----------- -------- -------------
Retail Banking 37,194 7,314 - 44,508
---------------------------------- --------- ----------- -------- -------------
Commercial Banking 28,350 2,626 - 30,976
---------------------------------- --------- ----------- -------- -------------
Private Banking 5,681 728 - 6,409
---------------------------------- --------- ----------- -------- -------------
Central & other items 49,178 3,691 244 53,113
---------------------------------- --------- ----------- -------- -------------
Total risk-weighted assets 215,664 27,620 20,806 264,090
---------------------------------- --------- ----------- -------- -------------
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across client segments, prior periods
have been restated from Q1 19
31.03.2019
-----------------------------------------------
Credit Operational Market
Risk (1) Risk Risk Total risk(1)
$million $million $million $million
---------------------------------- --------- ----------- -------- -------------
Corporate & Institutional Banking 96,265 13,261 21,398 130,924
---------------------------------- --------- ----------- -------- -------------
Retail Banking 34,810 7,314 - 42,124
---------------------------------- --------- ----------- -------- -------------
Commercial Banking 32,184 2,626 - 34,810
---------------------------------- --------- ----------- -------- -------------
Private Banking 5,670 728 - 6,398
---------------------------------- --------- ----------- -------- -------------
Central & other items 50,188 3,691 71 53,950
---------------------------------- --------- ----------- -------- -------------
Total risk-weighted assets 219,117 27,620 21,469 268,206
---------------------------------- --------- ----------- -------- -------------
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across client segments, prior periods
have been restated from Q1 19
Risk-weighted assets by geographic region
31.03.2020 31.12.2019 31.03.2019
$million $million $million
------------------------------------------------------ ------------------ --------------------- ----------
Greater China & North Asia 88,654 85,695 82,669
------------------------------------------------------ ------------------ --------------------- ----------
ASEAN & South Asia 89,100 88,942 92,780
------------------------------------------------------ ------------------ --------------------- ----------
Africa & Middle East 51,414 49,244 54,837
------------------------------------------------------ ------------------ --------------------- ----------
Europe & Americas 45,944 43,945 40,627
------------------------------------------------------ ------------------ --------------------- ----------
Central & other items (2,459) (3,736) (2,707)
------------------------------------------------------ ------------------ --------------------- ----------
Total risk-weighted assets 272,653 264,090 268,206
------------------------------------------------------ ------------------ --------------------- ----------
Movement in risk-weighted assets
Credit Risk
-----------------------------------------------------------------
Corporate
& Central
Institutional Retail Commercial Private & other Operational Market Total
Banking Banking Banking Banking items Total Risk Risk risk
$million $million $million $million $million $million $million $million $million
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
As at 1 January
2019 96,954 35,545 27,711 5,103 45,825 211,138 28,050 19,109 258,297
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Assets
(decline)/growth 1,303 1,020 (557) 528 4,093 6,387 - - 6,387
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Net credit
migration 2,565 832 (642) 8 607 3,370 - - 3,370
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Risk-weighted
assets
efficiencies (1,112) (33) (403) - (2,404) (3,952) - - (3,952)
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Model,
methodology and
policy changes (904) (7) - - 1,400 489 - 500 989
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Disposals (397) - (441) - - (838) - - (838)
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Foreign currency
translation (182) (219) (228) 42 (343) (930) - - (930)
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Other non-credit
risk
movements - - - - - - (430) 1,197 767
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
As at 31 December
2019 98,227 37,138 25,440 5,681 49,178 215,664 27,620 20,806 264,090
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
As at 1 January
2020
(1) 95,261 37,194 28,350 5,681 49,178 215,664 27,620 20,806 264,090
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Assets
(decline)/growth 6,194 (38) 1,181 182 1,565 9,084 - - 9,084
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Net credit
migration 1,765 48 (22) (1) 229 2,019 - - 2,019
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Risk-weighted
assets
efficiencies 156 - 58 - - 214 - - 214
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Model,
methodology and
policy changes 667 304 - - - 971 - (1,200) (229)
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Disposals - - - - - - - - -
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Foreign currency
translation (1,727) (1,081) (517) (96) (1,528) (4,949) - - (4,949)
----------------- ------------- -------- ---------- -------- -------- -------- ----------- ---------- --------
Other non-credit
risk
movements - - - - - - 183 2,241 2,424
----------------- ------------- -------- ---------- -------- --------
As at 31 March
2020 102,316 36,427 29,050 5,766 49,444 223,003 27,803 21,847 272,653
----------------- --------
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across client segments. 1 January
2020 balances have been restated.
UK leverage ratio
1Q'20 4Q'19 1Q'19
$million $million $million
------------------------------------------------------
Tier 1 capital (transitional) 41,087 43,677 43,796
Additional Tier 1 capital subject to phase
out (1,114) (1,671) (1,671)
Tier 1 capital (end point) 39,973 42,006 42,125
Derivative financial instruments 66,757 47,212 44,008
Derivative cash collateral 13,070 9,169 9,943
Securities financing transactions (SFTs) 70,269 60,414 69,992
Loans and advances and other assets 614,820 603,603 584,931
Total on-balance sheet assets 764,916 720,398 708,874
Regulatory consolidation adjustments(1) (42,178) (31,485) (35,955)
Derivatives adjustments - -
Derivatives netting (39,400) (32,852) (30,575)
Adjustments to cash collateral (23,381) (11,853) (13,651)
Net written credit protection 1,618 1,650 1,649
Potential future exposure on derivatives 34,961 32,961 31,418
Total derivatives adjustments (26,202) (10,094) (11,159)
Counterparty risk leverage exposure measure
for SFTs 10,380 7,005 12,446
Off-balance sheet items 122,763 122,341 113,684
Regulatory deductions from Tier 1 capital (6,184) (6,913) (6,933)
UK leverage exposure (end point) 823,495 801,252 780,957
UK leverage ratio (end point) 4.9% 5.2% 5.4%
UK leverage exposure quarterly average 829,542 816,244 771,650
UK leverage ratio quarterly average 4.9% 5.1% 5.4%
Countercyclical leverage ratio buffer 0.1% 0.1% 0.1%
G-SII additional leverage ratio buffer 0.4% 0.4% 0.4%
1 Includes adjustment for qualifying central
bank claims
Condensed consolidated interim income statement
For the three months ended 31 March 2020
3 months 3 months
ended ended
1Q'20 1Q'19
$million $million
-------- ----------
Interest income 3,746 4,141(1)
-------- ----------
Interest expense (1,907) (2,236)(1)
-------- ----------
Net interest income 1,839 1,905
-------- ----------
Fees and commission income 1,010 1,035
--------
Fees and commission expense (148) (125)
--------
Net fee and commission income 862 910
-------- ----------
Net trading income 1,138 938(1)
-------- ----------
Other operating income 496 165
-------- ----------
Operating income 4,335 3,918
-------- ----------
Staff costs (1,633) (1,762)
--------
Premises costs (90) (126)
--------
General administrative expenses (347) (530)
--------
Depreciation and amortisation (298) (238)
--------
Operating expenses (2,368) (2,656)
-------- ----------
Operating profit before impairment losses and
taxation 1,967 1,262
-------- ----------
Credit impairment (962) (78)
-------- ----------
Goodwill impairment (258) -
-------- ----------
Other impairment 92 (20)
-------- ----------
Profit from associates and joint ventures 47 78
-------- ----------
Profit before taxation 886 1,242
-------- ----------
Taxation (369) (424)
-------- ----------
Profit for the quarter 517 818
-------- ----------
Profit attributable to:
Non-controlling interests 7 10
-------- ----------
Parent company shareholders 510 808
-------- ----------
Profit for the quarter 517 818
-------- ----------
cents cents
-------- ----------
Earnings per share:
Basic earnings per ordinary share 15.0 23.4
--------
Diluted earnings per ordinary share 14.8 23.1
--------
1 Restated due to change in accounting policy
Condensed consolidated interim statement of comprehensive
income
For the three months ended 31 March 2020
3 months 3 months
ended ended
1Q'20 1Q'19
$million $million
-------- --------
Profit for the quarter 517 818
-------- --------
Other comprehensive income/(loss)
Items that will not be reclassified to income
statement: 253 (222)
-------- --------
Own credit gains/(losses) on financial liabilities
designated at fair value through profit or
loss 175 (261)
Equity instruments at fair value through other
comprehensive income 27 5
--------
Actuarial gain on retirement benefit obligations 83 -
--------
Taxation relating to components of other comprehensive
income (32) 34
--------
Items that may be reclassified subsequently
to income statement: (1,106) 203
-------- --------
Exchange differences on translation of foreign
operations:
Net (losses)/gains taken to equity (1,109) 54
--------
Net gains on net investment hedges 170 16
--------
Share of other comprehensive income from associates
and joint ventures - (2)
--------
Debt instruments at fair value through other
comprehensive income:
Net valuation gains taken to equity 244 160
--------
Reclassified to income statement (326) (6)
--------
Net impact of expected credit losses 9 2
--------
Cashflow hedges:
Net losses taken to equity (104) (18)
--------
Reclassified to income statement 4 3
--------
Taxation relating to components of other comprehensive
income 6 (6)
--------
Other comprehensive loss for the year, net of
taxation (853) (19)
-------- --------
Total comprehensive (loss)/income for the quarter (336) 799
-------- --------
Total comprehensive (loss)/income attributable
to:
Non-controlling interests (5) 3
Parent company shareholders (331) 796
-------- --------
Total comprehensive (loss)/income for the quarter (336) 799
-------- --------
Condensed consolidated interim balance sheet
As at 31 March 2020
1Q'20 4Q'19
$million $million
Assets
Cash and balances at central banks 59,374 52,728
-------- --------
Financial assets held at fair value through
profit or loss 103,024 92,818
-------- --------
Derivative financial instruments(1) 66,757 47,212
-------- --------
Loans and advances to banks 61,323 53,549
-------- --------
Loans and advances to customers 271,234 268,523
-------- --------
Investment securities 136,332 143,731
-------- --------
Other assets(1) 48,309 42,022
-------- --------
Current tax assets 729 539
-------- --------
Prepayments and accrued income 2,461 2,700
-------- --------
Interests in associates and joint ventures 1,951 1,908
-------- --------
Goodwill and intangible assets 4,890 5,290
-------- --------
Property, plant and equipment 6,080 6,220
-------- --------
Deferred tax assets 828 1,105
-------- --------
Assets classified as held for sale 1,624 2,053
-------- --------
Total assets 764,916 720,398
-------- --------
Liabilities
Deposits by banks 25,519 28,562
-------- --------
Customer accounts 422,192 405,357
-------- --------
Repurchase agreements and other similar secured
borrowing 4,357 1,935
-------- --------
Financial liabilities held at fair value through
profit or loss 78,573 66,974
-------- --------
Derivative financial instruments(1) 64,903 48,484
-------- --------
Debt securities in issue 51,220 53,025
-------- --------
Other liabilities(1) 45,592 41,583
-------- --------
Current tax liabilities 579 703
-------- --------
Accruals and deferred income 4,084 5,369
-------- --------
Subordinated liabilities and other borrowed
funds 16,349 16,207
-------- --------
Deferred tax liabilities 721 611
-------- --------
Provisions for liabilities and charges 428 449
-------- --------
Retirement benefit obligations 387 469
-------- --------
Liabilities included in disposal groups held
for sale 8 9
-------- --------
Total liabilities 714,912 669,737
-------- --------
Equity
Share capital and share premium account 7,058 7,078
-------- --------
Other reserves 10,781 11,685
-------- --------
Retained earnings 26,345 26,072
-------- --------
Total parent company shareholders' equity 44,184 44,835
-------- --------
Other equity instruments 5,513 5,513
-------- --------
Total equity excluding non-controlling interests 49,697 50,348
-------- --------
Non-controlling interests 307 313
-------- --------
Total equity 50,004 50,661
-------- --------
Total equity and liabilities 764,916 720,398
-------- --------
1 The Group has met the criteria to offset its derivative assets
and liabilities and the related variation margin for trades cleared
on behalf of clients with LCH SwapClear. This applies to both
trades between the Group and the clients and between the Group and
LCH SwapClear. The impact of this as at 31 March 2020 is a decrease
in the derivative assets and derivative liabilities of $20.2bn.
Prior periods have not been restated as the effect would not be
material. The impact at 31 December 2019 would have been a decrease
in the derivative assets and derivative liabilities of $8.7bn.
The Group has also met the criteria to derecognise initial
margin for trades cleared on behalf of clients with LCH SwapClear.
The impact of this as at 31 March 2020 is a decrease in other
assets and other liabilities of $2.9bn. Prior periods have not been
restated as the effect would not be material. The impact at 31
December 2019 would have been a decrease in other assets and other
liabilities of $3.2bn.
Condensed consolidated interim statement of changes in
equity
For the three months ended 31 March 2020
Fair Fair
Ordinary Preference value value
share share through through
capital capital other other
and and Capital Own comprehensive comprehensive Cash Parent
share share and credit income income flow company Other
premium premium merger adjustment reserve reserve hedge Translation Retained shareholders' equity Non-controlling
account account reserves reserve - debt - equity reserve reserve earnings equity instruments interests Total
$million $million $million $million $million $million $million $million $million $million $million $million $million
As at 1
January
2019 5,617 1,494 17,129(1) 412 (161) 120 (10) (5,612) 26,129 45,118 4,961 273 50,352
Profit after
tax - - - - - - - - 2,303 2,303 - 37 2,340
Other
comprehensive
(loss)/income - - - (410) 358 30 (49) (180) (132)(2) (383) - (17) (400)
Distributions - - - - - - - - - - - (35) (35)
Shares issued,
net of
expenses(3) 25 - - - - - - - - 25 - - 25
Other equity
instruments
issued, net
of
expenses - - - - - - - - - 552 - 552
Net treasury
shares
adjustment - - - - - - - - (199) (199) - - (199)
Share option
expense,
net of
taxation - - - - - - - - 139 139 - - 139
Dividends on
ordinary
shares - - - - - - - - (720) (720) - - (720)
Dividends on
preference
shares and
AT1
securities - - - - - - - - (448) (448) - - (448)
Share
buy-back(4) (58) - 58 - - - - - (1,006) (1,006) - - (1,006)
Other
movements - - - - - - - - 6(5) 6 - 55(6) 61
As at 31
December
2019 5,584 1,494 17,187 2 197 150 (59) (5,792) 26,072 44,835 5,513 313 50,661
Profit after
tax - - - - - - - - 510 510 - 7 517
Other
comprehensive
income/(loss) - - - 148 (96) 21 (71) (926) 83(2) (841) - (12) (853)
Distributions - - - - - - - - - - - (1) (1)
Net treasury
shares
adjustment - - - - - - - - (92) (92) - - (92)
Share option
expense,
net of
taxation - - - - - - - - 36 36 - - 36
Dividends on
ordinary
shares - - - - - - - - - - - - -
Dividend on
preference
shares and
AT1
securities - - - - - - - - (33) (33) - - (33)
Share
buy-back(7) (20) - 20 - - - - - (231) (231) - - (231)
As at 31 March
2020 5,564 1,494 17,207 150 101 171 (130) (6,718) 26,345 44,184 5,513 307 50,004
1 Comprises capital reserve of $5 million, capital redemption
reserve of $13 million and merger reserve of $17,111 million
2 Includes actuarial gain, net of taxation, $83 million
(actuarial loss $129 million for the year ending 31 December
2019)
3 Comprises share capital of shares issued to fulfil
discretionary awards $1 million, share capital of shares issued to
fulfil employee share save options $1 million and share premium of
shares issued to fulfil employee Sharesave options exercised $23
million
4 On 1 May 2019, the Group commenced a share buy-back of its
ordinary shares of $0.50 each up to a maximum consideration of
$1,000 million. Nominal value of share purchases was $58 million
for the year ended 31 December 2019 and the total consideration
paid was $1,006 million which includes share buyback expenses of $6
million. The total number of shares purchased was 116,103,483
representing 3.51% of the ordinary shares in issue. The nominal
value of the shares was transferred from the share capital to the
capital redemption reserve account.
5 Comprises of $10 million disposal of non-controlling interest
of Phoon Huat Pte Ltd offset by $4 million withholding tax on
capitalisation of revenue reserves for Standard Chartered Bank
Ghana Limited
6 Comprises $72 million of non-controlling interest in SC
Digital Solutions offset by $17 million disposal of non-controlling
interest in Phoon Huat Pte Ltd, Sirat Holdings Limited and Ori
Private Limited
7 On 28 Feb 2020, 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 $20 million, and the total
consideration paid was $231 million. The total number of shares
purchased was 40,029,585 representing 1.25% of the ordinary shares
in issue. The nominal value of the shares was transferred from the
share capital to the capital redemption reserve account. A further
$10 million expense will be recognised to equity in the three
months to 30 June 2020. On the 1 April 2020, the Group announced
that in response to a request from the Prudential Regulation
Authority and as a consequence of the unprecedented challenges
facing the world due to the COVID-19 pandemic, its board had
decided after careful consideration to withdraw the recommendation
to pay a final dividend for 2019 of 20 cents per ordinary share and
to suspend the buy-back programme.
Basis of presentation
This statement covers the results of Standard Chartered PLC
together with its subsidiaries and equity accounted interest in
associates and jointly controlled entities (the Group) for the
three months ended 31 March 2020. The financial information on
which this statement is based, and the data set out in the appendix
to this statement, are unaudited and have been prepared in
accordance with Standard Chartered's accounting policies. The
Group's significant accounting policies are described in the Annual
Report 2019.
The information in this announcement does not comprise statutory
accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2019, which
contained an unqualified audit report under Section 495 of the
Companies Act 2006 (which did not make any statements under Section
498 of the Companies Act 2006) have been delivered to the Registrar
of Companies in accordance with Section 441 of the Companies Act
2006
Underlying versus
Statutory
Results
Profit before
taxation
(PBT)
1Q'20
Share
Gains of profits
arising of PT
on repurchase Bank
Provision of senior Permata
for regulatory and subordinated Goodwill Tbk joint
Underlying matters Restructuring liabilities impairment venture Statutory
$million $million $million $million $million $million $million
Operating income 4,327 - 8 - - - 4,335
Operating expenses (2,358) 14 (24) - - - (2,368)
Operating
profit/(loss)
before impairment
losses
and taxation 1,969 14 (16) - - - 1,967
Credit impairment (956) - (6) - - - (962)
Other impairment 154 - (62) - (258) - (166)
Profit from
associates
and joint
ventures 55 - (8) - - - 47
Profit/(loss)
before taxation 1,222 14 (92) - (258) - 886
1Q'19
Share
Gains of profits
arising of PT
on repurchase Bank
Provision of senior Permata
for regulatory and subordinated Goodwill Tbk joint
Underlying matters Restructuring liabilities impairment venture Statutory
$million $million $million $million $million $million $million
Operating income 3,813 - 105 - - - 3,918
Operating expenses (2,415) (186) (55) - - - (2,656)
Operating
profit/(loss)
before impairment
losses
and taxation 1,398 (186) 50 - - - 1,262
Credit impairment (78) - - - - - (78)
Other impairment (2) - (18) - - - (20)
Profit from
associates
and joint
ventures 66 - - - - 12 78
Profit/(loss)
before taxation 1,384 (186) 32 - - 12 1,242
4Q'19
Gains
arising Share
on of profits
repurchase of PT
Provision of senior Bank
for and Permata
regulatory subordinated Goodwill Tbk joint
Underlying matters Restructuring liabilities impairment venture Statutory
$million $million $million $million $million $million $million
Operating income 3,597 - 31 - - - 3,628
Operating
expenses (2,939) - (129) - - - (3,068)
Operating
profit/(loss)
before
impairment
losses
and taxation 658 - (98) - - - 560
Credit impairment (373) - (1) - - - (374)
Other impairment (12) - (20) - (27) - (59)
Profit from
associates
and joint
ventures 52 - 2 - - 13 67
Profit/(loss)
before taxation 325 - (117) - (27) 13 194
Analysis of operating income by product and segment
The following tables provide a breakdown of the Group's underlying
operating income by product and client segment.
1Q'20
Corporate Central
& &
Institutional Retail Commercial Private other
Banking Banking Banking Banking items Total
$million $million $million $million $million $million
Transaction
Banking 673 5 206 - - 884
Trade 164 5 91 - - 260
Cash
Management 425 - 115 - - 540
Securities
Services 84 - - - - 84
Financial Markets 1,100 - 94 - - 1,194
Foreign
Exchange 362 - 53 - - 415
Rates 367 - 11 - - 378
Commodities 35 - 9 - - 44
Credit and
Capital
Markets 15 - 11 - - 26
Capital
Structuring
Distribution
Group 57 - 4 - - 61
DVA 305 - - - - 305
Other
Financial
Markets (41) - 6 - - (35)
Corporate Finance 251 - 27 - - 278
Lending and
Portfolio
Management 136 - 59 - - 195
Wealth Management - 414 - 116 - 530
Retail Products - 898 2 46 - 946
CCPL and
other
unsecured
lending - 304 - - - 304
Deposits - 431 2 39 - 472
Mortgage and
Auto - 129 - 7 - 136
Other Retail
Products - 34 - - - 34
Treasury - - - - 325 325
Other (6) 4 2 - (25) (25)
Total underlying
operating
income 2,154 1,321 390 162 300 4,327
1Q'19(1)
Central
Corporate &
& Institutional Retail Commercial Private other
Banking Banking Banking Banking items Total
$million $million $million $million $million $million
---------------- -------- ---------- -------- -------- --------
Transaction Banking 734 4 222 - - 960
Trade 173 4 100 - - 277
Cash Management 478 - 122 - - 600
Securities Services 83 - - - - 83
Financial Markets 656 - 92 - - 748
Foreign Exchange 247 - 51 - - 298
Rates 210 - 11 - - 221
Commodities 36 - 9 - - 45
Credit and Capital Markets 133 - 7 - - 140
Capital Structuring Distribution
Group 75 - 7 - - 82
DVA (53) - - - - (53)
Other Financial Markets 8 - 7 - - 15
Corporate Finance 238 - 24 - - 262
Lending and Portfolio
Management 127 - 60 - - 187
Wealth Management - 370 1 94 - 465
Retail Products - 895 1 55 - 951
CCPL and other unsecured
lending - 305 - - - 305
Deposits - 446 1 47 - 494
Mortgage and Auto - 121 - 8 - 129
Other Retail Products - 23 - - - 23
Treasury - - - - 308 308
Other 3 - (1) - (70) (68)
Total underlying operating
income 1,758 1,269 399 149 238 3,813
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across products and client segments.
Prior periods have been restated
Analysis of underlying performance by Retail Banking and
Commercial Banking segments
Retail Banking
1Q'20
Greater ASEAN Africa
China & &
& North South Middle Europe
Asia Asia East & Americas Total
$million $million $million $million $million
Operating income 766 369 178 8 1,321
Operating expenses (485) (256) (144) (6) (891)
-------- -------- -------- ----------- --------
Operating profit before impairment
losses and taxation 281 113 34 2 430
Credit impairment (86) (89) (22) - (197)
Underlying profit before taxation 195 24 12 2 233
Restructuring (1) (2) - - (3)
-------- -------- -------- ----------- --------
Statutory profit before taxation 194 22 12 2 230
-------- -------- -------- ----------- --------
Loans and advances to customers
including FVTPL 72,081 26,197 5,024 529 103,831
Customer accounts 96,608 35,671 8,714 1,032 142,025
-------- -------- -------- ----------- --------
1Q'19(1)
Greater ASEAN Africa
China & &
& North South Middle Europe
Asia Asia East & Americas Total
$million $million $million $million $million
Operating income 745 341 174 9 1,269
Operating expenses (485) (258) (149) (5) (897)
--------------
Operating profit before impairment
losses and taxation 260 83 25 4 372
Credit impairment (29) (37) (16) - (82)
Underlying profit before taxation 231 46 9 4 290
Restructuring - - - - -
--------------
Statutory profit before taxation 231 46 9 4 290
--------------
Loans and advances to customers
including FVTPL 67,620 27,873 5,358 526 101,377
Customer accounts 97,386 32,711 8,547 1,060 139,704
--------------
1 Following a reorganisation of certain clients, there has
been a reclassification of balances across client segments.
Prior periods have been restated
Commercial Banking
1Q'20
Africa
Greater &
China & ASEAN & Middle
North Asia South Asia East Total
$million $million $million $million
Operating income 127 178 85 390
Operating expenses (80) (81) (48) (209)
Operating profit before impairment
losses and taxation 47 97 37 181
Credit impairment (35) (38) (6) (79)
Underlying profit before taxation 12 59 31 102
Restructuring (7) - (7) (14)
Statutory profit before taxation 5 59 24 88
Loans and advances to customers
including FVTPL 12,941 10,754 4,904 28,599
Customer accounts 22,194 12,391 3,478 38,063
1Q'19(1)
Africa
Greater &
China & ASEAN & Middle
North Asia South Asia East Total
$million $million $million $million
----------- ----------- -------- --------
Operating income 141 168 90 399
----------- ----------- -------- --------
Operating expenses (82) (83) (53) (218)
----------- ----------- -------- --------
Operating profit before impairment
losses and taxation 59 85 37 181
----------- ----------- -------- --------
Credit impairment 6 (1) 1 6
----------- ----------- -------- --------
Underlying profit before taxation 65 84 38 187
----------- ----------- -------- --------
Restructuring 1 - - 1
----------- ----------- -------- --------
Statutory profit before taxation 66 84 38 188
----------- ----------- -------- --------
Loans and advances to customers
including FVTPL 13,693 11,925 5,393 31,011
----------- ----------- -------- --------
Customer accounts 19,827 12,158 3,445 35,430
----------- ----------- -------- --------
1 Following a reorganisation of certain clients, there has been
a reclassification of balances across client segments. Prior periods
have been restated
Average balance sheets and yields
Average assets
3 months ended 31.03.20
Gross
Average Average yield Gross
non-interest interest of interest yield
earning earning Interest earning of total
balance balance income balance balance
$million $million $million % %
Cash and balances at central banks 16,576 31,795 53 0.67 0.44
Gross loans and advances to banks 28,389 57,106 321 2.26 1.51
Gross loans and advances to customers 50,852 284,841 2,510 3.54 3.01
Impairment provisions against
loans and advances to banks and
customers - (5,692) - --
Investment securities 29,007 142,622 862 2.43 2.02
Property, plant and equipment
and intangible assets 9,895 - - --
Prepayments, accrued income and
other assets 103,766 - - --
Investment associates and joint
ventures 2,228 - - --
Total average assets 240,713 510,672 3,746 2.95 2.01
3 months ended 31.12.19
Gross
Average Average yield Gross
non-interest interest of interest yield
earning earning Interest earning of total
balance balance income balance balance
$million $million $million %%
Cash and balances at central banks 16,965 28,617 63 0.87 0.55
Gross loans and advances to banks 27,686 58,637 449 3.04 2.06
Gross loans and advances to customers 50,134 283,137 2,650 3.71 3.15
Impairment provisions against
loans and advances to banks and
customers - (4,924) - --
Investment securities 27,606 142,534 923 2.57 2.15
Property, plant and equipment
and intangible assets 11,000 - - --
Prepayments, accrued income and
other assets 86,929 - - --
Investment associates and joint
ventures 2,706 - - --
Total average assets 223,028 508,001 4,085 3.19 2.22
3 months ended 31.03.19
Gross
Average Average yield Gross
non-interest interest of interest yield
earning earning Interest earning of total
balance balance income balance balance
$million $million $million %%
Cash and balances at central banks 20,104 32,492 102 1.27 0.79
Gross loans and advances to banks 25,035 60,336 501 3.37 2.38
Gross loans and advances to customers 49,221 268,619 2,659 4.01 3.39
Impairment provisions against
loans and advances to banks and
customers - (5,060) - --
Investment securities 28,729 131,037 879 2.72 2.23
Property, plant and equipment
and intangible assets 11,022 - - --
Prepayments, accrued income and
other assets 87,268 - - --
Investment associates and joint
ventures 2,510 - - --
Total average assets 223,889 487,424 4,141 3.45 2.36
Average liabilities
3 months ended 31.03.20
Average Average Rate paid
non-interest interest on interest Rate paid
bearing bearing Interest bearing on total
balance balance expense balance balance
$million $million $million %%
Deposits by banks 18,354 27,517 149 2.18 1.31
Customer accounts:
Current accounts and savings
deposits 40,220 204,412 479 0.94 0.79
Time and other deposits 58,635 161,324 838 2.09 1.53
Debt securities in issue 8,275 54,010 245 1.82 1.58
Accruals, deferred income and
other liabilities 108,023 1,246 16 5.16 0.06
Subordinated liabilities and other
borrowed funds - 16,040 180 4.51 4.51
Non-controlling interests - - - --
Shareholders' funds 50,023 - - --
283,530 464,549 1,907 1.65 1.03
Adjustment for Financial Markets
funding costs (92)
Total average liabilities and
shareholders' funds 283,530 464,549 1,815 1.57 0.98
3 months ended 31.12.19
Average Average Rate paid
non-interest interest on interest Rate paid
bearing bearing Interest bearing on total
balance balance expense balance balance
$million $million $million %%
Deposits by banks 19,763 25,589 169 2.62 1.48
Customer accounts:
Current accounts and savings
deposits 40,142 195,227 554 1.13 0.93
Time and other deposits 58,759 166,370 974 2.32 1.72
Debt securities in issue 9,759 51,185 277 2.15 1.80
Accruals, deferred income and
other liabilities 93,132 3,514 26 2.94 0.11
Subordinated liabilities and other
borrowed funds - 15,528 178 4.55 4.55
Non-controlling interests 37 - - --
Shareholders' funds 50,128 - - --
Total average liabilities and
shareholders' funds 271,720 457,413 2,178 1.89 1.19
Adjustment for Financial Markets
funding costs (71)
Total average liabilities and
shareholders' funds 271,720 457,413 2,107 1.83 1.15
3 months ended 31.03.19
Average Average Rate paid
non-interest interest on interest Rate paid
bearing bearing Interest bearing on total
balance balance expense balance balance
$million $million $million %%
Deposits by banks 15,311 28,490 204 2.90 1.89
Customer accounts: -
Current accounts and savings
deposits 37,159 177,102 479 1.10 0.91
Time and other deposits 59,912 166,146 1,074 2.62 1.93
Debt securities in issue 8,712 48,480 283 2.37 2.01
Accruals, deferred income and
other liabilities 88,420 1,406 - --
Subordinated liabilities and other
borrowed funds - 15,238 196 5.22 5.22
Non-controlling interests 36 - - --
Shareholders' funds 50,435 - - --
Total average liabilities and
shareholders' funds 259,985 436,862 2,236 2.08 1.30
Adjustment for Financial Markets
funding costs (88)
Total average liabilities and
shareholders' funds 259,985 436,862 2,148 1.99 1.25
Earnings per ordinary share
1Q'20 1Q'19 Change 4Q'19 Change
$m $m % $m %
Profit/(loss) for the period
attributable to equity holders 517 818 (37) 72 nm(2)
Non-controlling interests (7) (10) 30 (7) -
Dividend payable on preference
shares and AT1 classified
as equity (33) (34) 3 (191) 83
Profit/(loss) for the period
attributable to ordinary shareholders 477 774 (38) (126) nm(2)
Items normalised:
Provision for regulatory matters (14) 186 nm(2) - nm(2)
Restructuring 92 (32) nm(2) 117 (21)
Profit from associates and
joint ventures - (12) nm(2) (13) nm(2)
Goodwill Impairment 258 - nm(2) 27 nm(2)
Tax on normalised items (3) 1 nm(2) (19) 84
Underlying profit 810 917 (12) (14) nm(2)
Basic - Weighted average number
of shares (millions) 3,186 3,310 nm(2) 3,191 nm(2)
Diluted - Weighted average
number of shares (millions) 3,218 3,345 nm(2) 3,228 nm(2)
Basic earnings/(loss) per
ordinary share (cents) 15.0 23.4 (8.4) (3.9) 18.9
Diluted earnings/(loss) per
ordinary share (cents) 14.8 23.1 (8.3) (3.9)(1) 18.7
Underlying basic earnings
per ordinary share (cents) 25.4 27.7 (2.3) (0.4) 25.9
Underlying diluted earnings
per ordinary share (cents) 25.2 27.4 (2.2) (0.4)(1) 25.6
1 The impact of any diluted options has been excluded from this
amount as required by IAS 33 Earnings per share
2 Not meaningful
Return on Tangible Equity
1Q'20 1Q'19 Change 4Q'19 Change
$m $m % $m %
Average parent company Shareholders'
Equity 44,511 45,475 (2) 44,855 (1)
Less Preference share premium (1,494) (1,494) - (1,494) -
Less Average intangible assets (5,090) (5,084) - (5,187) 2
Average Ordinary Shareholders'
Tangible Equity 37,927 38,898 (2) 38,174 (1)
Profit/(loss) for the period
attributable to equity holders 517 818 (37) 72 nm(1)
Non-controlling interests (7) (10) 30 (7) -
Dividend payable on preference
shares and AT1 classified
as equity (33) (34) 3 (191) 83
Profit/(loss) for the period
attributable to ordinary shareholders 477 774 (38) (126) nm
Items normalised:
Provision for regulatory matters (14) 186 nm(1) - nm(1)
Restructuring 92 (32) nm(1) 117 (21)
Profit from associates and
joint ventures - (12) nm(1) (13) nm(1)
Goodwill Impairment 258 - nm(1) 27 nm(1)
Tax on normalised items (3) 1 nm(1) (19) 84
Underlying profit for the
period attributable to ordinary
shareholders 810 917 (12) (14) nm(1)
Underlying Return on Tangible
Equity 8.6% 9.6% (100) bps (0.1%) 870 bps
Statutory Return on Tangible
Equity 5.1% 8.1% (300) bps (1.3%) 640 bps
1 Not meaningful
Net Tangible Asset Value per
Share
31.03.2020 31.03.2019 Change 31.12.2019 Change
$m $m % $m %
Parent company shareholders
equity 44,185 45,831 (4) 44,837 (1)
Less Preference share premium (1,494) (1,494) - (1,494) -
Less Intangible assets (4,890) (5,111) 4 (5,290) 8
Net shareholders tangible
equity 37,801 39,226 (4) 38,053 (1)
Ordinary shares in issue,
excluding own shares ('m) 3,147 3,310 (5) 3,191 (1)
Net Tangible Asset Value per
share (c) 1,201 1,185 16.0 1,192 9
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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