Reference Number ZC18
Directors’ Report and
Financ
ial Statements
Incorporated in England lim
ited l
iab
il
Princ
ipal Office: 1 Bas
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
Contents
Page
Strategic report
01-35
Who we are and what we do
02
Where we operate
05
Market environment
06
Our strategy
09
Our business model
10
Client Segment reviews
12
Financ
ial rev
iew
14
Our business
18
Risk review
19
Stakeholders and responsib
il
it
ies
26
Directors’ report
36-42
Statement of directors’ responsib
il
it
ies
43
Risk review and Capital review
44-110
Risk Management Framework
45
Princ
ipal r
isks
50
Risk profile
58
Capital review
109
Financ
ial Statements and Notes
111-244
Independent Auditors’ report
111
Financ
ial statements
123
Notes to the financial statements
130
Supplementary
245
Glossary
252
About this report
Sustainab
il
ity reporting – We adopt an integrated approach to corporate reporting, embedding non-financ
ial
informat
ion throughout our Annual Report.
For more informat
ion on Standard Chartered please v
is
it sc.com
linked
in.com/company/standard-chartered-bank
facebook.com/standardchartered
Unless another currency is specif
ied, the word ‘dollar’ or symbol ‘$’
in this document means US dollar and the word ‘cent’ or symbol ‘c’ means one-hundredth of
one US dollar. All disclosures in the Strategic Report, Directors’ Report, Risk Review and Capital Review, Supplementary informat
ion and Glossary are unaud
ited unless
otherwise stated. Unless context requires, with
in th
is document, ‘China’ refers to the People’s Republic of China and, for the purposes of this document only, excludes Hong
Kong Special Admin
istrat
ive Region (Hong Kong), Macau Special Admin
istrat
ive Region (Macau) and Taiwan. ‘Korea’ or ‘South Korea’ refers to the Republic of Korea.
Asia includes Australia, Bangladesh, Brunei, Cambodia, India, Indonesia, Laos, Malaysia, Myanmar, Nepal, Phil
ipp
ines, Singapore, Sri Lanka, Thailand, Vietnam,
Mainland China, Hong Kong, Japan, Korea, Macau, Taiwan; Africa includes Botswana, Côte d’Ivoire, Egypt, Ghana, Kenya, Maurit
ius, N
iger
ia, South Afr
ica, Tanzania, UAE,
Uganda, and Zambia. The Middle East includes Bahrain, Iraq, Oman, Pakistan, Qatar, Saudi Arabia and UAE. Europe includes Belgium, Falkland Islands, France, Germany,
Jersey, Luxembourg, Poland, Sweden, Türkiye and the UK . The Americas includes Argentina, Brazil, Colombia and the US.
With
in the tables
in this report, blank spaces ind
icate that the number
is not disclosed, dashes ind
icate that the number
is zero and ‘nm’ stands for not meaningful.
Standard Chartered Bank is incorporated in England and Wales with lim
ited l
iab
il
ity and is headquartered in London. The Group’s head office provides guidance on
governance and regulatory standards.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
1
Strategic report
Combin
ing cross-border capab
il
it
ies with wealth management expertise
Standard Chartered is a global bank connecting corporate, inst
itut
ional and affluent clients to a network that offers
unique access to sustainable growth opportunit
ies across As
ia, Africa and the Middle East.
Our cross-border and affluent strategy is designed to deliver our purpose: to drive commerce and prosperity through
our unique divers
ity.
This is underpinned by our brand promise, here for good.
The following are company designat
ions as descr
ibed in the document:
Standard Chartered Bank Group (Group) – being Standard Chartered Bank and its subsid
iar
ies
Standard Chartered PLC Group (PLC Group) – being the ultimate parent and its subsid
iar
ies
Standard Chartered Bank (Company) – being the standalone Bank legal entity
FINANCIAL KPIs AND MEASURES
1
Operating income
$12,414m
7%
Read more on (page 15)
Profit before tax
$4,447m
1%
Read more on (page 15)
CAPITAL KPIs
Common Equity Tier 1 ratio
13.3%
12bps
2
Read more on (page 17)
NON-FINANCIAL KPIs
Divers
ity and
inclus
ion: Women
in senior roles
3
29.6%
+0.4ppt
1
KPIs have been updated to move to a greater use of reported measures, in line with how the Group is run
2
Basis point (bps) and percentage movements are in relation to 31 December 2023, with brackets representing negative movements
3
Senior leadership is defined as Managing Directors and Band 4 roles (includ
ing Management Team)
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
2
Strategic report continued
Who we are and what we do
Our client segments
Corporate & Investment Banking (CIB)
Corporate & Investment Banking supports large
corporations, development organisat
ions, governments,
banks and investors to access cross-border trade and
investment opportunit
ies
in the world’s most dynamic
Operating income
$8,531m
Wealth & Retail Banking (WRB)
Wealth & Retail Banking serves the local and internat
ional
banking needs of affluent clients across the full wealth
continum via Private, Prior
ity and Personal Bank
ing, as well
Operating income
$3,706m
Ventures invests in disrupt
ive financial technology and
creating alternative financ
ial serv
ice business models,
promoting a culture of innovat
Operating income
$86m
Central and other items
Operating income
$91m
Total operating income
$12,414m
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
3
Enabling and supporting our businesses
Global functions
Our client-facing businesses are supported by our global functions, which work together to ensure the Group’s operations
run smoothly and consistently.
Group Chief Financ
ial Office (GCFO)
Partners with the business and collaborates with other functions to execute on the Group strategy. GCFO comprises of four
areas, namely, Finance, Treasury, Investor Relations and Corporate Development.
Strategy and Talent
Brings together the Corporate Strategy, Group-wide Transformation, Corporate Affairs, Brand & Marketing, Corporate
Real Estate Services, Human Resources, Supply Chain Management and Fit for Growth programme teams. The teams
play a crit
ical role
in how we execute and communicate our strategy and develop and deploy our skills and resources to
transform the Bank and achieve sustainable growth.
Technology & Operations
Responsible for reshaping the Group’s systems and technology platforms to ensure we provide robust, responsive, and
innovat
ive technology and d
ig
ital solut
ions. Also manages all client operations, seeking to provide an optimal client service
and experience across the board.
Group Internal Audit
An independent function with the primary role of supporting the Court and Management Team, and protect the assets,
reputation and sustainab
il
ity of the Group.
Compliance, Financ
ial Cr
ime & Conduct Risk
Partners internally and externally to achieve the highest standards in conduct and compliance to enable a sustainable
business and to fight financ
ial cr
ime.
Legal
Provides legal advice and support to the Group in managing legal risks and issues.
Risk
Provides oversight and challenge on the Group’s risk management, ensuring that business is conducted in line with regulatory
expectations
Strategic report continued
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
4
Strategic report continued
Our purpose and our strategy
Our purpose is to drive commerce and prosperity through our unique divers
ity. Our strategy
is combin
ing d
ifferent
iated
cross-border corporate and investment banking capabil
it
ies with leading wealth management expertise.
> Read more on
Our strategy
, page 10.
Our culture
We’ve been supporting clients ever since we first opened our doors in Mumbai, Kolkata and Shanghai in 1853
and – with our focus on cross-border banking and helping generations of famil
ies grow the
ir wealth– we remain the bank we
set out to be over 170 years ago.
Our dist
inct
ive culture has been developed in pursuit of our purpose, deliver
ing
innovat
ive solut
ions that create
long-term value for our clients and the communit
ies w
ith
in wh
ich we operate.
We’re committed to promoting equality and inclus
ion, as
it’s our divers
ity – of people, cultures and networks –
that sets us apart and helps us find opportunit
ies at every turn.
We are guided by our valued behaviours, our Stands and our brand promise, here for good.
Valued behaviours
Our valued behaviours are key to deliver
ing on our strategy. As the gu
id
ing pr
inc
iples for the way we do bus
iness every day,
they help us learn from our successes and take on new challenges.
When we live our valued behaviours, we question, innovate and make bold decis
ions, allow
ing us to take opportunit
ies to
go above and beyond for our clients.
Do the right thing
Doing the right thing means acting in the best interests of our clients, colleagues and stakeholders.
Better together
We build relationsh
ips w
ith our clients and each other so we can share our unique capabil
it
ies.
Never settle
We’re ambit
ious
in our constant pursuit of excellence and market-leading innovat
ion.
Our Stands
We set long-term ambit
ions to address some of the most press
ing societal challenges of our time.
Climate change, deepening inequal
ity and the
inequ
it
ies of globalisat
ion rema
in as urgent today as ever before.
• Accelerating Zero
• Lift
ing Part
ic
ipat
ion
• Resetting Globalisat
ion
+ Read more on Our Stands at
sc.com/en/about/who-we-are/
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
5
Where we operate
We operate in the world’s most dynamic markets which set the pace for global growth and prosperity.
Our unique geographic footprint connects high-growth and emerging markets in Asia, Africa and the Middle East with more
established economies in Europe and the Americas, allowing us to channel capital where it’s needed most.
For more than 170 years we have used the power of our network to maxim
ise opportun
it
ies for people and bus
inesses
who trade, operate, or invest in these regions. Our diverse experience, capabil
it
ies and culture sets us apart.
Asia
Australia
Japan
Singapore
Bangladesh
Laos
Sri Lanka
Brunei
Macau
Taiwan
Cambodia
Malaysia
Thailand
China
Myanmar
Vietnam
India
Nepal
Indonesia
Phil
ipp
ines
Africa
Botswana
Kenya
Tanzania
Cote d’Ivoire
Maurit
ius
Uganda
Egypt
Niger
ia
Zambia
Ghana
South Africa
The Middle East
Bahrain
Pakistan
UAE
Iraq
Qatar
Oman
Saudi Arabia
Europe
Belgium
Jersey
Türkiye
Falkland Islands
Luxembourg
UK
France
Poland
Germany
Sweden
Americas
Argentina
Colombia
Brazil
US
Strategic report continued
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
6
Market environment
Global macro trends: Macroeconomic factors affecting the global landscape
Trends in 2024
•
Global GDP growth held at 3.2% in 2024, the same as 2023, as central banks began to loosen policy in the face of
declin
ing
inflat
ion.
•
Asia was the best-performing region, recording growth of 5.0% as ASEAN economies in particular were supported by
improv
ing tour
ism and the semiconductor upcycle. Growth in China was slower relative to 2023, but appeared to have
accelerated in Q4 helped by policy support. Growth in India normalised to 6.2% from 8.2% in 2023.
•
Sub-Saharan Africa likely saw growth of 3.4% in 2024, an improvement from 3.1% in 2023, supported by easing global
financial cond
it
ions, the reg
ion’s continued recovery from COVID-19 cris
is and country-spec
if
ic factors.
•
Among the majors, the US economy remained resil
ient, w
ith growth improv
ing to 2.7% from 2.5%
in 2023, led by personal
consumption, despite recent signs of softening in the labour market. Growth also recovered in the UK to 0.8% in 2024 as
inflat
ion fell and
investment levels recovered. The euro-area economy grew by 0.7 per cent in 2024, following 0.4 per cent
growth in 2023, as growth was constrained by a subdued consumer recovery and weak investment. In most majors, labour
markets remained strong, but there are signs of softening.
•
Major central banks like the Fed and ECB started to loosen monetary policy from mid-2024 onwards as inflat
ion showed
clearer signs of returning to target levels, while fiscal policy remained accommodative in the US.
Outlook for 2025
•
We expect global economic growth to be broadly flat in 2025, slowing slightly to 3.1% from 3.2% in 2024. Support from
looser financial cond
it
ions and expans
ionary fiscal policy may be partly offset by protection
ist trade pol
ic
ies and st
ill-high
interest rates in the US and elsewhere.
•
The US economy is set to moderate in 2025, after a resil
ient 2024 performance desp
ite elevated interest rates. The euro
area continues to struggle; major European economies includ
ing Germany and France r
isk slipp
ing
into recession. Asia is
relatively healthy, although growth at the regional level is set to moderate slightly in 2025 as both China and India slow. The
GCC should also remain a bright spot for global growth, with the region’s non-oil growth exceeding overall global growth.
•
The global economy is facing heightened uncertainty following the US elections. The risk of a tit-for-tat tariff war has
increased with US tariffs on China already resulting in retaliatory tariffs on US imports. The US is also threatening to impose
tariffs on its other trading partners. Tariff wars are likely to result in further trade divers
ion and a reor
ientat
ion of supply
chains.
•
Expectations of a shallower rate cutting cycle from the Fed is likely to translate into a stronger USD and a steeper
US yield curve. Higher US rates and a stronger USD will make it harder for EM issuers to borrow in internat
ional cap
ital
markets, and could sign
ificantly reduce portfol
io flows to EM. In addit
ion, EM central banks may be constra
ined from
cutting rates meaningfully.
•
On the geopolit
ical front, markets w
ill be eager to see if President Trump is able to end the wars in Ukraine and the
Middle East, which would have far-reaching consequences globally.
Medium-and long-term view
Broader global trends
•
Long-term growth in the developed world is constrained by ageing populations and high levels of debt.
•
Ris
ing nat
ional
ism, ant
i-globalisat
ion and protect
ion
ism are threats to long-term growth prospects
in emerging markets.
•
However, there are potential offsets. Higher capex to meet sustainab
il
ity targets, and moves towards dig
ital
isat
ion could
boost productiv
ity growth, prov
ing an antidote to economic scarring concerns. With
in emerg
ing markets, countries in
Asia are best placed to take advantage of dig
ital
isat
ion,
includ
ing generat
ive Artif
ic
ial Intelligence (AI).
•
Relatively younger populations, and the adoption of dig
ital technology, w
ill allow emerging markets to become
increas
ingly
important to global growth.
•
In order to meet net zero targets, energy-related spending will have to increase sign
ificantly; headw
inds include
insuff
ic
ient funds across emerging markets, labour shortages and supply chain constraints.
The world under Trump 2.0
•
Trump’s victory in the US elections is likely to have sign
ificant
impl
icat
ions for the exist
ing geopol
it
ical env
ironment.
His reject
ion of mult
ilateral
ism and preference for an adversar
ial approach has impl
icat
ions for global climate policy,
the UN, Bretton Woods inst
itut
ions, and US relations with the EU.
•
Trump has pledged to use import tariffs to reduce the US trade defic
it and br
ing production back to the US. While this
process has begun, uncertainty around the scope and extent of tariff action from the US and likely retaliat
ion by trade
Strategic report continued
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
7
partners might act as drags on consumer and investor confidence, slowing growth.
•
Global trade has remained resil
ient
in the face of ris
ing protect
ion
ism over the past decade. However, an escalat
ion in
tit-for-tat tariff wars has the potential not only to accelerate the reorientat
ion of supply cha
ins already under way but also
lead to lower global trade overall.
•
Expectations of spending on defence and infrastructure together with possible tax cuts is likely to be inflat
ionary and could
see the Fed terminal rate settling at a higher level than in the pre-pandemic period.
•
This would sign
ificantly change the global fund
ing environment for emerging markets. The external funding environment
for emerging markets will likely be tougher as US Money Market rates could stay elevated with a higher Fed terminal rate.
•
Emerging market economies that are more domestically driven and have better fiscal and monetary buffers to offset
external shocks are likely to be more resil
ient to external shocks.
Regional outlooks
Actual and projected growth by market
2025
2024
Asia
China
4.5%
5.0%
Hong Kong
2.2%
2.5%
India
6.5%
6.2%
Indonesia
5.0%
5.0%
Singapore
2.5%
3.8%
Americas
US
1.8%
2.7%
Africa
Niger
ia
3.8%
3.5%
South Africa
2.0%
1.1%
Kenya
4.7%
4.5%
Middle East
UAE
5.0%
4.0%
Europe
UK
1.3%
0.8%
Euro area
0.8%
0.7%
Asia
•
China is likely to bear the brunt of US tariff policy, with in
it
ial US tariffs being met by retaliatory tariffs from China. The
authorit
ies are prepar
ing for the potential fallout by deliver
ing add
it
ional st
imulus to support the domestic economy. In late
September, China pivoted toward more aggressive policy easing that helped generate a Q4 rebound. In December, the top
planning meeting adopted a pro-growth stance for 2025, pledging to raise the defic
it rat
io and loosen monetary policy.
The authorit
ies appear determ
ined to tap the policy space to offset a potentially sharp increase in the US tariffs, focusing
more on consumption than investment.
•
Net exports have contributed sign
ificantly to Ch
ina’s growth in 2024; this contribut
ion
is expected to decline substantially
in 2025. However, the real-estate sector – which has weighed heavily on growth for the past few years – is likely to be less of
a drag in 2025 as supportive polic
ies take effect. Wh
ile the PBoC is expected to keep monetary policy loose, expansionary
fiscal policy will be the biggest source of support for 2025 growth, in our view. We expect China’s economy to grow 4.5% in
2025.
•
Hong Kong is likely to be disproport
ionally affected by outs
ized US trade measures targeted against China. The US-China
trade war under Trump 1.0 pushed Hong Kong to trade more with China and ASEAN (at the expense of trade with the
US and Europe); this secular trend could accelerate as global supply chains reorient around new US tariff threats. We
believe Hong Kong still has a key role to play as China’s ‘super-connector’ as South-South trade and investment links
expand in an increas
ingly fragmented world.
•
India’s growth has likely moderated to 6.2% in 2024 and 6.5% in 2025 down from 8.2% in 2023 owing to a cyclical slowdown
in urban demand, and delays in the private sector investment cycle. However, the likel
ihood of more measures to
improve
rupee liqu
id
ity, a shallow rate cutting cycle and a large income tax cut delivered in the recent budget are likely to provide a
floor. The government remains focused on fiscal consolidat
ion, albe
it gradually amid slowing domestic growth and
external uncertainty.
•
We expect growth in ASEAN to remain healthy but slow slightly in 2025 versus 2024 due to the effects of monetary
tighten
ing and the moderat
ing economic outlook for key trade partners – namely the US, the euro area and China.
Trade-reliant economies like Singapore, Vietnam, Malaysia and Thailand are exposed to US trade polic
ies. Even
if they are
not directly targeted by tariffs or other measures, Asia’s small, open economies could be hit by spillover from China in the
short term.
•
Larger and more domestically driven economies – includ
ing Ind
ia, Indonesia and the Phil
ipp
ines – may be less affected but
are not immune to a sign
ificant h
it to China and/or global trade. Over the medium term, however, we expect ASEAN to
continue to attract strong FDI as investors seek to divers
ify the
ir operational capacity and tap new markets.
Strategic report continued
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
8
Strategic report continued
•
Asian central banks focused on FX stabil
ity are l
ikely to scale back their rate-cutting cycles due to sharply reduced Fed
easing expectations, the spectre of a stronger USD in 2025, and an uncertain Asian trade environment. For India, we
mainta
in our call for 50bps of rate cuts; we th
ink monetary policy will focus more on the growth and inflat
ion
impact of
US trade polic
ies than on FX concerns. For the reg
ion’s small, open economies, negative currency spillover may have less
influence on policy decis
ions
in the coming year. Singapore has already eased monetary policy in January and we expect
Thailand to lower rates further in 2025.
Americas
•
The US economy is likely to stay on a healthy footing, with layoffs remain
ing low and consumer and bus
iness sentiment
staying strong. Tighter financ
ial cond
it
ions towards end-2024 could br
ing some growth softness in H1 2025 before
returning to trend in H2 2025.
•
Slowing growth and softening labour market should allow the Fed to continue with cautious easing.
•
Trade and fiscal polic
ies pledged by the
incom
ing adm
in
istrat
ion increase uncertainty around monetary policy decis
ions
in
the wider region; The Fed may have to tighten slightly in 2026 when the impact of stimulus and tariffs hits. A more
accommodative regulatory environment in the US could further boost investment sentiment and productiv
ity growth.
•
In Latin America, ris
ing fiscal r
isks have weighed on investor sentiment towards the region. High borrowing costs,
legislat
ive uncerta
inty and lacklustre growth momentum are likely to continue to challenge the fiscal outlook.
Africa
•
While escalating global trade tensions and higher UST yields are downside risks to SSA, stepped-up fiscal stimulus in China
may eventually support the region’s commodity-dependent economies. Sub-Saharan Africa trade dependency on the US
has declined in recent years, reflecting greater US energy self-suffic
iency; the EU
is the region’s largest trading partner,
followed by China.
•
Domestic reform momentum remains strong in South Africa and Niger
ia, the reg
ion’s two largest economies; this may
provide a buffer against global uncertainty. South Africa’s Government of National Unity has invested sign
ificant pol
it
ical
capital in ensuring that growth-boosting structural reforms yield meaningful div
idends. South Afr
ica may adopt a fiscal
rule in 2025, and eventually a lower inflat
ion target, as
it aims to regain its investment-grade status in the medium term.
Faster growth will be crit
ical to stab
il
is
ing South Africa’s debt.
•
Niger
ia has embarked on content
ious fuel subsidy and FX liberal
isat
ion reforms, trigger
ing h
igher inflat
ion. 2025 should
bring greater FX and price stabil
ity, as well as offshore
investor interest in Niger
ia’s local-currency debt market. However,
Niger
ia rema
ins exposed to a material decline in oil prices, which could negatively impact oil revenues and FX earnings.
•
2025 should also see the rehabil
itat
ion of economies that have recently concluded debt restructuring agreements.
While final agreements with non-Eurobond creditors are still awaited in Zambia and Ghana, the economic outlook for
both countries is set to stabil
ise. Zamb
ia should see sign
ificant growth ga
ins following a recent drought. Ghana’s inflat
ion
should stabil
ise somewhat after the country’s December 2024 elect
ions; post-election years are often characterised by
greater fiscal restraint (but also slower growth momentum).
•
While new external debt restructurings in the region look unlikely in 2025, liqu
id
ity pressures – and how they are navigated – will
be closely watched. Dependence on IFIs for liqu
id
ity support has increased in recent years in economies such as Kenya. Kenya is
now likely to focus on attracting greater private flows, with a reliance on public-private partnerships to boost capital spending.
Middle East
•
Despite some pressure on the energy sector, we expect the Gulf Cooperation Council (GCC) to remain a bright spot for
global growth in 2025, with the region’s non-oil growth exceeding overall global economic growth. With the exceptions of
Saudi Arabia and Bahrain, most of the region’s fiscal breakeven oil prices remain low. In some cases they have declined; for
Oman, this has prompted consecutive credit rating upgrades. Investment in the non-oil sector will continue to drive
economic activ
ity
in 2025, while lower interest rates should benefit interest rate-sensit
ive sectors such as hous
ing in Saudi
Arabia, the UAE and Qatar.
•
Lower geopolit
ical r
isk and supported oil prices should bode well for the MENA region in 2025. De-escalation of the regional
conflict should have posit
ive ram
if
icat
ions for external funding in Egypt and Lebanon. On the trade front, the GCC – and
the UAE in particular – will continue to benefit from ris
ing South-South trade as global trade
is re-routed in a more
fragmented world.
Europe
•
The euro area economy is likely to struggle in the face of structural headwinds – includ
ing poor compet
it
iveness and h
igh
energy costs – as well as external pressures from possible US trade protection
ist measures. Wh
ile there are recession risks in
Germany and France, private consumption should help to keep overall European growth posit
ive as
interest rates fall and
labour markets remain tight. The ECB is set to continue cutting into accommodative territory as inflat
ion returns to target
and growth is weak. Fiscal policy is unlikely to offer a sign
ificant ta
ilw
ind to growth as countr
ies must adhere to EU rules,
although flexib
il
ity could be applied if growth weakens sign
ificantly.
•
UK growth should be supported in 2025 as the Bank of England continues to cut interest rates and the government pursues
pro-growth reforms alongside an improvement in trading relations with the EU. However, the government is also likely to
tighten spending in the coming months, to ensure it keeps with
in
its own fiscal rules.
•
In Central and Eastern Europe, external spillovers weigh on domestic growth, while labour market tightness and fiscal
pressures delay central bank easing. President
ial elect
ions in Poland and legislat
ive elect
ions in Czechia this year pose
uncertainty for investors.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
9
Strategic report continued
Our strategy
Our strategy is designed to deliver our purpose: to drive commerce and prosperity through our unique divers
ity.
This is underpinned by our brand promise, here for good.
We are a global bank connecting corporate, inst
itut
ional and affluent clients to a network that offers unique
access to sustainable growth opportunit
ies across As
ia, Africa and the Middle East.
Strategic prior
it
ies
Cross-border
•
Continue to sharpen our focus on serving the cross-border needs of our larger global corporate and financ
ial
inst
itut
ion clients.
•
Concentrate our efforts on enhancing our cross-border product and advisory suite to meet our clients’ complex needs.
•
Optim
ise resource allocat
ion by reducing the number of clients whose needs do not play directly to our strengths.
•
Continue to scale sustainable finance and support to our clients’ transit
ion journeys across our markets.
Affluent
•
Solid
ify our pos
it
ion as a lead
ing wealth manager in Asia, Africa and the Middle East with a different
iated, fast-grow
ing
and high-returning internat
ional affluent franch
ise.
•
Invest in our wealth and dig
ital platforms, cl
ient centres, people and brand and marketing, to accelerate income
growth and returns.
•
Reshape our mass retail business to focus on developing a strong pipel
ine of future affluent and
internat
ional
banking clients.
•
Enable access to sustainable investments by integrat
ing Env
ironmental, Social and Governance (ESG) into our Wealth
Solutions proposit
ions and leverag
ing bank-wide sustainab
il
ity capabil
it
ies as a key different
iator to our affluent cl
ients.
Strategic report continued
Standard Chartered Bank
10
Directors’ Report and Financ
ial Statements 2024
Our Business model
Our business model reflects our strategy of combin
ing d
ifferent
iated cross-border capab
il
it
ies with leading wealth
management expertise.
Our business segments
Corporate & Investment Banking (CIB)
Supports large corporations, development organisat
ions, governments, banks and
investors to access cross-border trade
and investment opportunit
ies.
Wealth & Retail Banking (WRB)
Serves the local and internat
ional bank
ing needs of our clients across the full wealth continuum via Private, Prior
ity and
Personal Banking, as well as Small and Medium Enterprises.
Ventures
Promotes a culture of innovat
ion across the Group,
invest
ing
in disrupt
ive financial technology and creat
ing alternative
financial serv
ice business models, as well as growing Trust, our dig
ital bank
in Singapore.
Our key products and services
Global Markets & Global Banking
•
Macro, credit & commodit
ies trad
ing
• Lending & financ
ial solut
ions
• Capital markets & advisory
Transaction Services
• Payments and liqu
id
ity solutions
• Trade & Working capital
• Securit
ies & pr
ime services
Wealth Solutions
• Investments
• Bancassurance
• Wealth advice
• Portfolio management
Retail Products
• Deposits
• Mortgages
• Credit cards
• Personal loans
Our sustainab
il
ity capabil
ity
is an integral part of our client offering across all our business segments,
and the Group as a whole.
Responsible business practices
•
We strive to be a responsible business by operational
is
ing our net zero targets, managing environmental and social risks,
and acting transparently.
Bespoke sustainable finance solutions
•
We offer sustainable finance solutions designed to help our clients address environmental and social challenges and
achieve sustainable growth.
Innovation in service of our markets
•
We advocate in service of our markets to unlock the areas where capital is not flowing at scale or not at all and to drive
economic inclus
ion.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
11
Strategic report continued
Our resources provide the strong foundation that helps us deliver our strategy.
Human capital
Divers
ity d
ifferent
iates us;
it is in our Purpose statement. Deliver
ing our strategy rests on how we cont
inue to invest in our
people, the employee experience, and culture.
International network
Our network is our unique competit
ive advantage and connects corporates, financial
inst
itut
ions, ind
iv
iduals and small and
medium enterprises across some of the world’s fastest-growing and most dynamic markets.
Local expertise
We are deeply rooted in the markets where we operate, offering us ins
ights that help our cl
ients achieve their ambit
ions
locally and across the borders.
Brand recognit
ion
We are a leading internat
ional bank
ing group with 170 years of history. In many of our markets, we are a household name.
Financ
ial strength
With our solid balance sheet and prudent financ
ial management, we are a strong and trusted partner for our cl
ients.
Technology
Our strong dig
ital foundat
ions and leading technological capabil
it
ies continue to enable a data-driven dig
ital bank that
delivers world-class client service.
We create long-term value for a broad range of stakeholders.
Clients
We deliver banking solutions for our clients across our network, both dig
itally and
in person. We help ind
iv
iduals grow
their wealth while connecting corporates and financ
ial
inst
itut
ions to opportunit
ies across our network.
Employees
We believe that great employee experience drives great client experience. We want all our people to pursue their ambit
ions,
deliver with purpose and have a rewarding career enabled by great people leaders.
Suppliers
We engage diverse suppliers, locally and globally, to provide effic
ient and susta
inable goods and services for our business.
Investors
We aim to deliver robust returns and long-term sustainable value for our investors.
Regulators and governments
We play our part in supporting the effective function
ing of the financial system and the broader economy by proact
ively
engaging with public authorit
ies.
Society
We strive to operate as a sustainable and responsible company, working with local partners to promote social and
economic development.
Strategic report continued
Standard Chartered Bank
12
Directors’ Report and Financ
ial Statements 2024
Client segment reviews
Corporate & Investment Banking
Profit before taxation
$3,787m
Segment overview
Corporate & Investment Banking supports local and large corporations, governments, banks and investors with their
transaction services, banking and financ
ial markets needs. We prov
ide different
iated cross-border capab
il
it
ies to clients in
some of the world’s fastest-growing economies and most active trade corridors. Our clients operate or invest in several
markets across the globe.
Our strong and deep local presence enables us to help co-create bespoke financing solut
ions and connect our clients
multilaterally to investors, suppliers, buyers and sellers. Our products and services enable our clients to move capital, manage
risk and invest to create wealth. Our clients represent a large and important part of the economies we serve. Corporate and
Investment Banking is at the heart of the Group’s shared purpose to drive commerce and prosperity through our unique
divers
ity.
We are also committed to promoting sustainable finance in our markets and channelling capital to where the impact will
be greatest. We are deliver
ing on our amb
it
ion to support susta
inable economic growth, increas
ing support
and funding for financ
ial offer
ings that have a posit
ive
impact on our communit
ies and env
ironment.
Performance highl
ights
•
Profit before taxation of $3,787 mill
ion down 3 per cent dr
iven by higher costs and impa
irments, partly offset by h
igher
income.
•
Operating income of $8,531 mill
ion was up 6 per cent dr
iven by higher orig
inat
ion volumes in Global Banking and growth in
flow income in Global Markets, partly offset by lower trade volumes.
•
Operating Expense of $4,794 mill
ion was up 12 per cent due to h
igher staff costs and investments.
•
Credit impa
irment
is a net writeback of $262m, due to sign
ificant releases
in Stage 3. Other impa
irment
is a charge of
$212 mill
ion and
is related to software impa
irments.
Wealth & Retail Banking
Profit before taxation
$1,006m
Segment overview
Wealth & Retail Banking serves ind
iv
iduals and small businesses, with a focus on the affluent segment which encompasses
Private Bank, Prior
ity Pr
ivate, Prior
ity Bank
ing, and Premium. In the mass retail space, we are focused on emerging affluent
clients who will progress in their wealth journey with us and form the pipel
ine of future affluent cl
ients.
We are a leading wealth manager in Asia, Africa and the Middle East, as our deep local presence and internat
ional network
enables us to capture the strong structural tailw
inds wh
ich are driv
ing cross-border wealth flows.
Our comprehensive product proposit
ions span across depos
its, payments, financ
ing, adv
isory, investments and
bancassurance. In particular, our open product architecture allows us to collaborate and innovate with product partners to
offer best-in-class and first-to-market wealth solutions to our clients. We also support our small business clients with their
trade, working capital and other banking needs.
Wealth & Retail Banking is closely integrated with the Group’s other client segments; for example, we offer employee banking
services to Corporate & Investment Banking clients, and we also provide a source of high-quality liqu
id
ity for the Group.
Performance highl
ights
•
Profit before taxation of $1,006 mill
ion down 23 per cent dr
iven by higher costs and impa
irments, partly offset by h
igher
income.
•
Operating income of $3,706 mill
ion was up 6 per cent, due to by Wealth Solut
ions (Investment Products), Deposits
(due to volume growth), and Unsecured Lending.
•
Operating Expense of $2,339 mill
ion was up 13 per cent on account of
inflat
ion and frontl
ine hir
ing.
•
Credit impa
irment was a net charge of $286 m
ill
ion and relates to h
igher provis
ions
in Stage 3 and normal flows and higher
delinquenc
ies
in Stages 1 and 2. Other impa
irment
is a charge of $75 mill
ion and
is related to software impa
irments.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
13
Strategic report continued
Ventures
Profit before taxation
$(80)m
Segment overview
Ventures is comprised of Trust Bank, which is Singapore’s first dig
itally nat
ive bank, launched in partnership with FairPr
ice
Group in September 2022. It has become one of the world’s fastest growing dig
ital banks, rap
idly expanding to 974,000
customers in Singapore by the end of 2024 and build
ing a w
ide range of innovat
ive products and serv
ices.
Performance highl
ights
•
Loss before tax of $80mill
ion decreased by $177m
ill
ion dr
iven by lower cost aris
ing from pr
ior year disposal of SC Ventures
business, as well as growth in both customer numbers and volumes in Trust Bank.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
14
Strategic report continued
Financ
ial rev
iew
Summary of financial performance
2024
$mill
ion
2023
$mill
ion
Change
%
Net Interest income
4,400
4,607
(5)
Non NII
8,014
6,942
15
Operating income
12,414
11,549
7
Operating expenses
(7,550)
(7,147)
(6)
Operating profit before impa
irment and taxat
ion
4,864
4,402
10
Credit impa
irment
(15)
58
(126)
Goodwill & Other impa
irment
(410)
(42)
nm
Profit/(Loss) from associates and jo
int ventures
8
(4)
nm
Profit before taxation
4,447
4,414
1
Taxation
(1,465)
(1,177)
(24)
Profit for the period
2,982
3,237
(8)
Operating income
increased 7 per cent. Excluding three notable items relating to gains on revaluation of FX posit
ions
in
Egypt, hyperinflat
ionary account
ing adjustments in Ghana, and loss/gain on subsid
iar
ies disposals, as well as the
reclassif
icat
ion of deposit insurance premium to expenses (the reclassif
icat
ion), operating income was up 10 per cent and
was driven by growth in Non net interest income (Non NII).
Net interest income (NII)
decreased 5 per cent, driven by lower volumes and impact of elevated pass through rates on
margins, partly offset by short-term hedge roll off. Excluding the reclassif
icat
ion, NII decreased 6 percent.
Non NII
increased 15 per cent driven by higher orig
inat
ion volumes and fees in Global Banking, robust flow and episod
ic
income in Global Markets and sustained momentum in Wealth Solutions. Excluding notable items, Non NII increased 21 per
cent.
Operating expenses
are up 6 per cent or 5 per cent excluding the reclassif
icat
ion. This was largely driven by inflat
ion, strateg
ic
investments and continued investments into business growth in
it
iat
ives.
Credit impa
irment
is a net charge of $15mill
ion and
is driven by normal flows and higher delinquenc
ies
in WRB partially
offset by releases in CIB.
Other impa
irment
is a net charge of $410m, of which $383m relates to write-off of software assets.
Taxation
of $1,465 mill
ion for the year represents an effect
ive tax rate of 33 per cent against prior year effective tax rate of
27%, and is due to increased non-creditable withhold
ing taxes and other taxes, as well as loss on sale of subs
id
iar
ies in
Africa for which tax relief is not available.
Profit/(loss) before tax by client segment
2024
$mill
ion
2023
(Restated)¹
$mill
ion
Change
%
Corporate & Investment Banking
3,787
3,886
(3)
Wealth & Retail Banking
1,006
1,304
(23)
Ventures
(80)
(257)
69
Central & other items (segment)
(266)
(519)
49
Profit before taxation
4,447
4,414
1%
1
Prior period amounts have been restated to align with changes to the current year presentation which now reflect the impact of restructuring cost and gain on sale of
businesses.
Corporate & Investment Banking (CIB)
profit decreased 3 percent driven by higher cost and software impa
irments, partly
offset by higher income, largely from Global Banking and Global Markets, and stage 3 Expected Credit Loss (ECL) releases.
Wealth & Retail Banking (WRB)
profit decreased 23 percent driven by higher costs and credit impa
irments, partly offset
by higher income from Wealth Solutions.
Ventures
loss lower than prior year due to lower cost aris
ing from pr
ior year disposal of SC Ventures business.
Central & Other items (C&O)
loss is 49 per cent lower than prior year, driven by benefits from the roll-off of short-term hedges,
translation gains on the revaluation of FX posit
ions
in Egypt and gain relating to a hyperinflat
ionary account
ing adjustment
in Ghana, partly offset by non-repeat of gain from subsid
iary d
isposal in previous year.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
15
Strategic report continued
Credit risk summary
Balance Sheet
2024
$mill
ion
2023
$mill
ion
Change
1
%
Gross loans and advances to customers
2
161,141
159,552
1
Of which stage 1
149,751
146,718
2
Of which stage 2
7,292
7,657
(5)
Of which stage 3
4,098
5,177
(21)
Expected credit loss provis
ions
(2,899)
(3,409)
(15)
Of which stage 1
(254)
(198)
28
Of which stage 2
(193)
(193)
–
Of which stage 3
(2,452)
(3,018)
(19)
Net loans and advances to customers
158,242
156,143
1
Of which stage 1
149,497
146,520
2
Of which stage 2
7,099
7,464
(5)
Of which stage 3
1,646
2,159
(24)
Cover ratio of stage 3 before/after collateral (%)
3
60/74
58/73
2/1
Credit grade 12 accounts ($mill
ion)
892
2,117
(58)
Early alerts ($mill
ion)
3,830
3,791
1
Investment grade corporate exposures (%)
3
75
75
–
1
Variance is increase/(decrease) comparing current reporting period to prior reporting period
2
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $9,121 mill
ion at 31 December 2024
(31 December 2023: $13,827 mill
ion)
3
Change is the percentage points difference between the two points rather than the percentage change
Net charge-off ratio
2024
2023
Credit
impa
irment
(charge)/
release for the
year/ period
$mill
ion
Net average
exposure
$mill
ion
Net Charge-
off Ratio
%
Credit
impa
irment
(charge)/
release for the
year/ period
$mill
ion
Net average
exposure
$mill
ion
Net
Charge-off
Ratio
%
Stage 1
(18)
171,508
0.01%
32
169,013
(0.02)%
Stage 2
(158)
7,142
2.21%
(132)
7,154
1.85%
Stage 3
118
1,861
(6.34)%
45
2,358
(1.91)%
Total exposure
(58)
180,511
0.03%
(55)
178,525
0.03%
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
16
Strategic report continued
Balance sheet and liqu
id
ity
2024
$mill
ion
2023
$mill
ion
Assets
Loans and advances to banks
22,941
22,803
Loans and advances to customers
158,242
156,143
Other assets
382,351
359,633
Total assets
563,534
538,579
Liab
il
it
ies
Deposits by banks
22,409
23,616
Customer accounts
239,204
237,902
Other liab
il
it
ies
267,805
243,117
Total liab
il
it
ies
529,418
504,635
Equity
34,116
33,944
Total equity and liab
il
it
ies
563,534
538,579
Advances-to-deposits ratio (%)
1
53.9%
50.5%
1
Advances exclude $19,187mill
ion held w
ith central banks (31 December 2023: $20,710 mill
ion) that have been confirmed as repayable at the po
int of stress, repurchase
agreements and other sim
ilar secured lend
ing of $9,121 mill
ion (31 December 2023: $13,827 m
ill
ion) and
include loans and advances to customers held at fair value
through profit or loss of $3,989 mill
ion (31 December 2023: $3,188 m
ill
ion). Depos
its include customer accounts held at fair value through profit or loss of $9,222 mill
ion (31
December 2023: $9,166 mill
ion)
The Group’s balance sheet is strong, highly liqu
id and d
ivers
ified.
Loans and advances to customers increased 1 per cent since December 2023 to $158 bill
ion due ma
inly to higher orig
inat
ion
volumes in Global Banking.
Customer accounts of $239 bill
ion decreased by 1 per cent s
ince December 2023 driven mainly by increase in retail term deposits.
Capital base and ratios
2024
$mill
ion
2023
$mill
ion
CET1 capital
22,475
21,794
Addit
ional T
ier 1 capital (AT1)
5,897
5,453
Tier 1 capital
28,372
27,247
Tier 2 capital
10,553
11,607
Total capital
38,925
38,854
CET1 capital ratio (%)
13.3%
13.2%
Total capital ratio (%)
23.0%
23.5%
Leverage ratio (%)
5.1%
5.0%
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
17
Strategic report continued
Capital disclosures in this document are provided on the basis of Standard Chartered (Group), being Standard Chartered
Bank and its subsid
iar
ies.
Standard Chartered Bank is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financ
ial Conduct
Authority (FCA).
Capital requirements are set by the PRA for Standard Chartered Bank on a solo-consolidat
ion bas
is. The solo-consolidated
group differs from Standard Chartered Bank (Company) in that it includes the full consolidat
ion of four subs
id
iar
ies, namely
Standard Chartered Holdings (International) B.V., Standard Chartered Grindlays PTY Lim
ited, SCMB Overseas L
im
ited and
Corrasi Covered Bonds LLP.
The Group continues to operate through its branches and various subsid
iar
ies, all of which remain well-capital
ised
in
accordance with their applicable risk appetites and applicable regulatory requirements.
The Group’s CET1 capital ratio increased by 12bps to 13.3 per cent at 31 December 2024 with leverage ratio of 5.1 per cent. The
Group mainta
ins h
igh levels of loss absorbing capacity.
RWAs increased by $3.6 bill
ion to $169.2 b
ill
ion. CET1 cap
ital increased by $0.7 bill
ion to $22.5 b
ill
ion dr
iven primar
ily by profits
of $3 bill
ion, lower regulatory deduct
ions of $0.6 bill
ion (largely from
intang
ible assets), and movements
in other
comprehensive income of $0.2 bill
ion. These
increases were partially offset by distr
ibut
ions of $2.7 bill
ion and the fore
ign
currency translation impact of $0.4 bill
ion.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
18
Our business
Standard Chartered Bank is authorised by the Prudential Regulation Authority (PRA) and regulated by the PRA and by
the Financ
ial Conduct Author
ity (FCA). The PRA is the consolidated supervisor in respect of the Group (of which PLC is the
ultimate parent).
Standard Chartered Bank is a material subsid
iary of the PLC Group for the purposes of the Bank of England-led s
ingle point of
entry preferred resolution strategy for the PLC Group. The Group is a core part of, and crit
ical prov
ider of essential services to
the PLC Group and is fundamental to the delivery of the PLC Group’s purpose, franchise, and strategy.
Clients
•
The Group remains the largest Corporate & Investment Banking (CIB) orig
inat
ion hub supporting a sign
ificant
part of CIB revenues and is key to the global network proposit
ion
•
The Group is the relationsh
ip hub for the majority of key CIB cl
ients, particularly Organisat
ion for Econom
ic
Co-operation and Development (OECD) clients
•
The Group holds the majority of the PLC Group’s corporate and financial
inst
itut
ions deposits, a sign
ificant
part of the PLC Group’s USD funding base
Capabil
it
ies
•
The Group holds key licenses and hosts infrastructure vital for the global franchise such as global USD & EUR clearing
•
The Group is the main Global Markets booking centre supporting the major
ity of Global Market revenues
•
The Group remains a main access point to high quality USD funding
Crit
ical
infrastructure
•
The Group is the key liqu
id
ity management centre: holding the major
ity of the PLC Group’s h
igh-quality liqu
id
assets for regulatory purposes
•
The Group provides functional support on a global basis
•
The Group operates global business services hubs for the benefit of the PLC Group includ
ing shared serv
ice
centres and centres of excellence
Investors
•
The Group’s UK domic
ile underp
ins a unique investor proposit
ion: emerg
ing markets access from
a UK regulated platform
•
A sign
ificant number of PLC Group’s equ
ity and debt investors are based in the Group’s footprint
Recovery and
resolution
•
Standard Chartered Bank is the largest material subsid
iary for the purposes of m
in
imum requ
irement for own
funds and elig
ible l
iab
il
it
ies (MREL) and total loss-absorb
ing capital (TLAC)
•
The Group is crit
ical to the del
ivery of capital and liqu
id
ity generating management actions in PLC Group’s
recovery planning
•
The Group houses various crit
ical serv
ices and crit
ical funct
ions in resolution and resolution management
The Group’s Credit Ratings
The Group remains a highly rated inst
itut
ion (in both absolute and relative terms). Moody’s revised the rating outlook on
Standard Chartered Bank in September 2024 to posit
ive from stable, reflect
ing improv
ing profitabil
ity and expectations
that asset quality, capital
isat
ion and liqu
id
ity would remain stable. S&P and Fitch ratings are on stable outlook.
S&P
Moody’s
Fitch
Long Term
A+
A1
A+
Short Term
A-1
P-1
F1
Outlook
Stable
Posit
ive
Stable
Strategic report continued
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
19
Risk review
An update on our risk management approach
Our Risk Management Framework (RMF) sets out the princ
iples and m
in
imum requ
irements for risk management and
governance across the Group. The RMF enables the Group to manage enterprise-wide risks, with the object
ive of max
im
is
ing
risk-adjusted returns while remain
ing w
ith
in our R
isk Appetite (RA).
Princ
ipal R
isk Types and Risk Appetite
Princ
ipal R
isk Types (PRTs) are those risks that are inherent in our strategy and business model and have been formally
defined in the Group’s RMF.
The table below details the Group’s current PRTs and their corresponding RA statements.
Princ
ipal R
isk Types
Definit
ion
Risk Appetite Statement
Credit Risk
Potential for loss due to failure of a counterparty
to meet its agreed obligat
ions to pay the Group.
The Group manages its credit exposures following the
princ
iple of d
ivers
ification across products, geograph
ies,
client segments and industry sectors.
Traded Risk
Potential for loss resulting from activ
it
ies
undertaken by the Group in financ
ial markets.
The Group should control its financ
ial markets act
iv
it
ies to
ensure that market and counterparty credit risk losses do
not cause material damage to the Group’s franchise.
Treasury Risk
Potential for insuff
ic
ient capital, liqu
id
ity, or funding
to support our operations, the risk of reductions in
earnings or value from movements in interest rates
impact
ing bank
ing book items and the potential for
losses from a shortfall in the Group’s pension plans.
Indiv
idual regulated ent
it
ies w
ith
in the Group should
mainta
in sufficient cap
ital, liqu
id
ity, and funding to support
its operations, and an interest rate profile ensuring that the
reductions in earnings or value from movements in interest
rates impact
ing bank
ing book items does not cause material
damage to the Group’s franchise. In addit
ion, the Group
should ensure its pension plans are adequately funded.
Operational and
Technology Risk
Potential for loss resulting from inadequate or
failed internal processes, technology events,
human error, or from the impact of external events
(includ
ing legal r
isks).
The Group aims to control operational and technology risks
to ensure that operational losses (financ
ial or reputat
ional),
includ
ing those related to the conduct of bus
iness matters,
do not cause material damage to the Group’s franchise.
Information and
Cyber Security Risk
Risk to the Group’s assets, operations, and ind
iv
iduals
due to the potential for unauthorised access, use,
disclosure, disrupt
ion, mod
if
icat
ion, or destruction of
informat
ion assets and/or
informat
ion systems.
The Group aims to mit
igate and control ICS r
isks to ensure
that inc
idents do not cause the Bank mater
ial harm,
business disrupt
ion, financial loss or reputat
ional damage
– recognis
ing that wh
ilst inc
idents are unwanted, they
cannot be entirely avoided.
Financ
ial Cr
ime Risk
1
Potential for legal or regulatory penalties, material
financial loss or reputat
ional damage resulting
from the failure to comply with applicable laws
and regulations relating to internat
ional sanct
ions,
anti-money laundering and anti-bribery and
corruption, and fraud.
The Group has no appetite for breaches of laws
and regulations related to Financ
ial Cr
ime, recognis
ing
that whilst inc
idents are unwanted, they cannot be
entirely avoided.
Compliance Risk
Potential for penalties or loss to the Group or
for an adverse impact to our clients, stakeholders
or to the integr
ity of the markets we operate
in
through a failure on our part to comply with laws,
or regulations.
The Group has no appetite for breaches of laws and
regulations related to regulatory non-compliance;
recognis
ing that wh
ilst inc
idents are unwanted,
they cannot be entirely avoided.
Environmental,
Social and
Governance and
Reputational
(ESGR) Risk
Potential or actual adverse impact on the
environment and/or society, the Group’s financ
ial
performance, operations, or the Group’s name, brand
or standing, aris
ing from env
ironmental, social or
governance factors, or as a result of the Group’s
actual or perceived actions or inact
ions.
The Group aims to measure and manage financ
ial and
non-financial r
isks aris
ing from cl
imate change, reduce
emiss
ions
in line with our net zero strategy and protect the
Group from material reputational damage by upholding
responsible conduct and striv
ing to do no s
ign
ificant
environmental and social harm.
Model Risk
Potential loss that may occur because of decis
ions or
the risk of mis-estimat
ion that could be pr
inc
ipally
based on the output of models, due to errors in the
development, implementat
ion, or use of such models.
The Group has no appetite for material adverse impl
icat
ions
aris
ing from m
isuse of models or errors in the development
or implementat
ion of models; wh
ilst accepting some
model uncertainty.
1
Fraud forms part of the Financ
ial Cr
ime RA Statement but in line with market practice does not apply a zero-tolerance approach
As of November 2024, the Climate Risk RA statement was integrated into the ESGR PRT.
> Further details on our
Risk Management Approach
can be found on pages 45 to 57.
Strategic report continued
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
22
Supply chain issues and key material shortages
While the in
it
ial disrupt
ion caused by the Russ
ia–Ukraine and Middle East conflicts have somewhat abated, they highl
ighted
the continued vulnerabil
ity of global supply l
ines.
There is growing polit
ical awareness around the need for key component and resource secur
ity at national level. Countries
are enacting rules to “de-risk” by reducing reliance on rivals or concentrated suppliers (for example, semi-conductors) and
look to either re-industr
ial
ise or make use of near-shoring and friend-shoring production.
Countries’ increased will
ingness to
impose trade barriers to influence trading behaviour may disrupt exporters, strain relations
with trade partners and add to inflat
ionary pressures. A recent example
is the EU probe into unfair commercial practices in
the provis
ion of renewable energy equ
ipment, particularly subsid
ies related to offshore w
ind and solar energy.
The growing need for minerals and rare earth elements to power green energy technologies can be leveraged to achieve
economic or polit
ical a
ims by restrict
ing access. Th
is can bolster the negotiat
ing
influence of the main refiners and producers,
such as China, Indonesia and some African nations, while prompting some nations to slow down their green transit
ion plans.
Actions have already been taken in Western nations to de-risk through in
it
iat
ives such as the M
inerals Security Partnership.
How these risks are mit
igated
•
We remain vig
ilant
in monitor
ing r
isk and assessing impacts from geopolit
ical and macroeconom
ic risks to
portfolio concentrations.
•
We explored the impl
icat
ions of a second Trump admin
istrat
ion, evaluating policy direct
ion under d
ifferent scenarios,
the potential outcomes and challenges associated with each.
•
We mainta
in a d
ivers
ified portfol
io across products and geographies, with specif
ic r
isk appetite metrics to
monitor concentrations.
•
We are performing targeted portfolio analyses to ident
ify cl
ients that may be impacted by a new wave of tariffs.
•
Mit
igat
ions in our Wealth & Retail Banking segment include build
ing a res
il
ient revenue base and ma
inta
in
ing close
relations with clients for the awareness of early alerts.
•
Increased scrutiny is applied when onboarding clients in sensit
ive
industr
ies and
in ensuring compliance with sanctions.
•
We util
ise Cred
it Risk mit
igat
ion measures includ
ing collateral and cred
it insurance.
•
We conduct portfolio reviews as well as macroeconomic, thematic and event-driven stress tests at Group, country,
and business level, with regular reviews of vulnerable sectors, and undertake mit
igat
ing actions.
•
We have a dedicated country risk team that closely monitors sovereign risk.
•
We run a series of daily market risk stress scenarios to assess the impact of unlikely but plausible market shocks.
•
We run a suite of management scenarios with differ
ing sever
it
ies to assess the
ir impact on key risk appetite metrics.
•
We regularly review our third-party arrangements to improve operational resil
ience.
ESG considerat
ions
ESG risk
Higher frequencies of extreme weather events are observed each year and the cost of managing the climate impacts is
increas
ing, w
ith the burden disproport
ionately borne by develop
ing markets, where we have a large footprint. Alongside
climate, other environmental risks pose incremental challenges to food, health systems and energy security; for example,
biod
ivers
ity loss, pollution, and depletion of water.
Modern slavery and human rights concerns are increas
ingly
in focus with the scope expanding beyond direct operations
to extended supply chains and vendors.
ESG regulation continues to develop across the world, often with differ
ing taxonom
ies and disclosure requirements.
This increased regulation is also generating stakeholder scrutiny on greenwashing risk, with ESG lit
igat
ion being brought
against corporations and governments in multiple markets.
However, a succession of polit
ical, soc
ial and economic disrupt
ions
in recent years have diverted attention and resources
away from longer-term action on climate and sustainable development as competing spending demands are made of
stretched budgets. This will be further exacerbated by the new Trump admin
istrat
ion, which has rolled back green energy
polic
ies, and w
ithdrawn the US from the Paris Agreement.
For companies and governments, the trade-off between pragmatism and environmentalism has crystallised with several
delaying or rolling back targets. For example, there has been a sign
ificant reduct
ion in the number of ESG-focused funds
launched in 2024, and there has been a lack of progress at the recent COP meeting. Several US and Canadian banks have
withdrawn from the Net-Zero Banking Alliance. A slower transit
ion to low carbon bus
iness models may impact progress
towards the Group’s net zero targets and product roadmap.
Strategic report continued
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
21
Uncertain interest rate trajectory and credit downturn
Although rate cuts have been enacted by all major central banks, with further cuts signalled, the scale and pace of cuts are
still highly uncertain. Structurally higher defic
its, cont
inued supply disrupt
ions, m
il
itary spend
ing and other inflat
ionary
pressures such as addit
ional tar
iffs may keep rates higher.
A ‘higher-for-longer’ rate environment would continue to stretch companies and sovereigns alike, with the global corporate
default rate remain
ing well above the post-financial cr
is
is average
in 2024. Stress has continued in the global commercial
real estate sector and may extend to fixed-rate mortgages. In contrast, aggressive cuts could renew inflat
ion.
Despite this, markets have remained surpris
ingly res
il
ient to adverse geopol
it
ical cond
it
ions and
inflat
ion forecasts. The
conflicts in the Middle East and Russia have not had a material impact on commodity prices and the wider global economy.
However, oil price volatil
ity could re-emerge should the US strengthen sanct
ions enforcement. While credit spreads remain
below those observed at the outbreak of the Russia–Ukraine conflict, volatil
ity and abrupt changes
in sentiment remain a risk.
Economic challenges in China
China’s growth rate looks unlikely to return to pre-pandemic levels. Although prelim
inary figures reported 2024 growth at 5
per cent, the IMF’s forecast is for a drop to 4.5 per cent in 2025. As a result of the subdued growth rate, China announced a
co-ordinated package of stimulus measures in the second half of 2024 to boost the economy with a focus on the stressed real
estate and local government sectors.
Competit
ion w
ith the US and the EU is intense, particularly around modern technologies. Areas such as electric vehicles and
AI are key battlegrounds. China’s industr
ial overcapac
ity leads to increased search for export markets; electric vehicles and
steel are prime examples. This is stoking trade-related frict
ions and provok
ing economic counter measures such as tariffs
announced by the US and the EU, with the new Trump admin
istrat
ion’s plans to impose further trade barriers on China also
looming.
To combat this China has sought agreements with other nations, such as the Associat
ion of Southeast As
ia Nations
(ASEAN)–China Free Trade Agreement. As well as strengthening economic ties, they allow Chinese companies to establish
manufacturing overseas, potentially circumvent
ing the worst of the restr
ict
ions.
China is also urging partners to increase the use of renminb
i (RMB)
in trade. In the first half of 2024, RMB’s share of global
payments was 4.7 per cent, over double that of a year earlier, making it the fourth most used currency for global payments
by value.
Given China’s importance to global trade, a prolonged slowdown would have wider impl
icat
ions across the supply chain,
especially for its trading partners, as well as for countries which rely on it for investment, such as those in Africa. However,
opportunit
ies ar
ise from the divers
ification of
intra-Asia trade and other global trade routes, and growth acceleration in
South Asia, especially India.
Sovereign risk
While a number of markets remain in debt distress, emerging markets have proven resil
ient
in 2024. Despite continued higher
rates, the last notable request for debt relief was made in early 2023. Progress has also been observed with Zambia and
Sri Lanka’s debt exchanges.
However bond issuance remains high, with global government debt set to exceed $100 trill
ion
in 2024, and potentially reach
100 per cent of global GDP by 2030. Markets are likely to find it diff
icult to reduce debt levels due to the preva
il
ing pol
it
ical
backdrop, weak GDP growth, demographic pressures and pressure to increase national security and defence.
While markets have remained opened for all categories of sovereign issuers, refinanc
ing costs have been r
is
ing, and
interest
payments are an increas
ing burden on both emerg
ing and developed markets. Emerging markets in particular will continue
to be affected by US dollar strengthening, which has intens
ified s
ince the US election. This would impact through multiple
avenues, namely higher import prices, lower flexib
il
ity in monetary policy and making refinanc
ing ex
ist
ing debt or access
ing
hard currency liqu
id
ity more challenging.
Some countries also face a heightened risk of fail
ing to manage soc
ietal demands and increas
ing pol
it
ical vulnerab
il
ity, as
evidenced by France’s recent downgrade. Food and security challenges exacerbated by armed conflict and climate change
also have the potential to drive social unrest.
Debt moratoria and refinanc
ing
in
it
iat
ives for some emerg
ing markets are complicated by a larger number of financ
iers, w
ith
much financing done on a b
ilateral basis outside of the Paris Club. Whilst the Global Sovereign Debt Roundtable has made
some progress on coordinat
ing approaches between the Par
is Club and other lenders, their interests do not always match.
This can lead to delays in negotiat
ions on debt resolut
ions for developing nations.
Strategic report continued
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
22
Supply chain issues and key material shortages
While the in
it
ial disrupt
ion caused by the Russ
ia–Ukraine and Middle East conflicts have somewhat abated, they highl
ighted
the continued vulnerabil
ity of global supply l
ines.
There is growing polit
ical awareness around the need for key component and resource secur
ity at national level. Countries
are enacting rules to “de-risk” by reducing reliance on rivals or concentrated suppliers (for example, semi-conductors) and
look to either re-industr
ial
ise or make use of near-shoring and friend-shoring production.
Countries’ increased will
ingness to
impose trade barriers to influence trading behaviour may disrupt exporters, strain relations
with trade partners and add to inflat
ionary pressures. A recent example
is the EU probe into unfair commercial practices in
the provis
ion of renewable energy equ
ipment, particularly subsid
ies related to offshore w
ind and solar energy.
The growing need for minerals and rare earth elements to power green energy technologies can be leveraged to achieve
economic or polit
ical a
ims by restrict
ing access. Th
is can bolster the negotiat
ing
influence of the main refiners and producers,
such as China, Indonesia and some African nations, while prompting some nations to slow down their green transit
ion plans.
Actions have already been taken in Western nations to de-risk through in
it
iat
ives such as the M
inerals Security Partnership.
How these risks are mit
igated
•
We remain vig
ilant
in monitor
ing r
isk and assessing impacts from geopolit
ical and macroeconom
ic risks to
portfolio concentrations.
•
We explored the impl
icat
ions of a second Trump admin
istrat
ion, evaluating policy direct
ion under d
ifferent scenarios,
the potential outcomes and challenges associated with each.
•
We mainta
in a d
ivers
ified portfol
io across products and geographies, with specif
ic r
isk appetite metrics to
monitor concentrations.
•
We are performing targeted portfolio analyses to ident
ify cl
ients that may be impacted by a new wave of tariffs.
•
Mit
igat
ions in our Wealth & Retail Banking segment include build
ing a res
il
ient revenue base and ma
inta
in
ing close
relations with clients for the awareness of early alerts.
•
Increased scrutiny is applied when onboarding clients in sensit
ive
industr
ies and
in ensuring compliance with sanctions.
•
We util
ise Cred
it Risk mit
igat
ion measures includ
ing collateral and cred
it insurance.
•
We conduct portfolio reviews as well as macroeconomic, thematic and event-driven stress tests at Group, country,
and business level, with regular reviews of vulnerable sectors, and undertake mit
igat
ing actions.
•
We have a dedicated country risk team that closely monitors sovereign risk.
•
We run a series of daily market risk stress scenarios to assess the impact of unlikely but plausible market shocks.
•
We run a suite of management scenarios with differ
ing sever
it
ies to assess the
ir impact on key risk appetite metrics.
•
We regularly review our third-party arrangements to improve operational resil
ience.
ESG considerat
ions
ESG risk
Higher frequencies of extreme weather events are observed each year and the cost of managing the climate impacts is
increas
ing, w
ith the burden disproport
ionately borne by develop
ing markets, where we have a large footprint. Alongside
climate, other environmental risks pose incremental challenges to food, health systems and energy security; for example,
biod
ivers
ity loss, pollution, and depletion of water.
Modern slavery and human rights concerns are increas
ingly
in focus with the scope expanding beyond direct operations
to extended supply chains and vendors.
ESG regulation continues to develop across the world, often with differ
ing taxonom
ies and disclosure requirements.
This increased regulation is also generating stakeholder scrutiny on greenwashing risk, with ESG lit
igat
ion being brought
against corporations and governments in multiple markets.
However, a succession of polit
ical, soc
ial and economic disrupt
ions
in recent years have diverted attention and resources
away from longer-term action on climate and sustainable development as competing spending demands are made of
stretched budgets. This will be further exacerbated by the new Trump admin
istrat
ion, which has rolled back green energy
polic
ies, and w
ithdrawn the US from the Paris Agreement.
For companies and governments, the trade-off between pragmatism and environmentalism has crystallised with several
delaying or rolling back targets. For example, there has been a sign
ificant reduct
ion in the number of ESG-focused funds
launched in 2024, and there has been a lack of progress at the recent COP meeting. Several US and Canadian banks have
withdrawn from the Glasgow Financ
ial All
iance on Net Zero. A slower transit
ion to low carbon bus
iness models may impact
progress towards the Group’s net zero targets and product roadmap.
Strategic report continued
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
23
Strategic report continued
How these risks are mit
igated
•
Climate Risk considerat
ions are embedded across all relevant Pr
inc
ipal R
isk Types. This includes client-level
Climate Risk assessments, includ
ing sett
ing adequate mit
igants or controls as part of dec
is
ion mak
ing and portfolio
management activ
it
ies.
•
We embed our values through our Posit
ion Statements for sens
it
ive sectors and a l
ist of prohib
ited act
iv
it
ies. We also
mainta
in ESG and Reputat
ional Risk standards to ident
ify, assess and manage these r
isks when provid
ing financial
services to clients.
•
The management of greenwashing risks has been integrated into our ESG and Reputational Risk Framework, Reputational
Risk policy, Sustainable Finance product greenwashing standard, and Corporate Affairs, Brand and Marketing standards
for communicat
ions and segment campa
igns.
•
Detailed portfolio reviews and stress tests are conducted to test resil
ience to cl
imate-related physical and transit
ion r
isks
and enhance modelling capabil
it
ies to understand the financ
ial r
isks and opportunit
ies from cl
imate change.
•
We assess our relevant corporate clients and suppliers against various internat
ional human r
ights princ
iples, as well as
through our social safeguards.
+ Modern Slavery Statement:
sc.com/modernslavery
+ Human Rights Posit
ion Statement:
sc.com/humanrights
New business structures, channels and competit
ion
Competit
ion ar
is
ing from technolog
ical developments and non-bank lending
Tradit
ional bank
ing faces challenges in its external competit
ive env
ironment from a range of fintechs and private credit
players, which dis
intermed
iate and cause disrupt
ion to trad
it
ional lenders as well as publ
ic markets. There are also ‘dig
ital
enterprise’ business models, which integrate financ
ial serv
ices with emerging technologies like AI, big data analytics and
cloud computing fostering financ
ial d
is
intermed
iat
ion.
The rapid adoption of AI in particular raises a broad spectrum of challenges and opportunit
ies. There has been a large
increase of AI use in frauds and scams, and there are potential societal and economic impacts of the technology being used
to replace jobs across most sectors. However, with AI tools and models being embedded into everyday life it is likely to
become a foundational technology. Leveraging the benefits of augmented AI while managing these risks will be a core
part of the Group’s business model.
While there are challenges, banks themselves also have an opportunity to defend or leverage their competit
ive advantage
by harnessing new technologies, partnerships or new asset classes.
In the longer term, increased adoption of stable coins and dig
ital currenc
ies could sim
ilarly create alternat
ive deposit
channels and bank dis
intermed
iat
ion.
The rapid adoption of new technologies, partnership models or dig
ital assets by banks br
ings a range of inherent risks,
requir
ing clear operat
ing models and risk frameworks. It is essential to upskill our people to develop in-house expertise
and capabil
it
ies to manage associated risks, includ
ing model r
isks or managing external third parties which deliver these
technologies. We must ensure that the people, process and technology agendas are viewed holist
ically to ensure the most
effective and effic
ient
implementat
ion of new
infrastructure
Cyber security and data challenges
The Group’s dig
ital footpr
int is expanding. This increases inherent cyber risk as more services and products are dig
it
ised,
outsourced and made more accessible. Highly interconnected and extended enterprises drive effic
ienc
ies but can expand
the opportunit
ies ava
ilable for malic
ious actors to ga
in entry or access to corporate assets. This includes infrastructure such
as cloud and third-party enabled services.
The risk of cyber inc
idents
is amplif
ied by h
ighly organised and resourced threat actors includ
ing organ
ised crime and nation
states, with malic
ious act
iv
ity made eas
ier through the commodit
isat
ion or “as a service” access to malic
ious tools and
technologies. Emerging technology such as AI is enabling novel or augmented attack types, and cross-border tensions further
drive the arms race to develop more capable and innovat
ive cyber capab
il
it
ies, both offensive and defensive.
Geopolit
ical dynam
ics are leading to progressively fragmented and divergent regulatory frameworks through which
the Group must navigate. There are growing data sovereignty requirements to localise data, systems and operations,
with data increas
ingly recogn
ised as being at the centre of global trade.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
24
How these risks are mit
igated
•
We monitor emerging technology trends, business models and opportunit
ies relevant to the bank
ing sector.
•
We invest in our capabil
it
ies to prepare for and protect against disrupt
ion and new r
isks.
•
We have established enhanced governance for novel areas, such as the Dig
ital Asset R
isk Committee and the Responsible
AI Council.
•
We manage data risks through our Compliance Risk Type Framework and informat
ion secur
ity risks through our
Information and Cyber Security (ICS) Risk Type Framework. We mainta
in a ded
icated Group Data Conduct Policy with
globally applicable standards. These standards undergo regular review to ensure alignment with changing regulations
and industry best practice.
•
We augment our data risk management capabil
it
ies and controls, includ
ing through programmes to enhance data qual
ity
and compliance with Basel Committee of Banking Supervis
ion 239 requ
irements and to address evolving legal and
regulatory requirements relating to privacy and personal data protection, cross-border data transfers and the use of AI,
with progress tracked at executive level risk governance committees.
•
Risks embedded in key software programmes are continuously reassessed together with enhancements made in testing
stages of new systems before they go live.
•
The Group has implemented a ‘defence-in-depth’ ICS control environment strategy to protect, detect and respond to
known and emerging ICS threats.
•
New risks aris
ing from partnersh
ips, alliances, dig
ital assets and generat
ive technologies are ident
ified through the
New Init
iat
ives Risk Assessment and Third-Party Risk Management Policy and Standards.
•
Work is already under way to gauge the potential benefits and threats of nascent technologies such as quantum computing.
Regulatory considerat
ions
Regulatory evolution and fragmentation
The regulatory framework for banks is expanding, becoming more complex and remains subject to continual evolution.
Another outcome of the new Trump admin
istrat
ion may be a relaxation of US regulation, and potentially a challenge to its
adoption of Basel 3.1 rules. The UK has postponed its implementat
ion of Basel 3.1 tw
ice, with the current deadline being 2027.
Aside from changes in prudential, financ
ial markets, cl
imate and data regulations, we antic
ipate a r
ise in consultations and
regulations relating to the use of AI, and particularly around its ethical applicat
ion
in decis
ion-mak
ing.
Jurisd
ict
ional risk arises from internat
ionally d
iverg
ing regulat
ions, with differ
ing pace and scale of regulatory adopt
ion,
conflict
ing rules, extraterr
itor
ial and local
isat
ion requ
irements around data, staff, capital and revenues. Data sovereignty
and ESG regulation are prime examples of jur
isd
ict
ional r
isk.
This makes it challenging for multinat
ional groups to manage cross-border act
iv
it
ies, as well as adding complexity and cost.
Such fragmented regulatory changes can also create frict
ions
in the market as a whole.
How these risks are mit
igated
•
We actively monitor regulatory developments, includ
ing those related to susta
inable finance, ESG, dig
ital assets and
AI and respond to consultations either bilaterally or through well-established industry bodies.
•
We track evolving country-specif
ic requ
irements, and actively collaborate with regulators to support important in
it
iat
ives.
•
We help shape regulation particularly in new areas like AI and Central Bank Dig
ital Currenc
ies through thought leadership,
and actively engaging with policymakers and central banks.
Strategic report continued
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
25
Strategic report continued
Demographic considerat
ions
Skills of the future
Evolving client expectations and the rapid development of technologies such as AI are transforming the workplace,
and further accelerating changes to how people deliver outcomes, connect and collaborate. The skills needed to grow
businesses and sustain careers are being disrupted as a result, with a balance of both technical and human skills becoming
increas
ingly cr
it
ical.
Workforce expectations also continue to evolve. ‘What’ work people do and ‘how’ they get to deliver it have become
different
iators
in attracting future-focused talent. There is greater desire to do work aligned to ind
iv
idual purpose and to
have increas
ing expectat
ions from employers to invest in skills and careers. These trends are even more dist
inct among
Millenn
ials and Gen Z who make up an ever-
increas
ing proport
ion of the global talent pool, and as dig
ital nat
ives possess the
attributes needed to pursue our strategy.
To sustainably attract, grow and retain the relevant skills and talent, we must continue to invest in build
ing future-focused
skills as well as further strengthen our Employee Value Proposit
ion (EVP) and brand prom
ise.
Demographic and migrat
ion trends
Divergent demographic trends across developed and emerging markets create contrasting challenges. Developed markets’
state budgets will be increas
ingly stra
ined by ageing and shrink
ing populat
ions, whilst polit
ical stances reduce the ab
il
ity
to fill skills gaps through imm
igrat
ion. Conversely, emerging markets are experienc
ing fast-grow
ing, younger workforces.
While it is an opportunity to develop talent, population growth will put pressure on key resources such as food and water,
as well as government budgets for education and health to capital
ise on the ‘demograph
ic div
idend’.
Population displacement is ris
ing am
id increased conflict and natural disasters, a lack of key resources, climate change, and
disturbances in public order. This may increase the fragil
ity of soc
ietal structures in vulnerable centres. The topics of both
forced and economic migrat
ion are
increas
ingly
influent
ial
in polit
ical d
iscourse, and have been a major focus of the Trump
admin
istrat
ion’s first weeks in office. Large scale movement, both internally displaced persons and cross border migrat
ion,
could cause social unrest, as well as propagate disease transmiss
ion and accelerate the spread of future pandem
ics. The
threat of terrorist activ
ity has also
increased in the latter half of 2024.
Addit
ionally net populat
ion growth for the 21st century will be in less-developed countries. Antic
ipat
ing and proactively planning
for these demographic shifts will be essential in mainta
in
ing an effic
ient global bus
iness model in the coming decades.
How these risks are mit
igated
•
We are helping colleagues to upskill and reskill, both through classroom sessions and our online learning platform.
We have an internal Talent Marketplace which enables colleagues to sign up for projects to access diverse experiences
and career opportunit
ies.
•
We place emphasis on skills and aspirat
ion to
ident
ify the talents to accelerate, as well as deploy
it in areas with the
highest impact for our clients and the business. We are pilot
ing a d
ifferent
iated learn
ing proposit
ion for these talents w
ith
the highest potential.
•
We emphasise frequent two-way feedback through performance and development conversations to embed a culture of
continuous learning and development.
•
Our culture and EVP work is addressing the emerging expectations of our diverse talent base, particularly around being
purpose-led.
•
We provide support and resources to all colleagues to help balance productiv
ity, collaborat
ion and wellbeing, with more
than 60 per cent of our workforce having signed up to work flexibly.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
26
Strategic report continued
Stakeholders and responsib
il
it
ies
As a global bank operating in 51 markets, stakeholder engagement is crucial in ensuring we understand local, regional and
global perspectives and trends which inform how we do business.
This section forms our
Section 172
disclosure, describ
ing how the d
irectors considered the matters set out in section 172(1)(a)
to (f) of the Companies Act 2006. It also forms the directors’ statement required under section 414CZA of the Act.
See the following pages for:
•
How we engage stakeholders to understand their interests. See pages 26 to 27.
•
we engage employees and respond to their interests. See pages 30 to 32.
•
we respond to stakeholder interests through sustainable and responsible business. See pages 33 to 34.
Detailed informat
ion about how the Court engages d
irectly with stakeholders and shareholders can be found in the
Director’s report on pages 36 to 42.
An example of the Court’s Princ
ipal dec
is
ion
is included in this section. This section also forms our key non-financ
ial d
isclosures
in relation to sections 414CA and 414CB of the Companies Act. Our non-financ
ial
informat
ion statement can be found at the
end of this section.
Princ
ipal Court dec
is
ions – market entr
ies and exits
In 2024, the Court approved a decis
ion to explore opt
ions to divest three African Wealth and Retail Banking (WRB) businesses
in Botswana, Uganda and Zambia, to refocus capital to the Group’s cross-border and affluent businesses in line with the
Group’s strategic object
ives. In tak
ing this decis
ion, the Court cons
idered the long-term advantages for the Group and the
businesses themselves, but also the shorter-term effects on the Group’s clients, employees and regulators before approving
the decis
ion. Once firm proposals for the d
ivestments are made, the Court will scrutin
ise the w
ider stakeholder impacts
carefully.
The Court offered its support for the decis
ion to accelerate the Group’s strateg
ic focus on offering cross-border corporate and
investment banking capabil
it
ies and wealth management for affluent clients. In CIB, we will concentrate on serving the
complex needs of our largest global clients, leveraging our unique cross-border capabil
it
ies. In WRB, we will double our
investment plans in our fast-growing and high-returning wealth management business for affluent clients. This incremental
investment will be funded by reshaping our Mass Retail business to focus on build
ing a strong p
ipel
ine of future affluent and
internat
ional bank
ing clients. In taking this decis
ion, the Court cons
idered our investors’ interest in high quality growth and
improvement in our Return on Tangible Equity over the medium-term, as well as the interests of clients and employees in the
relevant areas of the business.
Engaging stakeholders
Listen
ing and respond
ing to stakeholder prior
it
ies and concerns is crit
ical to ach
iev
ing our Purpose and del
iver
ing on our
brand promise, here for good. We strive to mainta
in open and construct
ive relationsh
ips w
ith a wide range of stakeholders
includ
ing regulators, lawmakers, cl
ients, investors, civ
il soc
iety, and community groups.
Stakeholder feedback, where appropriate, is communicated internally to senior management through the relevant forums
and governing committees such as the Sustainab
il
ity Forum, and to the PLC Group’s Culture and Sustainab
il
ity Committee
(CSC) which oversees the PLC Group’s approach to its main relationsh
ips w
ith stakeholders.
We communicate progress regularly to external stakeholders through channels such as sc.com, established social media
platforms and this report. More detailed informat
ion on mater
ial sustainab
il
ity topics can be found in our Sustainab
il
ity
section of pages 11 to 12.
Clients
How we create value
We want to deliver easy, everyday banking solutions to our clients in a simple and cost-effective way with a great customer
experience. We enable ind
iv
iduals to grow, protect and pass on their wealth; we help businesses trade, transact, invest and
expand; and we help a variety of financ
ial
inst
itut
ions, includ
ing banks, publ
ic sector and development organisat
ions, w
ith
their banking needs.
How we serve and engage
Our push for a best-in-class client experience is underpinned by innovat
ive products and d
ig
ital stra
ight-through services.
This includes build
ing capab
il
ity to protect our cl
ients against evolving risks in the ecosystem, like fraud and cyber security,
and comes with education and increased client communicat
ion.
To act in the best interests of our clients, we use the ins
ights gathered from our data alongs
ide robust polic
ies, procedures
and the Group’s risk appetite to design and offer products and services that meet client needs, regulatory requirements and
Group performance targets.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
27
Strategic report continued
Fees and charges are disclosed to clients in line with regulatory requirements and industry best practice and, where available,
benchmarked against competitors. For Personal and Business Banking products, agreed interest rates, fees and other
charges as billed to clients are monitored and assessed locally, with global oversight.
Triggers for outlier fees and charges are defined and subject to annual review. Complaints are reviewed on an ongoing basis
and are one of the factors that are taken into account prior to amendments to annual interest, fees and charges.
We also assess our product portfolio for new risks to ensure they remain appropriate for client needs and aligned to
emerging regulation. These quantitat
ive and qual
itat
ive assessments,
includ
ing Per
iod
ic Product Rev
iews, are intended
to provide a complete view of whether to continue, enhance, grow or retire products.
Train
ing
is provided to frontline staff across our branches, contact centres and dig
ital channels to
ident
ify and support
vulnerable clients, and we have also implemented an educational train
ing programme for those cl
ients who require
assistance in navigat
ing onl
ine and mobile channels.
Throughout 2024, we mainta
ined our sharp focus on
improv
ing the cl
ient experience across the Bank. We engaged with
clients to show them the opportunit
ies trade corr
idors could bring and how using our network could help them flourish.
Our presence in high-growth markets – and ongoing roll out of dig
ital platforms – helps connect our cl
ients to the global
engines of trade and innovat
ion. As part of our PLC Group’s a
im to reach net zero carbon emiss
ions by 2050, our PLC Group’s
transit
ion finance team have been work
ing closely with our clients in hard-to abate sectors on their own transit
ions. Th
is is in
addit
ion to our PLC Group’s amb
it
ion to mob
il
ise $300 b
ill
ion of Susta
inable Finance between 2021 and 2030.
Across the bank, we have processes and controls to mit
igate greenwash
ing risks, and to support transparency we publish
the details of what constitutes our sustainable products and investments universe externally.
Wealth and Retail Banking
In 2024, we continued to expand our suite of solutions to help clients manage, protect and grow their wealth, includ
ing core
fund offerings for mass affluent clients to alternatives and structured solutions for high-net-worth clients.
We strengthened our proposit
ions and capab
il
it
ies, adding high end lifestyle and cross-border priv
ileges, fam
ily advisory
and trust services, with our product offering helping drive growth.
In addit
ion, our PLC Group evolved our managed
investments business to focus on helping clients build foundational and
opportunist
ic portfol
ios for which we bring innovat
ive solut
ions, such as our PLC Group’s Signature CIO Funds, a series of
foundational portfolios built on our PLC Group’s CIO ins
ights.
In 2024, we also tried to help clients by partnering to create new services. To help the next generation of high-net-worth
clients, our PLC Group launched our first Young Entrepreneur Programme (YEP). The YEP is curated in collaboration with
INSEAD and SC Ventures – our PLC Group’s innovat
ion, fintech
investment and ventures arm. Our PLC Group also partnered
with Wise Platform, Wise’s global payments infrastructure for banks, to power faster and cheaper internat
ional payments for
the bank’s cross-border payment service, SC Remit. The partnership allows SC Remit customers in Asia and in the Middle East
to send money in 21 currencies includ
ing USD, CAD, EUR, GBP, SGD, HKD, JPY
in seconds.
Corporate and Investment Banking
In 2024, we sharpened our focus on serving the cross-border needs of our largest and most sophist
icated corporate and
financial
inst
itut
ion clients who require risk management, financ
ing and sector adv
isory expertise across Asia, Africa and
the Middle East.
Our network and experience, combined with our presence in valuable cross-border hubs, means that we can help clients
from around the world access these regions. We continue to connect capital flows into Africa, the Middle East and Asia and
play a leading role in promoting sustainable finance. In 2024, in Africa we were involved in EUR533 mill
ion of financing, backed
by the African Development Bank, for the government of Côte d’Ivoire and EUR1.29 bill
ion of financing for the Angolan
Min
istry of F
inance to construct photovoltaic electric
ity d
istr
ibut
ion infrastructure.
Our clients are at the heart of what we do, everything we have done structurally in 2024 is about leveraging our platform so
that we can do more business with them.
We are scaling up where we can offer our clients a different
iated serv
ice, such as Securit
ies Serv
ices - capital
is
ing on local
custodian capabil
it
ies across Africa and the Middle East and the growing demand from financ
ial
inst
itut
ions – as well
Sustainab
il
ity Finance, Islamic Banking and RMB International
isat
ion, all of which are being embedded into our global
business teams.
Their interests
•
Different
iated product and serv
ice offering
•
Dig
itally enabled and pos
it
ive exper
ience
• Sustainable finance
• Access to internat
ional markets
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
28
Regulators and Governments
How we create value
We engage with public authorit
ies to play our part
in supporting the effective function
ing of the financial system and the
broader economy.
How we serve and engage
We engage with government, regulators and policy makers at the global, regional and national level as well as trade
associat
ions to share
ins
ights and support the development of best pract
ices and adoption of consistent approaches
across our markets. During 2024, we engaged on the following key topics:
•
Financ
ial serv
ices, includ
ing but not l
im
ited to prudent
ial regulations, financ
ial markets, and financial conduct and
financial cr
ime.
•
Sustainable finance, across a wide range of sub-topics such as transit
ion finance, carbon markets, adaptat
ion & resil
ience,
and climate risk.
•
Technologies and dig
ital assets,
includ
ing for example stableco
in and crypto assets, dig
ital asset custody, data sovere
ignty
or the use of artif
ic
ial intell
igence (AI).
•
International trade and dig
ital trade such as d
ig
ital token
izable trade assets.
Their interests
•
Strong capital base and liqu
id
ity posit
ion
•
Robust standards for financial conduct and financial cr
ime
• Competit
ive econom
ies and markets
•
Sustainable Finance and net-zero transit
ion
•
Dig
ital
innovat
ion and use of AI
in financ
ial serv
ices
• Operational resil
ience
•
Market integr
ity and customer protect
ion
• International and dig
ital trade
• Financ
ial stab
il
ity
Investors
How we create value
We aim to deliver robust returns and long-term sustainable value for our investors.
How we serve and engage
We rely on capital from debt and equity investors to execute our business model. Whether they have short or long-term
investment horizons, we provide our investors with informat
ion about progress aga
inst our strategic and financ
ial
frameworks.
Through our PLC Group’s footprint and the execution of our sustainab
il
ity agenda, we provide our investors with exposure to
opportunit
ies
in emerging markets. We believe that our integrated approach to Environmental, Social and Governance (ESG)
issues and a strong risk and compliance culture, are key different
iators. We cont
inue to respond to growing interest from
a wide range of stakeholders on ESG matters, includ
ing
investors.
Regular and transparent engagement with our investors, and the wider market, helps us understand investors’ needs and
tailor our public informat
ion accord
ingly. In addit
ion to d
irect engagement via our Investor Relations team, we communicate
through half-year and full-year results, conferences, roadshows, investor days and media releases.
We continued to expand our use of virtual meetings during 2024, coupled with a growing number of face-to-face
interact
ions. Our PLC Group hosted an Affluent Investor sem
inar in December and deep dive for Mainland Chinese
investors in September.
Key investor feedback, recommendations and requests are considered by our PLC Board, whose members keep abreast of
current topics of interest. Our PLC Group’s Annual General Meeting (AGM) in May was open to shareholders either in person
or electronically via a live video feed of the meeting. All partic
ipants had the opportun
ity to submit their votes and ask the
PLC Board questions.
Sim
ilarly, our PLC Group Cha
irman, alongside some members of the PLC Group Board, hosted a hybrid stewardship event
for inst
itut
ional investors in December provid
ing shareholders w
ith updates on a number of topics, includ
ing susta
inab
il
ity,
net zero and governance matters. The event included an open question-and-answer session
The PLC Group continues to respond to growing interest from a wide range of stakeholders on ESG matters, includ
ing
investors. In 2025, we will continue to engage with investors on progress against our strategic prior
it
ies and actions, as well as
our financial framework as we progress towards del
iver
ing susta
inably higher returns.
Strategic report continued
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
29
Strategic report continued
Their interests
•
Safe, strong and sustainable financ
ial performance
•
Facil
itat
ion of sustainable finance to meet the United Nations (UN) Sustainable Development Goals
•
Progress on ESG matters, includ
ing advanc
ing our net-zero agenda
Suppliers
Supporting a sustainable supply chain
The PLC Group measure and manage our Scope 3 upstream emiss
ions and work
in partnership with our suppliers to calculate
emiss
ions and set net zero targets where appropr
iate.
Supporting a diverse and inclus
ive supply cha
in
We are committed to build
ing mutually beneficial relat
ionsh
ips w
ith our suppliers to reflect the diverse communit
ies and
cultures we operate in. To support this, our supplier divers
ity and
inclus
ion programme a
ims to direct spend and offer support
where appropriate, to small and diverse businesses.
Supplier divers
ity at Standard Chartered
incorporates businesses owned by under-represented ind
iv
iduals or groups –
such as women and ethnic minor
it
ies, as well as micro and small businesses.
To help drive our programme, we are corporate members of not-for-profit organisat
ions ded
icated to supporting diverse
suppliers. This collaboration posit
ions us to
ident
ify and engage small and d
iverse suppliers, share in best practices, and
mainta
in awareness about d
iverse supplier needs.
In addit
ion, we engage and support our d
iverse suppliers with our PLC Group hosting two face-to-face supplier divers
ity
events in partnership WEConnect – a global network supporting women-owned businesses – in 2024. The events focused
on networking, sharing best practices in the sustainab
il
ity field and supplier awards.
+ For further details of our PLC Group’s supplier divers
ity programme and suppl
ier awards events vis
it
[https://www.sc.com/en/suppliers/supplier-divers
ity-and-
inclus
ion/]
Their interests
•
Open, transparent and consistent tendering process
• Accurate and on-time payments
•
Will
ingness to adopt suppl
ier-driven innovat
ions
•
Obtain guidance on implementat
ion of susta
inab
il
ity matters
Society
How we create value
We strive to operate as a sustainable and responsible company, leveraging our partnerships, networks and expertise to help
transform our markets for long-term societal and environmental impact, create more inclus
ive econom
ies and increase
equitable prosperity.
How we serve and engage
Our Futuremakers partners
With the Standard Chartered Foundation, we advanced our strategic partnerships with NGOs and civ
il soc
iety organisat
ions
in support of Futuremakers by Standard Chartered, our PLC Group’s global youth economic empowerment in
it
iat
ive. Sh
ift
ing
to an impact-focused strategy, we’ve engaged our partners to co-design long-term programmes towards achiev
ing our PLC
Group’s target of enabling and supporting 140,000 decent jobs between 2024 and 2030.
To deepen our understanding of the impacts of our programmes, our PLC Group refined our results monitor
ing framework
and developed a model to estimate the societal return on our Futuremakers investments. This provides a more holist
ic
analysis to enhance the impact potential of our programmes. We share learning from our new programmatic models
both across our portfolio and externally with our peers.
Our external stakeholders
We seek to promote greater economic inclus
ion through our networks, events and sponsorsh
ips. In collaboration with
Business Fights Poverty, we hosted various learning events, includ
ing a gender-focused panel d
iscuss
ion to celebrate
International Women’s Day and a thematic discuss
ion on Plugg
ing the financ
ing gap for young entrepreneurs at the
ir
Global Goals Summit in Nairob
i and New York, dur
ing the United Nations General Assembly meetings. The aim of these
events was to ident
ify act
ionable strategies and innovat
ive partnersh
ips to address global challenges. In addit
ion, we
sponsored Women of the World Foundation (WOW) as their Global Girls’ Champion to run the WOW bus tour, bring
ing
gender equality learning to girls and young people across the UK, and we extended the WOW festival to Pakistan and
Turkey, reaching over 23,000 children and young people in half a year.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
30
Strategic report continued
Our colleagues
We encourage colleagues to give back to their communit
ies us
ing their three days paid volunteering leave. To enable
a volunteering culture, we gathered feedback and ins
ights from our employee volunteer
ing (EV) champions and ran a series
of workshops to develop an EV toolkit accessible to all colleagues. We are expanding our focus on skills-based volunteering
to leverage our colleagues’ skills-sets and deepen our community impact. This year we launched a global skills-based
volunteering week provid
ing learn
ing sessions and volunteering opportunit
ies to bu
ild awareness across the Bank. To drive
partic
ipat
ion, we organised train-the-trainer workshops to equip our colleagues with skills necessary to conduct financ
ial
education and mentoring sessions with our community stakeholders.
Their interests
• Access to finance
• Economic inclus
ion
• Gender equity
• Skills-based volunteering
• Community impact
Employees
How we create value
We recognise that our workforce is key to driv
ing our performance and product
iv
ity and that the d
ivers
ity of our people,
cultures and network sets us apart. To be the best cross border and affluent bank to our clients, our workforce composit
ion,
includ
ing the sk
ills and engagement of our people, is a strategic source of competit
ive advantage. So we are develop
ing a
workforce that is future ready, and are co-creating with our employees to build an inclus
ive,
innovat
ive and cl
ient-centric
culture.
How we serve and engage
By engaging employees and fostering a posit
ive exper
ience for them, we can better serve our clients and deliver on our
Purpose. A culture of inclus
ion and amb
it
ion enables us to unlock
innovat
ion, make better dec
is
ions, del
iver our business
strategy, live our valued behaviours and embody our brand promise. We proactively assess and manage people-related risks,
such as, capacity, capabil
ity and culture, as part of our PLC Group R
isk Management Framework. Our People Strategy,
approved by the PLC Board, is future-focused, with external events accelerating many of the future of work trends which
continue to inform our approach.
Their interests
Translating our here for good brand promise and Purpose of driv
ing commerce and prosper
ity through our unique divers
ity
into our colleagues’ day-to-day experience is crit
ical to us rema
in
ing an employer of cho
ice across our footprint. The research
we have on our Employee Value Proposit
ion (EVP) tells us that our ex
ist
ing and potent
ial employees want to: have interest
ing
and impactful jobs; innovate with
in a d
iverse set of markets and for a spectrum of clients; cultivate a brand that sustainably
drives commerce and offers enrich
ing careers and development; and be supported by great people leaders. They want these
elements to be anchored in competit
ive rewards and a pos
it
ive work–l
ife balance. The employment proposit
ion
is a key input
to our People Strategy which supports the delivery of our business strategy.
Listen
ing to employees
Frequent feedback from employee surveys helps us ident
ify and close gaps between colleagues’ expectat
ions and their
experience. Colleague sentiment is captured through an annual survey as well as regularly through a weekly survey and at
key moments, such as when employees join us, leave, and return to work after parental leave. In add
it
ion to leverag
ing inputs
from these surveys, the Court and Management Team also engage with and listen to the views of colleagues through
interact
ive sess
ions.
In 2024, our annual My Voice survey was conducted in May and June. Key measures of employee satisfact
ion have stayed
high, however there has been a decline year-on-year as the impact of our transformation continues to be felt. The experience
of working for the Bank remains a broadly posit
ive one. 78 per cent employees say that the Bank meets or exceeds the
ir
expectations, 96 per cent feel committed to doing what is required to help the Bank succeed, and 86 per cent feel proud
about working for the Bank. This underscores the strength of our EVP to attract, retain and grow the skills and talent that are
crit
ical to del
iver
ing our strategy and outcomes for cl
ients.
Driv
ing a culture of susta
inable high-performance
As the PLC Group transforms to achieve our strategic ambit
ions, we cont
inue to embed our refreshed approach to managing,
recognis
ing and reward
ing performance. We are embedding more regular performance and development conversations, as
well as increas
ing the exchange of two-way balanced, construct
ive feedback amongst peers, stakeholders and team
members. At the same time, we are encouraging greater aspirat
ion dur
ing goal-setting as well as placing even more focus on
recognis
ing outperformance,
includ
ing by enhanc
ing flexib
il
ity in reward decis
ions. These hab
its that mark of culture of high
performance, have continued to strengthen each year – with more colleagues across PLC Group receiv
ing feedback
in the
system , as well as many using Appreciate, our new dig
ital platform launched
in early 2024 to enable democratised, hyper-
personalised, in-the-moment peer-to-peer recognit
ion.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
31
Strategic report continued
We recognise that wellbeing is a driver of sustainable high performance and productiv
ity, and are comm
itted to supporting
our colleagues’ wellbeing at an ind
iv
idual, team, and organisat
ional level. Th
is means focussing on prevention as well as cure,
and striv
ing to embed wellbe
ing into the flow of work. Globally, colleagues have access to a range of tools and resources to
manage their wellbeing, includ
ing several progress
ive benefits, a mental health app, access to 1:1 counselling or therapeutic
support, an employee assistance programme (through which professional counselling is also available), wellbeing toolkits,
and a network of trained mental health first aiders. We continue to drive intervent
ions to further enable healthy work
ing
practices, includ
ing market-level exper
iments that we are running on sustainable working habits, promoting train
ing of
wellbeing champions, and embedding wellbeing skills (such as resil
ience and adaptab
il
ity)
into multiple learning
programmes.
Our continued commitment to embedding our flexible working model (which was launched in 2021) that combines flexib
il
ity
in working patterns, time and locations, is an important part of our efforts to enhance both the productiv
ity and exper
ience
of our workforce. Our model purposefully balances client needs and business prior
it
ies with ind
iv
idual choice, allowing us to
be inclus
ive of the d
iverse needs of our workforce. We continue to explore opportunit
ies for enhanc
ing flexib
il
ity across further
markets and roles, where regulations and the nature of the work allow for it. We refreshed our toolkits and guidance to
people leaders and ind
iv
iduals to help navigate flexible working and establish clear, consistent expectations for all
colleagues when working flexibly. These include support on having regular conversations with teams on flexi-work
arrangements; on organis
ing team and
ind
iv
idual work to enhance productiv
ity and wellbe
ing; on leading in key moments
such as onboarding new team members, returning from parental leave and during performance conversations; and on
strengthening connections in flexible work environments. Colleagues continue to adopt ways of working that balance the
benefits of remote working with face-to-face interact
ions to
innovate and collaborate, as we also continue to re-imag
ine our
physical workspaces with the relevant infrastructure and technology to provide hubs for teamwork, collaboration and
learning.
+ Read more about our approach to flexible working at
sc.com/flexiblework
ing
Build
ing leadersh
ip capabil
it
ies
Exceptional performance needs exceptional leadership, and we believe that our people leaders are crit
ical to unlock
ing the
potential of our workforce and how they experience the Bank every day. Engaging, developing, and measuring our people
leaders continues to be a crit
ical enabler of our performance and culture. Our Leadersh
ip Agreement sets out clear
expectations from our leaders to Aspire, Inspire and Execute. It also forms the foundation of our leadership development
curriculum through which one-third of our people leaders are being covered each year to help them build new skills and
habits across different leadership stages – includ
ing sk
ills on coaching, performance management in business-specif
ic
contexts, leading for transformation, and leading through ambigu
ity. Wh
ile people leaders continue to learn through
face-to-face leadership programmes during the year, leadership skill-build
ing
is also made accessible to all colleagues to
build the capabil
ity deeper
into the organisat
ion – through the Leadersh
ip Health journey of regular micro-learning activ
it
ies,
our ‘virtual escape room’ game for aspir
ing leaders, and exper
ient
ial bootcamps on creat
ing an environment of psychological
safety and innovat
ion.
People leaders continue to receive feedback, either through our ‘always on’ feedback tool available to all colleagues or
through the structured 360-degree feedback tool that is available to mid-to-senior people leaders; along with a consolidated
view of the environment they are creating for their teams, and feedback on their leadership skills, as part of their Leadership
Dashboard - bring
ing even greater transparency to performance and development conversat
ions, and highl
ight
ing the value
we place on leadership.
+ Read our Leadership Agreement at
sc.com/leadershipagreement
Developing skills of future strategic value and enabling careers
To keep pace with our strategic prior
it
ies, evolving customer expectations, ongoing transformation, and rapid technological
innovat
ion, we stay comm
itted to a ‘skills-led’ approach. We are focused on accelerating the development of future skills
among our workforce, bring
ing
in greater agil
ity to how sk
ills are deployed to areas of opportunity across the PLC Group and
embedding skills purposefully across key talent practices. We are supporting employees to build the skills needed for high
performance today, to reskill and upskill for tomorrow, and to be global cit
izens who understand the chang
ing nature of the
world in which we operate. This includes helping them strengthen a combinat
ion of human and techn
ical skills, as well as
enhancing a culture of continuous learning that empowers them to grow, increase their long-term employabil
ity and follow
their career aspirat
ions.
Build
ing of system
ic future-focused skills that are antic
ipated to be needed to keep pace w
ith the changes happening in the
sector (such as in sustainab
il
ity, innovat
ion, data, d
ig
ital and leadersh
ip) is balanced with role-focused performance skills; as
well as access to skill-build
ing
intervent
ions that enable role-to-role movement,
includ
ing
into crit
ical ‘future’ roles where our
strategic workforce planning analysis predicts an increas
ing need for talent. Such as, w
ith our increas
ing focus on enhanc
ing
our Affluent client proposit
ion
in WRB, we are invest
ing
in deliver
ing upsk
ill
ing, resk
ill
ing and redeployment journeys for
colleagues to enable them to access opportunit
ies as the bus
iness segment grows. In CIB, we are focusing on sustainab
il
ity
capabil
it
ies and sales skills in line with our cross-border proposit
ion. These efforts a
im to ensure that our business growth and
transformation is closely linked with our workforce transformation.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
32
Strategic report continued
Learning in classrooms is combined with learning through our online learning platform, and colleagues are actively using one
or more of our Future Skills Academies which include the Data & Analytics, Dig
ital, Cyber, Cl
ient Advisory, Sustainable Finance
and Leadership Academies. Through ‘skills passports’ on our AI-enabled internal Talent Marketplace platform, employees
can sign up for projects (often cross-functional and cross-location) to build and practice skills on the job, can connect with
mentors, as well as can access more diverse roles based on skills adjacenc
ies. By comb
in
ing project opportun
it
ies w
ith
purposeful internal talent moves, we continue to enhance the career experience of colleagues and deploying their skills at
speed across our network has resulted in unlocking productiv
ity. We are also mak
ing it easier for colleagues to engage with
all that is available for growing their careers, through a range of resources and tools includ
ing a careers toolk
its, conversation
guides etc.
Creating an inclus
ive workplace
Our inclus
ive culture and comm
itment to divers
ity and
inclus
ion are a v
ital part of our employee value proposit
ion and what
enables us to drive business success. Through our multiple employee listen
ing surveys and supplemented by qual
itat
ive
feedback, we aim to better understand the lived experiences of our colleagues, and then act to make targeted, meaningful
changes to further drive inclus
ion and enhance the
ir experience. Our levels of inclus
ion rema
in high and is reflected in the 77.8
per cent of employees who shared posit
ive sent
iments in the 2024 annual survey.
We continue to invest in efforts towards increas
ing awareness around d
ivers
ity and
inclus
ion pr
inc
iples, unconsc
ious bias and
micro-behaviours as well as emphasise the importance of creating an inclus
ive env
ironment. Many of these aspects are
covered in the ‘When we’re all included’ learning programme, as well as the ‘Respect at Work’ e-learning programme that
helps understand what constitutes harassment, bullying, discr
im
inat
ion and v
ict
im
isat
ion, wh
ich continues to be mandatory
for all new joiners.
We are focused on further strengthening our inclus
ive culture, where all our people feel that the
ir ident
ity
is understood and
recognised for its uniqueness and anyone with the capabil
ity to excel can do so. Employees are prov
ided, where legally
permiss
ible, w
ith the abil
ity to share the
ir ident
ity data through our
internal employee portal. We are encouraging and
increas
ing self-declarat
ion (includ
ing soc
io-economic status in the UK) so that we can further improve colleague experience
by introduc
ing pol
ic
ies and
intervent
ions that are representat
ive of the needs of our diverse workforce.
We also remain focused on build
ing a workforce that
is truly representative of our client base and footprint. Our gender
divers
ity cont
inues to grow, with more women leaders moving up to senior roles. Women currently represent 50 per cent of
the Court, and representation of women in senior leadership roles increased to 29.6 per cent at the end of 2024. We are
committed to continuous improvement in this area and aspire to have 35 per cent representation
1
of women at a global
senior level across PLC Group by end of 2025. We continue to develop strategic partnerships and experiment with
programmes to widen our talent pools such as by launching the ‘Harnessing Africa’s Transformative Talent’ programme to
attract, retain, engage and develop Black and African talent, by improv
ing career mob
il
ity support
includ
ing through ‘buddy’
assistance, and by rolling out sponsorship programmes.
Leadership commitment stays crit
ical to our approach on D&I. Our Global D&I Counc
il is chaired by our CEO, WRB and
comprises enterprise-wide leaders representing various business, functions and geographies from across the PLC Group. The
Council is responsible for our overall PLC Group D&I strategy, direct
ion sett
ing, and overseeing the implementat
ion of
sustainable and measurable improvements. The Council is focused on developing a diverse talent pipel
ine to
improve
leadership representation, build
ing sponsorsh
ip muscle fostering posit
ive career progress
ion and refreshing our Employee
Resource Group approach to enhance colleague experience.
Equal Pay is a key princ
iple of our Fa
ir Pay Charter. Our commitment to paying colleagues fairly, recognis
ing sk
ills and
contribut
ions rather than any d
iscr
im
inatory factors, fosters an environment where all colleagues are given an equal chance
to succeed.
+ Read more about our approach towards strengthening divers
ity and
inclus
ion, as well as our approach to equal pay
in our
Divers
ity, Equ
ity & Inclusion Impact Report 2024 at
sc.com/fairpayreport
1
Subject to local legal requirements
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
33
Strategic report continued
Our approach to Sustainab
il
ity
Sustainab
il
ity is a strategic focus area for the Group, as we strive to promote inclus
ive growth and prosper
ity across the
markets where we operate.
The PLC Group’s approach to sustainab
il
ity supports the Group’s strategy, and is designed to deliver our purpose: to drive
commerce and prosperity through our unique divers
ity. Th
is is underpinned by our brand promise, here for good.
The approach is articulated through the PLC Group’s long-term sustainab
il
ity goals –Sustainab
il
ity Aspirat
ions – and short-
term sustainab
il
ity targets – the Sustainab
il
ity Strategic Pillars. The Aspirat
ions and P
illars set out how we intend to deliver
across our sustainab
il
ity agenda.
Sustainab
il
ity continues to be included in the 2024 PLC Group scorecard and 2024–26 Long-Term Incentive Plan (LTIP), which
include the Group employees, with performance measures that align with our Sustainab
il
ity Aspirat
ions and Susta
inab
il
ity
Strategic Pillars.
The Group’s strategy leverages the PLC Group’s sustainab
il
ity approach. This section sets out PLC Group’s progress against
the Sustainab
il
ity Aspirat
ions and Susta
inab
il
ity Strategic Pillars before we dive deeper into the material topics set out on
pages 33 to 34, includ
ing susta
inable finance, climate, nature and social impact.
+ For more informat
ion on our approach to susta
inab
il
ity see page 63 of PLC’s 2024 Annual Report
Sustainab
il
ity Aspirat
ions: our long-term goals
The PLC Group Sustainab
il
ity Aspirat
ions (
ind
icated below) are consol
idated into four overarching long-term goals, each
supported by key performance ind
icators. Together, these reflect our comm
itment to fostering sustainable social and
economic development in our markets.
•
Aspirat
ion 1: Mob
il
ise $300 b
ill
ion of susta
inable finance
•
Aspirat
ion 2: Operat
ional
ise our
inter
im 2030 financed em
iss
ions targets to meet our 2050 net zero amb
it
ion
•
Aspirat
ion 3: Enhance and deepen the susta
inab
il
ity ecosystem
•
Aspirat
ion 4: Dr
ive social impact with our clients and communit
ies
Sustainab
il
ity Strategic Pillars: our short-term targets and immed
iate pr
ior
it
ies
The four Sustainab
il
ity Strategic Pillars represent our near-term strategic focus designed to drive momentum and accelerate
progress toward the longer-term Sustainab
il
ity Aspirat
ions.
•
Pillar 1: Scale sustainable finance income
•
Pillar 2: Further embed sustainab
il
ity across the organisat
ion
•
Pillar 3: Deliver on the annual milestones set forth in our net zero roadmap
•
Pillar 4: Leverage our Innovation Hubs
+ For more informat
ion on our susta
inab
il
ity aspirat
ions see page 64 of PLC’s 2024 Annual Report
Innovation Hubs
The PLC Group’s four thematic Innovation Hubs – Adaptation Finance1, Blended Finance Programmes, Carbon Markets and
Nature Finance – focus on emerging sustainab
il
ity themes that are nascent but ripe for scale, aligned to areas where the
Group has a core competency, and are particularly suited to clients in our footprint markets.
+ For more informat
ion on
innovat
ion hubs see page 66 of PLC’s 2024 Annual Report
Sustainable finance
Sustainable finance, includ
ing trans
it
ion finance,
is a crucial part of the sustainab
il
ity strategy and is therefore reflected in
both long-term Sustainab
il
ity Aspirat
ions and short-term Susta
inab
il
ity Strategic Pillars.
The PLC Group’s broad sustainable finance product suite, which includes bonds, loans, advisory and trade finance, is
underpinned by our sustainable finance frameworks that outline how we apply the ‘green’, ‘social’, ‘sustainable’ or ‘transit
ion’
labels across products and transactions. We also work with retail and wealth clients to mobil
ise d
iverse sources of capital in
support of social and environmental outcomes.
+ For more informat
ion on our approach to susta
inable finance see page 69 of PLC’s 2024 Annual Report
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
34
Strategic report continued
Climate
The PLC Group aims to reach net zero in financed emiss
ions by 2050 and
in scope 1 and scope 2 emiss
ions by 2025. The Net
Zero Roadmap sets out the key steps needed to achieve this goal, and good progress has been made achiev
ing the goals set
for 2024.
PLC Group’s global footprint informs our unique understanding of the complexity associated with reaching the targets across
financed and facil
itated em
iss
ions,
includ
ing a he
ightened focus on the security and resil
ience of our markets as they respond
to greater climate change induced uncertainty. As a financ
ial
inst
itut
ion, the Group has an important role to play in
supporting our clients and markets as they navigate this complexity, while driv
ing and encourag
ing change in the real-world
economy.
+ For more informat
ion see page 74 of PLC’s 2024 Annual Report
Nature
It is estimated that over half of global GDP is directly dependent upon nature. Despite this, nature is rapidly declin
ing.
We acknowledge that protecting nature is essential to lim
it
ing global warming and mit
igat
ing the effects of climate change
and ensuring that the planet can sustain livel
ihoods as well as support
inclus
ive susta
inable economic development.
In 2024, the PLC Group published the inaugural
Nature Posit
ion Statement
outlin
ing our approach to nature across our
business, our clients, operations and supply chains. We seek to contribute to the Global Biod
ivers
ity Framework (GBF) 2030
miss
ion of halt
ing and reversing nature loss by: (1) continu
ing to
integrate nature in decis
ion-mak
ing with
in our bus
iness
(target 14); (2) publish
ing nature-related d
isclosures in alignment with Taskforce on Nature-related Financ
ial D
isclosures
TNFD recommendations from 2026 onwards (target 15); and (3) shift
ing financial flows toward nature pos
it
ive outcomes and
contribut
ing to mob
il
is
ing funding for nature and delivery of the GBF (target 19).
We are members of a wide range of industry platforms and memberships working to address nature-related challenges
and advance nature considerat
ions
in financ
ial dec
is
ion mak
ing.
+ For more informat
ion see page 90 of PLC’s 2024 Annual Report
Social impact
We believe in the power of finance to drive posit
ive change
in the world. Our desire to drive social impact extends across both
our commercial and our philanthrop
ic act
iv
it
ies, reflecting our aspirat
ion to bu
ild a future that is both financ
ially res
il
ient and
socially inclus
ive - th
is being a foundation for healthy and sustainable economies in our markets.
We approach social impact from two angles concurrently:
•
Through our business and clients: we provide clients with the financ
ing that they and the
ir communit
ies need to tackle
urgent matters such as inequal
ity, access to essent
ial services, and inclus
ive growth.
•
Through our philanthrop
ic commun
ity engagement: we work to empower disadvantaged young people by provid
ing
them with skills and networks and connecting them with employment and commercial opportunit
ies.
+ For more informat
ion see page 91 of PLC’s 2024 Annual Report
Managing environmental risk
We seek to proactively manage environmental and social risks and impacts aris
ing from the Group’s cl
ient relationsh
ips and
transactions.
+ For more informat
ion see page 93 of PLC’s 2024 Annual Report
Integrity, conduct and ethics
We aim to live our valued behaviours, which are ‘Never settle’, ‘Better together’ and ‘Do the right thing’ through our actions,
decis
ions and
interact
ions day-to-day w
ith colleagues, clients and the markets we serve.
+ For more informat
ion see page 95 of PLC’s 2024 Annual Report
Sustainab
il
ity governance
Sustainab
il
ity-related risks, opportunit
ies and organ
isat
ional
impl
icat
ions are overseen by the PLC Group’s Board,
Management Team and supporting sub-committees.
+ For more informat
ion see page 98 of PLC’s 2024 Annual Report
Strategic report continued
Standard Chartered Bank
35
Directors’ Report and Financ
ial Statements 2024
Non-financial and susta
inab
il
ity informat
ion statement
This table sets out where shareholders and stakeholders of the Group can find key non-financ
ial and susta
inab
il
ity
matters in this report. As the Company is a subsid
iary undertak
ing of PLC and included with
in PLC Group, compl
iance
with the non-financ
ial and susta
inab
il
ity reporting requirements contained in sections 414 CA and 414 CB of the Companies
Act 2006 is achieved by reference to PLC Group activ
it
ies where relevant and to the PLC Group report available at sc.com
via
sc.com/sustainab
il
ityl
ibrary
Reporting requirement
Where to read more in this report about polic
ies,
impact
(includ
ing r
isks, policy embedding, due dil
igence and outcomes)
Business model
Pages 10 to 11
Risk Review (princ
ipal r
isks)
Page 19
Environment
•
Sustainable & Responsible Business Pages 33 to 34
•
Directors Report
Pages 36 to 42
Employees
Pages 30 to 32
Human rights
Page 23
Social matters
Page 29
Anti-corruption and anti-bribery
Page 55
Authority
The strategic report up to page 35 has been issued by order of the Court.
Bill Winters
Director
21 February 2025
Company Reference Number: ZC18
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
36
The directors present their report and the audited financ
ial statements of Standard Chartered Bank and
its subsid
iar
ies
(the ‘Group’) and Standard Chartered Bank (the ‘Company’) for the year ended 31 December 2024. The Company has chosen
in accordance with Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008 (the Regulations), to include certain matters in its Strategic report (see pages 1 -35) that would otherwise be disclosed
in this Directors’ report as required by paragraphs 2,6,10,11,12 of the Regulations.
Activ
it
ies
The activ
it
ies of the Group are banking and provid
ing other financial serv
ices. The Group comprises a network of branches
and outlets in 51 markets. The Financ
ial Rev
iew on pages 14 to 17 contains a review of the business during 2024.
Key stakeholders
The long-term success of the Group is dependent on its relationsh
ips w
ith its key stakeholders. On pages 26 to 32 we outline
the ways in which we have engaged with key stakeholders, the material issues that they have raised with us, and how these
issues have been taken into account in the Court’s decis
ion-mak
ing processes.
Results and div
idends
The results for the year are given in the income statement on page 123.
Div
idends of $2,395 m
ill
ion were pa
id during the year to ordinary shareholders (2023: $2,599 mill
ion).
Share capital
Details of the Company’s share capital includ
ing the part
iculars of any share buy-backs are given in Note 27 to the accounts.
Loan capital
Details of the loan capital are given in Note 26 to the accounts.
Property, plant and equipment
Details of the property, plant and equipment of the Company are given in Note 17 to the accounts.
Financ
ial
instruments
Details of financ
ial
instruments are given in Note 12 to the accounts.
Details of exposure to credit, traded, liqu
id
ity and funding risk can be found in the Risk Profile section of the accounts.
Post balance sheet events
Details of post balance sheet events are given in Note 40 to the accounts.
Research and development
During the year, the PLC Group invested $2.13 bill
ion (2023: $2.01 b
ill
ion)
in research and development, of which $1.18 bill
ion
(2023: $0.99 bill
ion) was recogn
ised as an expense. The research and development investment primar
ily related to the
planning, analysis, design, development, testing, integrat
ion, deployment and
in
it
ial support of technology systems.
Future developments in the business of the Group
An ind
icat
ion of likely future developments in the business of the Group is provided in the Strategic report.
Directors’ Report
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
37
Directors’ Report continued
Directors and their interests
Mr A Halford (Resigned 2 January 2024)
Mr W Winters, CBE
Mr D De Giorg
i (Appo
inted 3 January 2024)
Mr S Apte
Ms G Huey Evans, CBE (Resigned 29 February 2024)
Ms J Hunt
Ms D Jurgens (Appointed 1 March 2024)
Ms R Lawther, CBE (Resigned 30 December 2024)
Mr L Leong (Appointed 2 November 2024)
Ms A McFadyen
Ms M Ramos
Ms S Ricke
Mr P Rivett
Mr D Tang (Resigned 9 May 2024)
Dr J Viñals
Dr L Yueh, CBE
Mr S Apte, MS J Hunt, Ms D Jurgens, Mr L Leong, Ms M Ramos, Mr P Rivett, and Dr L Yueh, CBE are all independent non-
executive directors.
Mr Halford resigned from the Company on 2 January 2024 and Mr D De Giorg
i was appo
inted a director of the Company
on 3 January 2024.
Ms G Huey Evans, Mr D Tang and Ms R Lawther, CBE resigned as a director of the Company with effect from 29 February
2024, 9 May 2024 and 30 December 2024, respectively.
Ms D Jurgens and Mr L Leong were appointed as directors of the Company with effect from 1 March 2024 and 2 November
2024, respectively.
None of the directors have a benefic
ial or non-beneficial
interest in the shares of the Company or in any of its subsid
iary
undertakings.
Details of directors’ pay and benefits are disclosed in Note 37 to the accounts.
All of the directors as at 31 December 2024 (except Ms McFadyen and Ms Ricke) are directors of the Company’s ultimate
holding company, Standard Chartered PLC.
Director train
ing
Director induct
ion
Upon join
ing the Court, our directors are given a comprehensive tailored induct
ion programme.
Diane Jurgens was appointed as an INED on 1 March 2024. She undertook a formal induct
ion plan cons
ist
ing of a
combinat
ion of meet
ings with exist
ing Court members, sen
ior staff and external counsel, receiv
ing ta
ilored train
ing sess
ions
on topics includ
ing D
irectors’ Duties, Governance Requirements, Strategy, Risk and Finance and Banking and a deep dive into
topics relevant to her membership of the PLC Group’s Risk Committee. She also vis
ited some key markets on the overseas
Court trips to Shanghai and Beijing in April, to Mumbai in June and to Nairob
i
in November, a trip to Sil
icon Valley w
ith the
Group’s MT and vis
its to S
ingapore where she met with senior management. Diane also studied for an on-line Finance course
at Harvard and attended a financial serv
ices conference in New York, where she met members of our US senior management
team.
Lincoln Leong was appointed as an INED in November 2024. Lincoln is undertaking an induct
ion programme cons
ist
ing of
a combinat
ion of meet
ings with exist
ing Court members, sen
ior staff and external counsel, receiv
ing ta
ilored train
ing sess
ions
on topics includ
ing D
irectors’ Duties, Governance Requirements, Strategy, Risk, Finance, and Cyber/AI and a deep dive into
topics relevant to his membership of the PLC Group’s Audit Committee.
The PLC Group’s Governance and Nominat
ion Comm
ittee reviews the induct
ion programme of all new INEDs. The
Committee is satisf
ied that all new INEDs have made excellent progress w
ith their induct
ion programmes.
Ongoing train
ing
Ongoing development plans ensure that directors lead with confidence and integr
ity and promote the Group’s culture,
purpose and values. Mandatory learning and train
ing are also
important elements of directors’ fitness and propriety
assessments as required under the UK Senior Managers and Certif
icat
ion Regime. During the year, all directors received
a combinat
ion of mandatory learn
ing, brief
ings, presentat
ions from guest speakers and papers on a wide range of topics
to ensure that they are well informed and that the Court remains highly effective. The table below gives further detail on
Directors’ train
ing th
is year.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
38
Directors’ Report continued
2024 director train
ing overv
iew
Sustainab
il
ity
Posit
ion
Statements
Artif
ic
ial
Intelligence
Geopolit
ical
Outlook: 2024
Elections and
their likely
impact on the
evolving
global order
ACG
Social
isat
ion
Recovery and
Resolvabil
ity
PLC Board
simulat
ion
exercise
BlueSky
Directors’
duties and
regulatory
updates
José Viñals
Bill Winters
Diego De Giorg
i
1
Shir
ish Apte
Alison McFadyen
Jackie Hunt
Diane Jurgensi
1
n/a
Robin Lawther
2
Maria Ramos
Phil Rivett
Sadia Ricke
Linda Yueh
Lincoln Leong
3
n/a
n/a
n/a
n/a
n/a
n/a
Director attended the session
Director was unable to attend the session but received any accompanying material and had opportunit
ies to ra
ise
questions and observations with the Group Chairman and Group Company Secretary
In 2024, Court members received brief
ings from and engaged w
ith diplomats, former polit
ical adv
isers and polit
ic
ians,
former leaders of internat
ional organ
isat
ions and econom
ists on topics includ
ing the evolv
ing geopolit
ical outlook,
the impact of the conflicts in the Middle East, the potential impact of the incom
ing adm
in
istrat
ion in the United States ,
the role of the global bank, the power and impact of technology in banking, regulatory developments and the global
macroeconomic environment.
Going concern
Having made appropriate enquir
ies, the Court
is satisf
ied that the Company and the Group as a whole have adequate
resources to continue in operation and meet their liab
il
it
ies as they fall due for a per
iod of at least 12 months from 21 February
2025 and therefore continue to adopt the going concern basis in preparing the financ
ial statements.
Polit
ical donat
ions
The Group has a policy in place which prohib
its donat
ions being made that would: (i) improperly influence legislat
ion or
regulation, (i
i) promote pol
it
ical v
iews or ideolog
ies, (
i
i
i) fund polit
ical causes. In al
ignment to this, no polit
ical donat
ions
were made in the year ended 31 December 2024.
Qualify
ing Th
ird Party Indemnit
ies
The Company has granted indemn
it
ies to all of its directors on terms consistent with the applicable statutory provis
ions.
Qualify
ing th
ird-party indemn
ity prov
is
ions for the purposes of sect
ion 234 of the Companies Act 2006 were accordingly
in force during the course of the financ
ial year ended 31 December 2024 and rema
in in force at the date of this report.
Qualify
ing Pens
ion Scheme Indemnit
ies
Qualify
ing pens
ion scheme indemn
ity prov
is
ions (as defined by sect
ion 235 of the Companies Act 2006) were in force during
the course of the financial year ended 31 December 2024 for the benefit of the d
irectors of the UK’s pension fund corporate
trustee (Standard Chartered Trustees (UK) Lim
ited) and rema
in in force at the date of this report.
Areas of operation
The Company operates through branches and subsid
iar
ies in 51 markets across Asia, the Middle East, Africa, Europe and
the Americas.
1
Diego de Giorg
i and D
iane Jurgens jo
ined the Court on 3 January 2024 and 1 March 2024 respect
ively
2
Robin Lawther stepped down from the Court on 30 December 2024
3
Lincoln Leong jo
ined the Court on 2 November 2024
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
39
Directors’ Report continued
Related party transactions
Details of transactions with directors and officers and other related parties are set out in Note 35 to the financ
ial statements.
Corporate Governance Statement
The Group operates under the subsid
iary governance model. As the Group cont
inues to cover the vast major
ity of PLC Group’s
total footprint, the governance arrangements of the Company and PLC sim
ilarly reflect th
is overlap and is represented by a
predominately mirrored board structure between PLC and the Company.
As a wholly-owned subsid
iary of a l
isted PLC and its governance structure as a company established by Royal Charter, the
Company complies with expectations set for listed companies in accordance with the UK Corporate Governance Code (2018)
(the “Code”) where applicable with respect to board leadership, responsib
il
it
ies, compos
it
ion (
includ
ing success
ion and
evaluation), audit, risk and internal control, and remuneration to ensure that the Group is well managed, with appropriate
oversight and control. Certain matters, such as remuneration, values, and external audit, are set at PLC Group level and
considered or approved, if appropriate, by the Court. It is considered more appropriate for the purposes of Group wide
consistency that princ
iples are set at PLC Board level and then d
issem
inated through the Group to be approved by subs
id
iary
boards.
The Court is supported by four primary committees: Audit Committee; Risk Committee; Nominat
ion Comm
ittee; and US Risk
Committee. Each of the primary committees and the Court have implemented clear lines of responsib
il
ity and polic
ies
to support the Court in its effective decis
ion mak
ing. The Court also has a Standing Committee with a remit to approve
matters, on behalf of the Court, where a formal resolution is required for legal and regulatory purposes. The Court, and its
Nominat
ion, Aud
it and Risk Committees have sim
ilar membersh
ip as the Board of PLC and its Nominat
ion, Aud
it and Risk
Committees, with the appropriate balance, skills, background and experience to make a valued contribut
ion. The Court
Nominat
ion Comm
ittee is responsible for the oversight and review of Court succession and overall Court effectiveness. The
Court Audit Committee is responsible for the oversight and review of financ
ial, aud
it, internal control and non-financ
ial cr
ime
issues. The Court Risk Committee is responsible for the oversight and review of princ
ipal r
isks. The Committee Chairs report to
the Court on the Committees’ key areas of focus following each meeting. For further informat
ion on how the Nom
inat
ion
Committee, Audit Committee and Risk Committee operate (includ
ing
in respect of their compliance with the Code), please
see pages 123 to 133 and 137 to 141 of PLC’s 2024 Annual Report.
The Court, together with the PLC Group, are committed to high standards of engagement with employees, suppliers and
other stakeholders. For a descript
ion of how the d
irectors engaged with stakeholders, includ
ing as to how such engagement
has been considered in the Court’s decis
ion mak
ing, please refer to page 26.
+ A copy of the UK Corporate Governance Code can be found at
frc.org.uk
Employee polic
ies and engagement
We work hard to ensure that our employees are kept informed about matters affecting, or of interest to, them and more
importantly that they have opportunit
ies to prov
ide feedback and engage in a dialogue.
We strive to listen and act on feedback from colleagues to ensure internal communicat
ions are t
imely, informat
ive,
meaningful, and in support of our strategy and transformation. Pulse is our primary internal communicat
ions channel that
allows colleagues to receive company updates and informat
ion that
is personalised by role and location, sign up for events,
provide feedback, and navigate to other internal platforms. In addit
ion to targeted d
ig
ital commun
icat
ions, we also organ
ise
audio and video calls, virtual and face-to-face townhalls, and other staff engagement and recognit
ion events.
To continue to improve the way we communicate and ensure our employee communicat
ions rema
in relevant, we also
period
ically analyse and measure the
impact of our communicat
ions through a range of feedback tools,
includ
ing an annual
global internal communicat
ions survey. Our sen
ior leaders and people leaders play a crit
ical role
in engaging our teams
across the network, ensuring that they are kept up to date on key business developments related to our performance and
strategy. We offer addit
ional support to our sen
ior leaders and people leaders with specif
ic calls and commun
icat
ions packs
to help them provide context and guidance to their team members to better understand their role in executing and deliver
ing
our strategy.
Across the organisat
ion, regular team meet
ings with people leaders, one-to-one conversations and various management
meetings provide an important platform for colleagues to discuss and clarify key issues. Regular performance conversations
provide the opportunity to discuss how ind
iv
iduals, the team and the business area have contributed to our overall
performance and how recognit
ion and reward relate to th
is. Senior leadership also regularly shares global, business, function,
and market updates on performance, strategy, structural changes, HR programmes, community involvement and other
campaigns. The Court also engages with and listens to the views of the workforce through several sources, includ
ing through
interact
ive engagement sess
ions.
Employees past, present and future can follow our progress through the PLC Group’s LinkedIn network and Facebook page,
as well as other social network channels includ
ing Instagram and X.
The diverse range of internal and external communicat
ion tools and channels we have put
in place aim to ensure that all
colleagues receive timely and relevant informat
ion to support the
ir effectiveness.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
40
Directors’ Report continued
We work hard to ensure that our employees’ wellbeing is so that they can thrive at work and in their personal lives. Our PLC
Group min
imum standards prov
ide employees with a range of flexible working options, in relation to both location and
working patterns. Employees are provided with at least thirty days’ leave (through annual leave and public holidays), and
new parents are provided a min
imum of twenty calendar weeks’ fully pa
id leave, irrespect
ive of gender, relat
ionsh
ip status or
how a child comes to permanently jo
in a fam
ily. These benefits are in excess of the International Labour Organisat
ion’s (ILO)
min
imum standards.
We seek to mainta
in a mean
ingful relationsh
ip based on mutual trust and respect w
ith various employee representative
bodies (includ
ing un
ions and work councils). In our recognit
ion and
interact
ions, we are heav
ily influenced by the 1948 United
Nations Universal Declaration of Human Rights (UDHR), and several ILO conventions includ
ing the R
ight to Organise and
Collective Bargain
ing Convent
ion, 1949 (No. 98) and the Freedom of Associat
ion and Protect
ion of the Right to Organise
Convention, 1948 (No. 87). Working condit
ions and terms of employment of other employees are based on our Group and
country polic
ies, and
in accordance with ind
iv
idual employment contracts issued by the Group.
Employees’ concerns in relation to their employment or another colleague which cannot be resolved through informal
mechanisms such as counselling, coaching or mediat
ion, are dealt w
ith through our PLC Group Grievance Standard. This
includes concerns related to bullying, harassment, sexual harassment, discr
im
inat
ion and/or v
ict
im
isat
ion, as well as concerns
regarding condit
ions of employment (for example, work
ing practices or the working environment).
Employees can raise grievances to their People Leader or a Human Resources (HR) Representative. The global process for
addressing grievances involves an HR representative and a member of the business review
ing the gr
ievance, conducting fact
finding
into the grievance and provid
ing a wr
itten outcome to the aggrieved employee. Where employees raise concerns
regarding alleged wrongdoing pertain
ing to another employee or
in circumstances where the employee alleges wrongdoing,
but does not wish to raise a grievance, such concerns are invest
igated
in accordance with the PLC Group Investigat
ions
Standard.
If a grievance or invest
igat
ion is upheld, the next steps might include remedying a process, or in
it
iat
ing a d
isc
ipl
inary review of
the conduct of the colleague who is the subject of the concern. The PLC Group Grievance Standard and accompanying
process is reviewed on a period
ic bas
is in consultation with stakeholders across HR, Legal, Compliance and Shared
Investigat
ive Serv
ices. Grievance trends are reviewed on a quarterly basis and action is taken to address any concerning
trends.
There is a dist
inct PLC Group Speak
ing Up Policy and Standard which covers instances where an employee wishes to ‘blow
the whistle’ on actual, planned or potential wrongdoing by another employee or the Bank.
We are committed to creating a fair, consistent and transparent approach to making decis
ions
in a disc
ipl
inary context. This
commitment is codif
ied
in our Fair Accountabil
ity Pr
inc
iples, wh
ich underpin our PLC Group Disc
ipl
inary Standard. Dism
issals
due to misconduct issues and/or performance (where required by law to follow a disc
ipl
inary process) are governed by the
PLC Group Disc
ipl
inary Standard. Where local law or regulation requires a different process with regards to dism
issals and
other disc
ipl
inary outcomes, we have clearly documented country variances in place.
Our PLC Group Divers
ity and Inclus
ion Standard has been developed to ensure a diverse and inclus
ive workplace, w
ith fair
and equal treatment, and the provis
ion of opportun
it
ies for employees to part
ic
ipate fully and reach the
ir full potential in a
respectful working environment. All ind
iv
iduals are entitled to be treated with dign
ity and respect, and to be free from
harassment, bullying, discr
im
inat
ion and v
ict
im
isat
ion. Th
is helps to support productive working condit
ions, decreased staff
attrit
ion, pos
it
ive employee morale and engagement, ma
inta
ins employee wellbe
ing, and reduces people-related risk.
All colleagues are responsible for fostering an inclus
ive culture where
ind
iv
idual
ity and d
iffer
ing sk
ills, capabil
it
ies and
experience are understood, respected and valued. All colleagues, consultants, contractors, volunteers, interns, casual workers
and agency workers are required to comply with the Standard, includ
ing conduct
ing themselves in a manner that
demonstrates appropriate, non-discr
im
inatory behaviours.
We do not accept unlawful discr
im
inat
ion
in our recruitment or employment practices on any grounds includ
ing but not
lim
ited to: sex, race, colour, nat
ional
ity, ethn
ic
ity, nat
ional or ind
igenous or
ig
in, d
isab
il
ity, age, marital or civ
il partner status,
pregnancy or maternity, sexual orientat
ion, gender
ident
ity, express
ion or reassignment, HIV or AIDS status, parental status,
mil
itary and veterans status, flex
ib
il
ity of working arrangements, relig
ion or bel
ief. We are committed to provide equal
opportunit
ies and fa
ir treatment in recruitment, appraisals, pay and condit
ions, tra
in
ing, development, success
ion planning,
promotion, grievance/disc
ipl
inary procedures and employment terminat
ion pract
ices, that are inclus
ive and access
ible; and
that do not directly or ind
irectly d
iscr
im
inate. Recruitment, employment, train
ing, development and promot
ion decis
ions are
based on the skills, knowledge and behaviour required to perform the role to the Group’s standards. Implied in all
employment terms is the commitment to equal pay for equal work. We also endeavour to make reasonable workplace
adjustments (includ
ing dur
ing the hir
ing process by g
iv
ing full and fa
ir considerat
ions to all appl
icat
ions) to ensure all
ind
iv
iduals feel supported and are able to partic
ipate fully and reach the
ir potential.
We aim to be a disab
il
ity confident organisat
ion w
ith a focus on removing barriers and improv
ing access
ib
il
ity. If employees
become disabled, we will aim to support them with appropriate train
ing and workplace adjustments where poss
ible and
support their career development and continued employment.
Standard Chartered Bank
Directors’ Report and Financ
ial Statements 2024
41
Directors’ Report continued
Health, Safety and Wellbeing
Our Health, Safety and Wellbeing (HSW) vis
ion
is to support employee productiv
ity through a healthy and res
il
ient workforce,
and our miss
ion
is to deliver every day in a safe and secure resil
ient way. Our corporate HSW programme covers both mental
and physical health and wellbeing. We comply with both external regulatory requirements and internal policy and standards
for HSW in all markets. It is our policy to ensure that the more stringent of the two requirements is always met, ensuring our
HSW practices meet or exceed the regulatory min
imum. Compl
iance rates are reported at least biannually to each country’s
Management Team.
We follow the ILO code of practice on recording and notif
icat
ion of occupational accidents and diseases, as well as align
ing
to UK Health and Safety Executive (HSE), and ensuring we meet all local Health and Safety (H&S) regulatory reporting
requirements. We record and report all work-related illness and injuries, includ
ing sub-contractors, v
is
itors and cl
ients.
In 2024, we saw a reduction in serious work injuries in PLC Group with nil work-related fatalit
ies nor
ill health to report. Major
injuries (per the UK HSE defin
it
ion) decreased from 21 in 2023 to 14 in 2024 in PLC Group, with fractures the most common type
of major in
jury (57 per cent). Overall, there is an increase of 6 percent in reported injuries in 2024 across PLC Group, with ‘slips/
trips/falls’ and ‘transport/commuting’ accidents remain
ing al
igned to or better than industry benchmarks. Hazards and
near- miss reports decreased 1 percent between 2023 and 2024 in PLC Group.
HSW performance and risks are reported annually to the PLC Group Risk Committee and Court Risk Committee. We use a
H&S management system and local regulatory compliance tracker across all countries to ensure a consistently high level of
H&S reporting and compliance for all our colleagues and clients.
In 2024, we refreshed our PLC Group Health Safety and Wellbeing Standards with enhanced focus on inc
ident management
through a clear process for timely invest
igat
ions, root cause analysis, and putting together corrective and preventive actions,
and on communicat
ing lessons learned. We enhanced contractor safety w
ith guidel
ines for select
ing, onboarding, and
managing contractors, and continuous monitor
ing and evaluat
ion of contractor performance to address the elevated H&S
risks faced by our contractors due to the nature of their work. In April 2024, we celebrated World Day for Safety and Health at
Work across the Group. Over 900 colleagues joined web
inars on topics of burnout and supporting resil
ience. We also
relaunched the Safety and Security Learning Pathway remind
ing how each employee can help ma
inta
in a safe work
ing
environment in the Group.
The Group sponsors medical and healthcare services for all employees, except in markets where cover is provided through
State-mandated healthcare, which represent less than 0.8 per cent of the PLC Group’s employees. More details on how we
support our colleagues’ wellbeing are on Page 39 of the PLC Group’s Annual Report.
Psychosocial risk is an area that an increas
ing number of H&S regulators are leg
islat
ing on. Psychosoc
ial risks are those that
cause physical or psychological harm, aris
ing from the des
ign or management of work, the work environment, workplace
interact
ions or behav
iours. In line with the Australia Work Health and Safety (Managing Psychosocial Hazards at Work) Code
of Practice 2024 a pilot study was conducted in Australia, assessing the psychosocial hazards and factors. In 2025 we aim to
expand our health and safety management systems to cover management of psychosocial risks.
In 2024, we achieved the WELL Equity Rating for nine key office build
ings across the globe and ach
ieved the WELL Gold
Certif
icat
ion for Capitol Tower Hanoi Vietnam. Developed by the International WELL Build
ing Inst
itute (IWBI), the rating &
certif
icat
ion recognises our commitment to creating people first workplaces that promote health, wellbeing, and equity, and
a sign
ificant m
ilestone in our broader strategy toward enhancing social sustainab
il
ity.
Supply Chain Management
Our purchases of goods and services are governed through a third-party risk management framework through which we
aim to follow the highest standards in terms of selection of suppliers, due dil
igence and contract management.
For informat
ion about how the PLC Group engages w
ith suppliers on environmental and social matters, please see our
Supplier Charter and Supplier Divers
ity and Inclus
ion Standard.
The PLC Group publishes a Modern Slavery Statement annually under the UK Modern Slavery Act 2015 and Australian
Modern Slavery Act 2018. The PLC Group’s 2024 Modern Slavery Statement will be published at the same time as the PLC
Group Annual Report. This document sets out the actions the PLC Group has taken during 2024 to assess and manage the
risk of slavery, forced, bonded or compulsory labour, the worst forms of child labour, and human traffick
ing (modern slavery)
in its operations and supply chain.
+ Our Supplier Charter and Supplier Divers
ity and Inclus
ion standard can be viewed at
sc.com/suppliercharter and sc.com/supplierd
ivers
ity
Directors’ Report continued
Standard Chartered Bank
42
Directors’ Report and Financ
ial Statements 2024
Product responsib
il
ity
The PLC Group has in place a risk framework, compris
ing pol
ic
ies, standards and controls to support these objectives
in
alignment with our Conduct Risk Management Approach. This framework covers sales practices, client communicat
ions,
appropriateness and suitab
il
ity, and post-sales practice. There are controls across all activ
it
ies above and the controls are
tested on a regular basis to provide assurance on the framework. As part of this, we ensure products sold are suitable for
clients and comply with relevant laws and regulations. We also review our products on a period
ic bas
is and refine them to
keep them relevant to the changing needs of Clients and to meet regulatory obligat
ions.
We have processes and guidel
ines spec
if
ic to each of our Cl
ient industr
ies, to promptly resolve Cl
ient complaints, understand
and respond to client issues. Conduct considerat
ions are g
iven sign
ificant we
ight
ing
in front-line incent
ive structures to dr
ive
the right behaviours.
For more informat
ion on our approach to product des
ign, product pric
ing, treat
ing Clients fairly and protecting vulnerable
customers, and incent
iv
is
ing our frontl
ine employees, see pages 26 and 27. For more informat
ion on fraud
ident
ification see
page 96 of PLC’s 2024 Annual Report.
Environmental impact of our operations
The PLC Group aims to min
im
ise the environmental impact of our operations as part of our commitment to be a responsible
company. The PLC Group reports on energy, water and non-hazardous waste data and the targets the PLC Group has set to
reduce energy, water and waste consumption.
The PLC Group’s reporting methodology is based upon the “The Greenhouse Gas Protocol – A Corporate Accounting and
Reporting Standard (Revised Edit
ion)”.
+ Information on the princ
iples and methodolog
ies used to calculate the GHG emiss
ions of the PLC Group can be found
in our
Environmental Reporting Criter
ia document at
sc.com/environmentcriter
ia
Reporting period
The reporting period of our Scope 1 and 2, emiss
ions
is from 1 October 2023 to 30 September 2024. This allows suffic
ient t
ime
for independent assurance to be completed on our Scope 1 and Scope 2 emiss
ions pr
ior to the publicat
ion of the PLC Annual
Report. Accordingly, the operating income used in this inventory corresponds to the same time period rather than the
calendar year used in financ
ial report
ing
Summary of Activ
it
ies of the Company’s Jersey Branch
Standard Chartered Bank Jersey Branch’s Affluent banking activ
it
ies include deposit taking, lending and investment business
in accordance with Jersey laws and regulations.
Auditor
The Audit Committee reviews the appointment of the Group statutory auditor, its effectiveness and its relationsh
ip w
ith
the Group, which includes monitor
ing our use of the aud
itors for non-audit services and the balance of audit and non-audit
fees paid. Each director believes that there is no relevant informat
ion of wh
ich our Group statutory auditor is unaware.
Each has taken all reasonable steps necessary as a director to be aware of any relevant audit informat
ion and to establ
ish
that Ernst & Young LLP (EY) is made aware of any pertinent informat
ion. A resolut
ion to re-appoint EY as auditor was passed
at the 2024 PLC Annual General Meeting.
By order of the Court
Bill Winters
Director
21 February 2025
Company Reference Number: ZC18
Directors’ Report continued
Standard Chartered Bank
43
Directors’ Report and Financ
ial Statements 2024
Statement of directors’ responsib
il
it
ies
The directors are responsible for preparing the Directors’ Report and the Group and Company Financ
ial Statements
in
accordance with applicable law and regulations.
Company law requires the directors to prepare Group and Company financ
ial statements for each financial year. Under that
law they are required to prepare the Group financ
ial statements
in accordance with internat
ional account
ing standards in
conformity with the requirements of the Companies Act 2006 and with International Financ
ial Report
ing Standards as
adopted by the European Union (EU IFRS) and applicable law, and the Company financ
ial statements
in accordance with
internat
ional account
ing standards in conformity with the requirements of the Companies Act 2006.
Under company law the directors must not approve the financ
ial statements unless they are sat
isf
ied that they g
ive a true
and fair view of the state of affairs of the Group and Company and of their profit or loss for that period. In preparing each
of the Group and Company financial statements, the d
irectors are required to:
•
Select suitable accounting polic
ies and then apply them cons
istently;
•
Make judgements and estimates that are reasonable, relevant and reliable;
•
State whether they have been prepared in accordance internat
ional account
ing standards in conformity with the
requirements of the Companies Act 2006 and with EU IFRS;
•
Assess the Group and the Company’s abil
ity to cont
inue as a going concern, disclos
ing, as appl
icable, matters related
to going concern; and
•
Use the going concern basis of accounting unless they either intend to liqu
idate the Group or the Company or to cease
operations or have no realist
ic alternat
ive but to do so.
The directors are responsible for keeping adequate accounting records that are suffic
ient to show and expla
in the
Company’s transactions and disclose with reasonable accuracy at any time the financ
ial pos
it
ion of the Company and
enable them to ensure that its financ
ial statements comply w
ith the Companies Act 2006. They are responsible for such
internal control as they determine is necessary to enable the preparation of financ
ial statements that are free from mater
ial
misstatement, whether due to fraud or error, and have general responsib
il
ity for taking such steps as are reasonably open
to them to safeguard the assets of the Group and to prevent and detect fraud and other irregular
it
ies.
Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report and Directors’
Report that complies with that law and those regulations.
Responsib
il
ity statement of the directors in respect of the Directors’ Report and Financ
ial Statements
We confirm that to the best of our knowledge:
•
The financial statements, prepared
in accordance with the applicable set of accounting standards, give a true and fair
view of the assets, liab
il
it
ies, financial pos
it
ion and profit or loss of the Company and the undertak
ings included in the
consolidat
ion taken as a whole; and
•
The Strategic Report includes a fair review of the development and performance of the business and the posit
ion of
the Company and the undertakings included in the consolidat
ion taken as a whole, together w
ith a descript
ion of the
emerging risks and uncertaint
ies that they face.
We consider the Directors’ Report and Financ
ial Statements, taken as a whole to be fa
ir, balanced and understandable and
provides the informat
ion necessary to assess the Group’s pos
it
ion and performance, bus
iness model and strategy.
By order of the Court
Diego De Giorg
i
Director
21 February 2025
Standard Chartered Bank
44
Directors’ Report and Financ
ial Statements 2024
The following parts of the Risk review and Capital review form part of these financ
ial statements –
•
a) Risk review:
Disclosures marked as ‘audited’ from the start of Credit Risk section (page 45) to the end of other princ
ipal
risks in the same section (page 108); and
•
b) Capital review:
Tables marked as ‘audited’ from the start of ‘Capital base’ (page 109) to the end of ‘Total capital’ (page
110).
Risk update | Page number | |
Risk management | Risk Management Framework | 45 |
approach | Princ ipal r isks | 50 |
Risk profile | Credit Risk | 58 |
Basis of preparation | 58 | |
Credit Risk overview | 58 | |
Impairment model | 58 | |
Staging of financ ial instruments | 58 | |
IFRS 9 expected credit loss princ iples and approaches | 58 | |
Summary of Credit Risk performance | 59 | |
Maximum exposure to Credit Risk | 60 | |
Analysis of financ ial instrument by stage | 62 | |
Credit quality analysis | 66 | |
• Credit quality by client segment | 66 | |
Movement in gross exposures and credit impa irment for loans and advances, debt secur it ies, | 71 | |
undrawn commitments and financ ial guarantees | ||
Credit impa irment charge | 76 | |
Problem credit management and provis ion ing | 76 | |
• Forborne and other modif ied loans by cl ient segment | 76 | |
Credit Risk mit igat ion | 77 | |
• Collateral | 77 | |
• Collateral held on loans and advances | 78 | |
• Collateral – Corporate and Investment Banking | 79 | |
• Collateral – Wealth and Retail Banking | 80 | |
• Mortgage loan-to-value ratios by geography | 81 | |
• Collateral and other credit enhancements possessed or called upon | 81 | |
• Other Credit Risk mit igat ion | 81 | |
Other portfolio analysis | 82 | |
• Contractual maturity analysis of loans and advances by client segment | 82 | |
• Credit quality by industry | 83 | |
• Debt securit ies and other el ig ible b ills | 87 | |
IFRS 9 expected credit loss methodology | 88 | |
Traded Risk | 96 | |
Market Risk changes | 96 | |
Counterparty Credit Risk | 99 | |
Derivat ive financial instruments Credit Risk mit igat ion | 99 | |
ity and Funding Risk Liqu id | 99 | |
ity and Funding Risk metrics Liqu id | 99 | |
ity analysis of the Group’s balance sheet Liqu id | 101 | |
Interest Rate Risk in the Banking Book | 106 | |
Operational and Technology Risk | 107 | |
Operational and Technology Risk profile | 107 | |
Other princ ipal r isks | 108 | |
Capital | Capital management and governance | 109 |
Capital ratios | 109 | |
Capital base | 110 | |
Leverage ratio | 110 |
Risk Profile
Risk Management Framework
Risk management is at the heart of banking; it is what we do. Managing risk effectively is how we drive commerce and
prosperity for our clients and our communit
ies, and
it is how we grow sustainably and profitably as an organisat
ion.
Effective risk management is essential in deliver
ing cons
istent and sustainable performance for all our stakeholders and
is a central part of the financ
ial and operat
ional management of the Group. The Group adds value to clients and the
communit
ies
in which they operate by balancing risk and reward to generate returns for shareholders.
The Risk Management Framework (RMF) enables the Group to manage enterprise-wide risks, with the object
ive of
maxim
is
ing risk-adjusted returns while remain
ing w
ith
in our R
isk Appetite (RA). The RMF has been designed in accordance
with the PLC Group’s Enterprise Risk Management Framework (ERMF). It is reviewed and approved by the SC Bank Court
annually, with the latest version being effective from August 2024.
Risk culture
Risk culture encompasses our general awareness, attitudes, and behaviours towards risk, as well as how risk is managed
at enterprise level.
A healthy risk culture is one in which everyone takes personal responsib
il
ity to ident
ify and assess, openly d
iscuss, and take
prompt action to address exist
ing and emerg
ing risks. We expect our control functions to provide oversight and challenge
constructively, collaboratively, and in a timely manner on the risks that are owned by the first line of defence. This effort is
reflected in our valued behaviours and underpinned by our Code of Conduct and Ethics.
> Further details on our
Code of Conduct and Ethics
can be found on page 95 of SC PLC Group 2024 Annual Report.
The risks we face constantly evolve, and we must always look for ways to manage them as effectively as possible. Whilst
unfavourable outcomes will occur from time to time, a healthy risk culture means that we react quickly and transparently.
We can then take the opportunity to learn from our experience and improve our framework and processes.
Strategic risk management
The Group’s approach to strategic risk management includes the following:
•
Risk ident
ification:
impact analyses of risks that arise from the Group’s growth plans, strategic in
it
iat
ives, and bus
iness
model vulnerabil
it
ies are reviewed. This assesses how exist
ing r
isks have evolved in terms of relative importance and
whether new risks have emerged.
•
Risk Appetite:
impact analysis is performed to assess if strategic in
it
iat
ives can be ach
ieved with
in RA and h
ighl
ight areas
where addit
ional RA should be cons
idered.
•
Stress testing:
ident
ified r
isks are used to develop scenarios for enterprise stress tests.
Roles and responsib
il
it
ies
1
Senior Managers Regime
Roles and responsib
il
it
ies under the RMF are al
igned to the object
ives of the UK Sen
ior Managers and Certif
icat
ion Regime.
The Group Chief Risk Officer (GCRO) is responsible for the overall development and maintenance of the Group’s RMF and for
ident
ify
ing material risks which the Group may be exposed to. The GCRO delegates effective implementat
ion of the R
isk
Type Frameworks (RTF) to Risk Framework Owners (RFO), who provide second line of defence oversight for their respective
PRTs.
The Risk function
The Risk function provides oversight and challenge on the Group’s risk management, ensuring that business is conducted in
line with regulatory expectations. The GCRO directly manages the Risk function, which is independent from the orig
inat
ion,
trading, and sales functions of the businesses. The Risk function is responsible for:
•
proposing the RA for approval by the SC Bank Court
•
mainta
in
ing the RMF, ensuring that it remains relevant and appropriate to the Group’s business activ
it
ies, and is effectively
communicated and implemented across the Group
•
ensuring that risks are properly assessed, risk and return decis
ions are transparent and r
isks are controlled in accordance
with the PLC Group’s standards and RA
•
overseeing and challenging the management of PRTs under the RMF
•
independence of the Risk function by ensuring that the necessary balance in making risk and return decis
ions
is not
compromised by short-term pressures to generate revenues.
The Risk function supports the Group’s strategy by build
ing a susta
inable RMF that places regulatory and compliance
standards, together with culture of appropriate conduct, at the forefront of the Group’s agenda.
1
Senior managers refer to ind
iv
iduals designated as senior management functions under the FCA and PRA Senior Managers Regime.
Standard Chartered Bank
45
Directors’ Report and Financ
ial Statements 2024
Risk Profile continued
Standard Chartered Bank
46
Directors’ Report and Financ
ial Statements 2024
Our Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR) function
2
works alongside the Risk function with
in the RMF to
deliver a unif
ied second l
ine of defence. Compliance Risk and Financ
ial Cr
ime Risk, as PRTs, fall under the scope of the
CFCR’s responsib
il
it
ies.
Three lines of defence model
The Group applies a three lines of defence model to its day-to-day activ
it
ies for effective risk management, and to reinforce
a strong governance and control environment. Typically:
•
Businesses and functions engaged in or supporting revenue generating activ
it
ies that own and manage risks constitute the
first line of defence.
•
Control functions, independent of the first line of defence, that provide oversight and challenge of risk management
activ
it
ies act as the second line of defence.
•
Internal Audit acts as the third line of defence, provid
ing
independent assurance on the effectiveness of controls supporting
the activ
it
ies of the first and second lines of defence.
Each PRT has an RTF which outlines the areas of governance and risk management and is the formal mechanism through
which authorit
ies are delegated. R
isk management plans, processes, activ
it
ies, and resource allocations are consistent with
the three lines of defence model prescribed by the RMF.
Risk ident
ification and assessment
Identif
icat
ion and assessment of potentially adverse risk events is an essential first step in managing the risks of any business
or activ
ity. To ensure cons
istency, we use PRTs to classify our risk exposures. However, we also recognise the need to mainta
in
a holist
ic perspect
ive since:
•
a single transaction or activ
ity may g
ive rise to multiple types of risk exposure
•
risk concentrations may arise from multiple exposures that are closely correlated
•
a given risk exposure may change its form from one risk type to another.
There are also sources of risk that arise beyond our own operations, such as the Group’s dependency on suppliers for the
provis
ion of serv
ices and technology.
As the Group remains accountable for risks aris
ing from the act
ions of such third parties, failure to adequately monitor
and manage these relationsh
ips could mater
ially impact the Group’s abil
ity to operate.
The Group mainta
ins a taxonomy of r
isks inherent to the strategy and business model, as well as a risk inventory which
captures ident
ified r
isks, includ
ing the TERs to wh
ich the Group is or might be exposed to. Multiple ident
ification and
assessment techniques are used to ensure breadth and depth of understanding of the internal and external risk environment,
as well as potential opportunit
ies. A r
isk assessment of the corporate plan is undertaken annually, supplemented by risk
assessments of new in
it
iat
ives. R
isk ident
ification findings
inform the related risk oversight process, and most importantly RA
and controls setting, scenario selection and design, and model refinement and development.
The GCRO and the Standard Chartered Bank Executive Risk Committee (SCB ERC) regularly review reports on the risk profile
for the PRTs, adherence to Group RA, stress test results and the Group risk inventory, includ
ing TERs.
Risk Appetite and profile
The Group recognises the following constraints which determine the risks that we are will
ing to take
in pursuit of our strategy
and the development of a sustainable business:
•
Risk capacity is the maximum level of risk the Group can assume, given its current capabil
it
ies and resources, before
breaching constraints determined by capital and liqu
id
ity requirements or the internal operational environment, or
otherwise fail
ing to meet the expectat
ions of regulator and law enforcement agencies.
•
RA is defined by the Group and approved by the Court. It is the boundary for the risk that the Group is will
ing to undertake
to achieve its strategic object
ives and corporate plan. We set RA to enable us to grow susta
inably whilst managing our
risks, giv
ing confidence to our stakeholders. The RA
is supplemented by risk control tools such as granular-level lim
its,
polic
ies and standards to ma
inta
in the Group’s r
isk profile with
in approved RA.
The Court is responsible for approving the RA Statements, which are underpinned by a set of financ
ial and operat
ional
control parameters known as RA metrics and their associated thresholds. These set boundaries for the aggregate risk
exposures that can be taken across the Group.
The Group RA is reviewed bi-annually to ensure that it is fit for purpose and aligned with strategy, with focus given to new
or emerging risks.
2
From 1 January 2025, our Conduct, Financ
ial Cr
ime and Compliance (CFCC) function was renamed as Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR)
Risk Profile continued
Standard Chartered Bank
47
Directors’ Report and Financ
ial Statements 2024
Risk Appetite Statement
“The Group’s objective
is to not compromise adherence with its RA in order to pursue revenue growth or higher returns”.
See the table on page 48 for the set of RA Statements.
Stress testing
The objective of stress test
ing is to support the PLC Group in assessing that it:
•
does not have exposure to excessive risk concentrations that could produce unacceptably high losses under severe but
plausible scenarios;
•
has sufficient financial resources to w
ithstand severe but plausible scenarios;
•
has the financial flex
ib
il
ity to respond to extreme but plausible scenarios;
•
understands key business model risks and considers what kind of event might crystallise those risks – even if extreme
and with a low likel
ihood of occurr
ing;
•
ident
ifies as requ
ired, actions to mit
igate the l
ikel
ihood or
impact of those events; and
•
has set RA metrics at appropriate levels.
The PLC Group enterprise stress tests incorporate capital and liqu
id
ity adequacy stress tests, includ
ing recovery and
resolution, as well as reverse stress tests.
Stress tests are performed at PLC Group, Solo, country, business, and portfolio level under a wide range of risks and at varying
degrees of severity.
Based on the stress test results, the Group Chief Financ
ial Officer (GCFO) and GCRO can recommend strateg
ic actions to the
Court to ensure that the Group’s strategy remains with
in RA.
In addit
ion, analys
is is run at the PRT level to assess specif
ic r
isks and concentrations that the Group may be exposed to.
These include qualitat
ive assessments such as stress
ing of credit sectors or portfolios, and quantitat
ive assessments such
as potential losses from severe but plausible market risk scenarios or internal stressed liqu
id
ity metrics.
Stress testing plays a crit
ical role
in assessing the potential impact on portfolio values of extreme but plausible scenarios,
leading to potential losses typically much larger than those predicted by the Value at Risk (VaR) model. The Group uses
histor
ical and forward-look
ing scenarios. A common set of scenarios is used across all legal entit
ies complemented
in some
cases with entity-specif
ic scenar
ios. RA for market risk stress losses is set at the Group as well as legal entity level.
Non-financial r
isk types are also stressed to assess the necessary capital requirements under the Operational and
Technology RTF.
The PLC Group has also undertaken a number of Climate Risk stress tests, both those mandated by regulators as well
as management scenarios.
Risk Profile continued
Standard Chartered Bank
48
Directors’ Report and Financ
ial Statements 2024
Princ
ipal R
isk Types
PRTs are those risks that are inherent in our strategy and business model and have been formally defined in the Group’s RMF.
These risks are managed in line with the PLC Group’s RTFs which are cascaded to the Group.
The PRTs and associated RA Statements are approved by the Court, and reviewed annually.
The table below shows the Group’s current PRTs, their defin
it
ion and RA Statements.
Princ ipal R isk Type | Definit ion | Risk Appetite Statement |
Credit Risk | Potential for loss due to failure of a counterparty to | The Group manages its credit exposures following the |
meet its agreed obligat ions to pay the Group. | princ iple of d ivers ification across products, geograph ies, | |
client segments and industry sectors. | ||
Traded Risk | Potential for loss resulting from activ it ies undertaken | The Group should control its financ ial markets act iv it ies |
by the Group in financ ial markets. | to ensure that Market and Counterparty Credit Risk | |
losses do not cause material damage to the Group’s | ||
franchise. | ||
Treasury Risk | Potential for insuff ic ient capital, liqu id ity, or funding to | Indiv idual regulated ent it ies w ith in the Group should |
support our operations, the risk of reductions in earnings | mainta in sufficient cap ital, liqu id ity, and funding to | |
or value from movements in interest rates impact ing | support its operations, and an interest rate profile | |
banking book items and the potential for losses from | ensuring that the reductions in earnings or value from | |
a shortfall in the Group’s pension plans. | movements in interest rates impact ing bank ing book | |
items does not cause material damage to the Group’s | ||
franchise. In addit ion, the Group should ensure its | ||
pension plans are adequately funded. | ||
Operational and | Potential for loss resulting from inadequate or | The Group aims to control operational and technology |
Technology Risk | failed internal processes, technology events, | risks to ensure that operational losses (financ ial or |
human error, or from the impact of external events | reputational), includ ing those related to the conduct | |
(includ ing legal r isks). | of business matters, do not cause material damage to | |
the Group’s franchise. | ||
Information and | Risk to the Group’s assets, operations, and ind iv iduals | The Group aims to mit igate and control ICS r isks to |
Cyber Security (ICS) | due to the potential for unauthorised access, use, | ensure that inc idents do not cause the Bank mater ial |
Risk | disclosure, disrupt ion, mod if icat ion, or destruction of | harm, business disrupt ion, financial loss or reputat ional |
informat ion assets and/or informat ion systems. | damage – recognis ing that wh ilst inc idents are | |
unwanted, they cannot be entirely avoided. | ||
Financ ial Cr ime Risk 3 | Potential for legal or regulatory penalties, material | The Group has no appetite for breaches of laws and |
financial loss or reputat ional damage resulting from the | regulations related to financ ial cr ime, recognis ing | |
failure to comply with applicable laws and regulations | that whilst inc idents are unwanted, they cannot be | |
relating to internat ional sanct ions, anti-money | entirely avoided. | |
laundering and anti-bribery and corruption, and fraud. | ||
Compliance Risk | Potential for penalties or loss to the Group or for an | The Group has no appetite for breaches of laws and |
adverse impact to our clients, stakeholders or to the | regulations related to regulatory non-compliance; | |
integr ity of the markets we operate in through a failure | recognis ing that wh ilst inc idents are unwanted, they | |
on our part to comply with laws, or regulations. | cannot be entirely avoided. | |
Environmental, | Potential or actual adverse impact on the environment | The Group aims to measure and manage financ ial and |
Social and | and/or society, the Group’s financ ial performance, | non-financial r isks aris ing from cl imate change, reduce |
Governance and | operations, or the Group’s name, brand or standing, | emiss ions in line with our net zero strategy and protect |
Reputational | aris ing from env ironmental, social or governance | the Group from material reputational damage by |
(ESGR) Risk | factors, or as a result of the Group’s actual or perceived | upholding responsible conduct and striv ing to do no |
actions or inact ions. | sign ificant env ironmental and social harm. | |
Model Risk | Potential loss that may occur because of decis ions | The Group has no appetite for material adverse |
or the risk of mis-estimat ion that could be pr inc ipally | impl icat ions aris ing from m isuse of models or errors | |
based on the output of models, due to errors in the | in the development or implementat ion of models, | |
development, implementat ion, or use of such models. | whilst accepting some model uncertainty. |
3
Fraud forms part of the Financ
ial Cr
ime RA Statement but, in line with market practice, does not apply a zero-tolerance approach
As of November 2024, Climate Risk RA statement is integrated into the ESGR PRT.
Risk Profile continued
Standard Chartered Bank
49
Directors’ Report and Financ
ial Statements 2024
RMF effectiveness reviews
Effectiveness review of the RMF is managed as part of the PLC Group ERMF effectiveness review. At Group level,
a self-assessment is conducted to assess the overall effectiveness of the RMF, and the results are taken into considerat
ion
in the ERMF effectiveness review. The GCRO is responsible for annually affirm
ing the effect
iveness of the RMF to the
Court Risk Committee (CRC).
The RMF effectiveness review measures year-on-year progress. Ongoing effectiveness reviews allow for a structured
approach to ident
ify
improvement opportunit
ies and bu
ild plans to address them.
In 2025, the Group aims to further strengthen its risk management practices by improv
ing the management of non-financial
risks with
in
its businesses, functions and across our footprint. As the regulatory environment continuously changes, the Group
constantly monitors regulatory developments and take pro-active actions for compliance.
Executive and Board risk oversight
Overview
The corporate governance and committee structure helps the Group to conduct our business. The Court has ultimate
responsib
il
ity for risk management and approves the RMF based on the recommendation of the Court Risk Committee, which
also recommends the Group RA Statement for all PRTs and other risks. The Court comprises of the major
ity of the
independent non-executive directors from the PLC Board, executive directors from the PLC Board as well as an executive
director and non-executive director who are appointed solely to the Court with the specif
ic purpose of prov
id
ing
independent
decis
ion mak
ing at the Court meetings.
Court and Executive level risk committee governance structure
The Committee governance structure below presents the view as of 2024.
| COURT | |||
| COURT LEVEL COMMITTEES¹ | |||
Combined United States | |||
Court Risk Committee | Court Audit Committee | Court Nominat ion | and Risk Committee |
| Committee | Operations | ||
(US Risk Committee) | |||
1
The Court also has a Standing Committee with a remit to approve matters, on behalf of the Court, where a formal resolution is required for legal and regulatory purposes
Court Risk Committee
The CRC is concerned with the oversight and review of princ
ipal r
isks.
Court Audit Committee
The Court Audit Committee is concerned with the oversight and review of financ
ial, aud
it, internal control and non-financ
ial
crime issues.
Court Nominat
ion Comm
ittee
The Court Nominat
ion Comm
ittee is responsible for oversight and review of the composit
ion of, and appo
intments to the
Company’s Court, and the development of a diverse pipel
ine for success
ion.
Combined United States Operations and Risk Committee (US Risk Committee)
The Committee is appointed by the SC Bank Court to oversee risk and governance of the Combined US Operations (CUSO)
to ensure compliance with the Dodd-Frank Act section 165 Enhanced Prudential Standards in particular for the requirements
relating to the responsib
il
it
ies of the US R
isk Committee and the US Chief Risk Officer. The Committee is responsible for
approval and oversight of the US strategy, the Risk Management Framework and associated polic
ies, and the R
isk Appetite
Statement and metrics for CUSO. The Committee also approves the remuneration and performance object
ives of key
US Officers. Membership of the Committee is comprised of directors of the SC Bank or PLC Group, includ
ing at least one
independent non-executive director and one member with sign
ificant r
isk management experience.
The Group has two management level committees, namely the SCB ERC and Solo & Standard Chartered Bank UK (Branch)
Asset and Liab
il
ity Management Committee (Solo & SCB ALCO).
Risk Profile continued
Standard Chartered Bank
50
Directors’ Report and Financ
ial Statements 2024
Standard Chartered Bank Executive Risk Committee
SCB ERC is responsible for ensuring the effective management of risk throughout the Group in support of the Group’s strategy.
The GCRO chairs the Committee, whose members are drawn from the GMT. The Committee oversees the implementat
ion
of the Standard Chartered Bank RMF, includ
ing the delegat
ion of any part of its authorit
ies to appropr
iate ind
iv
iduals
or properly constituted sub-committees. SCB ERC relies on jo
int meet
ings with the PLC Group Risk Committee and its
sub-committees to provide oversight of the PRTs across clients, businesses, products and functions. The Committee requests
and receives relevant informat
ion to fulfil
its governance mandates relating to the risks to which the Group is exposed,
and alerts Senior/Executive management when risk reports do not meet its requirements.
Solo & Standard Chartered Bank UK (Branch) Asset and Liab
il
ity Management Committee
Solo & SCB ALCO is appointed by the SC Bank CFO and chaired by the Group Treasurer. The Committee is responsible for
determin
ing the Group’s approach to balance sheet management and ensur
ing that, in executing the Group’s strategy, the
Group operates with
in the
internally approved RA and external requirements relating to capital, loss-absorbing capacity,
liqu
id
ity, leverage, Interest Rate Risk in the Banking Book (IRRBB), Banking Book Basis Risk and Structural Foreign Exchange
Risk as well as monitor
ing the structural
impact of decis
ions around susta
inable finance, Net Zero and Climate Risk.
The Committee is also responsible for ensuring that internal and external recovery planning requirements are met.
The SCB ERC and Solo & SCB ALCO receive reports that include informat
ion on r
isk measures, RA metrics and thresholds,
risk concentrations, forward-looking assessments, updates on specif
ic r
isk situat
ions and act
ions agreed by these committees
to reduce or manage risk.
Princ
ipal r
isks
We manage and control our PRTs through dist
inct RTFs, pol
ic
ies and RA.
> See page 48 for the Group’s current
PRT definit
ions
and
Risk Appetite Statements
.
In May 2024, to further align with our risk strategy and promote consistency and effic
iency the Operat
ional and Technology
Risk and Information and Cyber Security Risk teams were unif
ied under the Operat
ional, Technology and Cyber Risk (OTCR)
function. The PRT disclosures and RA statements for ICS Risk and Operational and Technology Risk remain separate.
Following Tracey McDermott’s retirement as Group Head, Conduct, Financ
ial Cr
ime and Compliance at the end of 2024,
David Howes has been appointed as Group Head, Compliance, Financ
ial Cr
ime and Conduct Risk (CFCR) from 1 January
2025 and will assume Senior Manager responsib
il
it
ies for F
inanc
ial Cr
ime, includ
ing the Group Ent
ity Senior Manager
Function, Compliance Oversight Function (SMF16) and Money Laundering Reporting Officer (MLRO) role
(SMF 17).
Credit Risk
Mit
igat
ion
We apply segment-specif
ic PLC Group pol
ic
ies for Corporate & Investment Bank
ing (CIB) and Wealth & Retail Banking (WRB),
which set the princ
iples that must be followed for the end-to-end cred
it process covering in
it
iat
ion, assessment,
documentation, approval, monitor
ing and governance.
We also apply the PLC Group standards for the elig
ib
il
ity, enforceab
il
ity, and effect
iveness of mit
igat
ion arrangements.
Potential losses are mit
igated us
ing a range of tools, such as collateral, netting agreements, credit insurance, credit
derivat
ives and guarantees.
Risk mit
igants are carefully assessed for the
ir market value, legal enforceabil
ity, correlat
ion, and counterparty risk of
the protection provider. Collateral is valued prior to drawdown and regularly thereafter as required, to reflect current
market condit
ions, the probab
il
ity of recovery and the per
iod of time to realise the collateral in the event of liqu
idat
ion.
We also seek to divers
ify
its collateral holdings across asset classes and markets.
Where guarantees, credit insurance, standby letters of credit or credit derivat
ives are used as Cred
it Risk mit
igat
ion, the
creditworth
iness of the protect
ion provider is assessed and monitored using the same credit process applied to the obligor.
Monitor
ing
The Group regularly monitors credit exposures, portfolio performance, external trends and emerging risks that may
impact risk management outcomes. Internal risk management reports that are presented to risk committees contain
informat
ion on key pol
it
ical and econom
ic trends across major portfolios and countries, portfolio delinquency and loan
impa
irment performance.
Risk Profile continued
Standard Chartered Bank
51
Directors’ Report and Financ
ial Statements 2024
In CIB, clients and portfolios are subject to addit
ional rev
iew when they display signs of actual or potential weakness; for
example, where there is a decline in the client’s posit
ion w
ith
in the
ir industry, financ
ial deter
iorat
ion, a breach of covenants,
or non-performance of an obligat
ion w
ith
in the st
ipulated period. Such accounts are subject to a dedicated process overseen
by the Credit Issues Committee in the relevant countries where client account strategies and credit grades are re-evaluated.
In addit
ion, remed
ial actions can be undertaken, such as placing accounts on early alert for exposure reduction, security
enhancement or exit
ing the account. Cred
it-impa
ired accounts are managed by the Group’s spec
ial
ist recovery un
it, Stressed
Asset Group (SAG), which is independent of the Client Coverage/Relationsh
ip Managers. The Stressed Asset R
isk (SAR) Group
is the second line risk unit.
On an annual basis, senior members from the CIB business and Risk partic
ipate
in a more extensive portfolio review (known
as the ‘industry portfolio review’) for certain industry groups. In addit
ion to a rev
iew of the portfolio informat
ion, th
is industry
portfolio review incorporates industry outlook, key elements of the business strategy, RA, credit profile and emerging and
horizon risks. A summary of these industry portfolio reviews is also shared with the CIB Financ
ial R
isk Committee.
For WRB, exposures and collateral monitor
ing are performed at the counterparty and/or portfol
io level across different client
segments to ensure transactions and portfolio exposures remain with
in RA. Portfol
io delinquency trends are also monitored.
Accounts that are past due (or perceived as high risk but not yet past due) are subject to collections or recovery processes
managed by a special
ist
independent function. In some countries, aspects of collections and recovery activ
it
ies are
outsourced. For discret
ionary lend
ing portfolios, sim
ilar processes to those of CIB are followed.
Any material in-country developments that may impact sovereign ratings are monitored closely by Country Risk with
in the
ERM function. The Country Risk Early Warning system, a triage-based risk ident
ification system, categor
ises countries based
on a forward-looking view of possible downgrades and the potential incremental risk-weighted assets (RWA) impact.
In addit
ion, an
independent Credit Risk review team with
in the ERM funct
ion performs assessments of the Credit Risk profiles
at various portfolio levels. They focus on selected countries and segments through deep dives, comparative analysis, and
review and challenge of the basis of credit approvals. The review aims to ensure that the evolving Credit Risk profiles of CIB
and
WRB are well managed with
in RA and pol
ic
ies. Results of the rev
iews are reported to the SC Bank ERC and CRC.
Credit rating and measurement
All credit proposals are subject to a robust credit risk assessment. It includes a comprehensive evaluation of the client’s
credit quality, includ
ing w
ill
ingness, ab
il
ity, and capac
ity to repay. The primary lending considerat
ion for counterpart
ies is
based on their credit quality and operating cashflows, while for ind
iv
idual borrowers it is based on personal income or
wealth. The risk assessment gives due considerat
ion to the cl
ient’s liqu
id
ity and leverage posit
ion.
Where applicable, the assessment includes a detailed analysis of the Credit Risk mit
igat
ion arrangements to determine
the level of reliance on such arrangements as the secondary source of repayment in the event of a sign
ificant deter
iorat
ion
in a client’s credit quality leading to default. Client income, net worth, and the liqu
id
ity of asset by class are considered for
overall risk assessment for wealth lending. Wealth lending credit lim
its are subject to the ava
ilab
il
ity of qualif
ied collateral.
A standard alphanumeric Credit Risk grade system is used for CIB, whereby credit grades 1 to 12 are assigned to performing
customers, and credit grades 13 and 14 are assigned to non-performing or defaulted customers.
WRB internal ratings-based portfolios use applicat
ion and behav
ioural credit scores that are calibrated to generate a
probabil
ity of default. The R
isk Decis
ion Framework uses a cred
it rating system to define the portfolio/new booking
segmentation, shape and decis
ion cr
iter
ia for the unsecured consumer bus
iness segment.
Advanced Internal Ratings-Based (AIRB) models cover the major
ity of our exposures and are used
in assessing risks at a
customer and portfolio level, setting strategy, and optim
is
ing our risk-return decis
ions. The PLC Group Model R
isk Committee
(MRC) approves material internal ratings-based risk measurement models. Prior to review and approval, all internal ratings-
based models are validated by an independent model validat
ion team. Rev
iews are also triggered if the performance of
a model deteriorates materially against predetermined thresholds, measured through the ongoing model performance
monitor
ing process.
We adopt the AIRB approach under the Basel regulatory framework to calculate Credit Risk capital requirements for the
majority of our exposures. The Group has also establ
ished a global programme to assess capital requirements necessary to
be implemented to meet the latest revised Basel III regulation (referred to as Basel 3.1 or Basel IV).
Credit Concentration Risk
Credit Concentration Risk for CIB is managed through concentration lim
its cover
ing large exposure lim
it to a s
ingle
counterparty or a group of connected counterparties (based on control and economic dependence criter
ia), or at portfol
io
level for multiple exposures that are closely correlated. Portfolio RA metrics are set, where appropriate, by industry, products,
tenor, collateralisat
ion level, top cl
ients, and exposure to holding companies.
For concentrations that are material at a Group level, breaches and potential breaches are monitored by the respective
governance committees and reported to the SC Bank ERC and CRC.
Risk Profile continued
Standard Chartered Bank
52
Directors’ Report and Financ
ial Statements 2024
Credit impa
irment
For CIB, in line with the regulatory guidel
ines, Stage 3 expected cred
it loss (ECL) is considered when an obligor is more than 90
days past due on any amount payable to the Group, or the obligor has symptoms of unlikel
iness to pay
its credit obligat
ions
in full as they fall due. These credit-impa
ired accounts are managed by SAG.
In WRB, loans to ind
iv
iduals and small businesses are considered credit-impa
ired as soon as any payment of
interest or
princ
ipal
is 90 days overdue or they meet other object
ive ev
idence of impa
irment, such as bankruptcy, debt restructur
ing,
fraud, or death, with unlikely continuat
ion of contractual payments. F
inanc
ial assets are wr
itten off, in the amount that is
determined to be irrecoverable, when they meet condit
ions set such that emp
ir
ical ev
idence suggests the client is unlikely to
meet their contractual obligat
ions, or a loss of pr
inc
ipal
is reasonably expected.
Estimat
ing the amount and t
im
ing of future recover
ies involves sign
ificant judgement and cons
iders the assessment of
matters such as future economic condit
ions and the value of collateral, for wh
ich there may not be a readily accessible
market. The total amount of the Group’s impa
irment prov
is
ion
is inherently uncertain, being sensit
ive to changes
in economic
and credit condit
ions across the markets
in which the Group operates.
> Further details on sensit
iv
ity analysis of ECL under IFRS 9 can be found in the ‘
Risk profile
’ section on page 91.
Underwrit
ing
The underwrit
ing of secur
it
ies and loans
is in scope of the CIB RA. Addit
ional l
im
its approved by the GCRO are set on sectoral
concentration and maximum holding period. The Underwrit
ing Comm
ittee, under the authority of the GCRO, approves
ind
iv
idual proposals to underwrite new security issues and loans for our clients. In July 2024, oversight of Underwrit
ing
Committee was transferred from Traded Risk to CIB Credit Risk.
Traded Risk
Mit
igat
ion
Traded Risk lim
its are defined at a level wh
ich aims to ensure that the Group remains with
in RA. The Traded R
isk Policy sets
the princ
iples that must be followed for the end-to-end traded r
isk management process includ
ing l
im
it sett
ing, risk capture
and measurement, lim
it mon
itor
ing and escalat
ion, risk mit
igat
ion and stress testing. Polic
ies are rev
iewed and approved by
the Global Head, Traded Risk Management period
ically to ensure the
ir ongoing effectiveness.
Market Risk measurement
The Group uses a VaR model to measure the risk of losses aris
ing from future potent
ial adverse movements in market
rates, prices, and volatil
it
ies. VaR is a quantitat
ive measure of market r
isk that applies recent histor
ical market cond
it
ions
to estimate the potential future loss in market value that will not be exceeded in a set time period at a set statist
ical
confidence level.
VaR provides a consistent measure that can be applied across trading businesses and products over time and can be set
against actual daily trading profit and loss outcomes.
For day-to-day risk management, VaR is calculated as at the close of business, generally at UK time for expected market
movements over one business day and to a confidence level of 97.5 per cent. Intra-day risk levels may vary from those
reported at the end of the day.
The Group applies two VaR methodologies:
•
Histor
ical s
imulat
ion: th
is involves the revaluation of all exist
ing pos
it
ions to reflect the effect of h
istor
ically observed
changes in Market Risk factors on the valuation of the current portfolio. This approach is applied for general Market Risk
factors and the majority of spec
if
ic (cred
it spread) risk factors. The enhanced Volatil
ity Scal
ing VaR (VSV) model went live
in January 2025, where risk factors’ returns are scaled to reflect histor
ical volat
il
ity. The VSV model
is more responsive to
volatil
ity changes observed
in the market.
•
Monte Carlo simulat
ion: th
is methodology is sim
ilar to h
istor
ical s
imulat
ion but w
ith considerably more input risk factor
observations. These are generated by random sampling techniques, but the results retain the essential variab
il
ity and
correlations of histor
ically observed r
isk factor changes. This approach is applied for capturing the id
iosyncrat
ic credit
spread risk factors.
As an input to regulatory capital, trading book VaR is calculated for expected movements over 10 business days and to a
confidence level of 99 per cent. Some types of market risk are not captured in the regulatory VaR measure and these risks
not in VaR are subject to capital add-ons.
An analysis of VaR results in 2024 is available in the Risk profile section (page 96).
Counterparty Credit Risk
A Potential Future Exposure (PFE) model is used to measure the credit exposure aris
ing from the pos
it
ive mark-to-market
of traded products. The PFE model provides a quantitat
ive est
imate of future potential movements in market rates, prices,
and volatil
it
ies at a certain confidence level over different time horizons based on the tenor of the transactions.
The Group applies two PFE methodologies: simulat
ion based, wh
ich is predominantly used, and an add-on based
PFE methodology.
Risk Profile continued
Standard Chartered Bank
53
Directors’ Report and Financ
ial Statements 2024
Monitor
ing
Traded Risk Management monitors the overall portfolio risk and ensures that it is with
in spec
if
ied l
im
its and therefore RA.
Lim
its are typ
ically reviewed twice a year.
All material Traded Risks are monitored daily against approved lim
its. Traded R
isk lim
its apply at all t
imes unless separate
intra-day lim
its have been set.
Treasury Risk
We apply the PLC Group polic
ies for the management of mater
ial Treasury Risks and closely monitor our risk profile through
RA metrics set at Solo and country level.
Capital Risk
In order to manage Capital Risk, strategic business, and capital plans (Corporate Plan) are drawn up covering a five-year
horizon and are approved by the Court annually. The plan ensures that adequate levels of capital, includ
ing loss-absorb
ing
capacity, and an effic
ient m
ix of the different components of capital are mainta
ined to support our strategy and
business plans.
Treasury is responsible for the ongoing assessment of the demand for capital and the updating of the Solo’s capital plan.
Solo level RA metrics includ
ing cap
ital, leverage and min
imum requ
irement for own funds and elig
ible l
iab
il
ity (MREL)
and are assessed with
in the Corporate Plan to ensure that the strategy can be ach
ieved with
in r
isk tolerances.
Structural Foreign Exchange (FX) Risk
The Group’s structural FX posit
ion results from the Company’s non-US dollar
investment in the share capital and reserves of
subsid
iar
ies and branches. The FX translation gains or losses are recorded in the Company’s translation reserves with a direct
impact on the PLC Group’s and Solo’s Common Equity Tier 1 ratio.
Hedges are contracted across PLC Group and Solo to manage its structural FX posit
ion
in accordance with the RA, and as
a result net investment hedges to partially cover its exposure to certain non-US dollar currencies to mit
igate the FX
impact
of such posit
ions on
its capital ratios.
> Our
structural foreign exchange exposures
can be found in page 98.
Liqu
id
ity and Funding Risk
At Solo and country level we implement various RA metrics to monitor and manage Liqu
id
ity and Funding risk. This ensures
that the Group mainta
ins an adequate and well-d
ivers
ified l
iqu
id
ity buffer, as well as a stable funding base, to meet its
liqu
id
ity and funding regulatory requirements.
> Further detail on
Liqu
id
ity and Funding Risk
can be found in page 99.
Interest Rate Risk in the Banking Book
At Solo level, we implement the RA for Economic Value of Equity and Annual Earnings at Risk and monitor these against lim
its
and management action triggers. This risk arises from differences in the repric
ing profile,
interest rate basis, and optional
ity of
banking book assets, liab
il
it
ies and off-balance sheet
items. IRRBB represents an economic and commercial risk to the Group
and its capital adequacy.
> Further detail on
IRRBB
can be found in page 106.
Pension Risk
Pension Risk is the potential for loss due to having to meet an actuarially assessed shortfall in the Group’s pension plans.
Pension Risk arises from the Group’s contractual or other liab
il
it
ies w
ith respect to its occupational pension plans or other
long-term benefit obligat
ion. For a funded plan,
it represents the risk that addit
ional contr
ibut
ions w
ill need to be made
because of a future funding shortfall. For unfunded obligat
ions,
it represents the risk that the cost of meeting future benefit
payments is greater than currently antic
ipated.
Recovery and resolution planning
In line with PRA requirements, the Group mainta
ins a Recovery Plan and a Solo Recovery Plan (SCB UK and
its branches).
The Solo Recovery Plan includes a set of recovery ind
icators, an escalat
ion framework and a set of management actions
capable of being implemented during a stress. The Solo Recovery Plan is also subject to period
ic fire-dr
ill testing in line with
the Group. Other major entit
ies of SC Bank also ma
inta
in the
ir own recovery plans in line with the Group Standards and local
requirements.
As the UK resolution authority, the BoE set a single point of entry bail-in at the ultimate holding company level (Standard
Chartered PLC) as the preferred resolution strategy for the PLC Group. In support of this strategy, the PLC Group has a set of
capabil
it
ies, arrangements, and resources in place to mainta
in, test and
improve resolution capabil
it
ies, and continue to meet
the required resolvabil
ity outcomes on an ongo
ing basis.
Following the BoE’s first resolvabil
ity assessment and publ
ic disclosure for major UK firms in 2022, the PLC Group submitted
its Resolvabil
ity Self-Assessment Report to the BoE and PRA and subsequently publ
ished its resolvabil
ity publ
ic disclosure in
August 2024 as part of the second Resolvabil
ity Assessment Framework cycle.
Risk Profile continued
Standard Chartered Bank
54
Directors’ Report and Financ
ial Statements 2024
Monitor
ing
On a day-to-day basis, Treasury Risk is managed by Treasury, Finance and country CEOs. The Group regularly reports and
monitors Treasury Risk inherent in its business activ
it
ies and those that arise from internal and external events.
Internal risk management reports covering the balance sheet and the capital and liqu
id
ity posit
ion are presented to the
Solo & SCB ALCO. The reports contain key informat
ion on balance sheet trends, exposures aga
inst RA and supporting risk
measures which enable members to make informed decis
ions around the overall management of the balance sheet. In
addit
ion, an
independent Treasury CRO with
in ERM rev
iews the prudency and effectiveness of Treasury Risk management.
Pension Risk is managed by the Head of Pensions and Reward Analytics, and monitored by the Global Head, ERM on
a period
ic bas
is.
Operational and Technology Risk
Mit
igat
ion
The Company addendum to the Operational and Technology RTF sets out the Group’s overall approach to the management
of Operational and Technology Risk in line with the Group’s Operational and Technology RA. This is supported by the Risk and
Control Self-Assessment (RCSA), which provides a systematic approach for ident
ification and assessment of operat
ional risks,
includ
ing des
ign and operation of mit
igat
ing controls (applicable to all risks as per the Non-Financ
ial R
isk Taxonomy).
The RCSA is used to determine the design and operating effectiveness of each process, and requires
•
the recording of end-to-end processes which deliver our key client journey and business outcomes
•
the ident
ification of r
isks to support the achievement of client and business outcomes
•
the assessment of inherent risk on the impact to client and business outcomes, and likel
ihood of occurrence
•
the design and monitor
ing of key controls to effect
ively and effic
iently m
it
igate pr
ior
it
ised risks with
in acceptable
levels and
•
the assessment of residual risk and timely treatment of elevated risks.
Elevated Residual Risks require treatment plans to address the underlying causes and reduce the risks to with
in the RA.
Monitor
ing
To deliver services to clients and to partic
ipate
in the financ
ial serv
ices sector, the Group runs processes which are exposed
to Operational and Technology risks. The Group prior
it
ises and manages risks which are sign
ificant to our cl
ients and to the
financial serv
ices sectors. The control ind
icators are regularly mon
itored to determine the Group’s exposure to residual risk.
The residual risk assessments and reporting of events form the Group’s Operational and Technology Risk profile.
The completeness of the Operational and Technology Risk profile ensures appropriate prior
it
isat
ion and t
imel
iness
of risk decis
ions,
includ
ing r
isk acceptances with treatment plans for risks that exceed acceptable thresholds.
The CRC is informed on adherence to Operational and Technology RA through metrics reported for selected risks.
These metrics are monitored, and escalation thresholds are devised based on the material
ity and s
ign
ificance of the r
isk.
These Operational and Technology RA metrics are consolidated on a regular basis and reported to the SCB ERC and CRC,
provid
ing sen
ior management with the relevant informat
ion to
inform their risk decis
ions.
Information and Cyber Security Risk
Mit
igat
ion
ICS Risk is managed through the ICS RTF, compris
ing a r
isk assessment methodology and supporting policy, standards, and
methodologies. The ICS Policy and standards are aligned to industry best practice models includ
ing the Nat
ional Institute of
Standards and Technology Cyber Security Framework and ISO 27001. We undertake an annual ICS Effectiveness Review to
evaluate ICS Risk management practices in alignment with the RMF.
Monitor
ing
The Group Chief Information Security Officer (CISO) function monitors the evolving threat landscape covering cyber threats,
attack vectors and threat actors that could target the Group. This includes performing a threat-led risk assessment to ident
ify
key threats, in-scope applicat
ions and key controls requ
ired to ensure the Group remains with
in RA.
The ICS Risk profiles of all businesses, functions and countries are consolidated to present a holist
ic Group-level ICS R
isk profile
for ongoing monitor
ing. Mandatory ICS learn
ing, phish
ing exerc
ises and role-specif
ic tra
in
ing support colleagues to mon
itor
and manage this risk.
During these reviews, the status of each risk is assessed against the Group’s controls to ident
ify any changes to
impact and
likel
ihood, wh
ich affects the overall risk rating.
The Group stress tests its cyber posture through extensive control testing and by executing offensive security testing
exercises, includ
ing vulnerab
il
ity test
ing, code reviews, penetration tests and Red Team attack simulat
ion test
ing. This testing
approach constantly stress tests the Group’s defence and approach to cyber security. These show a wider picture of the
Group’s risk profile, leading to better vis
ib
il
ity on potent
ial ‘in flight’ risks.
Risk Profile continued
Standard Chartered Bank
55
Directors’ Report and Financ
ial Statements 2024
The CISO and OTCR functions monitor the ICS Risk profile and ensure that breaches of RA are escalated to the appropriate
governance committee or authority levels for remediat
ion and track
ing.
Financ
ial Cr
ime Risk
Roles and responsib
il
it
ies
The Group Head, CFCR is the Group’s Compliance and Money-Laundering Reporting Officer and performs the Financ
ial
Conduct Authority (FCA) controlled function and senior management function in accordance with the requirements set
out by the FCA, includ
ing those set out
in their handbook on systems and controls.
Mit
igat
ion
The CFCR function is responsible for the establishment and maintenance of polic
ies, standards, and overs
ight of first line of
defence controls to ensure continued compliance with financ
ial cr
ime laws and regulations, and the mit
igat
ion of Financ
ial
Crime Risk. In this, the requirements of the PLC Group’s Operational and Technology RTF are followed to ensure a consistent
approach to the management of processes and controls.
Financ
ial Cr
ime Risk management is built on a risk-based approach, meaning the risk management plans, processes,
activ
it
ies, and resource allocations are determined according to the level of risk.
Risk mit
igat
ion takes place through the process of ident
ification of new and amended regulat
ions and the implementat
ion
of necessary process and control changes to address these.
Monitor
ing
The Group monitors enterprise-wide financ
ial cr
ime risks through the Financ
ial Cr
ime Risk Assessment. This is undertaken
annually to assess the inherent financ
ial cr
ime risk exposures and the associated processes and controls by which these
exposures are mit
igated.
Financ
ial Cr
ime Risk controls are governed in line with the PLC Group’s Operational and Technology RTF. The Group has a
monitor
ing and report
ing process in place for Financ
ial Cr
ime Risk, which includes escalation and reporting to the CFCR
relevant risk committees.
Whilst not a formal governance committee, the PLC Group’s CFCR Oversight Group provides oversight of CFCR risks
includ
ing the effect
ive implementat
ion of the PLC Group’s F
inanc
ial Cr
ime RTF. It also provides oversight, challenge and
direct
ion to CFCR pol
icy owners on material changes and posit
ions taken
in CFCR-owned polic
ies,
includ
ing
issues relating to
regulatory interpretat
ion and Group’s CFCR RA. The Regulatory Change Overs
ight Forum provides vis
ib
il
ity and overs
ight of
material and/or complex large-scale regulatory change emanating from financ
ial serv
ices regulators impact
ing non-
financial r
isks.
> Further details on
how we manage Financ
ial Cr
ime
can be found on page 96 of SC PLC Group 2024 Annual Report.
Compliance Risk
Roles and responsib
il
it
ies
All activ
it
ies that the Group engages in must comply with the relevant country/local specif
ic and extraterr
itor
ial regulat
ions.
Compliance Risk includes the risks associated with a failure to comply with all regulations that are applicable to the Group
regardless of the issu
ing regulatory author
ity. Where Compliance Risk arises, or could arise, from failure to manage another
PRT, the oversight and management processes for that specif
ic PRT must be followed, to ensure that effect
ive oversight and
challenge of the first line of defence can be provided by the appropriate second line of defence function.
Areas of regulation can be broadly div
ided
into two dist
inct categor
ies; those issued by financ
ial serv
ices regulatory
authorit
ies and those
issued by non-financ
ial serv
ices regulators. The Group is exposed to both categories of regulation,
and roles and responsib
il
it
ies d
iffer depending on the category. For regulations issued by financ
ial serv
ices regulatory
authorit
ies and other regulators that may
issue regulations pertain
ing to Compl
iance Risk, CFCR ident
ifies new and
amended regulations as and when issued and communicates the relevant regulatory obligat
ions to the country RFO
delegate. The areas where CFCR does not act in a second line of defence capacity are specif
ied
in the respective RTF
with appropriate ownership.
Each of the assigned second line of defence functions have responsib
il
it
ies,
includ
ing mon
itor
ing relevant regulatory
developments from non-financial serv
ices regulators at both Group and country levels, policy development, implementat
ion,
and validat
ion as well as overs
ight and challenge of first line of defence processes and controls.
Mit
igat
ion
We apply the PLC Group’s polic
ies for management of Compl
iance Risk. The CFCR function is responsible for the
establishment and maintenance of polic
ies, standards, and overs
ight of the first line of defence controls to ensure
compliance with laws and regulations, and the mit
igat
ion of Compliance Risk. In this, the requirements of the PLC
Group’s Operational and Technology RTF are followed to ensure a consistent approach to the management of processes
and controls.
Risk Profile continued
Standard Chartered Bank
56
Directors’ Report and Financ
ial Statements 2024
Monitor
ing
The monitor
ing of controls des
igned to mit
igate the r
isk of regulatory non-compliance in processes is governed in line with
the PLC Group’s Operational and Technology RTF. Compliance Risk reporting includes escalation and reporting to the CFCR
and relevant risk committees.
Whilst not a formal governance committee, the PLC Group’s CFCR Oversight Group provides oversight of CFCR risks includ
ing
the effective implementat
ion of the PLC Group’s Compl
iance RTF, and oversight, challenge and direct
ion to CFCR pol
icy
owners on material changes and posit
ions taken
in CFCR-owned polic
ies,
includ
ing
issues relating to regulatory interpretat
ion
and the Group’s CFCR RA. The Regulatory Change Oversight Forum provides vis
ib
il
ity and overs
ight of material and/or
complex large-scale regulatory change emanating from financ
ial serv
ices regulators impact
ing non-financial r
isks.
Environmental, Social and Governance (ESGR) Risk
Mit
igat
ion
The ESGR RTF provides the overall risk management approach for Environmental, Social and Governance (ESG) and
Reputational risks.
The ESG Risk policy outlines the Group’s commitment to integrat
ing ESG cons
iderat
ions
into its business, operations,
and decis
ion-mak
ing process. The policy sets out the requirements for ident
ify
ing, assessing, and managing ESG risks
includ
ing Cl
imate Risk.
The Reputational Risk policy sets out the princ
ipal sources of reputat
ional risk driven by negative shifts in stakeholder
perceptions, as well as the responsib
il
it
ies for manag
ing Reputational Risk aris
ing out of cl
ient onboarding and due dil
igence,
from transactions, product design and product features, or strategic coverages such as exposure to sensit
ive
industr
ies,
markets, or investments. Whenever potential for stakeholder concerns is ident
ified,
issues are subject to review and decis
ion
by both the first and second lines of defence. The Reputational Risk policy also sets out the key considerat
ions for m
it
igat
ing
greenwashing risk that can arise during product and/or deal lifecycle, sustainab
il
ity reporting and disclosures, and external
campaigns related to sustainab
il
ity themes.
Monitor
ing
Exposure to reputational risks aris
ing from transact
ions, clients, products and strategic coverage is monitored through
established triggers to prompt the appropriate risk-based considerat
ions and assessment by the first l
ine of defence
and escalations to the second line of defence. Risk acceptance decis
ions and themat
ic trends are also reviewed on
a period
ic bas
is.
Exposure to ESG Risks is monitored through triggers embedded with
in the first l
ine of defence processes. The environmental
and social risks are considered for clients and transactions via Environmental and Social Risk Assessments and/or Climate
Risk Assessments (CRAs). Vendors that are presenting as high risk are assessed for modern slavery risk. Based on responses
provided by the supplier at on-boarding, those that meet the high-risk category-country combinat
ions are subjected to
further risk assessment.
Exposure to Climate Risk is monitored in conjunct
ion w
ith other PRTs. We have embedded qualitat
ive and quant
itat
ive
climate considerat
ions
into the Group’s Credit Underwrit
ing Pr
inc
iples for O
il and Gas, Min
ing, Sh
ipp
ing, Commerc
ial Real
Estate and Project Finance portfolio. We have expanded coverage of Climate and Credit Risk considerat
ions to phys
ical
collateral, as they serve as key risk mit
igants espec
ially in default events. We assess physical risk concentrations for our
WRB portfolio on a quarterly basis and assess the physical risk vulnerabil
it
ies of our sites period
ically and when new s
ites
are onboarded.
Our Net Zero Climate Risk Working Forum meets quarterly to discuss account plans for high Climate Risk and net zero
divergent clients. Stress testing and scenario analysis are used to assess the impact of ESGR related risks. The impact on
capital requirements has been included in the PLC Group Internal Capital Adequacy Assessment Process. Management
informat
ion
is reviewed at a quarterly frequency and any breaches in RA are reported to the SC Bank ERC and CRC.
Risk Profile continued
Standard Chartered Bank
57
Directors’ Report and Financ
ial Statements 2024
Model Risk
Mit
igat
ion
The Model Risk Policy and Standards define requirements for model development, validat
ion,
implementat
ion and use,
includ
ing regular model performance mon
itor
ing and, where requ
ired, model risk mit
igants.
Model deficienc
ies ident
ified through the development or val
idat
ion process, or model performance
issues ident
ified through
ongoing monitor
ing, are m
it
igated through respect
ive model risk mit
igants. M
it
igants
include model overlays as either
post-model adjustments (PMAs) or management adjustments, model restrict
ions and potent
ially a model recalibrat
ion
or redevelopment, all of which undergo independent review, challenge, and approval. PMAs are used to address observed
deficienc
ies caused from with
in the model, by adjusting the model output e
ither directly or ind
irectly (e.g. adjusting
parameters). Where a PMA is applied as a mit
igant for a model used
in Pillar 1 or Pillar 2 calculations, or models with material
impact on financ
ial account
ing disclosures (e.g. IFRS 9), the independent review must be performed by Group Model
Validat
ion (GMV) w
ith sign-off from the Model Approver prior to implementat
ion.
As with all PRTs, operational controls are used to govern all Model Risk-related processes, with regular risk assessments
performed to assess appropriateness and effectiveness of those controls, in line with the Operational and Technology RTF,
with remediat
ion plans
implemented where necessary. Group Model Risk Policy and Standards also define requirements for
determin
ist
ic quantitat
ive methods (DQMs) that are used as part of an end-to-end modelled process. DQMs are s
im
ilar
in
nature to a Model, however the processing component is either purely determin
ist
ic or has an element of expert judgement.
Unlike a Model, there is no use of statist
ical, econom
ic financ
ial or mathemat
ical theories.
The regulatory framework around Model Risk is continuously evolving, the PRA’s Supervisory Statement 1/23 (SS1/23) is
an example. The Group proactively monitors regulatory changes to take the required actions timely for compliance.
Regarding SS1/23, the Group is currently deliver
ing to a roadmap to compl
iance, which commenced in 2024 and will
continue over the next two years.
Monitor
ing
The Group monitors Model Risk via a set of RA metrics. Adherence to Model RA and any threshold breaches are reported
to the CRC, SCB ERC and PLC Model Risk Committee (MRC). These metrics and thresholds are reviewed twice per year to
ensure that threshold calibrat
ion rema
ins appropriate, and the themes adequately cover the current risks.
Models undergo regular performance monitor
ing based on the
ir level of perceived Model Risk, with monitor
ing results
presented, and breaches escalated to the Model Sponsor, Model Owner, GMV and respective MRC
or Indiv
idual Delegated Model Approvers.
Model Risk management produces Model Risk reports covering the model landscape, which include performance
metrics, ident
ified model
issues and remediat
ion plans. These are presented for d
iscuss
ion at the Model R
isk governance
committees on a regular basis.
Risk Profile continued
Standard Chartered Bank
58
Directors’ Report and Financ
ial Statements 2024
Basis of preparation
Unless otherwise stated the balance sheet and income statement informat
ion presented w
ith
in th
is section is based on the
Group’s management view. This is princ
ipally the locat
ion from which a client relationsh
ip
is managed, which may differ from
where it is financ
ially booked and may be shared between bus
inesses and/or regions. This view reflects how the client
segments and regions are managed internally.
Loans and advances to customers and banks held at amortised cost in this Risk profile section include reverse repurchase
agreement balances held at amortised cost, per Note 15 Reverse repurchase and repurchase agreements includ
ing other
sim
ilar secured lend
ing and borrowing.
Credit Risk overview
Credit Risk is the potential for loss due to the failure of a counterparty to meet its obligat
ions to pay the Group. Cred
it
exposures arise from both the banking and trading books.
Impairment model
IFRS 9 requires an impa
irment model that requ
ires the recognit
ion of expected cred
it losses (ECL) on all financ
ial debt
instruments held at amortised cost, fair value through other comprehensive income (FVOCI), undrawn loan commitments
and financial guarantees.
Staging of financ
ial
instruments
Financ
ial
instruments that are not already credit-impa
ired are or
ig
inated
into stage 1 and a 12-month expected credit loss
provis
ion
is recognised.
Instruments will remain in stage 1 until they are repaid, unless they experience sign
ificant cred
it deteriorat
ion (stage 2)
or they become credit-impa
ired (stage 3).
Instruments will transfer to stage 2 and a lifet
ime expected cred
it loss provis
ion recogn
ised when there has been a sign
ificant
change in the credit risk compared to what was expected at orig
inat
ion.
The framework used to determine a sign
ificant
increase in credit risk is set out below.
Stage 1 | Stage 2 | Stage 3 |
• 12-month ECL | • Lifet ime expected cred it loss | • Credit-impa ired |
• Performing | • Performing but has exhib ited s ign ificant | • Non-performing |
increase in credit risk (SICR) |
IFRS 9 expected credit loss princ
iples and approaches
The main methodology princ
iples and approach adopted by the Group are set out
in the following table.
Title | Supplementary informat ion | Page |
Approach for determin ing | IFRS 9 ECL methodology | 88 |
expected credit losses | Applicat ion of l ifet ime ECL | |
Key assumptions | Incorporation of forward-looking informat ion | 89 |
and judgements in | Forecast of key macroeconomic variables underlying the expected credit loss calculation and | |
determin ing ECL | the impact of non-linear ity | |
Judgemental adjustments and management overlays and sensit iv ity of ECL calculation to | ||
macroeconomic variables | ||
Sign ificant increase in | Sign ificant increase in credit risk thresholds | 93 |
Credit risk (SICR) | Specif ic qual itat ive and quant itat ive cr iter ia per segment: | |
Corporate and Investment Banking clients | ||
Wealth and Retail Banking clients | ||
Private Banking clients | ||
Debt securit ies | ||
Assessment of credit- | WRB clients | 94 |
impa ired financial assets | CIB and Private Banking clients | |
Transfers between stages | Movement in loan exposures and credit impa irment | 71 |
Modif ied financial assets | Forbearance and other modif ied loans | 76 |
Governance of Post Model | Models and Model Performance Post Model Adjustments (PMAs) | 95 |
Adjustments (PMAs) and | IFRS 9 Impairment Committee (IIC) | |
applicat ion of expert cred it | ||
judgement in respect of | ||
expected credit losses |
Risk Profile continued
Standard Chartered Bank
59
Directors’ Report and Financ
ial Statements 2024
Summary of Credit Risk Performance
Maximum exposure
The Group’s on-balance sheet maximum exposure to Credit Risk increased by $26.7 bill
ion to $543.2 b
ill
ion (31 December 2023:
$516.6 bill
ion). Cash and balances at Central bank decreased by $7.5 b
ill
ion to $56.7 b
ill
ion (31 December 2023: $64.2 b
ill
ion)
due to reduced placements. Fair Value through profit and loss increased by $6.6 bill
ion to $102.3 b
ill
ion (31 December 2023:
$95.7 bill
ion) largely due to an
increase in debt securit
ies. Loans and advances to customers
increased by $2.1 bill
ion to
$158.2 bill
ion (31 December 2023: $156.1 b
ill
ion). Debt secur
it
ies decreased by $5.9 b
ill
ion to $96.2 b
ill
ion (31 December 2023:
$102 bill
ion) due to matur
ing exposures. Off-balance sheet instruments increased by $26.7 bill
ion to $205.3 b
ill
ion
(31 December 2023: $178.6 bill
ion), due to
increases in financ
ial guarantees, other equ
ivalents and undrawn commitments,
which was driven by new business.
> Further details can be found in the ‘
Maximum exposure to Credit Risk
’ section in pages 60 to 61.
Loans and Advances
93 per cent (31 December 2023: 92 per cent) of the Group’s gross loans and advances to customers remain in stage 1 at
$149.8 bill
ion (31 December 2023: $146.7 b
ill
ion), reflect
ing our continued focus on high-quality orig
inat
ion.
Stage 1 loans and advances to customers increased by $3 bill
ion to $149.8 b
ill
ion (31 December 2023: $146.7 b
ill
ion) ma
inly
due to increases in CIB exposures in Energy and Financ
ing and Insurance sectors. Th
is was offset by lower balances in
Central and other items due to a reduction in exposures to the Government sector, across a number of our markets.
For WRB, stage 1 balances decreased by $0.6 bill
ion to $45.7 b
ill
ion (31 December 2023: $46.4 b
ill
ion) ma
inly due to a reduction
in mortgages in Singapore as sales slowed due to the higher interest rate environment.
Stage 2 gross loans and advances to customers decreased by $0.4 bill
ion to $7.3 b
ill
ion (31 December 2023: $7.7 b
ill
ion). For CIB,
stage 2 balances increased by $0.6 bill
ion to $6.3 b
ill
ion (31 December 2023: $5.7 b
ill
ion) dr
iven by Transport and Commercial
real estate (CRE) sectors. For WRB, stage 2 balances remain unchanged at $1 bill
ion (31 December 2023: $1 b
ill
ion), due to
reduction in the Singapore mortgage portfolio of $0.1 bill
ion, offset by an
increase in secured wealth balances. Higher risk
exposure decreased by $0.9 bill
ion to $35 m
ill
ion (31 December 2023: $1 b
ill
ion) for Central and other
items due to the maturity
of short-term loan exposures that were replaced with debt securit
ies
in Pakistan.
Stage 3 loans decreased by $1.1 bill
ion to $4.1 b
ill
ion (31 December 2023: $5.2 b
ill
ion) due to repayments and wr
ite-offs in
CIB. For WRB, stage 3 balances remained stable at $1.1 bill
ion (31 December 2023: $1.1 b
ill
ion). For Central and other
items,
stage 3 balances decreased by $0.1 bill
ion to $0.1 b
ill
ion (31 December 2023: $0.2 b
ill
ion).
> Further details can be found in the ‘
Analysis of financ
ial
instrument by stage’
section in pages 62 to 65;
‘
Credit quality by client segment
’ section in pages 66 to 70.
Credit impa
irment charge
The Group’s credit impa
irment was a net charge of $15 m
ill
ion (31 December 2023: release of $58 m
ill
ion).
For CIB, credit impa
irment release
increased by $99 mill
ion to a net release of $262 m
ill
ion (31 December 2023: release of
$163 mill
ion) largely due to a number of stage 3 releases and one s
ign
ificant repayment. Th
is was offset by new overlays of
$42 mill
ion
in 2024.
For WRB, credit impa
irment charges
increased by $157 mill
ion to $286 m
ill
ion (31 December 2023: $129 m
ill
ion). Th
is charge off
increase was driven by higher interest rate environment impact
ing repayments on cred
it cards and personal loans, as well as
maturity and portfolio growth of dig
ital partnersh
ips in Indonesia.
For Ventures, credit impa
irment charges
increased by $12 mill
ion to $25 m
ill
ion (31 December 2023: $13 m
ill
ion) due to portfol
io
growth and maturity of Trust Bank Plc.
For Central and other items, credit impa
irment release was lower at $34 m
ill
ion (31 December 2023: release of $37 m
ill
ion).
The release in 2024 was mainly driven by two sovereign upgrades.
> Further details can be found in the ‘
Credit impa
irment charge
’ section in page 76.
Risk Profile continued
Standard Chartered Bank
60
Directors’ Report and Financ
ial Statements 2024
Maximum exposure to Credit Risk (audited)
The table below presents the Group’s maximum exposure to Credit Risk for its on-balance sheet and off-balance sheet
financial
instruments as at 31 December 2024, before and after taking into account any collateral held or other Credit
Risk mit
igat
ion.
> Further details can be found in the ‘
Summary of Credit Risk Performance
’ section in page 59.
Group
| 2024 | 2023 | |||||||
Credit risk management | Credit risk management | |||||||
Master | Master | |||||||
Maximum | netting | Net | Maximum | netting | Net | |||
exposure | Collateral 8 | agreements | exposure | exposure | Collateral 8 | agreements | exposure | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
On-balance sheet | ||||||||
Cash and balances at central banks | 56,665 | – | – | 56,665 | 64,198 | - | 64,198 | |
Loans and advances to banks 1 | 22,941 | 2,889 | – | 20,052 | 22,803 | 1,653 | - | 21,150 |
of which – reverse repurchase | ||||||||
agreements and other sim ilar | ||||||||
secured lending 7 | 2,889 | 2,889 | – | – | 1,653 | 1,653 | - | – |
Loans and advances to customers 1 | 158,242 | 54,780 | – | 103,462 | 156,143 | 51,985 | - | 104,158 |
of which – reverse repurchase | ||||||||
agreements and other sim ilar | ||||||||
secured lending 7 | 9,121 | 9,121 | – | – | 13,827 | 13,827 | - | – |
Investment securit ies – Debt secur it ies | ||||||||
and other elig ible b ills 2 | 96,179 | – | – | 96,179 | 102,040 | – | – | 102,040 |
Fair value through profit or loss 3,7 | 102,258 | 65,603 | – | 36,655 | 95,658 | 68,149 | – | 27,509 |
Loans and advances to banks | 2,033 | – | - | 2,033 | 2,265 | - | - | 2,265 |
Loans and advances to customers | 3,989 | – | - | 3,989 | 3,188 | - | - | 3,188 |
Reverse repurchase agreements | ||||||||
and other sim ilar lend ing 7 | 65,603 | 65,603 | - | – | 68,149 | 68,149 | - | – |
Investment securit ies – Debt | ||||||||
securit ies and other el ig ible b ills 2 | 30,633 | - | - | 30,633 | 22,056 | - | - | 22,056 |
Derivat ive financial instruments 4,7 | 82,717 | 12,984 | 65,027 | 4,706 | 52,554 | 7,960 | 43,684 | 910 |
Accrued income | 1,846 | - | - | 1,846 | 1,768 | - | - | 1,768 |
Assets held for sale⁹ | 866 | - | - | 866 | 693 | - | - | 693 |
Other assets 5 | 21,535 | - | - | 21,535 | 20,714 | - | - | 20,714 |
Total balance sheet | 543,249 | 136,256 | 65,027 | 341,966 | 516,571 | 129,747 | 43,684 | 343,140 |
Off-balance sheet 6 | ||||||||
Undrawn Commitments | 123,931 | 1,861 | - | 122,070 | 117,899 | 2,296 | - | 115,603 |
Financ ial Guarantees and | ||||||||
other equivalents | 81,343 | 1,570 | - | 79,773 | 60,707 | 2,139 | - | 58,568 |
Total off-balance sheet | 205,274 | 3,431 | – | 201,843 | 178,606 | 4,435 | – | 174,171 |
Total | 748,523 | 139,687 | 65,027 | 543,809 | 695,177 | 134,182 | 43,684 | 517,311 |
1
Amounts are net of ECL provis
ions. An analys
is of credit quality is set out in the credit quality analysis section- page 66. Further details of collateral held by client
segment and stage are set out in the collateral analysis section on page 77. The Group also has credit mit
igat
ion through Credit Linked Notes as set out on page 81
2
Excludes equity and other investments of $263 mill
ion (31 December 2023: $ 434m
ill
ion). Further deta
ils are set out in Note 12 Financ
ial
instruments
3
Excludes equity and other investments of $1,366 mill
ion (31 December 2023: $1,442 m
ill
ion). Further deta
ils are set out in Note 12 Financ
ial
instruments
4
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the counterparty through netting the sum of
the posit
ive and negat
ive mark-to-market values of applicable derivat
ive transact
ions
5
Other assets include cash collateral, and acceptances, in addit
ion to unsettled trades and other financial assets
6
Excludes ECL provis
ions of $208 m
ill
ion (31 December 2023: $180 m
ill
ion) wh
ich are reported under Provis
ions for l
iab
il
it
ies and charges
7
Collateral capped at maximum exposure (over-collateralised)
8
Adjusted for over-collateralisat
ion, wh
ich has been determined with reference to the drawn and undrawn component as this best reflects the effect on the amount
aris
ing from expected cred
it losses. Loans and advances to customers collateral now re-presented between on and off -balance sheet as it also includes guarantees
9
The amount is after ECL provis
ions. Further deta
ils are set out in Note 20 Assets held for sale and associated liab
il
it
ies
Risk Profile continued
Standard Chartered Bank
61
Directors’ Report and Financ
ial Statements 2024
Company
2024 | 2023 | |||||||
Credit risk management | Credit risk management | |||||||
Master | Master | |||||||
Maximum | netting | Net | Maximum | netting | Net | |||
exposure | Collateral 8 | agreements | exposure | exposure | Collateral 8 | agreements | exposure | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
On-balance sheet | ||||||||
Cash and balances at central banks | 45,233 | – | – | 45,233 | 52,758 | – | – | 52,758 |
Loans and advances to banks 1 | 11,755 | 1,423 | – | 10,332 | 10,135 | 554 | – | 9,581 |
of which – reverse repurchase | ||||||||
agreements and other sim ilar | ||||||||
secured lending 7 | 1,423 | 1,423 | – | – | 554 | 554 | – | – |
Loans and advances to customers 1 | 77,597 | 24,378 | – | 53,219 | 75,883 | 23,157 | – | 52,726 |
of which – reverse repurchase | ||||||||
agreements and other sim ilar | ||||||||
secured lending 7 | 9,041 | 9,041 | – | – | 12,212 | 12,212 | – | – |
Investment securit ies – Debt secur it ies | ||||||||
and other elig ible b ills 2 | 81,855 | – | 81,855 | 92,362 | – | – | 92,362 | |
Fair value through profit or loss 3,7 | 87,122 | 62,141 | – | 24,981 | 85,097 | 64,804 | – | 20,293 |
Loans and advances to banks | 1,880 | – | – | 1,880 | 2,244 | – | – | 2,244 |
Loans and advances to customers | 3,276 | – | – | 3,276 | 2,622 | – | – | 2,622 |
Reverse repurchase agreements | ||||||||
and other sim ilar lend ing 7 | 62,141 | 62,141 | – | – | 64,804 | 64,804 | – | – |
Investment securit ies – Debt | ||||||||
securit ies and other el ig ible b ills 2 | 19,825 | – | – | 19,825 | 15,427 | – | – | 15,427 |
Derivat ive financial instruments 4,7 | 82,844 | 11,788 | 67,030 | 4,026 | 53,221 | 7,289 | 45,556 | 376 |
Accrued income | 1,256 | – | – | 1,256 | 1,151 | – | – | 1,151 |
Assets held for sale⁹ | 474 | – | – | 474 | 52 | – | – | 52 |
Other assets 5 | 17,587 | – | – | 17,587 | 16,990 | – | – | 16,990 |
Total balance sheet | 405,723 | 99,730 | 67,030 | 238,963 | 387,649 | 95,804 | 45,556 | 246,289 |
Off-balance sheet 6 | ||||||||
Undrawn Commitments | 69,293 | 1,033 | – | 68,260 | 69,007 | 1,387 | – | 67,620 |
Financ ial Guarantees and | ||||||||
other equivalents | 69,038 | 1,215 | – | 67,823 | 49,586 | 1,836 | – | 47,750 |
Total off-balance sheet | 138,331 | 2,248 | – | 136,083 | 118,593 | 3,223 | – | 115,370 |
Total 10 | 544,054 | 101,978 | 67,030 | 375,046 | 506,242 | 99,027 | 45,556 | 361,659 |
1
Amounts are net of ECL provis
ions. An analys
is of credit quality is set out in the credit quality analysis section page 66. Further details of collateral held by client segment
and stage are set out in the collateral analysis section page 77. The Group also has credit mit
igat
ion through Credit Linked Notes as set out on page 81
2
Excludes equity and other investments of $246 mill
ion (31 December 2023: $409 m
ill
ion). Further deta
ils are set out in Note 12 Financ
ial
instruments
3
Excludes equity and other investments of $1,227 mill
ion (31 December 2023: $1,315 m
ill
ion). Further deta
ils are set out in Note 12 Financ
ial
instruments
4
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to the counterparty through netting the sum of
the posit
ive and negat
ive mark-to-market values of applicable derivat
ive transact
ions
5
Other assets include cash collateral, and acceptances, in addit
ion to unsettled trades and other financial assets
6
Excludes ECL provis
ions of $148 m
ill
ion (31 December 2023: $132 m
ill
ion) wh
ich are reported under Provis
ions for l
iab
il
it
ies and charges
7
Collateral capped at maximum exposure (over-collateralised)
8
Adjusted for over-collateralisat
ion, wh
ich has been determined with reference to the drawn and undrawn component as this best reflects the effect on the amount
aris
ing from expected cred
it losses. Loans and advances to customers collateral now re-presented between on and off -balance sheet as it also includes guarantees
9
The amount is after ECL provis
ions. Further deta
ils are set out in Note 20 Assets held for sale and associated liab
il
it
ies
10 Excludes 'Amounts due from subsid
iary undertak
ings and other related parties' of $10,066 mill
ion (31 December 2023: $10,053 m
ill
ion). The amounts are held w
ith
in
stage 1 and rated as 'strong' and is net of an expected credit loss of $2.4 mill
ion (31 December 2023: $20.4 m
ill
ion)
Risk Profile continued
Standard Chartered Bank
62
Directors’ Report and Financ
ial Statements 2024
Analysis of financ
ial
instrument by stage (audited)
The table below presents the gross and credit impa
irment balances by stage for amort
ised cost and FVOCI financ
ial
instruments as at 31 December 2024.
> Further details can be found in the ‘
Summary of Credit Risk Performance
’ section in page 59.
Group
2024 | ||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Net | Net | Net | Net | |||||||||
Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | |
balance 1 | impa irment | value | balance 1 | impa irment | value | balance 1 | impa irment | value | balance 1 | impa irment | value | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Cash and | ||||||||||||
balances at | ||||||||||||
central banks | 55,815 | – | 55,815 | 432 | (4) | 428 | 426 | (4) | 422 | 56,673 | (8) | 56,665 |
Loans and | ||||||||||||
advances | ||||||||||||
to banks | ||||||||||||
(amortised cost) | 22,556 | (5) | 22,551 | 313 | (1) | 312 | 80 | (2) | 78 | 22,949 | (8) | 22,941 |
Loans and | ||||||||||||
advances to | ||||||||||||
customers | ||||||||||||
(amortised cost) | 149,751 | (254) 149,497 | 7,292 | (193) | 7,099 | 4,098 | (2,452) | 1,646 | 161,141 | (2,899) 158,242 | ||
Debt securit ies | ||||||||||||
and other | ||||||||||||
elig ible b ills 5 | 94,480 | (20) | – | 1,612 | (4) | – | 103 | (2) | – | 96,195 | (26) | – |
Amortised cost | 36,867 | (14) | 36,853 | 473 | (2) | 471 | 42 | – | 42 | 37,382 | (16) | 37,366 |
FVOCI 2 | 57,613 | (6) | – | 1,139 | (2) | – | 61 | (2) | – | 58,813 | (10) | – |
Accrued income | ||||||||||||
(amortised cost) 4 | 1,846 | – | 1,846 | – | – | – | – | – | – | 1,846 | – | 1,846 |
Assets held | ||||||||||||
for sale | 822 | (7) | 815 | 38 | – | 38 | 58 | (45) | 13 | 918 | (52) | 866 |
Other assets | 21,535 | – | 21,535 | – | – | – | 3 | (3) | – | 21,538 | (3) | 21,535 |
Undrawn | ||||||||||||
commitments 3 | 120,578 | (25) | – | 3,346 | (33) | – | 7 | (1) | – | 123,931 | (59) | – |
Financ ial | ||||||||||||
guarantees, | ||||||||||||
trade credits | ||||||||||||
and irrevocable | ||||||||||||
letter of credits 3 | 78,996 | (13) | – | 1,744 | (7) | – | 603 | (129) | – | 81,343 | (149) | – |
Total | 546,379 | (324) | – | 14,777 | (242) | – | 5,378 | (2,638) | – | 566,534 | (3,204) | – |
1
Gross carrying amount for off-balance sheet refers to notional values
2
These instruments are held at fair value on the balance sheet. The ECL provis
ion
in respect of debt securit
ies measured at FVOCI
is held with
in the OCI reserve
3
These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a financ
ial l
iab
il
ity and therefore there is no “net carrying amount”.
ECL allowances on off-balance sheet instruments are held as liab
il
ity provis
ions to the extent that the drawn and undrawn components of loan exposures can
be separately ident
ified. Otherw
ise they will be reported against the drawn component
4
Stage 1 ECL is not material
5
Stage 3 gross includes $59 mill
ion (2023: $80 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith impa
irment of n
il mill
ion (2023: $14 m
ill
ion)
Risk Profile continued
Standard Chartered Bank
63
Directors’ Report and Financ
ial Statements 2024
2023 | ||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Net | Net | Net | Net | |||||||||
Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | |
balance 1 | impa irment | value | balance 1 | impa irment | value | balance 1 | impa irment | value | balance 1 | impa irment | value | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Cash and | ||||||||||||
balances at | ||||||||||||
central banks | 63,606 | – | 63,606 | 207 | (7) | 200 | 404 | (12) | 392 | 64,217 | (19) | 64,198 |
Loans and | ||||||||||||
advances | ||||||||||||
to banks | ||||||||||||
(amortised cost) | 22,210 | (3) | 22,207 | 537 | (9) | 528 | 74 | (6) | 68 | 22,821 | (18) | 22,803 |
Loans and | ||||||||||||
advances to | ||||||||||||
customers | ||||||||||||
(amortised cost) | 146,718 | (198) 146,520 | 7,657 | (193) | 7,464 | 5,177 | (3,018) | 2,159 | 159,552 | (3,409) | 156,143 | |
Debt securit ies | ||||||||||||
and other | ||||||||||||
elig ible b ills 5 | 100,092 | (26) | 1,861 | (34) | 165 | (61) | 102,118 | (121) | ||||
Amortised cost | 39,774 | (19) | 39,755 | 103 | (2) | 101 | 121 | (57) | 64 | 39,998 | (78) | 39,920 |
FVOCI 2 | 60,318 | (7) | 1,758 | (32) | 44 | (4) | 62,120 | (43) | ||||
Accrued income | ||||||||||||
(amortised cost) 4 | 1,768 | – | 1,768 | – | – | – | – | – | – | 1,768 | – | 1,768 |
Assets held | ||||||||||||
for sale 4 | 654 | (34) | 620 | 76 | (4) | 72 | 1 | – | 1 | 731 | (38) | 693 |
Other assets | 20,714 | – | 20,714 | – | – | – | 3 | (3) | – | 20,717 | (3) | 20,714 |
Undrawn | ||||||||||||
commitments 3 | 113,301 | (20) | 4,596 | (27) | – | 2 | – | 117,899 | (47) | – | ||
Financ ial | ||||||||||||
guarantees, | ||||||||||||
trade credits and | ||||||||||||
irrevocable letter | ||||||||||||
of credits 3 | 57,505 | (8) | – | 2,530 | (13) | – | 672 | (112) | – | 60,707 | (133) | – |
Total | 526,568 | (289) | – | 17,464 | (287) | – | 6,498 | (3,212) | – 550,530 | (3,788) | – | |
1
Gross carrying amount for off-balance sheet refers to notional values
2
These instruments are held at fair value on the balance sheet. The ECL provis
ion
in respect of debt securit
ies measured at FVOCI
is held with
in the OCI reserve
3
These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a financ
ial l
iab
il
ity and therefore there is no “net carrying amount”.
ECL allowances on off-balance sheet instruments are held as liab
il
ity provis
ions to the extent that the drawn and undrawn components of loan exposures can be
separately ident
ified. Otherw
ise they will be reported against the drawn component
4
Stage 1 ECL is not material
5
Stage 3 gross includes $80 mill
ion or
ig
inated cred
it-impa
ired debt secur
it
ies and $14 m
ill
ion
impa
irment
Risk Profile continued
Standard Chartered Bank
64
Directors’ Report and Financ
ial Statements 2024
Company
2024 | ||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Net | Net | Net | Net | |||||||||
Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | |
balance 1 | impa irment | value | balance 1 | impa irment | value | balance 1 | impa irment | value | balance 1 | impa irment | value | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Cash and | ||||||||||||
balances at | ||||||||||||
central banks | 45,093 | – | 45,093 | 140 | – | 140 | – | – | – | 45,233 | – | 45,233 |
Loans and | ||||||||||||
advances | ||||||||||||
to banks | ||||||||||||
(amortised cost) | 11,545 | (1) | 11,544 | 209 | (1) | 208 | 3 | – | 3 | 11,757 | (2) | 11,755 |
Loans and | ||||||||||||
advances to | ||||||||||||
customers | ||||||||||||
(amortised cost) | 72,697 | (116) | 72,581 | 4,010 | (99) | 3,911 | 2,685 | (1,580) | 1,105 | 79,392 | (1,795) | 77,597 |
Debt securit ies | ||||||||||||
and other | ||||||||||||
elig ible b ills 5 | 81,618 | (16) | – | 244 | (1) | – | – | – | 81,862 | (17) | – | |
Amortised cost | 35,212 | (7) | 35,205 | – | – | – | – | – | – | 35,212 | (7) | 35,205 |
FVOCI 2 | 46,406 | (9) | – | 244 | (1) | – | – | – | 46,650 | (10) | – | |
Accrued income | ||||||||||||
(amortised cost) 4 | 1,256 | – | 1,256 | – | – | – | – | – | – | 1,256 | – | 1,256 |
Assets held | ||||||||||||
for sale | 479 | (5) | 474 | – | – | – | – | – | – | 479 | (5) | 474 |
Other assets | 17,587 | – | 17,587 | – | – | – | – | – | – | 17,587 | – | 17,587 |
Undrawn | ||||||||||||
commitments 3 | 66,520 | (15) | – | 2,770 | (17) | – | 3 | – | 69,293 | (32) | – | |
Financ ial | ||||||||||||
guarantees, | ||||||||||||
trade credits and | ||||||||||||
irrevocable letter | ||||||||||||
of credits 3 | 67,538 | (10) | – | 1,059 | (4) | – | 441 | (102) | – | 69,038 | (116) | – |
Total 6 | 364,333 | (163) | – | 8,432 | (122) | – | 3,132 | (1,682) | – | 375,897 | (1,967) | – |
1
Gross carrying amount for off-balance sheet refers to notional values
2
These instruments are held at fair value on the balance sheet. The ECL provis
ion
in respect of debt securit
ies measured at FVOCI
is held with
in the OCI reserve
3
These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a financ
ial l
iab
il
ity and therefore there is no “net carrying amount”.
ECL allowances on off-balance sheet instruments are held as liab
il
ity provis
ions to the extent that the drawn and undrawn components of loan exposures can
be separately ident
ified. Otherw
ise they will be reported against the drawn component
4
Stage 1 ECL is not material
5
Stage 3 gross includes nil (2023: $25 mill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith impa
irment of n
il (2023: $14mill
ion)
6
Excludes 'Amounts due from subsid
iary undertak
ings and other related parties' of $10,066 mill
ion. The amounts are held w
ith
in stage 1 and rated as 'strong' at
31 December 2024 and is net of an expected credit loss of $2.4 mill
ion
Risk Profile continued
Standard Chartered Bank
65
Directors’ Report and Financ
ial Statements 2024
| 2023 | ||||||||||||
| Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Net | Net | Net | Net | |||||||||
Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | |
balance 1 | impa irment | value | balance 1 | impa irment | value | balance 1 | impa irment | value | balance 1 | impa irment | value | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Cash and balances | ||||||||||||
at central banks | 52,756 | – | 52,756 | 2 | – | 2 | – | – | – | 52,758 | – | 52,758 |
Loans and | ||||||||||||
advances to banks | ||||||||||||
(amortised cost) | 9,849 | (1) | 9,848 | 286 | (1) | 285 | 6 | (4) | 2 | 10,141 | (6) | 10,135 |
Loans and advances | ||||||||||||
to customers | ||||||||||||
(amortised cost) | 70,343 | (89) 70,254 | 4,077 | (80) | 3,997 | 3,761 | (2,129) | 1,632 | 78,181 | (2,298) 75,883 | ||
Debt securit ies and | ||||||||||||
other elig ible b ills 5 | 92,038 | (23) | 315 | – | 76 | (56) | 92,429 | (79) | ||||
Amortised cost | 38,053 | (11) 38,042 | – | – | – | 76 | (56) | 20 | 38,129 | (67) 38,062 | ||
FVOCI 2 | 53,985 | (11) | 315 | – | – | – | 54,300 | (11) | ||||
Accrued income | ||||||||||||
(amortised cost) 4 | 1,151 | – | 1,151 | – | – | – | – | – | – | 1,151 | – | 1,151 |
Assets held for sale 4 | 52 | – | 52 | – | – | – | – | – | – | 52 | – | 52 |
Other assets | 16,990 | – | 16,990 | – | – | – | – | – | – | 16,990 | – | 16,990 |
Undrawn | ||||||||||||
commitments 3 | 65,255 | (15) | – | 3,752 | (18) | – | – | – | – | 69,007 | (33) | – |
Financ ial guarantees, | ||||||||||||
trade credits and | ||||||||||||
irrevocable letter | ||||||||||||
of credits 3 | 47,186 | (4) | – | 1,886 | (8) | – | 514 | (87) | – | 49,586 | (99) | – |
Total 6 | 355,620 | (132) | 10,318 | (107) | 4,357 | (2,276) | 370,295 | (2,515) | ||||
1
Gross carrying amount for off-balance sheet refers to notional values
2
These instruments are held at fair value on the balance sheet. The ECL provis
ion
in respect of debt securit
ies measured at FVOCI
is held with
in the OCI reserve
3
These are off-balance sheet instruments. Only the ECL is recorded on-balance sheet as a financ
ial l
iab
il
ity and therefore there is no “net carrying amount”.
ECL allowances on off-balance sheet instruments are held as liab
il
ity provis
ions to the extent that the drawn and undrawn components of loan exposures can
be separately ident
ified. Otherw
ise they will be reported against the drawn component
4
Stage 1 ECL is not material
5
Stage 3 gross includes $25 mill
ion or
ig
inated cred
it-impa
ired debt secur
it
ies and $14 m
ill
ion
impa
irment
6
Excludes 'Amounts due from subsid
iary undertak
ings and other related parties' of $10,053 mill
ion. The amounts are held w
ith
in stage 1 and rated as 'strong' at
31 December 2023 and is net of an expected credit loss of $20.4 mill
ion
Risk Profile continued
Standard Chartered Bank
66
Directors’ Report and Financ
ial Statements 2024
Credit quality analysis (audited)
Credit quality by client segment
For CIB, exposures are analysed by credit grade (CG), which plays a central role in the quality assessment and monitor
ing
of risk. All loans are assigned a CG, which is reviewed period
ically and amended
in light of changes in the borrower’s
circumstances or behaviour. CGs 1 to 12 are assigned to stage 1 and stage 2 (performing) clients or accounts, while CGs 13
and 14 are assigned to stage 3 (credit-impa
ired) cl
ients. The mapping of credit quality is as follows.
Mapping of credit quality
The Group uses the following internal risk mapping to determine the credit quality for loans.
| Corporate & Investment Banking | Private Banking 1 | Wealth & Retail Banking 4 | |||
Credit quality | Internal grade | S&P external ratings | Regulatory PD | ||
descript ion | mapping | equivalent | range (%) | Internal ratings | Number of days past due |
Strong | 1A to 5B | AAA/AA+ to BBB-/ BB+ 2 | 0 to 0.425 | Class I and Class IV | Current loans (no past dues nor impa ired) |
Satisfactory | 6A to 11C | BB to CCC+ 3 | 0.426 to 15.75 | Class II and Class III | Loans past due till 29 days |
Higher risk | Grade 12 | CCC+/C | 15.751 to 99.999 | Stressed Assets Group | Past due loans 30 days and over till |
(SAG) Managed | 90 days | ||||
1
For Private Banking, classes of risk represent the type of collateral held. Class I represents facil
it
ies with liqu
id collateral, such as cash and marketable secur
it
ies.
Class II represents unsecured/partially secured facil
it
ies and those with ill
iqu
id collateral, such as equity in private enterprises. Class III represents facil
it
ies with
resident
ial or Commerc
ial real estate collateral. Class IV covers margin trading facil
it
ies
2
Banks’ rating: AAA/AA+ to BB+/BB. Sovereigns’ rating: AAA to BB+
3
Banks’ rating: BB to “CCC+ to C”. Sovereigns’ rating: BB+/BB to B-/CCC+
4
Wealth & Retail Banking excludes Private Banking. Medium enterprise clients with
in Bus
iness Banking are managed using the same internal credit grades as CIB
The table below sets out the gross loans and advances held at amortised cost, expected credit loss provis
ions and expected
credit loss coverage by business segment and stage. Expected credit loss coverage represents the expected credit loss
reported for each segment and stage as a proportion of the gross loan balance for each segment and stage.
> Further details can be found in the ‘
Summary of Credit Risk Performance
’ section in page 59.
Risk Profile continued
Standard Chartered Bank
67
Directors’ Report and Financ
ial Statements 2024
Loans and advances by client segment (audited)
Group
| 2024 | ||||||||
| Customers | ||||||||
Corporate | ||||||||
& | Wealth & | |||||||
Investment | Retail | Central & | Customer | Undrawn | Financ ial | |||
Banks | Banking | Banking | Ventures | other items | Total | commitments | Guarantees | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Stage 1 | 22,556 | 83,297 | 45,743 | 584 | 20,127 | 149,751 | 120,578 | 78,996 |
• Strong | 14,002 | 59,798 | 41,697 | 576 | 19,750 | 121,821 | 109,269 | 50,039 |
• Satisfactory | 8,554 | 23,499 | 4,046 | 8 | 377 | 27,930 | 11,309 | 28,957 |
Stage 2 | 313 | 6,251 | 1,001 | 5 | 35 | 7,292 | 3,346 | 1,744 |
• Strong | 7 | 896 | 684 | – | – | 1,580 | 851 | 371 |
• Satisfactory | 121 | 4,683 | 81 | – | – | 4,764 | 2,341 | 1,210 |
• Higher risk | 185 | 672 | 236 | 5 | 35 | 948 | 154 | 163 |
Of which (stage 2): | ||||||||
• Less than 30 days past due | – | 52 | 81 | – | – | 133 | – | – |
• More than 30 days past due | 2 | 5 | 236 | 5 | – | 246 | – | – |
Stage 3, credit-impa ired financial assets | 80 | 2,877 | 1,117 | 6 | 98 | 4,098 | 7 | 603 |
Gross balance¹ | 22,949 | 92,425 | 47,861 | 595 | 20,260 | 161,141 | 123,931 | 81,343 |
Stage 1 | (5) | (69) | (174) | (11) | – | (254) | (25) | (13) |
• Strong | (4) | (26) | (133) | (10) | – | (169) | (14) | (5) |
• Satisfactory | (1) | (43) | (41) | (1) | – | (85) | (11) | (8) |
Stage 2 | (1) | (134) | (55) | (4) | – | (193) | (33) | (7) |
• Strong | – | (4) | (17) | – | – | (21) | (2) | – |
• Satisfactory | (1) | (95) | (7) | – | – | (102) | (22) | (4) |
• Higher risk | – | (35) | (31) | (4) | – | (70) | (9) | (3) |
Of which (stage 2): | ||||||||
• Less than 30 days past due | – | (1) | (7) | – | – | (8) | – | – |
• More than 30 days past due | – | – | (31) | (4) | – | (35) | – | – |
Stage 3, credit-impa ired financial assets | (2) | (1,830) | (616) | (6) | – | (2,452) | (1) | (129) |
Total credit impa irment | (8) | (2,033) | (845) | (21) | – | (2,899) | (59) | (149) |
Net carrying value | 22,941 | 90,392 | 47,016 | 574 | 20,260 | 158,242 | ||
Stage 1 | 0.0% | 0.1% | 0.4% | 1.9% | 0.0% | 0.2% | 0.0% | 0.0% |
• Strong | 0.0% | 0.0% | 0.3% | 1.7% | 0.0% | 0.1% | 0.0% | 0.0% |
• Satisfactory | 0.0% | 0.2% | 1.0% | 12.5% | 0.0% | 0.3% | 0.1% | 0.0% |
Stage 2 | 0.3% | 2.1% | 5.5% | 80.0% | 0.0% | 2.6% | 1.0% | 0.4% |
• Strong | 0.0% | 0.4% | 2.5% | 0.0% | 0.0% | 1.3% | 0.2% | 0.0% |
• Satisfactory | 0.8% | 2.0% | 8.6% | 0.0% | 0.0% | 2.1% | 0.9% | 0.3% |
• Higher risk | 0.0% | 5.2% | 13.1% | 80.0% | 0.0% | 7.4% | 5.8% | 1.8% |
Of which (stage 2): | ||||||||
• Less than 30 days past due | 0.0% | 1.9% | 8.6% | 0.0% | 0.0% | 6.0% | 0.0% | 0.0% |
• More than 30 days past due | 0.0% | 0.0% | 13.1% | 80.0% | 0.0% | 14.2% | 0.0% | 0.0% |
Stage 3, credit-impa ired financial assets (S3) | 2.5% | 63.6% | 55.1% | 100.0% | 0.0% | 59.8% | 14.3% | 21.4% |
• Stage 3 Collateral | 1 | 169 | 412 | – | – | 581 | – | 45 |
• Stage 3 Cover ratio (after collateral) | 3.8% | 69.5% | 92.0% | 100.0% | 0.0% | 74.0% | 14.3% | 28.9% |
Cover ratio | 0.0% | 2.2% | 1.8% | 3.5% | 0.0% | 1.8% | 0.0% | 0.2% |
Fair value through profit or loss | ||||||||
Performing | 29,725 | 41,897 | – | – | – | 41,897 | – | – |
• Strong | 23,890 | 24,589 | – | – | – | 24,589 | – | – |
• Satisfactory | 5,825 | 17,200 | – | – | – | 17,200 | – | – |
• Higher risk | 10 | 108 | – | – | – | 108 | – | – |
Defaulted (CG13-14) | – | 3 | – | – | – | 3 | – | – |
Gross balance (FVTPL) 2 | 29,725 | 41,900 | – | – | – | 41,900 | – | – |
Net carrying value (incl FVTPL) | 52,666 | 132,292 | 47,016 | 574 | 20,260 | 200,142 | – | – |
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $9,121 mill
ion under Customers and of $2,889 m
ill
ion under Banks,
held at amortised cost
2
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $37,911 mill
ion under Customers and of $27,692 m
ill
ion under Banks,
held at fair value through profit or loss
Risk Profile continued
Standard Chartered Bank
68
Directors’ Report and Financ
ial Statements 2024
Group
| 2023 | ||||||||
| Customers | ||||||||
Corporate | ||||||||
& | Wealth & | |||||||
Investment | Retail | Central & | Customer | Undrawn | Financ ial | |||
Banks | Banking | Banking | Ventures | other items | Total | commitments | Guarantees | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Stage 1 | 22,210 | 77,513 | 46,378 | 235 | 22,592 | 146,718 | 113,301 | 57,505 |
• Strong | 14,756 | 55,407 | 42,362 | 232 | 22,254 | 120,255 | 104,198 | 37,642 |
• Satisfactory | 7,454 | 22,106 | 4,016 | 3 | 338 | 26,463 | 9,103 | 19,863 |
Stage 2 | 537 | 5,696 | 994 | 2 | 965 | 7,657 | 4,596 | 2,530 |
• Strong | 53 | 862 | 659 | – | – | 1,521 | 947 | 801 |
• Satisfactory | 211 | 3,955 | 100 | – | – | 4,055 | 3,168 | 1,472 |
• Higher risk | 273 | 879 | 235 | 2 | 965 | 2,081 | 481 | 257 |
Of which (stage 2): | ||||||||
• Less than 30 days past due | – | 78 | 100 | – | – | 178 | – | – |
• More than 30 days past due | – | 10 | 235 | 2 | – | 247 | – | – |
Stage 3, credit-impa ired financial assets | 74 | 3,887 | 1,064 | 2 | 224 | 5,177 | 2 | 672 |
Gross balance¹ | 22,821 | 87,096 | 48,436 | 239 | 23,781 | 159,552 | 117,899 | 60,707 |
Stage 1 | (3) | (68) | (123) | (7) | – | (198) | (20) | (8) |
• Strong | (2) | (26) | (80) | (7) | – | (113) | (8) | (1) |
• Satisfactory | (1) | (42) | (43) | – | – | (85) | (12) | (7) |
Stage 2 | (9) | (133) | (59) | – | (1) | (193) | (27) | (13) |
• Strong | – | (11) | (22) | – | – | (33) | (3) | – |
• Satisfactory | (2) | (64) | (7) | – | – | (71) | (15) | (6) |
• Higher risk | (7) | (58) | (30) | – | (1) | (89) | (9) | (7) |
Of which (stage 2): | ||||||||
• Less than 30 days past due | – | (1) | (7) | – | – | (8) | – | – |
• More than 30 days past due | – | (1) | (30) | – | – | (31) | – | – |
Stage 3, credit-impa ired financial assets | (6) | (2,362) | (639) | (2) | (15) | (3,018) | – | (112) |
Total credit impa irment | (18) | (2,563) | (821) | (9) | (16) | (3,409) | (47) | (133) |
Net carrying value | 22,803 | 84,533 | 47,615 | 230 | 23,765 | 156,143 | – | – |
Stage 1 | 0.0% | 0.1% | 0.3% | 3.0% | 0.0% | 0.1% | 0.0% | 0.0% |
• Strong | 0.0% | 0.0% | 0.2% | 3.0% | 0.0% | 0.1% | 0.0% | 0.0% |
• Satisfactory | 0.0% | 0.2% | 1.1% | 0.0% | 0.0% | 0.3% | 0.1% | 0.0% |
Stage 2 | 1.7% | 2.3% | 5.9% | 0.0% | 0.1% | 2.5% | 0.6% | 0.5% |
• Strong | 0.0% | 1.3% | 3.3% | 0.0% | 0.0% | 2.2% | 0.3% | 0.0% |
• Satisfactory | 0.9% | 1.6% | 7.0% | 0.0% | 0.0% | 1.8% | 0.5% | 0.4% |
• Higher risk | 2.6% | 6.6% | 12.8% | 0.0% | 0.1% | 4.3% | 1.9% | 2.7% |
Of which (stage 2): | ||||||||
• Less than 30 days past due | 0.0% | 1.3% | 7.0% | 0.0% | 0.0% | 4.5% | 0.0% | 0.0% |
• More than 30 days past due | 0.0% | 10.0% | 12.8% | 0.0% | 0.0% | 12.6% | 0.0% | 0.0% |
Stage 3, credit-impa ired financial assets (S3) | 8.1% | 60.8% | 60.1% | 100.0% | 6.7% | 58.3% | 0.0% | 16.7% |
• Stage 3 Collateral | 2 | 350 | 393 | – | – | 743 | – | 34 |
• Stage 3 Cover ratio (after collateral) | 10.8% | 69.8% | 97.0% | 100.0% | 6.7% | 72.6% | 0.0% | 21.7% |
Cover ratio | 0.1% | 2.9% | 1.7% | 3.8% | 0.1% | 2.1% | 0.0% | 0.2% |
Fair value through profit or loss | ||||||||
Performing | 28,318 | 45,266 | – | – | – | 45,266 | – | – |
• Strong | 23,954 | 27,667 | – | – | – | 27,667 | – | – |
• Satisfactory | 4,364 | 17,536 | – | – | – | 17,536 | – | – |
• Higher risk | – | 63 | – | – | – | 63 | – | – |
Defaulted (CG13-14) | – | 18 | – | – | – | 18 | – | – |
Gross balance (FVTPL) 2 | 28,318 | 45,284 | – | – | – | 45,284 | – | – |
Net carrying value (incl FVTPL) | 51,121 | 129,817 | 47,615 | 230 | 23,765 | 201,427 | – | – |
1
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $13,827 mill
ion under Customers and of $1,653 m
ill
ion under Banks,
held at amortised cost
2
Loans and advances includes reverse repurchase agreements and other sim
ilar secured lend
ing of $42,096 mill
ion under Customers and of $26,053 m
ill
ion under Banks,
held at fair value through profit and loss.
Risk Profile continued
Standard Chartered Bank
69
Directors’ Report and Financ
ial Statements 2024
Loans and advances by client segment (audited)
Company
Amortised cost
2024
Banks
$mill
ion
Customers
Undrawn
commitments
$mill
ion
Financ
ial
Guarantees
$mill
ion
Corporate
&
Investment
Banking
$mill
ion
Wealth &
Retail
Banking
$mill
ion
Central &
other items
$mill
ion
Customer
Total
$mill
ion
Stage 1
11,545
60,503
11,380
814
72,697
66,520
67,538
• Strong
6,614
44,809
9,397
501
54,707
57,856
41,193
• Satisfactory
4,931
15,694
1,983
313
17,990
8,664
26,345
Stage 2
209
3,787
223
–
4,010
2,770
1,059
• Strong
3
367
99
–
466
539
250
• Satisfactory
118
3,074
38
–
3,112
2,152
744
• Higher risk
88
346
86
–
432
79
65
Of which (stage 2):
•
Less than 30 days past due
–
42
38
–
80
–
–
•
More than 30 days past due
–
–
86
–
86
–
–
Stage 3, credit-impa
ired financial assets
3
2,005
680
–
2,685
3
441
Gross balance¹
11,757
66,295
12,283
814
79,392
69,293
69,038
Stage 1
(1)
(48)
(68)
–
(116)
(15)
(10)
• Strong
–
(16)
(59)
–
(75)
(7)
(3)
• Satisfactory
(1)
(32)
(9)
–
(41)
(8)
(7)
Stage 2
(1)
(68)
(31)
–
(99)
(17)
(4)
• Strong
–
-
(5)
–
(5)
(2)
–
• Satisfactory
(1)
(48)
(2)
–
(50)
(13)
(2)
• Higher risk
–
(20)
(24)
–
(44)
(2)
(2)
Of which (stage 2):
•
Less than 30 days past due
–
–
(2)
–
(2)
–
–
•
More than 30 days past due
–
–
(24)
–
(24)
–
–
Stage 3, credit-impa
ired financial assets
–
(1,175)
(405)
–
(1,580)
–
(102)
Total credit impa
irment
(2)
(1,291)
(504)
–
(1,795)
(32)
(116)
Net carrying value
11,755
65,004
11,779
814
77,597
Stage 1
0.0%
0.1%
0.6%
0.0%
0.2%
0.0%
0.0%
• Strong
0.0%
0.0%
0.6%
0.0%
0.1%
0.0%
0.0%
• Satisfactory
0.0%
0.2%
0.5%
0.0%
0.2%
0.1%
0.0%
Stage 2
0.5%
1.8%
13.9%
0.0%
2.5%
0.6%
0.4%
• Strong
0.0%
0.0%
5.1%
0.0%
1.1%
0.4%
0.0%
• Satisfactory
0.8%
1.6%
5.3%
0.0%
1.6%
0.6%
0.3%
• Higher risk
0.0%
5.8%
27.9%
0.0%
10.2%
2.5%
3.1%
Of which (stage 2):
•
Less than 30 days past due
0.0%
0.0%
5.3%
0.0%
2.5%
0.0%
0.0%
•
More than 30 days past due
0.0%
0.0%
27.9%
0.0%
27.9%
0.0%
0.0%
Stage 3, credit-impa
ired financial assets (S3)
0.0%
58.6%
59.6%
0.0%
58.8%
0.0%
23.1%
• Stage 3 Collateral
–
123
244
–
367
–
20
•
Stage 3 Cover ratio (after collateral)
0.0%
64.7%
95.4%
0.0%
72.5%
0.0%
27.7%
Cover ratio
0.0%
1.9%
4.1%
0.0%
2.3%
0.0%
0.2%
Fair value through profit or loss
Performing
26,846
40,449
–
–
40,449
–
–
• Strong
21,409
23,548
–
–
23,548
–
–
• Satisfactory
5,437
16,882
–
–
16,882
–
–
• Higher risk
–
19
–
–
19
–
–
Defaulted (CG13-14)
–
2
–
–
2
–
–
Gross balance (FVTPL)
2
26,846
40,451
–
–
40,451
–
–
Net carrying value (incl FVTPL)
3
38,601
105,455
11,779
814
118,048
–
–
1
Loans and advances include reverse repurchase agreements and other sim
ilar secured lend
ing for $9,041 mill
ion under Customers and for $1,423 m
ill
ion under Banks,
held at amortised cost
2
Loans and advances include reverse repurchase agreements and other sim
ilar secured lend
ing for $37,175 mill
ion under Customers and for $24,966 m
ill
ion under Banks,
held at fair value through profit and loss
3
Excludes 'Amounts due from subsid
iary undertak
ings and other related parties' of $10,066 mill
ion. The amounts are held w
ith
in stage 1 and rated as 'strong' at 31
December 2024 and is net of an expected credit loss of $2.4 mill
ion
Risk Profile continued
Standard Chartered Bank
70
Directors’ Report and Financ
ial Statements 2024
Company
Amortised cost
2023 | |||||||
Customers | |||||||
Corporate | |||||||
& | Wealth & | ||||||
Investment | Retail | Central & | Customer | Undrawn | Financ ial | ||
Banks | Banking | Banking | other items | Total | commitments | Guarantees | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Stage 1 | 9,849 | 57,077 | 12,096 | 1,170 | 70,343 | 65,255 | 47,186 |
• Strong | 5,987 | 42,254 | 9,812 | 867 | 52,933 | 58,451 | 30,160 |
• Satisfactory | 3,862 | 14,823 | 2,284 | 303 | 17,410 | 6,804 | 17,026 |
Stage 2 | 286 | 3,819 | 258 | – | 4,077 | 3,752 | 1,886 |
• Strong | 54 | 437 | 119 | – | 556 | 700 | 679 |
• Satisfactory | 201 | 2,954 | 50 | – | 3,004 | 2,690 | 1,098 |
• Higher risk | 31 | 428 | 89 | – | 517 | 362 | 109 |
Of which (stage 2): | |||||||
• Less than 30 days past due | – | 69 | 50 | – | 119 | – | – |
• More than 30 days past due | – | 8 | 89 | – | 97 | – | – |
Stage 3, credit-impa ired financial assets | 6 | 2,907 | 630 | 224 | 3,761 | – | 514 |
Gross balance¹ | 10,141 | 63,803 | 12,984 | 1,394 | 78,181 | 69,007 | 49,586 |
Stage 1 | (1) | (35) | (54) | – | (89) | (15) | (4) |
• Strong | (1) | (17) | (35) | – | (52) | (6) | – |
• Satisfactory | – | (18) | (19) | – | (37) | (9) | (4) |
Stage 2 | (1) | (52) | (28) | – | (80) | (18) | (8) |
• Strong | (1) | (3) | (3) | – | (6) | (2) | – |
• Satisfactory | – | (29) | (2) | – | (31) | (11) | (6) |
• Higher risk | – | (20) | (23) | – | (43) | (5) | (2) |
Of which (stage 2): | |||||||
• Less than 30 days past due | – | – | (2) | – | (2) | – | – |
• More than 30 days past due | – | (1) | (23) | – | (24) | – | – |
Stage 3, credit-impa ired financial assets | (4) | (1,715) | (399) | (15) | (2,129) | – | (87) |
Total credit impa irment | (6) | (1,802) | (481) | (15) | (2,298) | (33) | (99) |
Net carrying value | 10,135 | 62,001 | 12,503 | 1,379 | 75,883 | – | – |
Stage 1 | 0.0% | 0.1% | 0.4% | 0.0% | 0.1% | 0.0% | 0.0% |
• Strong | 0.0% | 0.0% | 0.4% | 0.0% | 0.1% | 0.0% | 0.0% |
• Satisfactory | 0.0% | 0.1% | 0.8% | 0.0% | 0.2% | 0.1% | 0.0% |
Stage 2 | 0.3% | 1.4% | 10.9% | 0.0% | 2.0% | 0.5% | 0.4% |
• Strong | 1.9% | 0.7% | 2.5% | 0.0% | 1.1% | 0.3% | 0.0% |
• Satisfactory | 0.0% | 1.0% | 4.0% | 0.0% | 1.0% | 0.4% | 0.5% |
• Higher risk | 0.0% | 4.7% | 25.8% | 0.0% | 8.3% | 1.4% | 1.8% |
Of which (stage 2): | |||||||
• Less than 30 days past due | 0.0% | 0.0% | 4.0% | 0.0% | 1.7% | 0.0% | 0.0% |
• More than 30 days past due | 0.0% | 12.5% | 25.8% | 0.0% | 24.7% | 0.0% | 0.0% |
Stage 3, credit-impa ired financial assets (S3) | 66.7% | 59.0% | 63.3% | 6.7% | 56.6% | 0.0% | 16.9% |
• Stage 3 Collateral | – | 293 | 217 | – | 510 | – | 22 |
• Stage 3 Cover ratio (after collateral) | 66.7% | 69.1% | 97.8% | 6.7% | 70.2% | 0.0% | 21.2% |
Cover ratio | 0.1% | 2.8% | 3.7% | 1.1% | 2.9% | 0.0% | 0.2% |
Fair value through profit or loss | |||||||
Performing | 25,655 | 44,013 | – | – | 44,013 | – | – |
• Strong | 21,448 | 26,803 | – | – | 26,803 | – | – |
• Satisfactory | 4,207 | 17,210 | – | – | 17,210 | – | – |
• Higher risk | – | – | – | – | – | – | – |
Defaulted (CG13-14) | – | 2 | – | – | 2 | – | – |
Gross balance (FVTPL) 2 | 25,655 | 44,015 | – | – | 44,015 | – | – |
Net carrying value (incl FVTPL) 3 | 35,790 | 106,016 | 12,503 | 1,379 | 119,898 | – | – |
1
Loans and advances include reverse repurchase agreements and other sim
ilar secured lend
ing of $12,212 mill
ion under Customers and of $554 m
ill
ion under Banks,
held at amortised cost
2
Loans and advances include reverse repurchase agreements and other sim
ilar secured lend
ing of $41,393 mill
ion under Customers and of $23,411 m
ill
ion under Banks,
held at fair value through profit and loss
3
Excludes 'Amounts due from subsid
iary undertak
ings and other related parties' of $10,053 mill
ion. The amounts are held w
ith
in stage 1 and rated as 'strong' at 31
December 2023 and is net of an expected credit loss of $20.4 mill
ion
Risk Profile continued
Standard Chartered Bank
71
Directors’ Report and Financ
ial Statements 2024
Movement in gross exposures and credit impa
irment for loans and advances, debt secur
it
ies, undrawn
commitments and financ
ial guarantees (aud
ited)
The tables overleaf set out the movement in gross exposures and credit impa
irment by stage
in respect of amortised cost
loans to banks and customers, undrawn commitments, financ
ial guarantees and debt secur
it
ies class
if
ied at amort
ised
cost and FVOCI.
Methodology
The movement lines with
in the tables are an aggregat
ion of monthly movements over the year and will therefore reflect
the accumulation of multiple trades during the year. The credit impa
irment charge
in the income statement comprises the
amounts with
in the boxes
in the table below less recoveries of amounts previously written off. Discount unwind is reported
in net interest income and related to stage 3 financ
ial
instruments only.
The approach for determin
ing the key l
ine items in the tables is set out below.
•
Transfers
– transfers between stages are deemed to occur at the beginn
ing of a month based on pr
ior month closing
balances.
•
Net remeasurement from stage changes
– the remeasurement of credit impa
irment prov
is
ions ar
is
ing from a change
in
stage is reported with
in the stage that the assets are transferred to. For example, assets transferred
into stage 2 are
remeasured from a 12 month to a lifet
ime expected cred
it loss, with the effect of remeasurement reported in stage 2.
For stage 3, this represents the in
it
ial remeasurement from specif
ic prov
is
ions recogn
ised on ind
iv
idual assets transferred
into stage 3 in the year.
•
Net changes in exposures
– new business written less repayments in the year. With
in stage 1, new bus
iness written will
attract up to 12 months of expected credit loss charges. Repayments of non-amortis
ing loans (pr
imar
ily w
ith
in CIB) w
ill
have low amounts of expected credit loss provis
ions attr
ibuted to them, due to the release of provis
ions over the term to
maturity. In stages 2 and 3, the net change in exposures reflect repayments although stage 2 may include new facil
it
ies
where clients are on non-purely precautionary early alert, are a credit grade 12, or when non-investment grade debt
securit
ies are acqu
ired.
•
Changes in risk parameters
– for stages 1 and 2, this reflects changes in the PD, LGD and EAD of assets during the year,
which includes the impact of releasing provis
ions over the term to matur
ity. It also includes the effect of changes in
forecasts of macroeconomic variables during the year and movements in management overlays. In stage 3, this line
represents addit
ional spec
if
ic prov
is
ions recogn
ised on exposures held with
in stage 3.
•
Interest due but not paid
– change in contractual amount of interest due in stage 3 financ
ial
instruments but not paid,
being the net of accruals, repayments and write-offs, together with the corresponding change in credit impa
irment.
Changes to ECL models, which incorporates changes to model approaches and methodologies, is not reported as
a separate line item as it has an impact over a number of lines and stages.
Movements during the year
Stage 1 gross exposures increased by $26 bill
ion to $466 b
ill
ion (31 December 2023: $440 b
ill
ion). CIB exposure
increased
by $28 bill
ion to $360 b
ill
ion (31 December 2023: $332 b
ill
ion), due to
increase in exposures in financ
ial guarantees. WRB
exposures increased by $0.8 bill
ion to $78.8 b
ill
ion (31 December 2023: $78 b
ill
ion), dr
iven by off balance sheet commitments.
Total stage 1 provis
ions
increased by $62 mill
ion to $317 m
ill
ion (31 December 2023: $255 m
ill
ion). CIB prov
is
ions
increased
by $26 mill
ion to $131 m
ill
ion (31 December 2023: $105 m
ill
ion) wh
ich includes new overlays of $25 mill
ion, pr
imar
ily
in
Bangladesh. WRB provis
ions
increased by $49 mill
ion to $180 m
ill
ion (31 December 2023: $131 m
ill
ion), due to del
inquenc
ies
in
the personal loans and unsecured lending portfolio.
Stage 2 gross exposures decreased by $3 bill
ion to $14 b
ill
ion (31 December 2023: $17 b
ill
ion), pr
imar
ily dr
iven by a net reduction
in CIB exposures from off balance sheet instruments.
Stage 2 provis
ions decreased by $39 m
ill
ion to $237 m
ill
ion (31 December 2023: $276 m
ill
ion). Most of the decrease
is from
Central and other items driven by sovereign upgrades and exposure reductions. CIB provis
ions rema
in unchanged at
$0.2 bill
ion (31 December 2023: $0.2 b
ill
ion) as portfol
io movements were largely offset by $17 mill
ion of new overlays.
Stage 3 gross exposures decreased by $1.2 bill
ion to $4.9 b
ill
ion (31 December 2023: $6.1 b
ill
ion) due to repayments and
write-offs, leading to a decrease in stage 3 provis
ions by $0.6 b
ill
ion to $2.6 b
ill
ion (31 December 2023: $3.2 b
ill
ion).
WRB stage 3 loans is stable at $1.1 bill
ion (31 December 2023: $1.1 b
ill
ion).
Risk Profile continued
Standard Chartered Bank
72
Directors’ Report and Financ
ial Statements 2024
All segments – Group (audited)
| Stage 1 | Stage 2 | Stage 3 5 | Total | |||||||||
Gross | Total credit | Gross | Total credit | Gross | Total credit | Gross | Total credit | |||||
Amortised cost and | balance 6 | impa irment | Net | balance 6 | impa irment | Net | balance 6 | impa irment | Net | balance 6 | impa irment | Net |
FVOCI | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
As at | ||||||||||||
1 January 2023 | 430,079 | (330) 429,749 | 20,469 | (349) | 20,120 | 7,173 | (3,831) | 3,342 | 457,721 | (4,510) | 453,211 | |
Transfers to | ||||||||||||
stage 1 | 11,184 | (515) | 10,669 | (11,174) | 515 | (10,659) | (10) | – | (10) | – | – | – |
Transfers to | ||||||||||||
stage 2 | (26,645) | 130 | (26,515) | 26,784 | (138) | 26,646 | (139) | 8 | (131) | – | – | – |
Transfers to | ||||||||||||
stage 3 | (19) | 1 | (18) | (1,523) | 132 | (1,391) | 1,542 | (133) | 1,409 | – | – | – |
Net change in | ||||||||||||
exposures | 20,964 | (150) | 20,814 | (14,050) | 19 | (14,031) | (1,476) | 460 | (1,016) | 5,438 | 329 | 5,767 |
Net | ||||||||||||
remeasurement | ||||||||||||
from stage | ||||||||||||
changes | – | 48 | 48 | – | (153) | (153) | – | (61) | (61) | – | (166) | (166) |
Changes in | ||||||||||||
models | – | – | – | – | – | – | – | – | – | – | – | – |
Changes in risk | ||||||||||||
parameters | – | 160 | 160 | – | 53 | 53 | – | (503) | (503) | – | (290) | (290) |
Derecognised | – | – | – | – | – | – | – | – | – | – | – | – |
Write-offs | – | – | – | – | – | – | (666) | 666 | – | (666) | 666 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | (19) | 19 | – | (19) | 19 | – |
Discount unwind | – | – | – | – | – | – | – | 139 | 139 | – | 139 | 139 |
Exchange | ||||||||||||
translation | ||||||||||||
differences and | ||||||||||||
other movements¹ | 4,263 | 401 | 4,664 | (3,325) | (355) | (3,680) | (315) | 39 | (276) | 623 | 85 | 708 |
As at | ||||||||||||
31 December 2023 ² | 439,826 | (255) 439,571 | 17,181 | (276) | 16,905 | 6,090 | (3,197) | 2,893 | 463,097 | (3,728) 459,369 | ||
Income statement | ||||||||||||
ECL (charge)/ | ||||||||||||
release 3 | 58 | (81) | (104) | (127) | ||||||||
Recoveries of | ||||||||||||
amounts | ||||||||||||
previously | ||||||||||||
written off | – | – | 185 | 185 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release 4 | 58 | (81) | 81 | 58 | ||||||||
Risk Profile continued
Standard Chartered Bank
73
Directors’ Report and Financ
ial Statements 2024
All segments – Group (audited) continued
| Stage 1 | Stage 2 | Stage 3 5 | Total | |||||||||
Gross | Total credit | Gross | Total credit | Gross | Total credit | Gross | Total credit | |||||
Amortised cost and | balance 6 | impa irment | Net | balance 6 | impa irment | Net | balance 6 | impa irment | Net | balance 6 | impa irment | Net |
FVOCI | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
As at | ||||||||||||
1 January 2024 | 439,826 | (255) | 439,571 | 17,181 | (276) | 16,905 | 6,090 | (3,197) | 2,893 463,097 | (3,728) | 459,369 | |
Transfers to | ||||||||||||
stage 1 | 10,616 | (351) | 10,265 (10,609) | 351 (10,258) | (7) | – | (7) | – | – | – | ||
Transfers to | ||||||||||||
stage 2 | (21,414) | 78 | (21,336) | 21,836 | (103) | 21,733 | (422) | 25 | (397) | – | – | – |
Transfers to | ||||||||||||
stage 3 | (1,531) | 62 | (1,469) | 538 | 44 | 582 | 993 | (106) | 887 | – | – | – |
Net change | ||||||||||||
in exposures | 48,007 | (169) | 47,838 | (12,337) | 25 | (12,312) | (1,023) | 578 | (445) | 34,647 | 434 | 35,081 |
Net | ||||||||||||
remeasurement | ||||||||||||
from stage | ||||||||||||
changes | – | 33 | 33 | – | (118) | (118) | – | (94) | (94) | – | (179) | (179) |
Changes in | ||||||||||||
models | – | – | – | – | – | – | – | – | – | – | – | – |
Changes in risk | ||||||||||||
parameters | – | 69 | 69 | – | (42) | (42) | – | (467) | (467) | – | (440) | (440) |
Derecognised | – | – | – | – | – | – | – | – | – | – | – | – |
Write-offs | – | – | – | – | – | – | (687) | 687 | – | (687) | 687 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | (132) | 132 | – | (132) | 132 | – |
Discount unwind | – | – | – | – | – | – | – | 106 | 106 | – | 106 | 106 |
Exchange | ||||||||||||
translation | ||||||||||||
differences and | ||||||||||||
other movements¹ | (9,143) | 216 | (8,927) | (2,302) | (118) | (2,420) | 79 | (250) | (171) | (11,366) | (152) | (11,518) |
As at | ||||||||||||
31 December | ||||||||||||
2024² | 466,361 | (317)466,044 | 14,307 | (237) | 14,070 | 4,891 | (2,586) | 2,305 | 485,559 | (3,140) 482,419 | ||
Income statement | ||||||||||||
ECL (charge)/ | ||||||||||||
release 3 | (67) | (135) | 17 | (185) | ||||||||
Recoveries of | ||||||||||||
amounts | ||||||||||||
previously | ||||||||||||
written off | – | – | 167 | 167 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release 4 | (67) | (135) | 184 | (18) | ||||||||
1
Includes fair value adjustments and amortisat
ion on debt secur
it
ies
2
Excludes Cash and balances at central banks, Accrued income, Assets held for sale and Other assets gross balance of $80,975 mill
ion (31 December 2023: $87,433
mill
ion) and total cred
it impa
irment of $63 m
ill
ion (31 December 2023: $60 m
ill
ion)
3
Does not include release relating to Other assets of $3 mill
ion (31 December 2023: $N
il mill
ion)
4 Reported basis
5
Stage 3 gross includes $59 mill
ion (31 December 2023: $80 m
ill
ion) and ECL N
il mill
ion (31 December 2023: $14 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies
6
The gross balance includes the notional amount of off balance sheet instruments
Risk Profile continued
Standard Chartered Bank
74
Directors’ Report and Financ
ial Statements 2024
All segments – Company (audited)
| Stage 1 | Stage 2 | Stage 3 5 | Total | |||||||||
Gross | Total credit | Gross | Total credit | Gross | Total credit | Gross | Total credit | |||||
Amortised cost and | balance 6 | impa irment | Net | balance 6 | impa irment | Net | balance 6 | impa irment | Net | balance 6 | impa irment | Net |
FVOCI | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
As at | ||||||||||||
1 January 2023 | 280,763 | (195) 280,568 | 12,812 | (120) | 12,692 | 5,435 | (2,789) | 2,646 | 299,010 | (3,104) 295,906 | ||
Transfers to | ||||||||||||
stage 1 | 8,709 | (222) | 8,487 | (8,699) | 222 | (8,477) | (10) | – | (10) | – | – | – |
Transfers to | ||||||||||||
stage 2 | (17,712) | 43 | (17,669) | 17,784 | (48) | 17,736 | (72) | 5 | (67) | – | – | – |
Transfers to | ||||||||||||
stage 3 | – | – | – | (767) | 117 | (650) | 767 | (117) | 650 | – | – | – |
Net change | ||||||||||||
in exposures | 8,702 | (56) | 8,646 | (9,095) | 12 | (9,083) | (1,088) | 273 | (815) | (1,481) | 229 | (1,252) |
Net | ||||||||||||
remeasurement | ||||||||||||
from stage | ||||||||||||
changes | – | – | – | – | (16) | (16) | – | (32) | (32) | – | (48) | (48) |
Changes in risk | ||||||||||||
parameters | – | 64 | 64 | – | 93 | 93 | – | (330) | (330) | – | (173) | (173) |
Write-offs | – | – | – | – | – | – | (435) | 435 | – | (435) | 435 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | (154) | 154 | – | (154) | 154 | – |
Discount unwind | – | – | – | – | – | – | – | 139 | 139 | – | 139 | 139 |
Exchange | ||||||||||||
translation | ||||||||||||
differences and | ||||||||||||
other movements¹ | 4,209 | 234 | 4,443 | (1,719) | (367) | (2,086) | (86) | (14) | (100) | 2,404 | (147) | 2,257 |
As at | ||||||||||||
31 December | ||||||||||||
2023² | 284,671 | (132) 284,539 | 10,316 | (107) | 10,209 | 4,357 | (2,276) | 2,081 | 299,344 | (2,515) 296,829 | ||
Income | ||||||||||||
statement ECL | ||||||||||||
(charge)/release | 8 | 89 | (89) | 8 | ||||||||
Recoveries of | ||||||||||||
amounts | ||||||||||||
previously | ||||||||||||
written off | – | – | 73 | 73 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release 4 | 8 | 89 | (16) | 81 | ||||||||
Risk Profile continued
Standard Chartered Bank
75
Directors’ Report and Financ
ial Statements 2024
All segments – Company (audited) continued
| Stage 1 | Stage 2 | Stage 3 5 | Total | |||||||||
Gross | Total credit | Gross | Total credit | Gross | Total credit | Gross | Total credit | |||||
Amortised cost and | balance 6 | impa irment | Net | balance 6 | impa irment | Net | balance 6 | impa irment | Net | balance 6 | impa irment | Net |
FVOCI | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
As at | ||||||||||||
1 January 2024 | 284,671 | (132) 284,539 | 10,316 | (107) | 10,209 | 4,357 | (2,276) | 2,081 299,344 | (2,515) 296,829 | |||
Transfers to | ||||||||||||
stage 1 | 7,448 | (173) | 7,275 | (7,445) | 173 | (7,272) | (3) | – | (3) | – | – | – |
Transfers to | ||||||||||||
stage 2 | (14,259) | 35 | (14,224) | 14,573 | (52) | 14,521 | (314) | 17 | (297) | – | – | – |
Transfers to | ||||||||||||
stage 3 | (187) | (4) | (191) | (270) | 48 | (222) | 457 | (44) | 413 | – | – | – |
Net change | ||||||||||||
in exposures | 29,361 | (64) | 29,297 | (7,981) | (2) | (7,983) | (822) | 398 | (424) | 20,558 | 332 | 20,890 |
Net | ||||||||||||
remeasurement | ||||||||||||
from stage | ||||||||||||
changes | – | 7 | 7 | – | (21) | (21) | – | (19) | (19) | – | (33) | (33) |
Changes in risk | ||||||||||||
parameters | – | 31 | 31 | – | 29 | 29 | – | (304) | (304) | – | (244) | (244) |
Write-offs | – | – | – | – | – | – | (422) | 422 | – | (422) | 422 | – |
Interest due | ||||||||||||
but unpaid | – | – | – | – | – | – | (145) | 145 | – | (145) | 145 | – |
Discount unwind | – | – | – | – | – | – | – | 51 | 51 | – | 51 | 51 |
Exchange | ||||||||||||
translation | ||||||||||||
differences and | ||||||||||||
other movements¹ | (7,116) | 143 | (6,973) | (901) | (191) | (1,092) | 24 | (72) | (48) | (7,993) | (120) | (8,113) |
As at 31 | ||||||||||||
December 2024² | 299,918 | (157) 299,761 | 8,292 | (123) | 8,169 | 3,132 | (1,682) | 1,450 | 311,342 | (1,962) 309,380 | ||
Income | ||||||||||||
statement ECL | ||||||||||||
(charge)/release 3 | (26) | 6 | 75 | 55 | ||||||||
Recoveries of | ||||||||||||
amounts | ||||||||||||
previously | ||||||||||||
written off | – | – | 60 | 60 | ||||||||
Total credit | ||||||||||||
impa irment | ||||||||||||
(charge)/release 4 | (26) | 6 | 135 | 115 | ||||||||
1
Includes fair value adjustments and amortisat
ion on debt secur
it
ies
2
Excludes Cash and balances at central banks, Accrued income, Assets held for sale and Other assets gross balance of $64,555 mill
ion (31 December 2023: $70,951
mill
ion) and total cred
it impa
irment of $5 m
ill
ion(31 December 2023: $N
il mill
ion)
3
Does not include charge relating to Other assets of $2 mill
ion (31 December 2023: N
il)
4 Reported basis
5
Stage 3 gross includes Nil mill
ion (31 December 2023: $25 m
ill
ion) and ECL N
il mill
ion (31 December 2023: $14 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies
6
The gross balance includes the notional amount of off balance sheet instruments
Risk Profile continued
Standard Chartered Bank
76
Directors’ Report and Financ
ial Statements 2024
Credit impa
irment charge (aud
ited)
The table below analyses credit impa
irment charges or releases of the ongo
ing business portfolio and restructuring business
portfolio for the year ended 31 December 2024.
> Further details can be found in the ‘
Summary of Credit Risk Performance
’ section in page 59.
| 2024 | 2023 | |||||
Stage 1 & 2 | Stage 3 | Total | Stage 1 & 2 | Stage 3 | Total | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Ongoing business portfolio | ||||||
Corporate & Investment Banking | 31 | (293) | (262) | 5 | (168) | (163) |
Wealth & Retail Banking | 171 | 115 | 286 | 50 | 79 | 129 |
Ventures | 13 | 12 | 25 | 7 | 6 | 13 |
Central & other items | (16) | (18) | (34) | (39) | 2 | (37) |
Total credit impa irment charge/(release) | 199 | (184) | 15 | 23 | (81) | (58) |
Problem credit management and provis
ion
ing (audited)
Forborne and other modif
ied loans by cl
ient segment
A forborne loan arises when a concession has been made to the contractual terms of a loan in response to a customer’s
financial d
iff
icult
ies.
Net forborne loans decreased by $67 mill
ion to $503 m
ill
ion (31 December 2023: $570 m
ill
ion) largely due to repayments.
Net non-performing forborne loans decreased by $78 mill
ion to $461 m
ill
ion (31 December 2023: $539 m
ill
ion) ma
inly in CIB.
This was partly offset by an increase of $11 mill
ion
in performing forborne loans.
The table below presents loans with forbearance measures by segment.
Group
2024 | 2023 | |||||||
Corporate, & | Wealth & | Corporate, & | Wealth & | |||||
Investment | Retail | Investment | Retail | |||||
Banking | Banking | Ventures | Total | Banking | Banking | Ventures | Total | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Gross Stage 1 and 2 forborne loans | 17 | 26 | – | 43 | – | 33 | – | 33 |
Modif icat ion of terms and condit ions 1 | 17 | 26 | – | 43 | – | 33 | – | 33 |
Impairment provis ions | – | (1) | – | (1) | – | (2) | – | (2) |
Modif icat ion of terms and condit ions 1 | – | (1) | – | (1) | – | (2) | – | (2) |
Net stage 1 and 2 forborne loans | 17 | 25 | – | 42 | – | 31 | – | 31 |
Collateral | – | 25 | – | 25 | – | 31 | – | 31 |
Gross stage 3 forborne loans | 960 | 148 | – | 1,108 | 1,218 | 161 | – | 1,379 |
Modif icat ion of terms and condit ions 1 | 959 | 148 | – | 1,107 | 1,210 | 161 | – | 1,371 |
Refinancing 2 | 1 | – | – | 1 | 8 | – | – | 8 |
Impairment provis ions | (575) | (72) | – | (647) | (755) | (85) | – | (840) |
Modif icat ion of terms and condit ions 1 | (574) | (72) | – | (646) | (747) | (85) | – | (832) |
Refinancing 2 | (1) | – | – | (1) | (8) | – | – | (8) |
Net stage 3 forborne loans | 385 | 76 | – | 461 | 463 | 76 | – | 539 |
Collateral | 74 | 53 | – | 127 | 153 | 42 | – | 195 |
Net Carrying value of forborne loans | 402 | 101 | – | 503 | 463 | 107 | – | 570 |
1
Modif
icat
ion of terms is any contractual change apart from refinanc
ing, as a result of cred
it stress of the counterparty, i.e. interest reductions, loan covenant waivers
2
Refinancing
is a new contract to a lender in credit stress, such that they are refinanced and can pay other debt contracts that they were unable to honour
Risk Profile continued
Standard Chartered Bank
77
Directors’ Report and Financ
ial Statements 2024
Company
2024 | 2023 | |||||
Corporate, & | Wealth & | Corporate, & | Wealth & | |||
Investment | Retail | Investment | Retail | |||
Banking | Banking | Total | Banking | Banking | Total | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Gross stage 1 and 2 forborne loans | – | 15 | 15 | – | 17 | 17 |
Modif icat ion of terms and condit ions 1 | – | 15 | 15 | – | 17 | 17 |
Impairment provis ions | – | – | – | – | (1) | (1) |
Modif icat ion of terms and condit ions 1 | – | – | – | – | (1) | (1) |
Net stage 1 and 2 forborne loans | – | 15 | 15 | – | 16 | 16 |
Collateral | – | 14 | 14 | – | 18 | 18 |
Gross stage 3 forborne loans | 701 | 7 | 708 | 904 | 8 | 912 |
Modif icat ion of terms and condit ions 1 | 701 | 7 | 708 | 897 | 8 | 905 |
Refinancing 2 | – | – | – | 7 | – | 7 |
Impairment provis ions | (394) | (3) | (397) | (549) | (3) | (552) |
Modif icat ion of terms and condit ions 1 | (394) | (3) | (397) | (542) | (3) | (545) |
Refinancing 2 | – | – | – | (7) | – | (7) |
Net stage 3 forborne loans | 307 | 4 | 311 | 355 | 5 | 360 |
Collateral | 62 | 3 | 65 | 124 | 3 | 127 |
Net carrying value of forborne loans | 307 | 19 | 326 | 355 | 21 | 376 |
1
Modif
icat
ion of terms is any contractual change apart from refinanc
ing, as a result of cred
it stress of the counterparty, i.e. interest reductions, loan covenant waivers
2
Refinancing
is a new contract to a lender in credit stress, such that they are refinanced and can pay other debt contracts that they were unable to honour
Credit risk mit
igat
ion
Potential credit losses from any given account, customer or portfolio are mit
igated us
ing a range of tools such as collateral,
netting arrangements, credit insurance and credit derivat
ives, tak
ing into account expected volatil
ity and guarantees.
The reliance that can be placed on these mit
igants
is carefully assessed in light of issues such as legal certainty and
enforceabil
ity, market valuat
ion correlation and counterparty risk of the guarantor.
Collateral (audited)
A secured loan is one where the borrower pledges an asset as collateral of which the Group is able to take possession in the
event that the borrower defaults.
The collateral values in the table below (which covers loans and advances to banks and customers, excluding those held
at fair value through profit or loss) are adjusted where appropriate in accordance with our risk mit
igat
ion policy and for the
effect of over-collateralisat
ion. The extent of over-collateral
isat
ion has been determ
ined with reference to both the drawn
and undrawn components of exposure as this best reflects the effect of collateral and other credit enhancements on the
amounts aris
ing from expected cred
it losses. We have remained prudent in the way we assess the value of collateral, which
is calibrated for a severe downturn and backtested against our prior experience.
Risk Profile continued
Standard Chartered Bank
78
Directors’ Report and Financ
ial Statements 2024
Collateral held on loans and advances
The table below details collateral held against exposures, separately disclos
ing stage 2 and stage 3 exposure and
corresponding collateral.
Group
| 2024 | |||||||||
Net amount outstanding | Collateral | Net exposure | |||||||
Credit- | Credit- | Credit- | |||||||
Stage 2 | impa ired | Stage 2 | impa ired | Stage 2 | impa ired | ||||
financial | financial | financial | financial | financial | financial | ||||
Total | assets | assets (S3) | Total 2 | assets | assets (S3) | Total | assets | assets (S3) | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Corporate & | |||||||||
Investment Banking 1 | 113,333 | 6,429 | 1,125 | 26,379 | 2,398 | 170 | 86,954 | 4,031 | 955 |
Wealth & Retail Banking | 47,016 | 946 | 501 | 31,210 | 688 | 412 | 15,806 | 258 | 89 |
Ventures | 574 | 1 | – | – | – | – | 574 | 1 | – |
Central & other items | 20,260 | 35 | 98 | 80 | 35 | – | 20,180 | – | 98 |
Total 2 | 181,183 | 7,411 | 1,724 | 57,669 | 3,121 | 582 | 123,514 | 4,290 | 1,142 |
2023 | ||||||||||
Net amount outstanding | Collateral | Net exposure | ||||||||
Credit- | Credit- | Credit- | ||||||||
Stage 2 | impa ired | Stage 2 | impa ired | Stage 2 | impa ired | |||||
financial | financial | financial | financial | financial | financial | |||||
Total | assets | assets (S3) | Total 2 | assets | assets (S3) | Total | assets | assets (S3) | ||
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Corporate & | ||||||||||
Investment Banking 1 | 107,336 | 6,091 | 1,593 | 25,744 | 2,043 | 352 | 81,592 | 4,048 | 1,241 | |
Wealth & Retail Banking | 47,615 | 935 | 425 | 29,960 | 619 | 393 | 17,655 | 316 | 32 | |
Ventures | 230 | 2 | – | – | – | – | 230 | 2 | – | |
Central & other items | 23,765 | 964 | 209 | 2,369 | 964 | – | 21,396 | – | 209 | |
Total 2 | 178,946 | 7,992 | 2,227 | 58,073 | 3,626 | 745 | 120,873 | 4,366 | 1,482 | |
1
Includes loans and advances to banks
2
Adjusted for over-collateralisat
ion based on the drawn and undrawn components of exposures
Company
| 2024 | |||||||||
Net amount outstanding | Collateral | Net exposure | |||||||
Credit- | Credit- | Credit- | |||||||
Stage 2 | impa ired | Stage 2 | impa ired | Stage 2 | impa ired | ||||
financial | financial | financial | financial | financial | financial | ||||
Total | assets | assets (S3) | Total 2 | assets | assets (S3) | Total | assets | assets (S3) | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Corporate & | |||||||||
Investment Banking 1 | 76,759 | 3,927 | 833 | 19,149 | 1,542 | 123 | 57,610 | 2,385 | 710 |
Wealth & Retail Banking | 11,779 | 192 | 275 | 6,653 | 110 | 244 | 5,126 | 82 | 31 |
Central & other items | 814 | – | – | – | – | – | 814 | – | – |
Total 2 | 89,352 | 4,119 | 1,108 | 25,802 | 1,652 | 367 | 63,550 | 2,467 | 741 |
| 2023 | |||||||||
Net amount outstanding | Collateral | Net exposure | |||||||
Credit- | Credit- | Credit- | |||||||
Stage 2 | impa ired | Stage 2 | impa ired | Stage 2 | impa ired | ||||
financial | financial | financial | financial | financial | financial | ||||
Total | assets | assets (S3) | Total 2 | assets | assets (S3) | Total | assets | assets (S3) | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Corporate & | |||||||||
Investment Banking 1 | 72,136 | 4,052 | 1,194 | 19,783 | 1,343 | 293 | 52,353 | 2709 | 901 |
Wealth & Retail Banking | 12,503 | 230 | 231 | 6,401 | 94 | 217 | 6,102 | 136 | 14 |
Central & other items | 1,379 | – | 209 | 750 | – | – | 629 | 0 | 209 |
Total 2 | 86,018 | 4,282 | 1,634 | 26,934 | 1,437 | 510 | 59,084 | 2,845 | 1,124 |
1
Includes loans and advances to banks
2
Adjusted for over-collateralisat
ion based on the drawn and undrawn components of exposures
Risk Profile continued
Standard Chartered Bank
79
Directors’ Report and Financ
ial Statements 2024
Collateral – Corporate & Investment Banking (audited)
Our underwrit
ing standards encourage tak
ing specif
ic charges on assets and we cons
istently seek high-quality,
investment-grade collateral.
88 per cent (31 December 2023: 82 per cent) of tangible collateral excluding reverse repurchase agreements and financ
ial
guarantees held comprises physical assets or is property based, with the remainder held in cash. Overall collateral increased
by $0.7 bill
ion to $26.4 b
ill
ion (31 December 2023: $25.7 b
ill
ion).
Non-tangible collateral, such as guarantees and standby letters of credit, is also held against corporate exposures,
although the financial effect of th
is type of collateral is less sign
ificant
in terms of recoveries. However, this is considered
when determin
ing the probab
il
ity of default and other cred
it-related factors. Collateral is also held against off balance sheet
exposures, includ
ing undrawn comm
itments and trade-related instruments.
The following table provides an analysis of the types of collateral held against CIB loan exposures.
Group
Corporate & Investment Banking
2024 | 2023 | |
Amortised cost | $mill ion | $mill ion |
Maximum exposure | 113,333 | 107,336 |
Property | 3,459 | 3,486 |
Plant, machinery and other stock | 904 | 896 |
Cash | 1,031 | 1,497 |
Reverse repos | 11,972 | 13,127 |
AA- to AA+ | 897 | 395 |
A- to A+ | 8,225 | 10,548 |
BBB- to BBB+ | 981 | 855 |
Lower than BBB- | 95 | 169 |
Unrated | 1,774 | 1,160 |
Financ ial guarantees and insurance | 5,564 | 4,169 |
Commodit ies | 33 | 5 |
Ships and aircraft | 3,416 | 2,564 |
Total value of collateral 1 | 26,379 | 25,744 |
Net exposure | 86,954 | 81,592 |
Company
Corporate & Investment Banking
2024 | 2023 | |
Amortised cost | $mill ion | $mill ion |
Maximum exposure | 76,759 | 72,136 |
Property | 1,752 | 2,186 |
Plant, machinery and other stock | 636 | 602 |
Cash | 835 | 953 |
Reverse repos | 10,464 | 12,016 |
AA- to AA+ | 742 | 395 |
A- to A+ | 8,225 | 10,548 |
BBB- to BBB+ | 564 | 21 |
Unrated | 933 | 1,052 |
Financ ial guarantees and insurance | 4,187 | 2,916 |
Commodit ies | 8 | 2 |
Ships and aircraft | 1,267 | 1,108 |
Total value of collateral 1 | 19,149 | 19,783 |
Net exposure | 57,610 | 52,353 |
1
Adjusted for over-collateralisat
ion based on the drawn and undrawn components of exposures
Risk Profile continued
Standard Chartered Bank
80
Directors’ Report and Financ
ial Statements 2024
Group
Collateral – Wealth & Retail Banking (audited)
In WRB, fully secured products increased by 1 per cent to 86 per cent of the total portfolio (31 December 2023: 85 per cent).
The following table presents an analysis of loans to ind
iv
iduals by product; split between fully secured, partially secured
and unsecured:
| 2024 | 2023 | |||||||
Fully | Partially | Fully | Partially | |||||
secured 1 | secured 1 | Unsecured | Total 2 | secured 1 | secured 1 | Unsecured | Total 2 | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Maximum exposure | 40,229 | 226 | 6,561 | 47,016 | 40,483 | 198 | 6,934 | 47,615 |
Loans to ind iv iduals | ||||||||
Mortgages | 23,001 | – | – | 23,001 | 24,750 | – | – | 24,750 |
CCPL | 463 | – | 5,930 | 6,393 | 370 | – | 6,334 | 6,704 |
Auto | 160 | – | – | 160 | 312 | – | – | 312 |
Secured wealth products | 16,595 | – | – | 16,595 | 15,009 | – | – | 15,009 |
Other | 10 | 226 | 631 | 867 | 42 | 198 | 600 | 840 |
Total collateral 2 | 31,210 | 29,960 | ||||||
Net exposure 3 | 15,806 | 17,655 | ||||||
Percentage of total loans | 86% | 0% | 14% | 85% | 0% | 15% | ||
1
Secured loans are fully secured if the fair value of the collateral is equal to or greater than the loan at the time of orig
inat
ion. All other secured loans are considered to be
partly secured
2
Collateral values are adjusted where appropriate in accordance with our risk mit
igat
ion policy and for the effect of over-collateralisat
ion
3
Amounts net of ECL
Company
Collateral - Wealth & Retail Banking (audited)
In WRB, $9.4 bill
ion wh
ich equates to 80 per cent of the portfolio is fully secured (31 December 2023: 76 per cent).
The following table presents an analysis of loans to ind
iv
iduals by product; split between fully secured, partially secured
and unsecured:
| 2024 | 2023 | |||||||
Fully | Partially | Fully | Partially | |||||
secured 1 | secured 1 | Unsecured | Total 2 | secured 1 | secured 1 | Unsecured | Total 2 | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Maximum exposure | 9,375 | 167 | 2,237 | 11,779 | 9,531 | 156 | 2,816 | 12,503 |
Loans to ind iv iduals | ||||||||
Mortgages | 5,030 | – | – | 5,030 | 5,345 | – | – | 5,345 |
CCPL | 464 | – | 1,890 | 2,354 | 369 | – | 2,460 | 2,829 |
Auto | 7 | – | – | 7 | 15 | – | – | 15 |
Secured wealth products | 3,860 | – | – | 3,860 | 3,786 | – | – | 3,786 |
Other | 14 | 167 | 347 | 528 | 16 | 156 | 356 | 528 |
Total collateral 2 | 6,653 | 6,401 | ||||||
Net exposure 3 | 5,126 | 6,102 | ||||||
Percentage of total loans | 80% | 1% | 19% | 76% | 1% | 23% | ||
1
Secured loans are fully secured if the fair value of the collateral is equal to or greater than the loan at the time of orig
inat
ion. All other secured loans are considered to be
partly secured
2
Collateral values are adjusted where appropriate in accordance with our risk mit
igat
ion policy and for the effect of over-collateralisat
ion
3
Amounts net of ECL
Risk Profile continued
Standard Chartered Bank
81
Directors’ Report and Financ
ial Statements 2024
Mortgage loan-to-value ratios by geography (audited)
Loan-to-value (LTV) ratios measure the ratio of the current mortgage outstanding to the current fair value of the properties
on which they are secured.
In mortgages, the value of property held as security sign
ificantly exceeds the value of mortgage loans. The average LTV
of the overall mortgage portfolio is low at 45.1 per cent (31 December 2023: 45.8 per cent). Singapore, which represents
56 per cent of the mortgage portfolio as at 31 December 2023, has an average LTV of 42.5 per cent (31 December 2023:
43.4 per cent).
An analysis of LTV ratios by geography for the mortgage portfolio is presented in the table below.
2024 | 2023 1 | |||||||||
Singapore | Malaysia | Jersey | Others | Total | Singapore | Malaysia | Jersey | Others | Total | |
Amortised cost | % | % | % | % | % | % | % | % | % | % |
Less than 50 per cent | 52.7 | 37.4 | 28.2 | 62.8 | 51.0 | 50.9 | 41.1 | 31.0 | 57.4 | 49.6 |
50 per cent to 59 per cent | 21.8 | 15.2 | 14.9 | 16.5 | 19.2 | 24.7 | 14.1 | 17.4 | 17.9 | 21.4 |
60 per cent to 69 per cent | 15.6 | 18.1 | 33.7 | 12.4 | 16.7 | 15.2 | 15.4 | 33.9 | 13.8 | 16.4 |
70 per cent to 79 per cent | 9.6 | 16.2 | 17.6 | 6.4 | 10.4 | 8.7 | 16.2 | 14.4 | 7.9 | 9.8 |
80 per cent to 89 per cent | 0.1 | 11.6 | 3.9 | 1.2 | 2.2 | 0.5 | 11.8 | 2.5 | 1.5 | 2.2 |
90 per cent to 99 per cent | 0.0 | 0.9 | 1.7 | 0.5 | 0.4 | 0.0 | 0.8 | 0.6 | 0.7 | 0.3 |
100 per cent and greater | 0.1 | 0.6 | 0.1 | 0.3 | 0.2 | 0.0 | 0.6 | 0.3 | 0.8 | 0.3 |
Average portfolio | ||||||||||
loan-to-value | 42.5 | 55.4 | 58.8 | 42.2 | 45.1 | 43.4 | 54.2 | 56.0 | 45.4 | 45.8 |
Loans to ind iv iduals – | ||||||||||
mortgages ($mill ion) | 13,756 | 3,332 | 2,142 | 3,771 | 23,001 | 15,292 | 3,199 | 2,218 | 4,041 | 24,750 |
1
Amounts have been re-presented from a regional basis (Asia; Africa & Middle East; and Europe & Americas) to key geographies covering the major
ity of the reported
balances.
Collateral and other credit enhancements possessed or called upon (audited)
The Group obtains assets by taking possession of collateral or calling upon other credit enhancements (such as guarantees).
Repossessed properties are sold in an orderly fashion. Where the proceeds are in excess of the outstanding loan balance the
excess is returned to the borrower.
Certain equity securit
ies acqu
ired may be held by the Group for investment purposes and are classif
ied as fa
ir value
through profit or loss, and the related loan written off. The carrying value of collateral possessed and held by the Group
as at 31 December 2024 is $23.7 mill
ion (31 December 2023: $16.5 m
ill
ion).
2024 | 2023 | |
$mill ion | $mill ion | |
Property, plant and equipment | 6.1 | 10.5 |
Guarantees | 4.7 | 6.0 |
Other | 12.9 | – |
Total | 23.7 | 16.5 |
Other Credit Risk mit
igat
ion
Other forms of Credit Risk mit
igat
ion are set out below.
Credit default swaps
The Group has entered into credit default swaps for portfolio management purposes, referencing loan assets with a notional
value of $2.8 bill
ion (31 December 2023: $3.5 b
ill
ion). These cred
it default swaps are accounted for as financ
ial guarantees as
per IFRS 9 as they will only reimburse the holder for an incurred loss on an underlying debt instrument. The Group continues
to hold the underlying assets referenced in the credit default swaps and it continues to be exposed to related Credit and
Foreign Exchange Risk on these assets.
Credit linked notes
The Group has issued credit linked notes for portfolio management purposes, referencing loan assets with a notional value of
$18.6 bill
ion (31 December 2023: $22.5 b
ill
ion). The Group cont
inues to hold the underlying assets for which the credit linked
notes provide mit
igat
ion. The credit linked notes are recognised as a financ
ial l
iab
il
ity at amortised cost on the balance sheet
and are adjusted, where appropriate, for reductions in expected future cash flows with a corresponding credit to credit
impa
irment
in the income statement.
Risk Profile continued
Standard Chartered Bank
82
Directors’ Report and Financ
ial Statements 2024
Derivat
ive financial
instruments
The Group enters into master netting agreements, which in the event of default result in a single amount owed by or to
the counterparty through netting the sum of the posit
ive and negat
ive mark-to-market values of applicable derivat
ive
transactions. These are also set out under the Derivat
ive financial
instruments Credit Risk mit
igat
ion section (page 77).
Off-balance sheet exposures
For certain types of exposures, such as letters of credit and guarantees, the Group obtains collateral such as cash depending
on internal Credit Risk assessments, as well as in the case of letters of credit holding legal title to the underlying assets should
a default take place.
Other portfolio analysis
This section provides maturity analysis of loans and advances by business segment.
Contractual maturity analysis of loans and advances by client segment (audited)
Loans and advances to the CIB segment remain predominantly short-term, with $58 bill
ion (31 December 2023: $56 b
ill
ion)
maturing in less than one year. 88 per cent (31 December 2023: 97 per cent) of loans to banks mature in less than one year.
Shorter maturit
ies g
ive us the flexib
il
ity to respond promptly to events and rebalance or reduce our exposure to clients or
sectors that are facing increased pressure or uncertainty. The WRB loan book continues to be longer-term in nature with
47 per cent (31 December 2023: 49 per cent) of the loans maturing over five years, as mortgages constitute the major
ity of
this portfolio.
Group
2024 | 2023 | |||||||
One year or | One to five | Over five | One year or | One to five | Over five | |||
less | years | years | Total | less | years | years | Total | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Corporate & Investment Banking | 58,427 | 20,537 | 13,461 | 92,425 | 55,898 | 21,194 | 10,004 | 87,096 |
Wealth & Retail Banking | 20,579 | 4,748 | 22,534 | 47,861 | 20,078 | 4,767 | 23,591 | 48,436 |
Ventures | 391 | 204 | – | 595 | 198 | 41 | – | 239 |
Central & other items | 20,259 | – | 1 | 20,260 | 23,725 | 56 | – | 23,781 |
Gross loans and advances | ||||||||
to customers | 99,656 | 25,489 | 35,996 | 161,141 | 99,899 | 26,058 | 33,595 | 159,552 |
Impairment provis ions | (2,652) | (172) | (75) | (2,899) | (3,245) | (101) | (63) | (3,409) |
Net loans and advances to customers | 97,004 | 25,317 | 35,921 | 158,242 | 96,654 | 25,957 | 33,532 | 156,143 |
Net loans and advances to banks | 20,285 | 2,376 | 280 | 22,941 | 22,029 | 773 | 1 | 22,803 |
Company
2024 | 2023 | |||||||
One year or | One to five | Over five | One year or | One to five | Over five | |||
less | years | years | Total | less | years | years | Total 1 | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Corporate & Investment Banking | 44,859 | 12,646 | 8,790 | 66,295 | 42,803 | 13,828 | 7,172 | 63,803 |
Wealth & Retail Banking | 5,831 | 2,278 | 4,174 | 12,283 | 5,692 | 2,762 | 4,530 | 12,984 |
Ventures | – | – | – | – | – | – | – | – |
Central & other items | 813 | – | 1 | 814 | 1,349 | 45 | – | 1,394 |
Gross loans and advances | ||||||||
to customers | 51,503 | 14,924 | 12,965 | 79,392 | 49,844 | 16,635 | 11,702 | 78,181 |
Impairment provis ions | (1,683) | (75) | (37) | (1,795) | (2,202) | (54) | (42) | (2,298) |
Net loans and advances to customers | 49,820 | 14,849 | 12,928 | 77,597 | 47,642 | 16,581 | 11,660 | 75,883 |
Net loans and advances to banks | 10,162 | 1,313 | 280 | 11,755 | 9,439 | 695 | 1 | 10,135 |
1
Excludes 'Amounts due from subsid
iary undertak
ings and other related parties' of $10,066 mill
ion (31 December 2023: $10,053 m
ill
ion). The amounts are held w
ith
in
stage 1 and rated as 'strong' and is net of an expected credit loss of $2.4 mill
ion (31 December 2023: $20.4 m
ill
ion)
Risk Profile continued
Standard Chartered Bank
83
Directors’ Report and Financ
ial Statements 2024
Credit quality by industry
Loans and advances
This section provides an analysis of the Group’s amortised cost portfolio by industry on a gross, total credit impa
irment and
net basis.
Group
| 2024 | ||||||||||||
| Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Net | Net | Net | Net | |||||||||
Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | |
balance | impa irment | amount | balance | impa irment | amount | balance | impa irment | amount | balance | impa irment | amount | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Industry: | ||||||||||||
Energy | 10,695 | (11) 10,684 | 449 | (33) | 416 | 859 | (551) | 308 | 12,003 | (595) | 11,408 | |
Manufacturing | 9,610 | (9) | 9,601 | 509 | (10) | 499 | 390 | (278) | 112 | 10,509 | (297) | 10,212 |
Financ ing, insurance | ||||||||||||
and non-banking | 26,699 | (12) 26,687 | 804 | (1) | 803 | 86 | (74) | 12 | 27,589 | (87) 27,502 | ||
Transport, telecom | ||||||||||||
and util it ies | 9,542 | (9) | 9,533 | 1,962 | (26) | 1,936 | 330 | (85) | 245 | 11,834 | (120) | 11,714 |
Food and | ||||||||||||
household products | 6,484 | (8) | 6,476 | 267 | (8) | 259 | 236 | (184) | 52 | 6,987 | (200) | 6,787 |
Commercial real estate | 5,394 | (7) | 5,387 | 879 | (9) | 870 | 120 | (82) | 38 | 6,393 | (98) | 6,295 |
Min ing and quarry ing | 3,757 | (3) | 3,754 | 251 | (12) | 239 | 124 | (56) | 68 | 4,132 | (71) | 4,061 |
Consumer durables | 2,699 | (6) | 2,693 | 187 | (16) | 171 | 245 | (229) | 16 | 3,131 | (251) | 2,880 |
Construction | 1,181 | (1) | 1,180 | 478 | (5) | 473 | 171 | (160) | 11 | 1,830 | (166) | 1,664 |
Trading companies | ||||||||||||
& distr ibutors | 364 | – | 364 | 2 | – | 2 | 82 | (44) | 38 | 448 | (44) | 404 |
Government | 24,374 | – | 24,374 | 428 | (12) | 416 | 193 | (18) | 175 | 24,995 | (30) 24,965 | |
Other | 2,624 | (2) | 2,622 | 72 | (4) | 68 | 139 | (68) | 71 | 2,835 | (74) | 2,761 |
Total | 103,423 | (68) 103,355 | 6,288 | (136) | 6,152 | 2,975 | (1,829) | 1,146 | 112,686 | (2,033) 110,653 | ||
Retail Products: | ||||||||||||
Mortgage | 22,266 | (7) 22,259 | 436 | (2) | 434 | 431 | (123) | 308 | 23,133 | (132) 23,001 | ||
Credit Cards | 3,665 | (70) | 3,595 | 95 | (37) | 58 | 49 | (44) | 5 | 3,809 | (151) | 3,658 |
Personal loans | ||||||||||||
and other | ||||||||||||
unsecured lending | 3,280 | (82) | 3,198 | 69 | (13) | 56 | 118 | (64) | 54 | 3,467 | (159) | 3,308 |
Auto | 159 | – | 159 | 1 | – | 1 | – | – | – | 160 | – | 160 |
Secured wealth | ||||||||||||
products | 16,110 | (24) 16,086 | 387 | (5) | 382 | 460 | (334) | 126 | 16,957 | (363) | 16,594 | |
Other | 848 | (3) | 845 | 16 | – | 16 | 65 | (58) | 7 | 929 | (61) | 868 |
Total | 46,328 | (186) | 46,142 | 1,004 | (57) | 947 | 1,123 | (623) | 500 | 48,455 | (866) 47,589 | |
Net carrying | ||||||||||||
value (customers)¹ | 149,751 | (254)149,497 | 7,292 | (193) | 7,099 | 4,098 | (2,452) | 1,646 | 161,141 | (2,899) 158,242 | ||
Net carrying | ||||||||||||
value (banks)¹ | 22,556 | (5) | 22,551 | 313 | (1) | 312 | 80 | (2) | 78 | 22,949 | (8) | 22,941 |
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $9,121 mill
ion for Customers and $2,889 m
ill
ion for Banks
Risk Profile continued
Standard Chartered Bank
84
Directors’ Report and Financ
ial Statements 2024
| 2023 | ||||||||||||
| Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Net | Net | Net | Net | |||||||||
Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | |
balance | impa irment | amount | balance | impa irment | amount | balance | impa irment | amount | balance | impa irment | amount | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Industry: | ||||||||||||
Energy | 8,064 | (9) | 8,055 | 648 | (22) | 626 | 933 | (527) | 406 | 9,645 | (558) | 9,087 |
Manufacturing | 10,639 | (6) | 10,633 | 491 | (13) | 478 | 541 | (329) | 212 | 11,671 | (348) | 11,323 |
Financ ing, insurance | ||||||||||||
and non-banking | 24,376 | (10) | 24,366 | 169 | (1) | 168 | 79 | (76) | 3 | 24,624 | (87) 24,537 | |
Transport, telecom | ||||||||||||
and util it ies | 8,846 | (6) | 8,840 | 1,583 | (32) | 1,551 | 481 | (178) | 303 | 10,910 | (216) | 10,694 |
Food and | ||||||||||||
household products | 5,853 | (15) | 5,838 | 323 | (7) | 316 | 354 | (261) | 93 | 6,530 | (283) | 6,247 |
Commercial real estate | 5,917 | (9) | 5,908 | 705 | (13) | 692 | 282 | (170) | 112 | 6,904 | (192) | 6,712 |
Min ing and quarry ing | 3,795 | (3) | 3,792 | 132 | (10) | 122 | 147 | (81) | 66 | 4,074 | (94) | 3,980 |
Consumer durables | 2,363 | (2) | 2,361 | 221 | (20) | 201 | 290 | (271) | 19 | 2,874 | (293) | 2,581 |
Construction | 1,520 | (1) | 1,519 | 480 | (8) | 472 | 358 | (326) | 32 | 2,358 | (335) | 2,023 |
Trading companies | ||||||||||||
& distr ibutors | 355 | – | 355 | 10 | – | 10 | 102 | (55) | 47 | 467 | (55) | 412 |
Government | 26,209 | (4) | 26,205 | 1,768 | (5) | 1,763 | 357 | (33) | 324 | 28,334 | (42) 28,292 | |
Other | 2,168 | (3) | 2,165 | 131 | (3) | 128 | 187 | (70) | 117 | 2,486 | (76) | 2,410 |
Total | 100,105 | (68) 100,037 | 6,661 | (134) | 6,527 | 4,111 | (2,377) | 1,734 | 110,877 | (2,579)108,298 | ||
Retail Products: | ||||||||||||
Mortgage | 24,008 | (7) | 24,001 | 509 | (3) | 506 | 353 | (110) | 243 | 24,870 | (120) 24,750 | |
Credit Cards | 3,310 | (57) | 3,253 | 120 | (25) | 95 | 42 | (29) | 13 | 3,472 | (111) | 3,361 |
Personal loans | ||||||||||||
and other | ||||||||||||
unsecured lending | 3,500 | (48) | 3,452 | 65 | (19) | 46 | 180 | (105) | 75 | 3,745 | (172) | 3,573 |
Auto | 310 | – | 310 | 1 | – | 1 | 1 | – | 1 | 312 | – | 312 |
Secured wealth | ||||||||||||
products | 14,663 | (14) | 14,649 | 258 | (8) | 250 | 435 | (325) | 110 | 15,356 | (347) 15,009 | |
Other | 822 | (4) | 818 | 43 | (4) | 39 | 55 | (72) | (17) | 920 | (80) | 840 |
Total | 46,613 | (130) | 46,483 | 996 | (59) | 937 | 1,066 | (641) | 425 | 48,675 | (830) 47,845 | |
Net carrying | ||||||||||||
value (customers)¹ | 146,718 | (198) 146,520 | 7,657 | (193) | 7,464 | 5,177 | (3,018) | 2,159 159,552 | (3,409) 156,143 | |||
Net carrying | ||||||||||||
value (Banks)¹ | 22,210 | (3) | 22,207 | 537 | (9) | 528 | 74 | (6) | 68 | 22,821 | (18) 22,803 | |
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $13,827 mill
ion for Customers and $1,653 m
ill
ion for Banks
Risk Profile continued
Standard Chartered Bank
85
Directors’ Report and Financ
ial Statements 2024
Company
| 2024 | ||||||||||||
| Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Net | Net | Net | Net | |||||||||
Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | |
balance | impa irment | amount | balance | impa irment | amount | balance | impa irment | amount | balance | impa irment | amount | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Industry: | ||||||||||||
Energy | 7,345 | (5) | 7,340 | 342 | (10) | 332 | 564 | (266) | 298 | 8,251 | (281) | 7,970 |
Manufacturing | 6,415 | (7) | 6,408 | 330 | (4) | 326 | 312 | (234) | 78 | 7,057 | (245) | 6,812 |
Financ ing, insurance | ||||||||||||
and non-banking | 23,812 | (9) 23,803 | 413 | (1) | 412 | 24 | (22) | 2 | 24,249 | (32) | 24,217 | |
Transport, telecom | ||||||||||||
and util it ies | 5,256 | (6) | 5,250 | 1,485 | (22) | 1,463 | 267 | (62) | 205 | 7,008 | (90) | 6,918 |
Food and | ||||||||||||
household products | 3,743 | (4) | 3,739 | 106 | (5) | 101 | 83 | (59) | 24 | 3,932 | (68) | 3,864 |
Commercial real estate | 3,655 | (7) | 3,648 | 443 | (8) | 435 | 115 | (79) | 36 | 4,213 | (94) | 4,119 |
Min ing and quarry ing | 2,795 | (2) | 2,793 | 56 | (8) | 48 | 51 | (48) | 3 | 2,902 | (58) | 2,844 |
Consumer durables | 1,796 | (6) | 1,790 | 83 | (9) | 74 | 225 | (209) | 16 | 2,104 | (224) | 1,880 |
Construction | 878 | (1) | 877 | 127 | – | 127 | 105 | (96) | 9 | 1,110 | (97) | 1,013 |
Trading companies | ||||||||||||
& distr ibutors | 227 | – | 227 | 2 | – | 2 | 54 | (23) | 31 | 283 | (23) | 260 |
Government | 3,874 | – | 3,874 | 378 | (3) | 375 | 94 | (18) | 76 | 4,346 | (21) | 4,325 |
Other | 1,521 | (1) | 1,520 | 22 | (2) | 20 | 111 | (59) | 52 | 1,654 | (62) | 1,592 |
Total | 61,317 | (48) | 61,269 | 3,787 | (72) | 3,715 | 2,005 | (1,175) | 830 | 67,109 | (1,295) | 65,814 |
Retail Products: | ||||||||||||
Mortgage | 4,805 | (5) | 4,800 | 69 | (1) | 68 | 243 | (81) | 162 | 5,117 | (87) | 5,030 |
Credit Cards | 599 | (12) | 587 | 35 | (16) | 19 | 18 | (10) | 8 | 652 | (38) | 614 |
Personal loans | ||||||||||||
and other | ||||||||||||
unsecured lending | 1,744 | (44) | 1,700 | 34 | (8) | 26 | 26 | (11) | 15 | 1,804 | (63) | 1,741 |
Auto | 7 | – | 7 | – | – | – | – | – | – | 7 | – | 7 |
Secured wealth | ||||||||||||
products | 3,708 | (6) | 3,702 | 79 | (2) | 77 | 367 | (285) | 82 | 4,154 | (293) | 3,861 |
Other | 517 | (1) | 516 | 6 | – | 6 | 26 | (18) | 8 | 549 | (19) | 530 |
Total | 11,380 | (68) | 11,312 | 223 | (27) | 196 | 680 | (405) | 275 | 12,283 | (500) | 11,783 |
Net carrying | ||||||||||||
value (customers)¹ | 72,697 | (116) | 72,581 | 4,010 | (99) | 3,911 | 2,685 | (1,580) | 1,105 | 79,392 | (1,795) 77,597 | |
Net carrying | ||||||||||||
value (banks)¹ | 11,545 | (1) | 11,544 | 209 | (1) | 208 | 3 | – | 3 | 11,757 | (2) | 11,755 |
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $9,041 mill
ion for Customers and $1,423 m
ill
ion for Banks
Risk Profile continued
Standard Chartered Bank
86
Directors’ Report and Financ
ial Statements 2024
| 2023 | ||||||||||||
| Stage 1 | Stage 2 | Stage 3 | Total | |||||||||
Net | Net | Net | Net | |||||||||
Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | Gross | Total credit | carrying | |
balance | impa irment | amount | balance | impa irment | amount | balance | impa irment | amount | balance | impa irment | amount | |
Amortised cost | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Industry: | ||||||||||||
Energy | 5,560 | (4) | 5,556 | 475 | (3) | 472 | 648 | (276) | 372 | 6,683 | (283) | 6,400 |
Manufacturing | 6,907 | (3) | 6,904 | 275 | (4) | 271 | 426 | (283) | 143 | 7,608 | (290) | 7,318 |
Financ ing, insurance | ||||||||||||
and non-banking | 21,533 | (4) | 21,529 | 85 | (1) | 84 | 29 | (26) | 3 | 21,647 | (31) | 21,616 |
Transport, telecom | ||||||||||||
and util it ies | 4,915 | (4) | 4,911 | 1,288 | (18) | 1,270 | 367 | (110) | 257 | 6,570 | (132) | 6,438 |
Food and | ||||||||||||
household products | 3,640 | (3) | 3,637 | 58 | (1) | 57 | 190 | (149) | 41 | 3,888 | (153) | 3,735 |
Commercial real estate | 4,560 | (7) | 4,553 | 288 | (1) | 287 | 257 | (165) | 92 | 5,105 | (173) | 4,932 |
Min ing and quarry ing | 2,968 | (1) | 2,967 | 76 | (7) | 69 | 77 | (73) | 4 | 3,121 | (81) | 3,040 |
Consumer durables | 1,811 | (2) | 1,809 | 95 | (7) | 88 | 260 | (244) | 16 | 2,166 | (253) | 1,913 |
Construction | 1,127 | (1) | 1,126 | 305 | (5) | 300 | 293 | (269) | 24 | 1,725 | (275) | 1,450 |
Trading companies | ||||||||||||
& distr ibutors | 163 | – | 163 | 7 | – | 7 | 78 | (38) | 40 | 248 | (38) | 210 |
Government | 3,688 | (4) | 3,684 | 794 | (3) | 791 | 357 | (33) | 324 | 4,839 | (40) | 4,799 |
Other | 1,375 | (2) | 1,373 | 73 | (2) | 71 | 149 | (64) | 85 | 1,597 | (68) | 1,529 |
Total | 58,247 | (35) | 58,212 | 3,819 | (52) | 3,767 | 3,131 | (1,730) | 1,401 | 65,197 | (1,817) 63,380 | |
Retail Products: | ||||||||||||
Mortgage | 5,160 | (4) | 5,156 | 72 | (1) | 71 | 191 | (73) | 118 | 5,423 | (78) | 5,345 |
Credit Cards | 634 | (14) | 620 | 62 | (11) | 51 | 11 | (8) | 3 | 707 | (33) | 674 |
Personal loans | ||||||||||||
and other | ||||||||||||
unsecured lending | 2,125 | (26) | 2,099 | 41 | (11) | 30 | 38 | (12) | 26 | 2,204 | (49) | 2,155 |
Auto | 15 | – | 15 | – | – | – | – | – | – | 15 | – | 15 |
Secured wealth | ||||||||||||
products | 3,649 | (7) | 3,642 | 70 | (3) | 67 | 368 | (291) | 77 | 4,087 | (301) | 3,786 |
Other | 513 | (3) | 510 | 13 | (2) | 11 | 22 | (15) | 7 | 548 | (20) | 528 |
Total | 12,096 | (54) | 12,042 | 258 | (28) | 230 | 630 | (399) | 231 | 12,984 | (481) | 12,503 |
Net carrying | ||||||||||||
value (customers)¹ | 70,343 | (89) 70,254 | 4,077 | (80) | 3,997 | 3,761 | (2,129) | 1,632 | 78,181 | (2,298) 75,883 | ||
Net carrying | ||||||||||||
value (banks)¹ | 9,849 | (1) | 9,848 | 286 | (1) | 285 | 6 | (4) | 2 | 10,141 | (6) | 10,135 |
1
Includes reverse repurchase agreements and other sim
ilar secured lend
ing held at amortised cost of $12,212 mill
ion for Customers and $554 m
ill
ion for Banks
Risk Profile continued
Standard Chartered Bank
87
Directors’ Report and Financ
ial Statements 2024
Debt securit
ies and other el
ig
ible b
ills (audited)
This section provides further detail on gross debt securit
ies and treasury b
ills.
The standard credit ratings used by the Group are those used by Standard & Poor’s or its equivalent. Debt securit
ies held that
have a short-term rating are reported against the long-term rating of the issuer. For securit
ies that are unrated, the Group
applies an internal credit rating, as described under the credit rating and measurement section on page 51. Total gross debt
securit
ies and other el
ig
ible b
ills decreased by $5.9 bill
ion to $96 b
ill
ion (31 December 2023: $102 b
ill
ion) due to matur
ity
of exposures in stage 1.
Stage 1 gross balance decreased by $5.6 bill
ion to $94 b
ill
ion (31 December 2023: $100 b
ill
ion) due to matur
ity of exposures
in United Kingdom and United States.
Stage 2 gross balance decreased by $0.3 bill
ion to $1.6 b
ill
ion (31 December 2023: $1.9 b
ill
ion).
Stage 3 gross balance decreased by $0.1 bill
ion to $0.1 b
ill
ion (31 December 2023: $0.2 b
ill
ion) due to exposure reduct
ions
and disposals during the year.
Group
| 2024 | 2023 | |||||
Gross | ECL | Net 2 | Gross | ECL | Net 2 | |
Amortised cost and FVOCI | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Stage 1 | 94,480 | (20) | 94,460 | 100,092 | (26) | 100,066 |
Strong | 90,971 | (16) | 90,955 | 97,346 | (23) | 97,323 |
Satisfactory | 3,509 | (4) | 3,505 | 2,746 | (3) | 2,743 |
Stage 2 | 1,612 | (3) | 1,609 | 1,861 | (34) | 1,827 |
Strong | 560 | – | 560 | 918 | (7) | 911 |
Satisfactory | 31 | – | 31 | 50 | (1) | 49 |
High Risk | 1,021 | (3) | 1,018 | 893 | (26) | 867 |
Stage 3 | 103 | (2) | 101 | 165 | (61) | 104 |
Gross balance¹ | 96,195 | (25) | 96,170 | 102,118 | (121) | 101,997 |
1
Stage 3 gross includes $59 mill
ion (2023: $80 m
ill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith Nil impa
irment (2023: $14 m
ill
ion)
2
FVOCI instrument are not presented net of ECL. While the presentation is on a net basis for the table, the total net on-balance sheet amount is $96,179 mill
ion
(31 December 2023: $102,041 mill
ion). Refer to the Analys
is of financ
ial
instrument by stage table on page 62
Company
| 2024 | 2023 | |||||
Gross | ECL | Net 2 | Gross | ECL | Net 2 | |
Amortised cost and FVOCI | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Stage 1 | 81,618 | (15) | 81,603 | 92,038 | (23) | 92,015 |
Strong | 78,648 | (12) | 78,636 | 90,028 | (21) | 90,007 |
Satisfactory | 2,970 | (3) | 2,967 | 1,979 | (2) | 1,977 |
Stage 2 | 244 | (2) | 242 | 315 | – | 315 |
Strong | – | – | – | 315 | – | 315 |
Satisfactory | 6 | – | 6 | – | – | – |
High Risk | 238 | (2) | 236 | – | – | – |
Stage 3 | – | – | – | 76 | (56) | 20 |
Gross balance¹ | 81,862 | (17) | 81,845 | 92,429 | (79) | 92,350 |
1
Stage 3 gross includes Nil (31 December 2023: $25 mill
ion) or
ig
inated cred
it-impa
ired debt secur
it
ies w
ith Nil impa
irment (31 December 2023: $14 m
ill
ion)
2
FVOCI instrument are not presented net of ECL. While the presentation is on a net basis for the table, the total net on-balance sheet amount is $81,855 mill
ion
(31 December 2023: $92,362 mill
ion). Refer to the Analys
is of financ
ial
instrument by stage table on page 62
Risk Profile continued
Standard Chartered Bank
88
Directors’ Report and Financ
ial Statements 2024
IFRS 9 expected credit loss methodology (audited)
Approach for determin
ing expected cred
it losses
Credit loss terminology
Component | Definit ion |
Probabil ity of | The probabil ity that a counterparty w ill default, over the next 12 months from the reporting date (stage 1) or |
default (PD) | over the lifet ime of the product (stage 2), incorporating the impact of forward-looking economic assumptions |
that have an effect on Credit Risk, such as unemployment rates and GDP forecasts. The PD estimates will | |
fluctuate in line with the economic cycle. The lifet ime (or term structure) PDs are based on stat ist ical models, | |
calibrated using histor ical data and adjusted to incorporate forward-looking economic assumptions. | |
Loss given | The loss that is expected to arise on default, incorporating the impact of forward-looking economic assumptions |
default (LGD) | where relevant, which represents the difference between the contractual cashFlows due and those that the bank |
expects to receive. | |
The Group estimates LGD based on the history of recovery rates and considers the recovery of any collateral | |
that is integral to the financ ial asset, tak ing into account forward-looking economic assumptions where relevant. | |
Exposure at | The expected balance sheet exposure at the time of default, taking into account expected changes over the |
default (EAD) | lifet ime of the exposure. Th is incorporates the impact of drawdowns of facil it ies with lim its, pr inc ipal and |
repayments of interest and amortisat ion. |
To determine the expected credit loss, these components are multipl
ied together: PD for the reference per
iod (up to
12 months or lifet
ime) x LGD x EAD and d
iscounted to the balance sheet date using the effective interest rate as the
discount rate.
IFRS 9 expected credit loss models have been developed for the CIB business on a global basis, in line with their respective
portfolios. However, for some of the key countries, country-specif
ic models have also been developed. The cal
ibrat
ion of
forward-looking informat
ion
is assessed at a country or region level to take into account local macroeconomic condit
ions.
Retail expected credit loss models are country and product specif
ic g
iven the local nature of the retail business.
For less material retail portfolios, the Group has adopted less sophist
icated approaches based on h
istor
ical roll rates or
loss rates:
•
For medium-sized retail portfolios, a roll rate model is applied, which uses a matrix that gives the average loan migrat
ion
rate between delinquency states from period to period. A matrix multipl
icat
ion is then performed to generate the final
PDs by delinquency bucket over different time horizons.
•
For smaller retail portfolios, a loss rate approach is applied. These use an adjusted gross charge-off rate, developed using
monthly write-off and recoveries over the preceding 12 months and total outstanding balances.
•
Whilst the loss rate approaches do not incorporate forward looking informat
ion, to the extent that there are s
ign
ificant
changes in the macroeconomic forecasts an assessment is completed on whether an adjustment to the modelled output is
required.
For a lim
ited number of exposures, proxy parameters or approaches are used where the data
is not available to calculate
the orig
inat
ion PDs for the purpose of applying the SICR criter
ia; or for some reta
il portfolios where a full history of LGD data is
not available, estimates based on the loss experience from sim
ilar portfol
ios are used. The use of proxies is monitored and will
reduce over time.
The following processes are in place to assess the ongoing performance of the models:
•
Quarterly model monitor
ing that uses recent data to compare the d
ifferences between model predict
ions and actual
outcomes against approved thresholds.
•
Annual independent validat
ion
is performed by Group Model Valuation (GMV); Depth of GMV’s validat
ion var
ies
depending on the model material
ity. Mater
ial models would go through a full annual re-validat
ion process, wh
ile a less
intens
ive val
idat
ion process w
ill be performed on non-material models.
Applicat
ion of l
ifet
ime
Expected credit loss is estimated based on the period over which the Group is exposed to Credit Risk. For the major
ity
of exposures this equates to the maximum contractual period. For retail credit cards and corporate overdraft facil
it
ies,
however, the Group does not typically enforce the contractual period, which can be as short as one day. As a result, the
period over which the Group is exposed to Credit Risk for these instruments reflects their behavioural life, which incorporates
expectations of customer behaviour and the extent to which Credit Risk management actions curtail the period of that
exposure. The average behavioural life for retail credit cards is between 3 and 6 years across our footprint markets.
The behavioural life for corporate overdraft facil
it
ies is 24 months.
Risk Profile continued
Standard Chartered Bank
89
Directors’ Report and Financ
ial Statements 2024
Key assumptions and judgements in determin
ing expected cred
it loss
Incorporation of forward-looking informat
ion
The evolving economic environment is a key determinant of the abil
ity of a bank’s cl
ients to meet their obligat
ions as they fall
due. It is a fundamental princ
iple of IFRS 9 that the prov
is
ions banks hold aga
inst potential future credit risk losses should
depend not just on the health of the economy today but should also take into account potential changes to the economic
environment. For example, if a bank were to antic
ipate a sharp slowdown
in the world economy over the coming year, it
should hold more provis
ions today to absorb the cred
it losses likely to occur in the near future.
To capture the effect of changes to the economic environment, the PDs and LGDs used to calculate ECL incorporate
forward-looking informat
ion
in the form of forecasts of the values of economic variables and asset prices that are likely to
have an effect on the repayment abil
ity of the Group’s cl
ients.
The ‘Base Forecast’ of the economic variables and asset prices is based on management’s view of the five-year outlook,
supported by projections from the Group’s
in-house research team and outputs from a third-party model that project specif
ic
economic variables and asset prices. The research team takes consensus views into considerat
ion and sen
ior management
reviews project
ions for some core country var
iables against consensus when forming their view of the outlook. For the period
beyond five years, management util
ises the
in-house research view and third-party model outputs, which allow for a
reversion to long-term growth rates or norms. All project
ions are updated on a quarterly bas
is.
Forecast of key macroeconomic variables underlying the expected credit loss calculation and the impact
on non-linear
ity
In the Base Forecast – management’s view of the most likely outcome – the pace of growth of the world economy is expected
to remain broadly unchanged from 2024 at around 3 per cent in 2025. This compares to the average of 3.7 per cent growth
for the 10 years prior to COVID-19 (between 2010 and 2019). Support from easing financ
ial cond
it
ions and expans
ionary
fiscal policy may be partly offset by protection
ist trade pol
ic
ies and st
ill-high interest rates in the US and elsewhere. The US
economy is set to moderate in 2025, after a resil
ient 2024 performance desp
ite elevated interest rates. The euro area
continues to struggle with major European economies includ
ing Germany and France who r
isk slipp
ing
into recession.
Asia is relatively healthy, although growth at the regional level is set to moderate slightly in 2025 as both China and India
slow. The Middle-East is expected also to remain a bright spot for global growth, with the region’s non-oil growth exceeding
overall global growth.
The uncertainty around the economic outlook remains elevated. In particular, the change in US Presidency is expected to
lead to sign
ificant changes
in US polic
ies,
includ
ing new and h
igher tariffs on key US trading partners. On the geopolit
ical
front, tensions remain elevated over the conflict in Ukraine and the situat
ion
in the Middle-East.
Whilst the quarterly Base Forecast inform the Group’s strategic plan, one key requirement of IFRS 9 is that the assessment of
provis
ions should cons
ider multiple future economic environments. For example, the global economy may grow more quickly
or more slowly than the Base Forecast, and these variat
ions would have d
ifferent impl
icat
ions for the provis
ions that the
Group should hold today. As the negative impact of an economic downturn on credit losses tends to be greater than the
posit
ive
impact of an economic upturn, if the Group sets provis
ions only on the ECL under the Base Forecast
it might mainta
in
a level of provis
ions that does not appropr
iately capture the range of potential outcomes. To address the inherent
uncertainty in economic forecast, and the property of skewness (or non-linear
ity), IFRS 9 requ
ires reported ECL to be
a probabil
ity-we
ighted ECL calculated over a range of possible outcomes.
To assess the range of possible outcomes the Group simulates a set of 50 scenarios around the Base Forecast, calculates the
ECL under each of them and assigns an equal weight of 2 per cent to each scenario outcome. These scenarios are generated
by a Monte Carlo simulat
ion, wh
ich addresses the challenges of crafting many realist
ic alternat
ive scenarios in the many
countries in which the Group operates by means of a model, which produces these alternative scenarios whilst consider
ing
the degree of histor
ical uncerta
inty (or volatil
ity) observed from Q1 1990 to Q3 2023 around econom
ic outcomes, the trends in
each macroeconomic variable modelled and the correlation in the unexplained movements around these trends. This
naturally means that each of the 50 scenarios do not have a specif
ic narrat
ive, although collectively they explore a range
of hypothetical alternative outcomes for the global economy, includ
ing scenar
ios that turn out better than expected and
scenarios that amplify antic
ipated stresses.
The tables on page 91 provide a summary of the Group’s Base Forecast for key markets. The peak/trough amounts in the
tables show the highest and lowest points with
in the Base Forecast.
Risk Profile continued
Standard Chartered Bank
90
Directors’ Report and Financ
ial Statements 2024
China’s GDP growth is expected to ease slightly to 4.5 per cent in 2025 from 4.8 per cent in 2024. This reflects persistent
weakness in the property sector, though it is expected to moderate, external headwinds and low consumer confidence.
Growth in India is also expected to ease with GDP expanding by 6.5 per cent from 6.9 per cent in 2024 as the impact from
recent one-off factors such as construction activ
ity and electr
ic
ity demand (am
id below normal rains) fade. GDP growth for
Singapore is expected to slow to 2.4 per cent in 2025 from 3.5 per cent last year . An uncertain global trade outlook will weigh
on sentiment in trade-reliant economies. Recent economic activ
ity may have also been partly dr
iven by front-loading of
orders of electronics ahead of potentially negative trade polic
ies
in 2025. In contrast the GDP growth for the UAE is expected
to improve to 5 per cent from 4 per cent in 2024. The faster growth in 2025 is mostly supported by an increase in oil-sector
growth, as the UAE is set to increase its oil output this year.
Brent crude oil prices are expected to average around $77 in 2025 compared to around $78 in 2024. They are expected to
remain at sim
ilar levels beyond th
is year. The five-year average oil price is $76.
2024 year-end forecasts 7 | ||||||||||||||||
| China 5 | UAE | Singapore 6 | India | |||||||||||||
Base | Base | Base | Base | |||||||||||||
5 yr | forecast | 5 yr | forecast | 5 yr | forecast | 5 yr | forecast | |||||||||
average | quarterly | average | quarterly | average | quarterly | average | quarterly | |||||||||
base | peak/ | base | peak/ | base | peak/ | base | peak/ | |||||||||
forecast | trough | Low 2 | High 3 | forecast | trough | Low 2 | High 3 | forecast | trough | Low 2 | High 3 | forecast | trough | Low 2 | High 3 | |
GDP growth | ||||||||||||||||
(YoY%) | 4.1 | 5.3/3.2 | (1.0) | 9.3 | 3.7 | 5.4/2.7 | (0.1) | 12.6 | 2.3 | 3.4/0.6 | (2.7) | 7.0 | 6.6 | 7.1/5.9 | 3.2 | 10.0 |
Unemployment | ||||||||||||||||
(%) | 3.3 | 3.5/3.1 | 2.8 | 3.7 | NA | NA | NA | NA | 2.7 | 2.8/2.7 | 2.0 | 3.6 | NA | NA | NA | NA |
3 month interest | ||||||||||||||||
rates (%) | 1.7 | 1.9/1.6 | 0.6 | 3.0 | 2.9 | 3.6/2.7 | 0.5 | 5.5 | 2.0 | 2.4/1.6 | 0.3 | 3.9 | 6.0 | 6.2/6.0 | 1.9 | 10.3 |
House prices | ||||||||||||||||
(YoY%) | (1.3) 2.3/(5.6) (10.1) | 7.8 | 3.5 | 12.4/1.9 | (12.0) | 22.3 | 2.4 3.2/(0.4) (10.5) | 17.5 | 6.4 | 7.3/6.0 | (0.1) | 12.6 | ||||
2023 year-end forecasts
| China 5 | UAE | Singapore 6 | India | |||||||||||||
Base | Base | Base | Base | |||||||||||||
5 yr | forecast | 5 yr | forecast | 5 yr | forecast | 5 yr | forecast | |||||||||
average | quarterly | average | quarterly | average | quarterly | average | quarterly | |||||||||
base | peak/ | base | peak/ | base | peak/ | base | peak/ | |||||||||
forecast | trough | Low 2 | High 3 | forecast | trough | Low 2 | High 3 | forecast | trough | Low 2 | High 3 | forecast | trough | Low 2 | High 3 | |
GDP growth | ||||||||||||||||
(YoY%) | 4.3 | 5.7/3.8 | 0.6 | 7.7 | 3.4 | 4.3/2.4 | (1.3) | 8.8 | 2.9 | 3.8/1.9 | (2.4) | 8.5 | 6.2 | 9.1/4.4 | 2.1 | 10.5 |
Unemployment | ||||||||||||||||
(%) | 4.0 | 4.1/3.8 | 3.3 | 4.4 | NA | NA | NA | NA | 2.8 | 2.9/2.8 | 1.7 | 3.8 | NA | NA | NA | NA |
3 month interest | ||||||||||||||||
rates (%) | 2.1 | 2.5/1.7 | 0.8 | 3.8 | 3.8 | 5.3/2.7 | 0.4 | 7.8 | 2.9 | 4.1/2.3 | 0.6 | 5.9 | 6.2 | 6.3/5.8 | 2.7 | 9.9 |
House prices | ||||||||||||||||
(YoY%) | 4.6 | 7.2/1.5 | (1.5) | 12.0 | 2.6 | 8.4/1.9 | (15.3) | 19.1 | 2.2 | 3.9/(0.7) (16.2) | 19.2 | 6.1 | 6.5/4.7 | (0.5) | 13.8 | |
| 2024 year-end forecasts | 2023 year-end forecasts | |||||||
5 yr average | Base forecast | 5 yr average | Base forecast | |||||
base forecast | peak/trough | Low 2 | High 3 | base forecast | peak/trough | Low 2 | High 3 | |
Brent Crude, $ pb | 76.2 | 77.8/74.8 | 44.5 | 107.8 | 88.2 | 93.8/82.8 | 46.0 | 137.8 |
1
N/A – Not available
2
Represents the 10th percentile in the range of economic scenarios used to determine non-linear
ity
3
Represents the 90th percentile in the range of economic scenarios used to determine non-linear
ity
4
Base forecasts are evaluated from Q1 2024 to Q4 2028. The forward-looking simulat
ion starts from Q1 2024.
5
A judgemental management adjustment is held in respect of the China commercial real estate sector as discussed below.
6
Singapore unemployment rate covers the resident unemployment rate, which refers to cit
izens and permanent res
idents.
7
Data presented are those used in the calculation of ECL. These may differ slightly to forecasts presented elsewhere in the Financ
ial statements as they are finalised
before the period end.
Risk Profile continued
Standard Chartered Bank
91
Directors’ Report and Financ
ial Statements 2024
Judgemental adjustments
As at 31 December 2024, the Group held $50 mill
ion (31 December 2023: $33 m
ill
ion) of judgemental management overlays,
$42 mill
ion (31 December 2023: $11 m
ill
ion) of wh
ich relates to CIB, $1 mill
ion (31 December 2023: $5 m
ill
ion) to WRB and
$7 mill
ion (31 December 2023: $17 m
ill
ion) to Central and Others. Overlays have been taken for Bangladesh by est
imat
ing the
impact of deteriorat
ion to certa
in exposures in the country, together with an immater
ial amount for cl
imate risks. The overlay
in Bangladesh reflects that the polit
ical s
ituat
ion has contr
ibuted to an increas
ing level of uncerta
inty in the macroeconomic
outlook. Further details on the adjustment for climate risk are set out in Note 1 Accounting polic
ies.
Overlays held at 31 December 2023 of $33 mill
ion were fully released
in 2024. This comprises of $11 mill
ion
in CIB for China
Commercial real estate due to repayments, $5 mill
ion
in WRB for macroeconomic environment challenges and $17 mill
ion
in Central and Others relating to a temporary market dislocat
ion
in Africa and the Middle East.
As at 31 December 2024, judgemental post model adjustments which reduced ECL by a net $9 mill
ion (31 December 2023:
$1 mill
ion decrease
in ECL) have been applied. There was a $16 mill
ion upward adjustment for non-l
inear
ity, as the current set
of ceil
ings and floors used
in the Monte Carlo model generated a relatively narrow range of forecasts at 31 December 2024.
The total amount of non-linear
ity has been est
imated by assign
ing probab
il
ity we
ights of 68 per cent, 22 per cent and 10 per
cent respectively to the Base Forecast, Higher for Longer Commodit
ies and Rates, and Global Trade and Geopol
it
ical
Tensions scenarios which are presented on pages 91 and comparing this to the unweighted Base Forecast ECL. The non-
linear
ity PMA represents the d
ifference between the probabil
ity we
ighted ECL calculated using the three scenarios and the
probabil
ity we
ighted ECL calculated by the Monte Carlo model. The remain
ing $25 m
ill
ion reduct
ion in ECL relates to
adjustments applied to and for certain WRB models, primar
ily to adjust for temporary factors
impact
ing modelled outputs.
These will be released when these factors normalise.
Judgemental adjustments are re-assessed quarterly, are reviewed and approved by the IFRS 9 IIC and will be released when
the risks are no longer relevant.
Stage 3 assets
Credit-impa
ired assets managed by Stressed Asset R
isk incorporate forward-looking economic assumptions in respect of
the recovery outcomes ident
ified, and are ass
igned ind
iv
idual probabil
ity we
ight
ings. These assumpt
ions are not based
on a Monte Carlo simulat
ion but are
informed by the Base Forecast.
Sensit
iv
ity of expected credit loss calculation to macroeconomic variables
The ECL calculation relies on multiple variables and is inherently non-linear and portfolio-dependent, which impl
ies that no
single analysis can fully demonstrate the sensit
iv
ity of the ECL to changes in the macroeconomic variables. The Group has
conducted a series of analyses with the aim of ident
ify
ing the macroeconomic variables which might have the greatest
impact on overall ECL. These encompassed single variable and multi-variable exercises, using simple up/down variat
ion
and extracts from actual calculation data, as well as bespoke scenario design and assessments.
The primary conclusion of these exercises is that no ind
iv
idual macroeconomic variable is materially influent
ial. The Group
believes this is plausible as the number of variables used in the ECL calculation is large. This does not mean that
macroeconomic variables are uninfluent
ial; rather, that the Group bel
ieves that considerat
ion of macroeconom
ics should
involve whole scenarios, as this aligns with the multi-variable nature of the calculation.
The Group faces downside risks in the operating environment related to the uncertaint
ies surround
ing the macroeconomic
outlook. To explore this, a sensit
iv
ity analysis of ECL was undertaken to explore the effect of slower economic recoveries
across the Group’s footprint markets. Two downside scenarios were considered in particular to explore the current
uncertaint
ies over commod
ity prices. The Global Trade and Geopolit
ical Trade Tens
ions (GTGT) scenario is characterised by
an escalating trade war between the US and China and other economies. The “Higher for Longer Commodit
ies and Rates“
scenario explores the impact from stick
ier than expected
inflat
ion due to pers
istent shipp
ing d
isrupt
ions and r
ise in energy
prices amid fears of an escalation of the Middle East conflict.
Global Trade and Geopolit ical | Higher for longer: | |||||
Baseline | Tensions (GTGT) | Commodit ies and Rates | ||||
Five year | Five year | Five year | ||||
average | Peak/Trough | average | Peak/Trough | average | Peak/Trough | |
China GDP | 4.1 | 5.3 / 3.2 | 0.8 | 3.8 / (2.6) | 3.5 | 4.3 / 1.8 |
China unemployment | 3.3 | 3.5 / 3.1 | 4.9 | 5.5 / 3.8 | 4.3 | 5.2 / 3.1 |
China property prices | (1.3) | 2.3 / (5.6) | (5.1) | 11.1 / (47.6) | (1.4) | 8.6 / (24.5) |
UAE GDP | 3.7 | 5.4 / 2.7 | 0.8 | 3.7 / (6.5) | 3.5 | 4.2 / 2.8 |
UAE property prices | 3.5 | 12.4 / 1.9 | (0.6) | 12.0 / (12.1) | 3.2 | 11.6 / 1.7 |
US GDP | 2.0 | 2.6 / 1.1 | 0.3 | 2.2 / (3.2) | 1.1 | 2.5 / (2.1) |
Singapore GDP | 2.3 | 3.4 / 0.6 | 0.0 | 3.1 / (5.9) | 1.6 | 2.8 / (2.3) |
India GDP | 6.6 | 7.1 / 5.9 | 4.7 | 6.7 / 0.8 | 6.1 | 7.4 / 4.3 |
Crude oil | 76.2 | 77.8 / 74.8 | 59.1 | 86.2 / 46.2 | 84.9 | 113.4 / 74.8 |
Risk Profile continued
Standard Chartered Bank
92
Directors’ Report and Financ
ial Statements 2024
The total reported stage 1 and 2 ECL provis
ions (
includ
ing both on and off-balance sheet
instruments) would be
approximately $47 mill
ion h
igher under the Higher for Longer Commodit
ies and Rates scenar
io and $172 mill
ion h
igher
under the Global Trade and Geopolit
ical Tens
ions scenario than the baseline ECL provis
ions (wh
ich excluded the impact of
multiple economic scenarios and management overlays which may already capture some of the risks in these scenarios).
The proportion of stage 2 assets would increase from 3.1 per cent in the base case to 3.3 per cent and 3.9 per cent respectively
under the Higher for Longer Commodit
ies and Rates and Global Trade and Geopol
it
ical Tens
ions scenarios. This includes
the impact of exposures transferring to stage 2 from stage 1 but does not consider an increase in stage 3 defaults.
Under both scenarios the major
ity of the
increase in CIB came from the main corporate and project finance portfolios booked
in the Singapore. For the WRB portfolios most of the increases came from the unsecured retail portfolios with Singapore
credit cards most impacted.
There was no material change in modelled stage 3 provis
ions as these pr
imar
ily relate to unsecured reta
il exposures for which
the LGD is not sensit
ive to changes
in the macroeconomic forecasts. There is also no material change for non-modelled stage
3 exposures as these are more sensit
ive to cl
ient specif
ic factors than to alternat
ive macroeconomic scenarios.
The actual outcome of any scenario may be materially different due to, among other factors, the effect of management
actions to mit
igate potent
ial increases in risk and changes in the underlying portfolio.
Modelled provis
ions
Increase in ECL | ||
ECL Global | ||
ECL Higher | Trade and | |
for Longer | Geopolit ical | |
Commodit ies | Trade | |
and Rates | Tensions | |
$mill ion | $ mill ion | |
Stage 1 | ||
Corporate & Investment Banking | 12 | 19 |
Wealth & Retail Banking | 6 | 18 |
Ventures | – | – |
Central & Others | 1 | 2 |
Total increase in stage 1 ECL | 19 | 39 |
Stage 2 | ||
Corporate & Investment Banking | 19 | 96 |
Wealth & Retail Banking | 9 | 37 |
Ventures | – | – |
Central & Others | – | – |
Total increase in stage 2 ECL | 28 | 133 |
Total Stage 1 & 2 | ||
Corporate & Investment Banking | 31 | 115 |
Wealth & Retail Banking | 15 | 55 |
Ventures | – | – |
Central & Others | 1 | 2 |
Total increase in stage 1 & 2 ECL | 47 | 172 |
Risk Profile continued
Standard Chartered Bank
93
Directors’ Report and Financ
ial Statements 2024
Sign
ificant
increase in credit risk (SICR)
Quantitat
ive cr
iter
ia
SICR is assessed by comparing the risk of default at the reporting date to the risk of default at orig
inat
ion. Whether a change
in the risk of default is sign
ificant or not
is assessed using quantitat
ive and qual
itat
ive cr
iter
ia. These cr
iter
ia have been
separately defined for each business and where meaningful are consistently applied across business lines.
Assets are considered to have experienced SICR if they have breached both relative and absolute thresholds for the change
in the average annualised IFRS 9 lifet
ime probab
il
ity of default (IFRS 9 PD) over the res
idual term of the exposure.
The absolute measure of increase in credit risk is used to capture instances where the IFRS 9 PDs on exposures are relatively
low at in
it
ial recognit
ion as these may
increase by several multiples without representing a sign
ificant
increase in credit risk.
Where IFRS 9 PDs are relatively high at in
it
ial recognit
ion, a relat
ive measure is more appropriate in assessing whether there
is a sign
ificant
increase in credit risk, as the IFRS 9 PDs increase more quickly.
The SICR thresholds have been calibrated based on the following princ
iples:
•
Stabil
ity – The thresholds are set to ach
ieve a stable stage 2 population at a portfolio level, trying to min
im
ise the number
of accounts moving back and forth between stage 1 and stage 2 in a short period of time
•
Accuracy – The thresholds are set such that there is a materially higher propensity for stage 2 exposures to eventually
default than is the case for stage 1 exposures
•
Dependency from backstops – The thresholds are stringent enough such that a high proportion of accounts transfer
to stage 2 due to movements in forward-looking IFRS 9 PDs rather than relying on backward-looking backstops such
as arrears
•
Relationsh
ip w
ith business and product risk profiles – the thresholds reflect the relative risk differences between different
products, and are aligned to business processes
For CIB clients the quantitat
ive thresholds are a relat
ive 100 per cent increase in IFRS 9 PD and an absolute change in IFRS 9
PD of between 50 and 100 bps for investment grade and sub-investment grade assets. For debt securit
ies or
ig
inated before
1 January 2018, the bank is util
is
ing the low Credit Risk simpl
ified approach, where debt secur
it
ies w
ith an internal credit rating
mapped to an investment grade equivalent are allocated to stage 1 and all other debt securit
ies are allocated to stage 2.
For Wealth and Retail Banking (excluding Private Banking) clients, portfolio specif
ic quant
itat
ive thresholds
in Singapore,
Malaysia, India and UAE are applied for credit cards and one Business Client portfolio in India. The thresholds include relative
and absolute increases in IFRS 9 PD with average lifet
ime IFRS 9 PD cut-offs for those exposures that are w
ith
in a range of
customer util
isat
ion lim
its (for cred
it cards) and remain
ing tenor (for personal loans) and d
ifferent
iate between exposures
that are current and those that are 1 to 29 days past due.
The range of thresholds applied are:
Relative IFRS 9 | Absolute IFRS | Customer | Average | |
PD increase | 9 PD increase | util isat ion | IFRS 9 PD | |
Portfolio | (%) | (%) | (%) | (lifet ime) |
Credit cards – Current | 50%-120% | 3.5%-9.3% | 15%-85% | 4.15%-11.6% |
Credit cards – 1-29 days past due | 100%-180% | 3.5%-6.1% | 25%-47% | 3.5%-9.5% |
Business Client Mortgages – Current | 100% | 4.4% | – | – |
Business Client Mortgages – 1-29 days past due | 100% | 7.0% | – | – |
For all other material WRB portfolios (excluding Private Banking) for which a statist
ical model has been bu
ilt, the quantitat
ive
SICR thresholds applied are a relative threshold of 100 per cent increase in IFRS 9 PD and an absolute change in IFRS 9 PD
of between 100 and 350 bps depending on the product. Certain countries have a higher absolute threshold reflecting the
lower default rate with
in the
ir personal loan portfolios compared with the Group’s other personal loan portfolios. The orig
inal
lifet
ime IFRS 9 PD term structure
is determined based on the orig
inal Appl
icat
ion Score or R
isk Segment of the client.
For all Private Banking classes, in line with risk management practice, an increase in credit risk is deemed to have occurred
where margin
ing or loan-to-value covenants have been breached. For Class I assets (lend
ing against divers
ified l
iqu
id
collateral), if these margin
ing requ
irements have not been met with
in 30 days of a tr
igger, a sign
ificant
increase in credit risk is
assumed to have occurred. For Class I and Class III assets (real-estate lending), a sign
ificant
increase in credit risk is assumed
to have occurred where the bank is unable to ‘sell down’ the applicable assets to meet revised collateral requirements with
in
five days of a trigger. Class II assets are typically unsecured or partially secured, or secured against ill
iqu
id collateral such as
shares in private companies. Sign
ificant cred
it deteriorat
ion of these assets
is deemed to have occurred when any early alert
trigger has been breached.
Risk Profile continued
Standard Chartered Bank
94
Directors’ Report and Financ
ial Statements 2024
Qualitat
ive cr
iter
ia
Qualitat
ive factors that
ind
icate that there has been a s
ign
ificant
increase in credit risk include processes linked to current risk
management, such as placing loans on non-purely precautionary early alert or being assigned a CG12 rating. An account is
placed on non-purely precautionary early alert if it exhib
its r
isk or potential weaknesses of a material nature requir
ing closer
monitor
ing, superv
is
ion or attent
ion by management. Weaknesses in such a borrower’s account, if left uncorrected, could
result in deteriorat
ion of repayment prospects and the l
ikel
ihood of be
ing downgraded. Indicators could include a rapid
erosion of posit
ion w
ith
in the
industry, concerns over management’s abil
ity to manage operat
ions, weak/deteriorat
ing
operating results, liqu
id
ity strain and overdue balances, among other factors.
All client assets that have been assigned a CG12 rating, equivalent to ‘Higher risk’, are deemed to have experienced a
sign
ificant
increase in credit risk. Accounts rated CG12 are primar
ily managed by relat
ionsh
ip managers
in the CIB unit with
support from SAG for certain accounts. All CIB clients are placed in CG12 when they are 30days past due (DPD) unless they
are granted a waiver through a strict governance process.
In WRB, SICR is also assessed for where specif
ic r
isk elevation events have occurred in a market that are not yet reflected in
modelled outcomes or in other metrics. This is applied collectively either to impacted specif
ic products/customer cohorts
or across the overall consumer banking portfolio in the affected market.
Backstop
Across all portfolios, accounts that are 30 or more DPD on contractual payments of princ
ipal and/or
interest that have not
been captured by the criter
ia above are cons
idered to have experienced a sign
ificant
increase in credit risk.
For less material portfolios, which are modelled based on a roll-rate or loss-rate approach, SICR is primar
ily assessed through
the 30 DPD trigger.
Expert credit judgement may be applied in assessing SICR to the extent that certain risks may not have been captured by
the models or through the above criter
ia. Such
instances are expected to be rare, for example due to events and material
uncertaint
ies ar
is
ing close to the report
ing date.
Assessment of credit-impa
ired financial assets
WRB clients
The core components in determin
ing cred
it-impa
ired expected cred
it loss provis
ions are the value of gross charge-off and
recoveries. Gross charge-off and/or loss provis
ions are recogn
ised when it is established that the account is unlikely to pay
through the normal process. Recovery of unsecured debt post credit impa
irment
is recognised based on actual cash
collected, either directly from clients or through the sale of defaulted loans to third-party inst
itut
ions. Release of credit
impa
irment prov
is
ions for secured loans
is recognised if the loan outstanding is paid in full (release of full provis
ion),
or the provis
ion
is higher than the loan outstanding (release of the excess provis
ion).
CIB and Private Banking clients
Credit-impa
ired accounts are managed by the Group’s spec
ial
ist recovery un
it, Stressed Asset Group (SAG), which is
independent of the Client Coverage/Relationsh
ip Managers. Where a port
ion of exposure is considered not recoverable, a
stage 3 credit impa
irment prov
is
ion
is raised. This stage 3 provis
ion
is the difference between the loan-carrying amount and
the probabil
ity-we
ighted present value of estimated future cash flows, reflecting a range of scenarios (typically the Upside,
Downside and Likely recovery outcomes). Where the exposure is secured by collateral, the values used will incorporate
the impact of forward-looking economic informat
ion on the value recoverable collateral and t
ime to realise the same.
The ind
iv
idual circumstances of each client are considered when SAR estimates future cashflows and the tim
ing of future
recoveries which involves sign
ificant judgement. All ava
ilable sources, such as cashflow aris
ing from operat
ions, selling assets
or subsid
iar
ies, realis
ing collateral or payments under guarantees, are cons
idered. In any decis
ion relat
ing to the rais
ing of
provis
ions, the Group attempts to balance econom
ic condit
ions, local knowledge and exper
ience, and the results of
independent asset reviews. The ind
iv
idual impa
irment prov
is
ions (v
iz. those not directly from a model) are approved by
Stressed Assets Risk (SAR) who are in the Second Line of Defence.
Write-offs
Where it is considered that there is no realist
ic prospect of recover
ing a portion of an exposure against which an impa
irment
provis
ion has been ra
ised, that amount will be written off.
Risk Profile continued
Standard Chartered Bank
95
Directors’ Report and Financ
ial Statements 2024
Governance of PMAs and applicat
ion of expert cred
it judgement in respect of expected credit losses
The Group’s Credit Policy and Standards framework details the requirements for continuous monitor
ing to
ident
ify any
changes in credit quality and resultant ratings, as well as ensuring a consistent approach to monitor
ing, manag
ing and
mit
igat
ing credit risks. The framework aligns with the governance of ECL estimat
ion through the early recogn
it
ion of
sign
ificant deter
iorat
ions
in ratings which drive stage 2 and 3 ECL.
The models used in determin
ing expected cred
it losses are reviewed and approved by the Group Credit Model Assessment
Committee (CMAC) or Delegate Model Approver, which is appointed by the Model Risk Committee. CMAC has the
responsib
il
ity to assess and approve the use of models and to review all IFRS 9 interpretat
ions related to models. CMAC also
provides oversight on operational matters related to model development, performance monitor
ing and model val
idat
ion
activ
it
ies, includ
ing standards and regulatory matters.
Prior to submiss
ion to CMAC for approval, the models are val
idated by GMV, a function which is independent of the business
and the model developers. GMV’s analysis comprises review of model documentation, model design and methodology,
data validat
ion, rev
iew of the model development and calibrat
ion process, out-of-sample performance test
ing, and
assessment of compliance review against IFRS 9 rules and internal standards.
Model performance PMAs - The process of PMA ident
ification, calculat
ion and approval are prescribed in the Credit Risk IFRS
9 ECL Model Family Standards, which are approved by the Global Head, Model Risk Management. PMA calculations are
reviewed by GMV and submitted to CMAC for approval and will be removed when the estimates return to being with
in the
monitor
ing thresholds or val
idat
ion standards. The level of PMAs and remed
iat
ion plans are regularly tracked at CMAC.
Judgemental adjustments - These comprise judgemental PMAs and judgemental management overlays and , account
for events that are not captured in the Base Case Forecast or the resulting ECL calculated by the models. judgemental
adjustments must be approved by the IIC having considered the nature of the event, why the risk is not captured in the model,
and the basis on which the quantum of the overlay has been calculated. Judgemental adjustments are subject to quarterly
review and re-approval by the IIC and will be released when the risks are no longer relevant.
The IFRS 9 Impairment Committee:
•
Oversees the appropriateness of all Business Model Assessment and Solely Payments of Princ
ipal and Interest tests
•
Reviews and approves expected credit loss for financ
ial assets class
if
ied as stages 1, 2 and 3 for each financial report
ing period
•
Reviews and approves stage allocation rules and thresholds
•
Approves material adjustments in relation to expected credit loss for fair value through other comprehensive income and
amortised cost financ
ial assets
•
Reviews, challenges and approves base macroeconomic forecasts and the multiple macroeconomic scenarios approach
that are util
ised
in the forward-looking expected credit loss calculations
Key inputs into the calculation and resulting expected credit loss provis
ions are subject to rev
iew and approval by the IIC.
The IIC consists of senior representatives from Risk and Finance. It meets at least twice every quarter; once before the models
are run to approve key inputs into the calculation, and once after the models are run to approve the expected credit loss
provis
ions and any judgemental overr
ides that may be necessary.
The IIC is supported by an Expert Panel which also reviews and challenges the base case project
ions and mult
iple
macroeconomic scenarios. The Expert Panel consists of members of Enterprise Risk Management (which includes
the Scenario Design team), Finance, Group Economic Research and country representatives of major jur
isd
ict
ions.
Risk Profile continued
Standard Chartered Bank
96
Directors’ Report and Financ
ial Statements 2024
Traded Risk
Market Risk (audited)
Market Risk is the potential for fair value loss due to adverse moves in markets. The Group’s exposure to Market Risk arises
predominantly from the following sources:
• Trading book:
–
The Group provides clients with access to markets, facil
itat
ion of which entails the Group taking moderate market
risk posit
ions. All trad
ing teams support client activ
ity; there are no propr
ietary trading teams. Hence, income earned
from market risk-related activ
it
ies is primar
ily dr
iven by the volume of client activ
ity.
• Non-trading book:
–
Treasury is required to hold a liqu
id assets buffer, much of wh
ich is held in high-quality marketable debt securit
ies
–
The Group underwrites and sells down loans, and invests in select investment grade debt securit
ies w
ith no trading intent
–
The Group has capital invested and related income streams denominated in currencies other than US dollars. To the
extent that these income streams are not hedged, the Group is subject to Structural Foreign Exchange Risk which is
reflected in reserves.
A summary of our current polic
ies and pract
ices regarding market risk management is provided in the Princ
ipal R
isks section
(page 52).
The primary categories of Market Risk for the Group are:
•
Interest Rate Risk: aris
ing from changes
in yield curves and impl
ied volat
il
it
ies
•
Foreign Exchange Risk: aris
ing from changes
in currency exchange rates and impl
ied volat
il
it
ies
•
Commodity Risk: aris
ing from changes
in commodity prices and impl
ied volat
il
it
ies
•
Credit Spread Risk: aris
ing from changes
in the price of debt instruments and credit-linked derivat
ives and dr
iven by factors
other than the level of risk-free interest rates
•
Equity Risk: aris
ing from changes
in the prices of equit
ies and
impl
ied volat
il
it
ies
Market risk changes (audited)
Value at Risk (VaR) allows the Group to manage Market Risk across the trading book and most of the fair valued
non-trading books.
The average level of total trading and non-trading VaR in 2024 was $30.2 mill
ion, 27 per cent lower than 2023 ($41.1 m
ill
ion).
The year end level of total trading and non-trading VaR in 2024 was $30.7 mill
ion, 5 per cent lower than 2023 ($32.2 m
ill
ion),
due to a reduction in credit spreads.
For the trading book, the average level of VaR in 2024 was $18.4 mill
ion, 2 per cent h
igher than 2023 ($18 mill
ion).
Trading activ
it
ies have remained relatively unchanged, and client driven.
Risk Profile continued
Standard Chartered Bank
97
Directors’ Report and Financ
ial Statements 2024
Daily value at risk (VaR at 97.5%, one day) (audited)
| 2024 | 2023 | |||||||
Average | High | Low | Year End | Average | High | Low | Year End | |
Trading 1 and non-trading 2 | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Interest Rate Risk | 21.7 | 31.1 | 11.9 | 27.3 | 26.3 | 38.8 | 16.8 | 17.2 |
Credit Spread Risk | 14.8 | 25.6 | 9.9 | 12.7 | 27.9 | 43.9 | 20.9 | 26.0 |
Foreign Exchange Risk | 8.9 | 15.6 | 5.1 | 7.6 | 6.6 | 10.0 | 3.6 | 6.3 |
Commodity Risk | 4.6 | 9.7 | 2.4 | 4.1 | 5.6 | 9.4 | 3.4 | 4.6 |
Equity Risk | 0.4 | 0.9 | – | – | 0.1 | 0.4 | – | – |
Divers ification effect 3 | (20.2) | NA | NA | (21.0) | (25.4) | NA | NA | (21.9) |
Total | 30.2 | 43.6 | 18.8 | 30.7 | 41.1 | 55.3 | 30.3 | 32.2 |
| 2024 | 2023 | |||||||
Average | High | Low | Year End | Average | High | Low | Year End | |
Trading 1 | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Interest Rate Risk | 10.7 | 18.2 | 5.6 | 12.4 | 10.8 | 14.8 | 6.3 | 6.3 |
Credit Spread Risk | 4.6 | 8.5 | 2.9 | 3.4 | 6.9 | 9.7 | 5.7 | 6.9 |
Foreign Exchange Risk | 8.9 | 15.6 | 5.1 | 7.6 | 6.6 | 10.0 | 3.6 | 6.3 |
Commodity Risk | 4.5 | 9.7 | 2.3 | 4.1 | 5.6 | 9.4 | 3.4 | 4.5 |
Equity Risk | – | – | – | – | – | – | – | – |
Divers ification effect 3 | (10.3) | NA | NA | (6.0) | (11.9) | NA | NA | (9.8) |
Total | 18.4 | 29.4 | 11.0 | 21.5 | 18.0 | 25.3 | 13.0 | 14.2 |
| 2024 | 2023 | |||||||
Average | High | Low | Year End | Average | High | Low | Year End | |
Non-trading 2 | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion |
Interest Rate Risk | 18.4 | 23.6 | 11.5 | 22.8 | 22.9 | 31.0 | 13.4 | 14.3 |
Credit Spread Risk | 13.1 | 21.3 | 8.1 | 11.5 | 24.1 | 37.8 | 17.6 | 20.1 |
Equity Risk | 0.4 | 0.9 | – | – | 0.1 | 0.4 | – | – |
Divers ification effect 3 | (8.1) | NA | NA | (4.2) | (13.1) | NA | NA | (8.6) |
Total | 23.8 | 30.5 | 17.4 | 30.1 | 34.0 | 43.1 | 23.6 | 25.8 |
The following table sets out how trading and non-trading VaR is distr
ibuted across the Group’s bus
inesses:
2024 | 2023 | |||||||
Average | High | Low | Year End | Average | High | Low | Year End | |
$mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | $mill ion | |
Trading 1 and non-trading 2 | 30.2 | 43.6 | 18.8 | 30.7 | 41.0 | 55.3 | 30.3 | 32.2 |
Trading 1 | ||||||||
Global Credit | 5.2 | 9.2 | 3.1 | 4.0 | 11.1 | 15.7 | 7.2 | 7.6 |
Macro Trading 4 | 15.8 | 27.7 | 8.0 | 17.7 | 11.6 | 16.0 | 7.6 | 9.6 |
XVA | 4.3 | 5.7 | 3.3 | 3.3 | 5.8 | 7.8 | 4.1 | 5.6 |
Divers ification effect 3 | (6.9) | NA | NA | (3.5) | (10.5) | NA | NA | (8.6) |
Total | 18.4 | 29.4 | 11.0 | 21.5 | 18.0 | 25.3 | 13.0 | 14.2 |
Non-trading 2 | ||||||||
Treasury 5 | 22.8 | 27.2 | 16.8 | 27.0 | 33.0 | 40.9 | 22.2 | 25.5 |
Global Credit | 4.0 | 9.5 | 2.3 | 8.2 | 3.7 | 14.0 | 1.9 | 3.7 |
Listed Private Equity | 0.4 | 0.9 | – | – | 0.1 | 0.4 | – | – |
Divers ification effect 3 | (3.4) | NA | NA | (5.1) | (2.9) | NA | NA | (3.4) |
Total | 23.8 | 30.5 | 17.4 | 30.1 | 34.0 | 43.1 | 23.6 | 25.8 |
1
The trading book for Market Risk is defined in accordance with the UK onshored Capital Requirements Regulation Part 3 Title I Chapter 3, which restricts the posit
ions
permitted in the trading book
2
The non-trading book VaR does not include the loan underwrit
ing bus
iness
3
The total VaR is non-addit
ive across r
isk types due to divers
ification effects, wh
ich is measured as the difference between the sum of the VaR by ind
iv
idual risk type
or business and the combined total VaR. As the maximum and min
imum occur on d
ifferent days for different risk types or businesses, it is not meaningful to calculate
a portfolio divers
ification benefit for these measures
4
Macro Trading comprises the Rates, FX and Commodit
ies bus
inesses
5
Treasury comprises Treasury Markets and Treasury Capital Management businesses
Risk Profile continued
Standard Chartered Bank
98
Directors’ Report and Financ
ial Statements 2024
Average daily income earned from Market Risk-related activ
it
ies
¹
(audited)
Trading: The average level of total trading daily income in 2024 was $8.3 mill
ion, 6 per cent h
igher than 2023 ($7.8 mill
ion).
The increase is largely attributable to higher financ
ing
income across Credit Trading businesses includ
ing Global Repo and
Structured Credit Financ
ing.
Non-trading: The average level of total non-trading daily income in 2024 was $2.3 mill
ion, attr
ibutable to translation gains on
the revaluation of FX posit
ions
in Egypt, and FX revaluation gains across currencies in Markets Credit Trading business.
2024 | 2023 | |
Trading | $mill ion | $mill ion |
Interest Rate Risk | 3.0 | 3.0 |
Credit Spread Risk | 1.1 | 0.7 |
Foreign Exchange Risk | 3.7 | 3.7 |
Commodity Risk | 0.5 | 0.4 |
Equity Risk | – | – |
Total | 8.3 | 7.8 |
Non-trading | $mill ion | $mill ion |
Interest Rate Risk | 0.6 | (0.1) |
Credit Spread Risk | 1.7 | (0.5) |
Equity Risk | – | 0.1 |
Total | 2.3 | (0.5) |
1
Reflects total product income which is the sum of client income and own account income. Includes elements of trading income, interest income and non funded income
which are generated from Market Risk-related activ
it
ies. Rates, XVA and Treasury income are included under Interest Rate Risk whilst Credit Trading income is included
under Credit Spread Risk
Structural foreign exchange exposures
The table below sets out the princ
ipal structural fore
ign exchange exposures (net of investment hedges) of the Group.
2024 | 2023 | |
$mill ion | $mill ion | |
Indian rupee | 3,451 | 3,291 |
Singapore dollar | 3,279 | 2,370 |
Malaysian ringg it | 1,538 | 1,540 |
Bangladeshi taka | 1,113 | 1,007 |
Euro | 1,112 | 1,125 |
UAE dirham | 797 | 696 |
Thai baht | 763 | 782 |
Pakistan i rupee | 392 | 306 |
Indonesian rupiah | 230 | 293 |
Other | 3,512 | 3,300 |
16,187 | 14,710 |
As at 31 December 2024, the Group had taken net investment hedges using derivat
ive financial
instruments to partly cover its
exposure to the Indian rupee of $1,784 mill
ion (31 December 2023: $1,809 m
ill
ion), UAE d
irham of $1,470 mill
ion (31 December
2023: $1,470 mill
ion), S
ingapore dollar of $nil mill
ion (31 December 2023: $1,047 m
ill
ion) and South Afr
ican rand of $nil mill
ion
(31 December 2023: $64 mill
ion). An analys
is has been performed on these exposures to assess the impact of a 1 per cent fall
in the US dollar exchange rates, adjusted to incorporate the impacts of correlations of these currencies to the US dollar.
The impact on the posit
ions above would be an
increase of $294 mill
ion (31 December 2023: $146 m
ill
ion). Changes
in the
valuation of these posit
ions are taken to reserves.
For analysis of the Group’s capital posit
ion and requ
irements, refer to the Capital Review (page 109).